Real Estate

JPMorgan Chase unveils payments platform for landlords and tenants

A JPMorgan emblem displayed on a smartphone.

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JPMorgan Chase is betting that landlords and tenants are lastly able to ditch paper checks and embrace digital payments.

The financial institution is piloting a platform it created for property homeowners and managers that automates the invoicing and receipt of on-line lease payments, in response to Sam Yen, chief innovation officer of JPMorgan’s commercial banking division.

While digital payments have steadily taken over extra of the world’s transactions, boosted lately by the Covid pandemic, there may be one nook of commerce the place paper nonetheless reigns supreme: the month-to-month lease verify. That’s as a result of the market is extremely fragmented, with many of the nation’s 12 million property homeowners working smaller portfolios of fewer than 100 models.

As a consequence, about 78% are nonetheless paid utilizing old-school checks and money orders, in response to JPMorgan. More than 100 million Americans pay a mixed $500 billion yearly in lease, the financial institution mentioned.

“The vast majority of rent payments are still done through checks,” Yen mentioned in a current interview. “If you talk to residents to this day, they often say ‘The only reason I have a checkbook still is to pay my rent.’ So there are lots of opportunities to provide efficiencies there.”

Excel, QuickBooks

JPMorgan has spent the previous few years engaged on the software, known as Story, which is supposed to in the end grow to be an all-in-one property administration resolution.

The financial institution aimed toward first enhancing the lease assortment course of as a result of it is the “most time-intensive process that exists today for a real estate owner-operator,” in response to Kurt Stuart, who runs JPMorgan’s business time period lending for the Northeast area.

Besides having to manually accumulate paper checks and depositing them, landlords usually lean on decades-old software together with Microsoft‘s Excel and Intuit‘s QuickBooks to run their companies, mentioned Yen. Newer choices extra tailor-made to the actual property trade have appeared lately with names like Buildium and TurboTenant. None are dominant but, in response to the manager.

Story will “give [property owners and managers] much more visibility across their entire portfolio to see exactly what’s been paid and what hasn’t been paid,” Yen mentioned.

JPMorgan hopes to achieve traction by providing customers priceless insights by knowledge and analytics, together with the way to set lease ranges, the place to make future investments and even help in screening tenants, in response to Yen.

While the financial institution says it’s the nation’s prime lender to multifamily property homeowners with $95.2 billion in loans out at midyear, it’s aiming past its 33,000 shoppers within the sector.

Landlords and renters do not must be JPMorgan clients to enroll for the platform when it’s launched extra broadly subsequent year, mentioned Yen. The financial institution hasn’t but finalized its price structure for the product, he mentioned.

Residents can automate month-to-month lease payments, obtain notifications, and view their fee historical past and lease settlement by an internet dashboard. That supplies ease of thoughts versus mailing out a paper verify, Yen mentioned.

Digital push

It’s a part of JPMorgan’s bigger drive to create digital experiences, fend off fintech rivals and solidify shopper relationships. Under CEO Jamie Dimon, the bank has committed to spending more than $12 billion a year on technology, a staggering figure that has raised eyebrows among bank analysts who called for greater clarity into investments this year.

JPMorgan hopes to maneuver past making loans to property homeowners to finally seize “a significant portion” of the $500 billion in annual lease payments with its software, business banking CEO Doug Petno informed analysts in May.

“We’ve been investing to build comprehensive payments and rent solutions capabilities specifically for our multifamily clients,” Petno mentioned. “In doing this, we hope to create an entirely new and substantial revenue opportunity for our business.”

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