What Are Digital Certified Funds?
Landlords have long required new residents and those with a history of late payments to pay with money orders and cashier’s checks, collectively known as certified funds. Today, more than 10 percent of rent is paid using these cash-equivalent methods, which provides guaranteed payment without concern for chargebacks and returned checks due to insufficient funds.
As part of its mission to help the multifamily industry process 100 percent of rent payments digitally, Domuso is pioneering a new online equivalent to certified payments known as digital certified funds. By removing paper cashier’s checks and money orders from the leasing office, property managers can now streamline the receivables process while giving property management companies the security of knowing that they don’t have to worry about employee theft of those payments.
The Risk of Traditional Certified Funds
While money orders and cashier’s checks have a reputation for being “safe,” repeated incidents of fraud over the last decade have proven otherwise. Not only can money orders and cashier’s checks be stolen and tampered with, but they also require a manager to manually scan or deposit the item into the property’s bank account, which wastes time. As with any manual process, there is also the potential for human error, further increasing processing time and delaying cash flow to the property.
From a consumer convenience perspective, money orders aren’t available to purchase at all hours of the day, and because some issuers put a limit the amount of any single money order, resident’s are often forced to obtain multiple money orders to pay rent and possibly pay for additional fees.
As with any solution, one size rarely fits all and cash payments may not be the best option for all residents. Allowing more options is a more resident-friendly approach that also allows property managers to adhere to payment policies.
How Digital Certified Funds Work
Residents of multifamily properties powered by Domuso now have two ways to submit digital certified funds.
Online Certified funds can be transmitted during the checkout process from any mobile device. After securely verifying a resident’s identity Domuso does a real-time lookup into the resident’s bank balance and once funds are confirmed they are immediately transferred into the property’s account.
Residents who prefer paying with cash can do so through Domuso’s partnership with Money Gram. Equipped with just their property and account number, they can easily pay rent with cash at any MoneyGram location. Domuso verifies the resident identity and balance due and sends the amount of cash deposited directly to the property’s bank. Because Domuso integrates with leading property management systems, all transactions post seamlessly to resident ledgers and Domuso assumes all of the risks.
Why Update the Tech?
Today more than at any point in the last 50 years, people are renting in the United States. The renter population has outpaced that of homeowners in 42 of the 100 largest cities. The median age of renters is 25–36, who are tech-savvy and eager to embrace technological advancements. Yet 10 percent of rent is still paid with cash, money orders, and cashier’s checks, leaving plenty of room for improvement.
Considering the limitations of traditional money orders, digital certified funds are increasingly helping property management companies become more efficient and more profitable.
Digital certified payment methods can also help enforce a property’s payment policies. For example, Domuso’s automated payment logic presents the certified payment options residents are allowed to use based on their payment history. And because digital certified funds are fully integrated into Domuso’s multifamily rent payment platform, properties are able to streamline resident account ledger reconciliation.
The Bottom Line?
When certified funds are required to complete a transaction, digital certified options remove paper from the leasing office, reduce the risk of fraud and theft, create greater operational efficiency and give early adopters of the Domuso platform increased profit and a competitive edge.
As a compliment to Digital Certified Funds, Domuso also offers a cash payment option via MoneyGram. Through an integration directly with MoneyGram, residents who prefer to pay by cash may deposit funds at any MoneyGram kiosk location and have a certified payment transferred immediately into their property. Domuso assumes all the payment risk for cash transactions.