June 18, 2015
How Technology is Killing the Cheque
When’s the last time you wrote a cheque? Probably not recently or very often. Whether you realize it or not, the cheque (check to our American friends) has one foot in the grave and the other on a banana peel.
For the past 20 years, cheque use has been dramatically falling in most countries, with some banks no longer sending out a cheque book unless the customer requests one.
Up until approximately the mid-1990s, most financial transactions were performed through cash or cheque here in Canada, and around the world. Then in 1994 Interac launched “Direct Payment”, which rapidly became so widespread that, as of 2001, more transactions in Canada were completed using debit cards than cash.
In 2002, when Interac launched email money transfers it opened up yet another floodgate of electronic fund transfers, with a new way to send money with just an e-mail address or mobile number.
Consumers have never looked back.
The Way of the Dodo
Yet, many property management firms have continued to use cheques as a main method of rental collection, as it acts as an agreement of payment. Residents can provide a series of post-dated cheques upfront or pay by cheque on a monthly basis.
The Canadian Bankers Association reports that while the use of cheques has been declining with the growing popularity of electronic and card payments, financial institutions in Canada still process more than half a billion cheques every year.
And, these cheques can be costly. According to independent research, the cost to process cheques can range from $15 to $25 for each cheque issued. This includes both hard and soft costs, such as clerical, cheque requisitioning, authorization, reconciliation, tracing and more.
Electronic payments are faster, safer and cheaper, whereas cheques can be risky. There may not be the funds in the account to honour the cheque and the transfer of funds can take several days.
Even the federal government announced plans to phase paper cheques out for Canada Pension Plan payments and tax refunds by April 2016, and opt for direct deposit instead.
As technology continues to evolve and consumers embrace the on-the-go convenience of mobile and electronic payments, cheques will slowly go the way of the Dodo. Just as mobile phones have virtually eliminated payphones, new technology will change the payment landscape in the coming years.
Modern Property Management
Your customers want to pay for their rent in the same way they pay for everything else – through the electronic method that is most familiar.
By offering your residents online payment methods, you can reduce or eliminate many of the direct costs associated with paper cheques. You’ll also be keeping them satisfied and more likely to stay on as your tenant. With Property Vista’s solution, your residents can choose direct withdrawal, direct online payment, debit or even Visa and MasterCard payment methods.
They will appreciate the convenience and you’ll appreciate your improved cash flow. The resident portal even accommodates different state/provincial rules concerning security deposits and last month’s rent payments. It’s also fully secure.
Looking for an easy way to collect rent? Give your tenant option! To discover how Property Vista can work with you to streamline your operations, sign up for your free account today.