The property management sector thrives on a constant flurry of financial activity. Landlords employ and contract with a variety of vendors and suppliers to keep their property grounds maintained, the sinks and toilets unclogged, and everything running smoothly. Tenant turnover demands an endless to-do list of repainting rooms, removing scuff marks from floors, and cleaning carpets. And everyone, from plumbers and groundskeepers, to HVAC companies and movers, needs to get paid.
That said, traditional vendor payments in property management are long overdue due for a digital makeover. Digital push payments for property management and services have already become a reality for thousands of companies., including platforms like AppFolio. And this is just the beginning. To stay on top of property management financial services, it’s imperative to understand push payments and how they might work for your business.
What Are Push Payments?
So, let’s get started. To understand push payments, let’s first define what a traditional pull payment is. Pull payments are payments initiated by any payee where a company “pulls” requested funds from a payee’s account.
Pull payments can be an integral part of running a recurring payment system. Think monthly rent payments: with pull payments, your residents don’t need to remember to write a check each month, and you don’t need to remind them that rent is due.
Push payments do the same work, in reverse, allowing the payer to initiate the transfer of funds into a payee’s account and giving both parties more control over the payment process. Push payments are faster, allowing the payer to immediately transfer the funds to the recipient’s account. There are many types of push payments, depending on where the payment is going and the speed with which it is delivered—to bank accounts by debit card (called “push to debit”), by ACH and RTP transfer, the new FedNow and to digital wallets.
The Trend Towards Real-Time Across Verticals
The property market’s trend towards real-time push payments mirrors a wider marketplace change. Many markets are moving away from the slower rails and paper, especially for ad hoc payments. And the stage is set for an even wider embrace of instant payments. For example, studies show that when a push to debit instant payment option is offered, in comparison to a traditional payment method, people go for it. Across Ingo’s client base, push to debit payments currently account for between 40% to 70% of overall transactions where they are offered.
Even industries like trucking and movement logistics have seen a significant shift towards digital wallets and instant push payments. Their adoption of these instant payments has significantly streamlined complex interactions and financial management across their distributors, warehouses, carriers, brokers and beyond.
Additionally, the rise of the gig economy through apps like DoorDash and Uber has spurred key adoption of instant payments for freelance invoicing. This shift has helped numerous companies retain their best contractors and increased gig work satisfaction.
These are just a few examples. Broadly speaking, the world is trending toward fast, digital transactions with instant push payments at the forefront—in property management, related verticals, and beyond.
Specific Benefits Property Managers
Push payments, like push to debit, has specific benefits for property management companies, especially in streamlining vendor payment capabilities. Before instant payments, a property manager had to juggle and keep track of multiple invoices, vendors, and check numbers. With push to debit, property managers can instantly pay vendors directly into debit accounts when work is done, decreasing delays and avoiding the “out of sight, out of mind” headache that comes with non-instant payments.
This speed is also useful in financial planning for property managers and vendors alike, because managers aren’t left wondering when a vendor will cash their checks, and vendors don’t have to worry about when the business will get around to sending it. Win-win.
Beyond speed, push payments offer a reduced risk of fraud for property managers. Why? Because the payer initiates the transaction, and the payee does not have access to the payer’s bank account information. This compartmentalization reduces potential data breaches and keeps sensitive information more secure.
Push payments are also simply easier. They can be made anytime, anywhere. The process is straightforward and user-friendly for both sides. With just a few clicks on a mobile app, managers send money and vendors get paid.
Less Redundancy, More Reliability
Digital connectivity for instant money transacting has always been relatively simple. An API is an API. But it’s the other pieces to the payments equation—from connecting sponsor banks and managing risk and fraud, to the ongoing management, optimization, enablement of low-cost routing, redundancy and ubiquity that are the real contributing factors to the overall complexity of payments—and differentiating factors with push payments.
As a business begins to operate and expand, transactions multiply. The availability of push payments in lieu of more traditional methods not only speeds up payments themselves but also reduces reliance on paper checks and the crisscrossing of invoices and approvals, or else the three-day wait for ACH transactions to settle. This alleviates cash flow issues and visibility for handymen, electricians, lawn care firms, regional suppliers and anyone else who previously had to deal with receipt tracking and reimbursements.
Closing The Gap For Property Management Payments
Significant progress has already been made in residents embracing digital channels (using their debit cards) to pay monthly rent. As individual consumers, we’ve grown familiar with peer-to-peer (P2P) payments through PayPal, CashApp and Venmo.
But property management can uniquely and substantially benefit from the adoption of push payments through the implementation of push to debit and beyond. Vendors in property management are coming to expect increased speed and choice in accessing their money, and push payments is a surefire way of making both happen with minimal headache.
The shift toward instant access to money via push payments will soon become standard and lead to new opportunities to embed payments even more fully into company workflows. Artificial intelligence (AI) might also be used to help automate the invoice-to-approval continuum. In other words, the future of push payments is bright.
With the adoption of the FedNow service and as other large corporations allow instant payments to take route within their own business practices, and as a new generation of renters and business owners come into their own, the desire for a variety of digital payments will become an expectation. So watch this space because the instant money push payments revolution is only beginning.
Better Push Payments With Ingo
Ready to institute push payments for your property management company? Ingo Money powers embedded payments at scale. Established in 2001, we provide instant payments, payouts, account funding, and digital issuing solutions for companies of all sizes, with risk management expertise and network reach to over 4.5 billion consumer accounts.
Want to learn more? Contact us today!
