B2Bpay launches rent card payments service for tenants

B2Bpay has launched Pay and Earn, a payments platform that lets tenants pay rent by credit card even if their property manager does not accept card payments. The launch follows Reserve Bank of Australia reforms that have changed the economics of card acceptance for billers.

Thousands of renters who had been paying by card face disruption after changes took effect preventing businesses from passing card surcharges on to customers. As a result, some property managers and billing platforms may stop accepting card payments rather than absorb the cost.

One of the biggest shifts has come from Macquarie Bank's DEFT platform, which processes about 1.2 million rent payments each month and accounts for roughly 40% of the market. The platform has confirmed it will no longer accept credit or debit card payments from tenants.

That leaves renters who used card payments to collect frequent flyer points and other rewards choosing between returning to direct bank transfers or finding another way to use their cards.

Pay and Earn is aimed at that group. The service allows tenants to pay rent by credit card, including American Express, while the property manager receives payment without needing to accept cards directly.

Under the model, the customer pays a service fee rather than the biller taking on the card cost. Users can also collect Pay and Earn points in addition to any points available through their credit card, creating the prospect of rewards from both the card and the platform on the same transaction.

B2Bpay already operates in business payments, enabling companies to pay bills by credit card when the recipient does not accept cards. The new platform extends that approach to consumers, starting with rent before expanding into other household payments.

Those categories are set to include electricity, gas, phone and internet bills, insurance, council rates, school and childcare fees, tax and other government payments. Users will be able to upload regular bills, automate payments and choose how they pay them, with different points tiers available.

Jane Grant, Chief of B2Bpay, said the shift in rent payments could come as a surprise to many consumers.

"Rent is the biggest regular expense for many Australians, so paying by credit card has allowed thousands of people to collect reward points," Grant said.

"For people who have been paying their rent by credit card, the changes coming into effect from today could come as a shock. They may suddenly find that their property manager no longer accepts credit cards, so if earning points is important to them, they will need to find another way to make that payment. Pay and Earn allows them to continue doing that and earn points as they do so," she said.

Cost question

B2Bpay has positioned the service as an option for renters who value rewards or the flexibility of paying by card, rather than as a universal replacement for direct debit or bank transfer. Grant said the platform was designed so property managers do not bear the expense of card acceptance.

"There is no magic bullet here. The simple fact is that accepting credit cards costs money," Grant said.

"The difference is that instead of asking the property manager to absorb that cost, Pay and Earn gives the consumer the option of paying a small fee if they value being able to use their card," she said.

Grant said the product would not suit every renter, particularly where a no-fee bank payment option is available.

"Nobody is saying this is the right option for every consumer. If you can pay your rent directly from your bank account with no fee, that's a perfectly good option. But if you value the flexibility of your credit card, the interest-free period and the rewards you can earn, consumers should have the choice to make that trade-off. And with earn rates on many credit cards being cut, Pay and Earn will ensure consumers can continue to earn points towards flights, holidays or other rewards," she said.

On the choice of rent as the initial category, Grant said: "Rent is a perfect place to start because it is such a large, regular expense. Ultimately people will be able to upload all their regular bills to the platform, automate the payments and choose how they want to pay them, with tiers allowing people to earn even more points."