Digital Payments

As Bill Payments Go Digital, The Rental Industry Still Lags

More than 50 percent: That’s the amount of U.S. bills paid online.

As eCommerce continues to rake in revenue — global sales volume topped $2.3 trillion in 2017, and that could nearly double by 2021 — online billing platforms are rushing to incorporate payment processing capabilities into their offerings. That’s according to the new “Payments Powering Platforms Tracker” from PYMNTS.

Younger consumers are leading the way when it comes to online bill payments, with 61 percent of those payments coming from millennials. Another online bill payment trend is a move away from banks for those transactions. According to a new report from Aite, 73 percent of U.S. online bill payments made by consumers in 2016 were conducted via biller-direct sites, up from 62 percent in 2010. That growth came, in part, at the expense of bill-paying sites and services operated by banks. They accounted for 27 percent of online bill payments in 2016, down from 38 percent in 2010.

Rent checks, though, continue to endure, according to the Payments Powering Platforms Tracker. It cites a figure from the Federal Reserve Bank of Boston that says more than 80 percent of rent payments are made via cash or paper checks. That’s despite the frictions that plague such payments, like slower transaction times and security flaws.

Companies active in the rental space are trying to push the move to digital. For instance, online real estate platform Zillow, as part of its effort to gain a larger foothold in rentals, has added rent payment processing features to its platform.

The Zillow platform enables renters to apply for multiple rentals with one application — including background checks and credit reports — along with paying rent. The features intend to help landlords avoid the time and hassle involved in screening potential tenants, and give time-strapped renters a competitive edge in the rental process.

Zillow faces increasing competition from other companies also offering online rental payments and related services. The PYMNTS tracker report includes an interview with Ryan Coon, Co-founder and COO and rent payment platform Avail. That company and others are, according to the tracker report, “hoping to eliminate not just paper rent checks, but also paper applications and legacy systems that slow down the rental process.”

The move from analog to digital — from paper to electronic payments — is an ongoing trend for a variety of industries, including construction and government. The rental industry could well be the next market to undergo that shift.

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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