Why Paper Checks Persist in Property Management

This year could be a good one for the property management industry, with 80% of industry professionals polled in a recent survey saying they anticipate revenue growth in 2022.

All the same, the pandemic has left a permanent mark on the real estate space nonetheless, and not all of its impacts are because of optimism.

Public health and safety guidelines exacerbated many of the frictions already associated with paper check payments, leading tenants, brokers and property managers searching for new ways to make and collect rents or other bills using more efficient channels.

But transitioning to digital payments might be challenging for property managers, considering recent PYMNTS data shows that the real estate industry still is leaning hard on paper checks, both for rent collection and a large portion of B2B payments.

It’s not an issue confined to the real estate sector. PYMNTS research has shown 40% of firms still rely on checks and postal mail for their B2B transactions. The real estate industry is especially dependent on manual methods, with paper checks accounting for 34% of real estate companies’ B2B payments, according to a June 2021 study from PYMNTS.

Many important factors have helped checks keep their hold on the sector, including the needs and preferences of tenants as well as insufficient digitally optimized payment infrastructure.

About 5% of households in the U.S. do not have bank accounts, according to 2019 data, making them dependent on cash or other time-consuming methods to pay their rent. In addition, the pandemic’s stay-at-home rules made it harder for landlords or property managers to receive these payments, leading property management companies to find alternative methods.

A report from April 2020 found that tenants with the ability to pay rent online were more likely to pay early. But property managers must first be able to offer these online tools, and digital-first technologies are also becoming critical to property managers’ B2B processes as the need to maintain cash flow to and from vendors and other partners grows.

For more on what property managers can do to go paperless, download The Treasurer’s Guide To AR Payment Optimization, a PYMNTS and CheckAlt collaboration.