In a presentation he gave at the 2014 CAMfire Conference in Las Vegas, NV, Ben Truehart explores the past of how homeowners pay their dues, and makes a well-researched and data backed case for online payment processing for community associations.
2. Speaker Name
• Ben Truehart is the Senior Vice President at PayLease, one of
the nation’s leading e-payment providers catering to the
property management industry. He has over 10 years of
experience in the payments and property management
industries.
• Ben is a frequent speaker and guest panelist at events catering
to property management professionals and has presented at
dozens of conferences over the past few years. He is also a
regular speaker for PayLease’s monthly webinar series that
addresses hot topics in the property management industry.
• Ben holds a degree in Advertising Management and Marketing
from Drake University along with a MBA from the University of
Iowa. Prior to joining PayLease, Ben worked for CDS Global, a
subsidiary of the Hearst Corp, where he was a Product &
Marketing Manager.
Payments – Then, Now, and in the Future
Speaker
Ben Truehart
3. Agenda
Section
One
•Overview
•More
• Still More
Section
Two
• Then & Now
•Overview
Section
Three
•Overview
Section
Four
•Overview
Payments – Then, Now, and in the Future
• What it Means to You
• Preparing for the Future
• Conclusion
4. Then & Now
Payments – Then, Now, and in the Future
5. Oh how far we’ve come…
• The beginning: Barter
• 9000 BC: Cattle
• 1200 BC: Cowrie Shells
• 500 BC: Metal Coins
• 806 AD: Chinese Paper Money
• 1661 AD: Bank Notes
• 1785 AD: The US Dollar
• 1950 AD: Diners Club Card
• 1958 AD: American Express and Bank Americard (VISA)
• 1997 AD: First payment made with a cell phone
• 2009 AD: Bitcoin introduced
Payments – Then, Now, and in the Future
6. How do we pay for stuff today?
Payment Types
Currency Account-based Credit
Currency Credit
Payments – Then, Now, and in the Future
7. The Internet: A Game-Changer
Though payment methods remain the same,
the internet has changed the payment types we select
Payments – Then, Now, and in the Future
8. Smart Phones
• The International Data Corporation predicts that by
2015 the Internet will be accessed more often through
mobile devices than through PCs
• The number of smartphone
users is currently estimated
at 163.9 Million and is
projected to be 209.7
Million by 2017
• Statista 2014
52%
Payments – Then, Now, and in the Future
41%
3%
2%
2%
Android
Apple
Blackberry
Windows
Other
Source: comScore 2014
9. Checks are Dying
16
9
18
16
14
12
10
8
6
4
2
0
2013 2014 2015 2016 2017 2018
Billions of Dollars
Forecast: Check Transactions - US
Source: Federal Reserve, Business Intelligence012
CAGR= -10.8%
Payments – Then, Now, and in the Future
10. Cash is Fading
$1,340
$1,440
$1,420
$1,400
$1,380
$1,360
$1,340
$1,320
$1,300
2013 2014 2015 2016 2017 2018
Billions of Dollars
Forecast: US Cash Transaction Volume
Source: Federal Reserve, Business Intelligence012
Payments – Then, Now, and in the Future
11. For the First Time, Consumers are Using
Debit and Credit More Often than Cash
40%
US Number and Value of Consumer Payments
By instrument type share of total
42%
7% 7%
4%
14%
34%
19%
27%
5%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Cash Credit and Debit Check Online
Transfer/Bill Pay
Other
Number of Payments
Value of Payments
Source: Federal Reserve, Business Intelligence, April 2014
Payments – Then, Now, and in the Future
Percentage of Payments
12. The Winners and Losers
Payments – Then, Now, and in the Future
13. It’s all about Channels
Payments – Then, Now, and in the Future
Retail store
Mail
Phone
Online
Peer-to-Peer
14. Video Killed the Radio Star
Payments – Then, Now, and in the Future
61%
56%
51%
47%
38%
34%
31% 30%
26%
23%
13%
16%
22%
24%
35%
39%
42%
44% 45%
50%
70%
60%
50%
40%
30%
20%
10%
0%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Percent of Bill Payments/Month
Check vs. Online Payments
Check Payment
Online Payment
2011 Consumer Trends Survey,
Fiserv Inc., 2011
15. Channel: Consumer’s Choice
Online Bill Payment Channels
Biller Direct Online Banking Alternative
Payments – Then, Now, and in the Future
16. What Impacts our Channel Selection?
Biller Direct
• Control & Timing
• More Payment Types
Bank Pay
• Consolidation
• Financial Management
Checks Online Banking Biller Direct
Payments – Then, Now, and in the Future
17. Trends – Biller Direct vs. Bank Bill Pay
Payments – Then, Now, and in the Future
15.9
18.8
27.2
31.4
41.0
44.8 45.7 46.6
48.0
53.4
11.7
14.4
15.3
17.9
26.3
28.2
30.0
32.6
36.4
40.5
60.0
50.0
40.0
30.0
20.0
10.0
0.0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Millions of Households Adopting Service
Biller Direct vs Online Banking
Biller Direct
Online Billing
2011 Consumer Trends Survey,
Fiserv Inc., 2011
18. Bill Payments in 2013
• 74% of households pay bills via biller direct or through
online banking
• % of households
paying bills with checks
drops another 8%
• Limited overlap
between online
bankers and biller-direct
loyalists
74%
62%
53%
48%
45%
36%
24%
22%
17%
16%
16%
11%
Payments – Then, Now, and in the Future
Online (biller or financial institution)
Online at biller site
Check
Auto-Debit (ACH)
With a debit or credit card
Online at a financial institution
website
Both biller and financial institution
site
In person retailer location
By calling biller
Using a mobile phone
In person at a check cashing,
convenience or grocery store
Online through a non-banking
website
Sixth Annual Billing Household Survey,
Fiserv Inc., 2013
19. What it Means to You
Payments – Then, Now, and in the Future
20. Annual Survey – Benchmarking
• Purpose: To serve as the property management industry’s first
benchmark study regarding biller direct online payment
adoption
• Methodology:
• 2014: Year 3
• Survey and results tabulation completed by third party research firm
(New Heights Research)
• Master list created;
Sample of 585 management
companies were surveyed
• Sample was segmented by
portfolio type (HOA, SF and MF)
and unit count (100-500, 501-1500, etc.)
Payments – Then, Now, and in the Future
21. 72%
77%
83%
67%
69%
74%
67%
75%
79%
80%
84%
91%
95%
90%
85%
80%
75%
70%
65%
60%
2012 2013 2014
Percentage accepting online payments
HOA firms by size accepting online payments
5000+ units managed
Payments – Then, Now, and in the Future
Source: New Heights Research, 2014 Market Survey 012
Total HOA
1501-5000 units managed
501-1500 units managed
HOA E-Payment Adoption
22. Lot’s of Movement and Change…
Change in Online Payments Status Among Core HOA
Payments – Then, Now, and in the Future
5%
4%
18%
16%
14%
12%
10%
8%
6%
4%
2%
2013-2014
Source: New Heights Research, 2014 Market Survey 012
8%
7%
5% 5%
10%
4%
16%
0
4%
1%
0%
501-1500 Units 1501-5000 Units 5000+ Units
New penetration
Incremental
Full Switch
Reduced #
Total – 21%
Total – 17%
Total – 30%
23. Offline Payment Options Accepted
95%
Offline Payment Types Accepted
48%
94%
12%
33%
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Money Order /
Cashiers Check
ACH / Bank Auto
Deduct
Personal Check CC Over the Phone Cash
Payments – Then, Now, and in the Future
Source: New Heights Research, 2014 Market Survey 012
24. Online Payment Options Accepted
61%
Payment Types Accepted Online
67%
72%
37%
88%
85%
92%
89%
7%
13%
8%
0%
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
All PMCs 500-1500 Units 1501-5000 Units 5000+ Units
Credit Card
ACH
PayPal
Payments – Then, Now, and in the Future
Source: New Heights Research, 2014 Market Survey 012
25. Percent of Payments Made Online
34%
32%
41%
24%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
All PMCs 500-1500 Units 1501-5000
Units
5000+ Units
Payment Types Accepted Online
61%
67%
72%
37%
88% 85%
92% 89%
7%
13%
8%
0%
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
All PMCs 500-1500 Units 1501-5000
Units
5000+ Units
Credit Card
ACH
PayPal
One Key Driver of E-Pay Utilization
Payments – Then, Now, and in the Future
Source: New Heights Research, 2014 Market Survey 012
26. Resident Adoption by Portfolio Type
Utilization by Segment – First 12 Months
16.5%
11.3%
4.6%
Payments – Then, Now, and in the Future
18.0%
16.0%
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
2009 2010 2011 2012 2013 2014
Single Family
Multi-Family
HOA
Source: PayLease Admin012
28. The Future
MAKE IT EASY
Payments – Then, Now, and in the Future
29. 4 Recommendations
1. Optimize your Websites and Portals
• Mobile Friendly (optimized or responsive)
• App w/ common tools (e.g. e-pay, maintenance requests, etc.)
2. Statement Enhancements
• E-Statements
• Mobile billing
• QR codes / SSO (single sign-on)
3. Online Banking Integration
• Work with your banking partner to connect with online banking platforms
(MasterCard RPPS, CheckFree, etc.)
4. Set a Goal for Coupon Book Independence!
Payments – Then, Now, and in the Future
30. This presentation was given at the 2014 CAMfire
Conference by TOPS Software. CAMfire is an
educational gathering of Community Association
Management Professionals and TOPS Software
users.
To learn more about CAMfire, visit
www.camfireconference.com.
For mope community association management
information, subscribe to
http://camblog.topssoft.com
Defining Your Management Company
Editor's Notes
The International Data Corporation predicts that by 2015 the Internet will be accessed more often through mobile devices than through PCs
Mobile Payments, defined as transactions for goods or services made by scanning, tapping, swiping, or texting with a mobile phone at the point of sale, are expected to reach $58 Billion in the US by 2017 according to eMarketer. Gartner estimates these payments will reach $721 Billion worldwide in the same time frame
The number of checks paid declined by 9.2% from 2009 to 2012. Debit card payments showed the largest growth among all types, growing 7.7 % in the same time period.
2013 Federal Reserve Payments Study
Radio communication is established by bringing a chip-enabled smartphone within close proximity to a contactless reader
New feature announced with the iPhone 6 and Apple Watch
NFC in-store transactions expected to reach $189 Billion in the US by 2018 according to Business Insider
Familiar with and ready to engage in mobile payments
MasterCard Mobile Payment Readiness Index Score of 42
Second behind only Thailand
Global average score was 33.2
Completed EMV migration around 2012
High levels of NFC penetration at the POS
250,000 out of 800,000 POS terminals are equipped with contactless card readers
Network infrastructure is ready
PayFirma, Test2Pay, 1-Tap for Android, PayPass, payWave
Google Android and Apple iOS have a 44% and 37% market share respectively, followed by BlackBerry with 15%.