B2Bpay launches platform to keep rent on credit cards

B2Bpay has launched Pay and Earn, a payments platform that lets tenants pay rent by credit card. The launch comes as card surcharge reforms prompt some property managers to stop accepting card payments.

Macquarie Bank has confirmed its DEFT platform will no longer accept credit or debit card payments, affecting a channel that processes about 1.2 million rent payments a month and accounts for roughly 40% of the market.

The change forces a decision on renters who have used credit cards for recurring rent payments, particularly those collecting frequent flyer points and other rewards. Under the new platform, tenants can pay rent by credit card, including American Express, even if their property manager does not accept cards.

Instead of the property manager bearing the cost of card acceptance, the customer pays a service fee. Users can also collect points through the Pay and Earn loyalty program on top of any rewards attached to their credit card.

Jane Grant, Chief of B2Bpay, said the changes could disrupt established payment habits for many renters.

“Rent is the biggest regular expense for many Australians, so paying by credit card has meant thousands of people have been collecting 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 while earning points,” she said.

Payment shift

Reserve Bank reforms prevent businesses from passing card surcharge costs on to customers. As a result, some billers that offered card payments may decide to withdraw that option rather than absorb the expense.

Pay and Earn is designed to preserve card use for consumers without requiring agents or property managers to change how they receive funds. B2Bpay already operates a service that lets businesses pay bills by credit card when the recipient does not accept cards.

Grant said the economics of card payments remain central to the issue.

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

The platform starts with rent payments but is also intended for other recurring household costs, including electricity, gas, phone and internet bills, insurance, council rates, school and childcare fees, tax and other government payments.

Broader bills

Users will be able to upload regular bills, automate payments and choose how they want to pay them. B2Bpay also plans to offer different loyalty tiers that change the number of points customers can collect through the platform.

That means some users may receive rewards from two sources on the same transaction: first from the credit card issuer and second from the platform itself. Whether that trade-off is worthwhile will depend on the service fee and the value individual customers place on flexibility, interest-free periods and loyalty schemes.

Grant said the service is not intended to replace direct account payments for everyone.

“Nobody is saying this is the right option for every consumer,” she said.

“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,” Grant said.