Online property management platforms are charging renters new fees or encouraging them to take out paid “memberships” to cover processing costs for card payments. This follows the Reserve Bank’s ban on surcharges, which came into effect from 1 October.
OurProperty, a rent-tech platform, has ceased accepting direct card payments across Australia. Its founder, Russell Burstow, stated that payments are now routed through Pay4it, a platform he also founded, which charges a 1.95% “service fee.” Burstow indicated that OurProperty and Pay4it are not profiting from these new arrangements and would incur losses unless Visa and Mastercard reduce their processing fees.
In Victoria, OurProperty plans to introduce a new “membership” system on Tuesday. Tenants who opt for a “platinum” membership, costing 1.95% of their monthly rent, will have the Pay4it “service fees” waived. This comes as Victoria is set to ban rental providers and real estate agents from charging fees for rent payments or tenancy applications later this month, having already prohibited rent-tech companies from doing so in March.
Another platform, Ailo, has also replaced card surcharges with paid memberships. However, the largest platform, DEFT, owned by Macquarie Bank, has blocked debit and credit cards entirely, noting that cards accounted for only 2% of the 1.2 million monthly rent payments it processed.
Dr Fengfei Li, a senior lecturer in finance at Deakin University, suggested that renaming a charge to a “membership” fee might not be permissible under the ban, even if bundled with other services. Tenants are encouraged to question new charges and, if the service is optional, decline it in favour of available fee-free payment methods.