Digitization has transformed operations in the leasing sector. Statistics show that about 60% of U.S. renters pay their rent online, while most renters use about five apps or websites to look for a property. It’s evident that most financial arrangements between the consumer and leasing companies now involve digital payment solutions like electronic checks, commonly referred to as eChecks.
Leasing service providers are shifting to innovative digital payments to streamline operations and enhance customer convenience. eChecks can facilitate purchases between consumers and retailers and help with rent collection.
But how can leasing companies start accepting electronic check payments?
Simple. By partnering with an efficient payment processor that facilitates these ACH transactions. iCG Pay, formerly iCheckGateway.com, provides online solutions for lease account management.
Let’s explore why leasing services should use electronic check payments and their role in modernizing financial transactions.
How Do Electronic Check Payments Work?
Electronic check payments, also known as eCheck, are a digital version of a traditional paper check. To process an eCheck, funds are electronically transferred from the payer’s bank account to the payee’s account via the ACH network. The shift to eCheck payments has contributed to an increase in the ACH payment volume, valued at $80.1 trillion in 2023.
eChecks are much faster and more convenient than paper checks. Here's how they work:
- Authorization: The payer authorizes the payment by providing their bank account information, including the routing and account numbers.
- Verification: A payment processor, such as iCG Pay, verifies the payer's bank account details to ensure accuracy and validity.
- Transaction initiation: The payment amount is electronically debited from the payer's bank account after verification.
- Payment transmission: The transaction information is securely transmitted between the sender’s account and the recipient’s bank through the ACH network.
- Clearing and settlement: The transaction is processed, and funds are transferred between the two bank accounts within a few business days.
- Confirmation: Both parties receive confirmation of the completed electronic payment.
How Do Electronic Check Payments Benefit Leasing Companies?
eCheck payment processing has several benefits for leasing companies. Let’s explore the reasons why you should incorporate this payment method in your operations.
Streamlined Payment Processes
Compared to paper checks that require physical handling, eChecks are easier to manage. For instance, they are ideal for customers who need to pay rent online. As a leasing company, you don’t have to deal with bounced paper checks, and it's also an opportunity to reduce administrative tasks such as sorting, depositing, and manually reconciling accounts.
Additionally, automated systems can help you integrate seamlessly with existing accounting and property management software, further streamlining financial operations and reducing the likelihood of errors.
Enhanced PCI Compliance
Payment fraud is on the rise as more consumers shift to digital payments. Research by Insikit Group shows that credit card payments are at high risk, and fraudsters have posted more than 119 million payment cards on the dark web. Electronic check payments have added protection because they utilize advanced encryption and authentication measures to protect sensitive financial data.
These security features greatly reduce the risk of check fraud, identity theft, and unauthorized access to account information. Leasing companies can operate more confidently, knowing that their transactions are highly secure and compliant with industry regulations.
In addition, you can reduce the PCI scope by partnering with iCG Pay, which offers branded hosted payment portals that direct your customers to pay leasing fees via your website. As the payment gateway, iCG Pay reduces your liability and ensures the security of customer financial data.
Accelerated Fund Availability
Electronic transfers typically clear much faster than conventional payment methods like paper checks. This rapid clearance means leasing companies can access funds more quickly, improving cash flow. Therefore, eChecks are a convenient payment option for leasing companies that require cash to run operations.
Integration with Existing Company Systems
Leasing companies use multiple digital technologies to collect rent online. They can use payment apps and software to make the process more convenient for renters. The advantage of using electronic check payments is that they can seamlessly integrate with various digital platforms and payment gateways, allowing leasing companies to offer diverse payment options to their clients.
Clients can easily initiate an eCheck payment through a website, mobile app, or customer portal using their preferred digital channels. This integration enhances the overall customer experience by providing a user-friendly payment process, which increases client satisfaction and retention.
Your leasing company needs an eCheck payment processing partner like iCG Pay that provides plugins and developer tools to boost integration.
What Factors Should You Consider When Choosing an eCheck Payment Processing Partner for Your Leasing Company?
Since eChecks are processed in the same network as ACH payments, you need a payment gateway with the right features. Here are the key factors to consider before picking a partner:
Payment Options
Look for a payment processing partner that offers various payment options. At iCG Pay, we offer secure hosted payment transactions, ACH, credit card processing, eChecks, email and text invoicing, Remote Deposit Capture (RDC), and mobile solutions. This will lead to quicker payment settlements and accommodate more customers.
Customer Support
An ideal partner should have a support team available to resolve issues and address technical concerns promptly. When picking a gateway, ensure that the team has prioritized these services.
Reputation and Reliability
Has your payment processing partner worked with a leasing company before? You need to research the reputation and track record of potential payment processing partners in the industry. Look for reviews, testimonials, and case studies from other leasing companies or businesses in similar sectors.
This approach enables you to gauge reliability, customer satisfaction, and ability to handle recurring payments.
Security Standards
To process eCheck payments via the ACH network, you need to work with a Nacha Preferred Partner like iCG Pay. Such partners adhere to industry-standard security protocols, such as encryption and tokenization, to protect sensitive financial data. Additionally, you can access payment services like iCG-Verify, which determines the validity of a check to mitigate fraud.
Streamline Lease Payment Collections with iCG Pay
Electronic checks are a great addition to your payment systems. As an industry reliant on regular payments, you need reliable and convenient payment solutions. With iCG Pay, you can access multiple advanced technologies that allow you to collect lease payments on time. Our lease servicing payment solutions guarantee a secure and steady revenue stream.
Looking to enhance your lease servicing capabilities? Book a presentation call today!
