It was an Android avalanche.
Los Angeles-based rental app RadPad had to shut down a popular promotion last week allowing users to pay their rents via Android Pay after too many people signed up. The cancellation of the promotion, which was active for just two weeks, angered many of the app’s users, who hit out on social media.
RadPad, which offered the promotion to its users Aug. 9, had planned to pay the credit card fees for all users of Android Pay, allowing them to pay their rents by card for free through the end of the year. But, within just a couple of weeks, RadPad surpassed its budget for subsidizing the credit card fees — and racked up $5 million a month in exposure.
“Prior to the promotion, Android Pay users represented less than 5 percent of all rent payments on RadPad,” said Jonathan Eppers, the CEO of RentPad, in a statement on RentPad’s blog last week. “Six days after the promotion, Android Pay users represented 70 percent and the number continues to climb.”
Users who signed up to the promotion prior to Aug. 24 were informed that they could take advantage of it for just one month, instead of through the end of the year as promised. After August 31, 2016, the regular 2.99 percent fee for Android transactions would apply.
While RentPad’s promotion clearly misfired, the situation does shine some light on the increasing demand amongst millennials to pay rent via credit cards and mobile apps.
RentPad first launched its popular “Pay my rent” feature in 2014, enabling renters to pay their landlords with a credit or debit card. They pay RadPad by credit card and RadPad writes a check to the landlord.
“If you look at the economics of renting today, more renters are spending more of their income on rent, more renters live check to check, and more renters are willing to put it on a credit card because essentially it gives them a 3 percent loan and it gives them 30 days extra to pay their rent,” Eppers told the Los Angeles Business Journal last year. “It’s a very popular feature with young people.”