(Cincy Project)
Very few transactions require the handling of large sums of cash these days. With debit and credit payment options near-ubiquitous in retail and most bills payable via electronic fund transfers, Canadians are increasingly a cashless people. But there’s one sector that still runs on plastic currency notes instead of plastic cards: renting.
Residential rent payments total add up to over $50 billion a year in Canada alone, according to Patrick Postrehovsky, with much of that sum still paid out via cheque and cash. Postrehovsky is the co-founder and CEO of RentMoola, a service launched in 2013 to digitize these conventional transactions and allow property managers to accept virtual payments. Vancouver-based RentMoola has signed up 100,000 apartments-worth of landlords in Canada and the U.S. since its inception.
Earlier this month the company relaunched its platform as RM 2.0. “The last 18 months we’ve scaled in a very controlled fashion,” explains Postrehovsky. “RM 2.0 really allows us to scale with a global focus, whereas before we were scaling on our 1.0 platform in a very controlled fashion, getting user and industry feedback.”
Postrehovsky discussed his company’s origins and how it plans to conquer the global rental industry.
How did you come up with this idea?
I’ve been an expat for the better part of the last decade. I was living in Shanghai and was running my own consulting firm. At the end of every month I would go to an ATM in Shanghai, and use my Canadian-issued ATM card to make four or five withdrawals at the end of every month to get the cash that I needed to pay the rent to my landlord. I was paying everything else on my American Express cards and getting the points, but my biggest monthly transaction I was still paying cash.
When I returned to Canada at the end of 2012 I was just really surprised by the fact that the property-management industry here in Canada—and generally in North America—was still accepting cash and cheques for rent payments. In a day and age where there’s so many awesome technologies when it comes to payments and fintech, why are consumers paying the biggest monthly expense that they make by cheque or cash? That’s how RentMoola was really born
In addition to payments, we also offer users access to our MoolaPerks program—deals and discounts to things that they would probably have to buy anyway. When you move into your apartment you probably have to set up your home phone, your cable, your internet services. So we built up a fairly impressive MoolaPerks brand roster. We offer discounts to Uber, ZipCar, Rogers in Ontario, Telus in Western Canada. We’ve got discounts to Handy—which is a cleaning service—1-800-GOT-JUNK, and a whole host of other brands and services that really are relatable to the young urban renter.
Is it just individual landlords signing up to use the service?
Our focus is in the enterprise REIT space. For example one of our clients which is launching shortly is one of Canada’s largest multi-residential REITs that trades publicly on the Toronto Stock Exchange and has just over 35,000 apartments across Canada. But we also get a lot of inbound leads from the mom-and-pop who maybe own one apartment. We have the whole spectrum. But in terms of where our focus is, it’s definitely in those larger property management companies that manage in excess of 5,000 apartments.
You don’t charge property managers to use the service. What’s your revenue model?
There are credit card service fees of up to 2.75%, depending on card type. We also have affiliate revenue from our perk partners. We’re providing our perk partners like Rogers and Telus a very targeted and engaged user audience. Companies want to acquire the young, urban millennials, but it’s very difficult to reach them. We’re able to speak to those people on our platform and have targeted offers.
Services based around perks often seem to have a lot of initial success, and then people get tired of the idea—it turns into a gimmick. How do you prevent that from happening to RentMoola?
The core focus of our business is rental payments. And we are very specific in terms of what brands we partner with. This is not a Groupon opportunity where we have perks to everything. We’re really focused on what a renter needs and wants, and what makes their experience better. For example, we offer discounts to renters insurance, home phone cable and internet services, move in-move out services.
We also ask for feedback—we really welcome our users to let us know, “What is it that you would like us to get you a discount on?” If we can offer a brand or a service that they need to get anyway at a discount, and then we can monetize that opportunity, that’s in my mind a great win-win. We really look to avoid that gimmicky stereotypical daily deal-site fatigue.
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