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JPMorgan wants you to rip up your rent checks

Bank piloting automated payments platform for small landlords

Sam Yen of JPMorgan Chase (LinkedIn, Illustration by The Real Deal with Getty)
Sam Yen of JPMorgan Chase (LinkedIn, Illustration by The Real Deal with Getty)

Rent checks will become a thing of the past one day. JPMorgan Chase is banking on it.

The banking giant is rolling out a property management platform for multifamily owners that automates invoicing and receiving online rent payments, CNBC reported.

Some larger landlords have embraced digital invoicing platforms, most of which allow tenants to opt into automatic payments, but the vast majority of American renters still pay with pen and paper. Roughly 78 percent of property owners are paid with checks or money orders, according to JPMorgan.

“If you talk to residents to this day, they often say ‘The only reason I have a checkbook still is to pay my rent,’” said Sam Yen, chief innovation officer in JPMorgan Chase’s commercial banking division. “So there are lots of opportunities to provide efficiencies there.”

While consumers have embraced digital payments for everything from retail purchases to utility bills, the rental market’s highly fragmented nature is a big reason for its sustained use of checks. The U.S. has about 12 million landlords, most of whom are responsible for small portfolios with fewer than 100 units. For smaller owners, implementing an automated system often isn’t worth the cost or effort.

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But it’s also inefficient to collect rent checks, deposit them one by one and track it all with old-fashioned spreadsheets. JPMorgan isn’t the first to offer a solution: It’s a problem several startups are tackling as they aim to simplify and digitize the rental sector.

JPMorgan’s platform, which comes with other tools like tenant screening or market metrics to help landlords set rent levels, will be available beyond its current pilot phase next year. Landlords using the program won’t have to be JPMorgan customers.

The bank claims to be the largest lender for multifamily property owners in the country, reporting $95.2 billion in such loans as of June 30, up from $89 billion at the end of last year. It says it has 33,000 clients in the sector.

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— Holden Walter-Warner

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Commercial Real EstateJP MorganProptechRental MarketTechnology