"We're looking at 100 million renters in the U.S. alone and most of the other types of services that are out there in the rental market are geared toward the landlord, said Jeff Golding, President and COO of WilliamPaid.com.
Since most rental properties are owned by small business landlords, finding a way to streamline rental collection has been difficult.
"About 52 percent of the marketplace today, of roughly 40-million rental units, is single-family homes," said Golding. He added that about 70 percent of the marketplace is dominated by landlords who own and operate 10 units or less.
"So these landlords aren't going to build and invest in the infrastructure to offer the convenience of online payments or taking credit cards–they don't want to become merchants," explained Golding.
But WilliamPaid.com has crafted an online bill payment solution for renters that enables renters to pay their rent online even if their landlords don't have an online payment system. Golding says that renters can also "mix and match" where their rental funds come from. "[For instance,] using a bank draft as well as a credit card."
Using a credit card to pay rent is becoming more popular, not so much because renters are wanting to carry a rental balance, but because they want to capitalize on credit card rewards programs to achieve different bonus levels from the credit card companies. "They can achieve some of those goals by using our service," says Golding.
The online rental payment system can be started by either the tenant or the landlord. "When the tenant originates it, a correspondence goes out to the landlord. They'll get a check in the mail. [They'll also be notified] that they can sign up to receive the payments electronically deposited into their account at no cost to the landlord," said Golding.
This is a win-win for both the tenant and the landlord. Having a recurring online payment system is designed to ease the burden of the paying-and-collection process for the rental industry. Golding explains that the free electronic deposits also simplify the process on both sides and when tenants use multiple financial streams to pay rent it gives an extra layer or protection for the landlord.
"Providing additional payment sources can help ensure that the rent is being paid in full, on time, and month after month. [Landlords] don't have to worry about the forgetful tenant who forgets to write the check."
Golding points out there's another real benefit for many renters. He said that there are about 50 to 70 million people who fall into the category of "little or no credit". This group has not been able to establish credit for many reasons such as being new immigrants, or part of the younger demographic that hasn't had a credit card yet.
"So the opportunity to get credit has diminished and on top of that, without credit, you can't build credit. So, we partnered with a credit reporting agency that will accept non-traditional payment history, like rent, which isn't reported to the big three [credit bureaus] because it's not considered a loan or an extension of credit," said Golding.
But with WilliamPaid, renters can earn credit history. "We help build [renters] FICO expansion score by reporting their payment history. ... And lenders like FHA, Fannie Mae, and various other banks and financial institutions can access this supplemental data to help view credit-worthiness of their applicant," said Golding.
In these financially challenging times, that can be very helpful, especially since about 71 percent of renters paying monthly rent are under the age of 30. And, as Golding points out, rent is typically a person's single largest recurring payment. WilliamPaid system is also helping tenants deliver messages to their roommates via a song that renters can post to their roommates Twitter and Facebook feeds. Some of the titles say it all: The rent is due. Your girlfriend is a mooch. Your boyfriend is a freeloader. Clean it up, and I love you, man.
The company tapped into the well-known talents of songwriter Geoff Smith, an independent artist, to develop songs that carry a vital message to roommates.
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