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JPMorgan Chase I bet landlords and renters are finally ready to move away from paper checks and embrace digital payments.
The bank is experimenting with a platform created for property owners and managers that automates billing and receiving online rental payments, according to Sam Yên, chief innovation officer of JPMorgan’s Commercial Banking division.
While digital payments are steadily picking up In addition to global transactions, pushed by the pandemic in recent years, there is one corner of the business where the card still reigns supreme: the monthly rent check. Indeed, the market is highly fragmented, with most of the country’s 12 million homeowners managing portfolios of less than 100.
As a result, according to JPMorgan, around 78% are still paid with old-fashioned checks and money orders. More than 100 million Americans pay a total of $ 500 billion annually in rent, the bank said.
“The vast majority of rent payments are still made by check,” Yen said in a recent interview. “If you talk to residents to this day, they often say, ‘The only reason I still have a checkbook is to pay the rent.’ So there are many opportunities to bring efficiency there. “
JPMorgan has spent the last few years working on the software, called Story, which is set to become an all-in-one property management solution.
They primarily aimed to improve the rent collection process as it is “the most time-consuming process for a property owner-operator today,” according to Kurt Stuart, who manages JPMorgan’s commercial term loans for the region. from the northeast.
In addition to having to manually collect and deposit paper checks, owners usually rely on decades-old software, including Microsoftis Excel and Intuitive‘s QuickBooks to manage their businesses, Yen said. New options more suited to real estate have appeared in recent years with names like Buildium and TurboTenant. No one is dominant yet, according to the executive.
History “will give [property owners and managers] much more visibility across the entire portfolio to see exactly what has been paid and what has not been paid, ”Yen said.
JPMorgan hopes to gain ground by providing users with valuable insights through data and analytics, including how to set rental levels, where to make future investments, and even help select tenants, according to Yen.
Although the bank claims to be the nation’s leading lender to multi-family homeowners with $ 95.2 billion in mid-year credits, it targets more than its 33,000 industry customers.
Landlords and tenants don’t have to be JPMorgan customers to sign up for the platform when it becomes available more broadly next year, Yen said. The bank has yet to finalize the fee structure for the product, she said.
Residents can automate monthly rent payments, receive notifications, and view their payment and rent history via an online dashboard. This offers peace of mind compared to sending a paper check, Yen said.