At Archstone-Smith, the check is increasingly not in the mail. Ever since the Denver-based apartment firm introduced online rent payment through its Web-based resident portal in early 2004, ever-growing numbers of Archstone-Smith renters are choosing to click and pay. In just October and November of last year, the company collected nearly $5 million in online rent—an astronomical increase from 2004's first quarter, when it received $105,000 in such payments.
Of course, those numbers also reflect increasing numbers of properties (the company is adding online payment as it rolls out new property management software) but also the willingness of renters to embrace this payment option. “This is the Internet age,” says Dan Amedro, Archstone-Smith's chief information officer. “People will start to expect these capabilities from the companies they do business with.”
So will the companies themselves. Archstone-Smith hasn't released figures on cost savings, but Edward Neumann of Javelin Strategy & Research says taking an online payment costs a firm three cents—roughly 10 percent of the cost of processing a paper check. “There's a lot of money to be saved in online payments,” says Neumann, the California-based firm's managing director of consulting services.
The approach also makes companies more money. “From a cash management perspective, they also know when the money is coming,” Neumann says, “so they can sweep the funds into a higher-yield account” and boost their interest rate and interest income on those rent receipts.