Ease of payments opens doors to digital rental settlements
Top executives at real estate startups as well as digital payments firms said that an increasing number of consumers are opting for online methods of paying monthly rents.
Top executives at real estate startups such as Nestaway and NoBroker, as well as digital payments firms told ET that an increasing number of consumers are opting for online methods of paying monthly rents. “For us, the major mode of payment is credit card, as almost 85% of payments are being done through it,” said Akhil Gupta, cofounder, NoBroker. Around 22% of the payments are through the UPI platform as debit cards have almost been replaced by this mode, Gupta said.
The Bengaluru-based startup launched NoBroker Pay in October last year. More than 17,600 consumers have used NoBroker Pay and Rs 50 crore worth rentals have been paid through the platform, he said, a growth of 40% per month.
Nestaway, another Bengaluru-based home rental startup, has also seen a similar trend. The company said around 55% of the transactions has moved to UPI. “We had launched UPI as a payment mode in May-June last year, and within such a short span of time, it has become the preferred mode of payment,” said Nithin Chandra, head of product management at Nestaway.
One major reason why consumers prefer UPI over other payment modes could be due to its lower transaction fee, said Chandra. With transaction failure rates going down on UPI, many consumers prefer this payment method. “Rent payment ticket sizes are much larger, hence if there is a percentage cost that needs to be paid by the consumer it becomes very high,” he said. “On UPI, many banks offer a flat rate while others have no charges, which is why consumers prefer it over the methods,” Chandra said.
Major payment companies such as PhonePe and Paytm have reported rent payments picking up on their platforms. For Paytm, the average rent payments every month used to be around Rs 10,000, which has jumped significantly after it launched UPI-based payments. Phone-Pe said it was trying to develop multiple use cases for consumers. These include credit card bill payment, rental payments, salaries, recharges, among others.