In an ever-changing world of digital innovation people have come to expect streamlined processes and procedures when conducting their daily routines, both business and personal. Writing cheques as a form of payment is one of those old-fashioned traditional methods that have noticeably fallen out of favour as consumers and rental agencies look for quicker, more convenient ways to make payment transfers.
Vancouver-based RentMoola, the brainchild of brothers Philipp and Patrick Postrehovsky, has developed an excellent improvement on the cheque-writing method and encourages Canadians to pay their rent or condominium fees with their credit card, debit card or other similar means.
For the vast majority of people rent is the single largest reoccurring monthly payment in their lives. RentMoola’s global payment network allows tenants and owners to transact rental payments by such methods as debit, credit, ACH and more. All major credit cards including Visa, Mastercard and American Express are accepted as well as RentMoola’s proprietary RM eCheck and RM Cash.
RentMoola was inspired by the everyday experiences of its co-founders, when they found that paying their rent became a cumbersome experience, due to the fact that landlords generally demand only cheques or debit payments, with no credit card options. That’s when RentMoola’s core value was born – solving the age-old problem of paying and collecting rent for tenants and landlords. This simple idea grew the company into one of North America’s leading fintech companies, and RentMoola is changing the landscape of paying rent all around the world.
The RentMoola innovative payment solution was created in 2012 and the business platform was launched in April, 2013. In just a short period of time RentMoola has established itself as one of North America’s leading fintech companies and is revolutionizing the landscape of paying rent in Canada and throughout the world. With operations across the country, the company is focusing its attention on enlisting large property-management firms.
Landlords view RentMoola’s system as an excellent option because it allows them to obtain their money up front, with little risk of default and no fees to be concerned about. For the tenant, there is a flat fee of $1.99 with the use of a debit card and there is a 2.75% surcharge if the transaction is executed on a credit card. The benefit to the renter is the chance to collect points and loyalty rewards on the card, as well as perks added by RentMoola. It’s a method that also provides flexibility and can serve as a form of bridge financing.
The Canadian Business Journal recently managed to catch up with Philipp Postrehovsky, co-founder and COO of RentMoola about the company’s tremendous success. It’s been especially busy for Philipp and his wife these past few months. In addition to their three-year-old daughter they recently welcomed the arrival of their newborn son.
“Both my brother and I had the same issues with having to remember post-dated cheques,” he begins. “Patrick was living in China and I was renting in Vancouver. We’d always thought about working together and decided this would be the perfect opportunity.”
The Postrehovsky brothers both experienced those pain points, which are still felt today by millions of people across North America and around the world.
“We thought there had to be a better way to pay your rent from anywhere, any time. At the time credit-card acceptance didn’t really exist, at least not here in Canada. We pioneered the process of allowing people to pay rent with credit cards and multiple other payment methods,” says Postrehovsky.
If a property management company has been collecting rent by cheque it can now be done so with preauthorized debit (PAD). It’s a method used in a wide variety of industries throughout Canada.
There had been virtually no innovation or evolution and so RentMoola saw a prime opportunity to develop a paperless system for the property management industry.
“Now, instead of having to fill-out a preauthorized debit form, which still requires a VOID cheque, we’ve completely eliminated that with an online solution within a few seconds on your smartphone. We launched this a few months ago and it has been very popular with many of our property management clients,” says Postrehovsky.
The main reason for property managers not offering credit-card options was the high service fees for credit card option which would eat into their already tight profit margins. RentMoola has flipped the servicing model around, and the service fees are paid by the tenants, not the property managers, while the tenants can take advantages of the rewards provided by their credit card and company’s own MoolaPerks™ reward program.
This past May, RentMoola launched its next generation pre-authorized debit payments (PAD) solution designed specifically for the property management industry. In partnership with BMO Financial Group, RM PAD+ digitizes the pre-authorized debit enrolment for monthly rent payments. The paperless solution eliminates the need for forms and void cheques.
RM PAD+ combines RentMoola’s award-winning payments platform with BMO’s industry leading PAD solution to deliver a secure payment method with a significantly enhanced user experience for both the tenant and the property management company. Tenants can also access RentMoola’s MoolaPerks™ rewards program.
“We are excited to bring RM PAD+ to the Canadian multi-family rental and apartment market. There has been no innovation in pre-authorized payments for decades until now. As a fintech leader, RentMoola is delivering on its mission of providing a rewarding and paperless payments solution while helping realize significant time and expense reductions to owners and operators,” explained Patrick Postrehovsky, RentMoola Co-Founder & CEO, in a media release. “RM PAD+ allows the tenant to also easily make one-time payments, which until now has been another pain point.”
RentMoola has a complex tech system running in the background that has been rebuilt three times to this point as technology continues to advance and the requirement for scaling. It’s an online payments engine designed for the medium to enterprise-level property management companies in North America and there is also the tenant side that we excel at as well.
Neither of the Postrehovsky brothers are software developers but they’ve proven to be astute entrepreneurs. Philipp comes from a marketing, operations and product background while Patrick comes from a sales and finance background, so the skillsets complement one another quite well. Prior to RentMoola, Postrehovsky worked at other fintech companies on the product and marketing side and he was able to transfer that experience and those skills with him on this venture.
“We had all the skills except tech so we found individuals that could help us in that space,” says Postrehovsky.
Due to the limited innovation in this industry, Postrehovsky believes that financial institutions are recognizing the benefits of partnering with fintechs such as RentMoola to ensure a more successful, streamlined future that makes life easier for everyone involved in the property management space.
“BMO has been very supportive of RentMoola and really understands the opportunity,” he says. You have our layer of technology, which is catered to the user, and you have that core banking infrastructure that works, but was lacking the innovation aimed at customers. We’ve taken the two layers and combined them to make an excellent customer experience. It’s a win-win on all fronts and we’re very happy to be working with them.”
In dealing with both rental management companies and tenants, RentMoola is primarily targeted towards the residential sector. Some companies that RentMoola deals with also owns commercial properties, but Postrehovsky estimates 90% of their business is residential with anywhere between one and 3,000 units but RentMoola has some clients that go all the way up to almost 40,000 units. About 75% of the current business is in Canada and 25% in the U.S., although the company’s single largest client is based in California.
“We are a made in Vancouver story and have had great support from the community. Due to its size, the Greater Toronto Area and the Lower Mainland of Greater Vancouver have been especially good for us,” says Postrehovsky.
The RentMoola system has proven to be an excellent resource tool for both rental management firms and renters alike.
“One of the clear benefits is convenience. Over and over again in testimonials from our users they really appreciate the convenience and they can pay their rent from their phone whenever they want. That is very important to them,” explains Postrehovsky.
By using a rewards credit card the user is able to leverage that existing rewards program but Postrehovsky wanted to ensure that if payment was being made by other methods such as the RM eCheck solution that those tenants would also be able to enjoy some type of reward.
“In the U.S., our cash solution has been very popular through a product called RM Cash, which allows you to pay your rent with cash at any 7-11 or CVS Pharmacy,” reveals Postrehovsky.
Once again, the fundamental benefit is convenience. A tenant can pay rant at 1am, if desired. It’s a service that has worked out tremendously well for both the tenants and property managers.
Postrehovsky is confident there is still a tremendous growth opportunity to pursue in both Canada and the United States. Just two years ago more than $600 billion paid in rent in America and it’s estimated that more than 50% of that total is still not being paid online. The Canadian online payments industry is generally acknowledged as being more mature that in the U.S., but nonetheless there still remains ample opportunity to capture a sizable portion of the population that still pays by way of the old, traditional methods.
“We don’t have an app because we are mobile friendly on our website at www.rentmoola.com. We’ve chosen that route because we see more and more than many people are just using a handful of apps and they get lost amongst each other,” he says.
Payment can be made from a desktop, laptop, tablet or smartphone. RentMoola’s mobile usage continues to expand every month. The site is extremely user friendly and for that reason an app is not required.
“For our older demographic we do have individuals that are available on the phone and we can help walk them through the process of paying securely. We really pride ourselves on leading the industry with excellent customer service,” says Postrehovsky.
“We’re planning on bringing the RM Cash solution to Canada whereby you’ll be able to make a payment at any Canada Post location. We will also be looking at adding other payment methods that focus on certain demographics from Asia,” adds Postrehovsky.
As the definitive market leader in Canada, Postrehovsky also believes there is great potential in the U.S. as well as overseas, especially in expatriate regions, which was one of the incentives for launching the business five years ago. With only a handful of legitimate competitors and over $600 billion in rent payments annually, the U.S. market is primed for a convenient service such as this.
The fintech industry moves at the speed of light, and mergers and acquisitions are common practice within the industry, so the Postrehovsky brothers don’t rule out having their company being bought out by a large, multinational conglomerate.
“By 2020, I could see us being acquired,” Postrehovsky candidly states. “There are large companies like PayPal that have been focusing on acquiring companies that have become successful on niches. We are focused on a niche but it happens to be a very large payment hook niche – that being rent.”
PayPal is expected to spend $3 billion on acquisitions over the next few years with a lot of activity taking place within the global payments space. An acquisition of RentMoola would serve to enhance the support of long-term growth and continue to help scale the business on an international scale.