Electronic Payment Processing

The benefits of electronic payment processing

EPP can be a fast, easy and secure alternative to cheque payments
Monday, December 16, 2013
By Chris Seepe

With more and more Canadians spending time online, it is surprising that more landlords are not saying hello to electronic payment processing (EPP) and goodbye to collecting cheques.

After all, cheques have known labour and material costs. What’s more, they have forever provided tenants with a convenient (or desperate) excuse for delaying their payments. EPP requires less time than cheques, eliminates material costs, and is much more secure and private. So why are haven’t more landlords made the switch?

It can be a challenge getting tenants (or landlords) to switch to something new. Technology must be designed for the lowest common denominator in order to be adopted and properly used on a consistent basis. The solution must be simple, easy to use, and convenient — and EPP is all of the above.

Benefits of EPP

A growing concern for landlords is their legal obligation to protect personal information, especially under federal legislation to combat identity theft. Accidental (or intentional) disclosure of a tenant’s personal information could have serious consequences, so minimizing that risk exposure is something all landlords take seriously.

Reporting, accounting, accountability, and security are also key influencing factors. The 2013 AFP (Association for Financial Professionals) Payments Fraud and Control Survey reported that 61 per cent of North American corporations experienced payment fraud, 87 per cent of which was attributed to paper cheques. In addition, 28 per cent of companies suffered a financial loss.

Another major benefit is that with debit card payments, tenants can only pay rent with funds that are actually in their accounts. This eliminates NSF charges and the holding of funds, instantly changing an accounts receivable cycle from net 10-to-30 to net one-to-two. EPP also provides instant notification upon receipt of tenant payments.

Credit versus debit

Not all EPP solutions are created equal. Credit card and e-commerce offerings are different in that they charge a percentage of each transaction. Even one per cent can be a notable annual expense. The credit card is a private financial instrument of the bank offering the service. Not every financial institution will accept every credit card. Credit card processors require three to five business days to process a transaction, and most require tenants to reveal personal and credit information. Credit card services can claw back rent money paid by the tenant if the tenant submits a case to have the money refunded.


TenantPay is a payment portal or clearing house that collects rent money from various sources, aggregates it (saving individual deposit fees), and then delivers it to a chosen bank account within 30 hours. This service stands out because of its low transaction fees, lack of training costs, and no hidden setup or monthly fees. TenantPay is not a bank or financial institution; rather, it is a banking instrument that is accepted by every financial institution across Canada.

Some banks offer a low-cost EPP service designed for low-volume transactions from the customer to the vendor. However, there is no data aggregation so landlords must be vigilant about checking their accounts for every payment, a burden that escalates with each additional unit. TenantPay automatically authenticates each payment and notifies the user of each ‘block’ of payments received. On the second of each month, landlords can check TenantPay for any missing payments, send emails or make phone calls to tenants who have not paid, and send an N1 to those who do not reply by the third day.

Converting tenants

Landlords should write a letter to each tenant extolling the virtues of their chosen EPP service. They should highlight the security and convenience and explain that paying rent would be the same process as if it were a utility bill. In the case of TenantPay, landlords can collect any kind of payment, whether they are for deposits, rent, laundry or parking fees.

Multiple tenants residing in the same suite can use the same TenantPay number, making tracking payments easier. Parents can make payments from any province and setup recurring monthly payments for their children attending school.

It takes only seconds for a tenant to add TenantPay to their bill-paying list. Since the rent changes only once a year (if that), tenants can schedule automatic payments — meaning no more excuses about forgetting to pay the rent. A tenant can’t transfer funds they don’t have, so landlords will never get another NSF notice or the associated costs.

If a tenant is late in the rent, they can instantly include the late payment fee with their transaction.

If a tenant does not have Internet access or an online account, they can go to their bank to make the payment, use their bank’s telephone payment service or ATM, or use a cheque-cashing retail service.

It is only a matter of time before EPP will replace cheques, and for landlords, the benefits are endless. They can eliminate the cost of materials and postage, reduce the risk of privacy exposure, boost an organization’s productivity, and provide the most simple, convenient and secure payment solution available for tenants.

Chris Seepe is a commercial real estate broker and broker of record at Toronto-based Aztech Realty. He can be reached at 416-525-1558 or cseepe@aztechrealty.com 

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