Removing the Risks of Paper Payments, Money Orders at Affordable Properties

Accepting paper payments is common in the multifamily industry, and particularly in the affordable housing market. Unlike at conventional properties, affordable property residents are less likely to pay rent from a bank account or credit card, instead relying on a form of paper currency such as cash or money orders for covering rent and deposits. In the case of money orders, a resident will typically exchange cash for money orders at local retailers, check cashing venues or grocery stores. A resident may need to get two or three money orders to equal their rent. They then pay in person at the leasing office or leave the money orders in a drop box. Unfortunately, receiving paper payments can pose issues for property managers. Time spent on manual payment processing, input errors and occasional missing payments can slow down – or prevent – posting to resident ledgers and collection of funds. There are also the risks of fraud and theft. In some cases, a paper payment may simply not get posted because of clerical error. In extreme cases, the payment is stolen, either internally or externally. Either way, if a resident receives a past-due notice for a payment made, trust in property management is damaged. Money order fraud a concern at rental properties RealPage VP of Payments Chris Walton says more property managers are having issues with handling money orders. Most complain about a growing number of money order fraud cases, some of them originating from staff. One property management company threw up its hands and asked how to eliminate paper payments in the office after losing a large sum due to fraud in 2020. “Money order fraud seems to be increasing, and that fraud could be happening among a property’s staff,” Walton says. “It has been really common for clients to say they’ve got to get money orders out of their office, and some have stopped accepting them altogether.” When a resident doesn’t fill in the p...