PropertyBridge Brings PIN-less Debit to Residential Rent

PropertyBridge Inc., which handles electronic rent payments on behalf of property managers, plans to launch next month a recurring PIN-less debit option. It is processing some PIN-less transactions now in a test, or so-called “beta,” mode, for an unnamed property-management firm, says Jason Gardner, president of the Oakland, Calif.-based company, which has linked to Fiserv Inc.'s Accel/Exchange electronic-funds transfer network for the PIN-less service. Accel/Exchange, in turn, provides a gateway to the NYCE, Pulse, and Star national EFT networks. Up to now, rent payments were not among the categories of payments approved by the EFT networks for PIN-less debit, a payment type in which consumers make online payments by entering their debit card account numbers but not their PINs. Concerned about the risk of fraud associated with debit transactions not secured with PINs, the networks have confined the PIN-less option to certain markets deemed to be low-risk, such as utilities, cable companies, and mortgage lenders. Now residential rent is on the list. “We got it approved,” says Gardner, who points out that rent payments fit the low-risk profile. As with utility payments, he says, fraudsters generally aren't interested in paying the rent for someone else. Chargeback rates on the credit and debit card transactions PropertyBridge handles, he says, average 20 basis points (0.20%), key point with PIN-less debit, since billers and merchants assume the risk of fraud. The 4-year-old company, which acts as a gateway funneling payments to electronic-transaction processors, expects the PIN-less debit option to be popular with landlords looking to cut the cost of acceptance. Though PIN-debit interchange rates have risen in recent years, they generally yield a dramatically lower acceptance cost than that for credit and signature-debit transactions for the range of ticket sizes that monthly rent payments fall into. PropertyBridge's average ticket is $800, while that for the industry is $632, Gardner says. “It was a logical step for us,” he says. “By having that option, we can lower the cost of processing across the portfolio.” An independent sales organization sponsored by Wells Fargo & Co. and First National Bank of Omaha, PropertyBridge manages card and automated clearing house payments for 1.3 million tenants in 850,000 residential units. If property managers don't charge a convenience fee, cards account for 30% of payments, Gardner says, with ACH accounting for another 30% and checks for the rest (the company also handles remote-deposit-capture for paper checks presented by tenants in management offices). With a convenience fee, the share for cards plunges to around 2%, he says. Although EFT networks have been cautious about expanding the approved categories for PIN-less debit, they have added several over the past few years. Earlier this year, the Star network announced a four-month pilot of PIN-less debit for micropayments, or online transactions generally of $5 or less (Digital Transactions News, April 19).