Neal Verma once had a problem on his hands.
On the first day of each month, Verma’s apartment residents brought hundreds of dollars of cash to Verma’s front offices to pay their rent. Some even brought in blank checks and money orders because they didn’t know how to write English and relied on employees to fill them out, Verma said.
With upwards of $100,000 in cash, blank checks and money orders coming in, thefts and robberies became an issue. Some employees succumbed to the temptation of blank checks, depositing them into their own bank accounts. Hold-ups and break-ins were common.
“It’s a rampant problem in the industry,” Verma said.
The president of Nova Asset Management rents apartments to predominantly Hispanic residents, many of whom deal primarily with cash and don’t use a bank. Houston is the second-most “underbanked” city nationally with 40.6 percent of the population who don’t have a bank account, according to the government.
As a result, Verma used to accept cash and money orders at each of his 16 apartment complexes — Class B and C properties located primarily on the west side of Houston. Founded in 1992, Nova Asset Management is a Houston-based multifamily company that owns and operates about 6,000 apartment units across the Bayou City.
Verma estimated he was losing about $40,000 each year. So he explained his dilemma to RealPage Inc., a Carrollton, Texas-based multifamily company that provides property management software and services to apartment owners and managers.
Realpage (Nasdaq: RP) had been thinking about this problem, too, and came up with a new payment method — called eMoney Order — that allowed users to pay their rent at any of the 24,000 supermarkets, drugstores and convenience stores in RealPage’s eMoney Order system across the country.
Instead of bringing cash or money orders to the front office, residents would pay their rent when they went grocery shopping. It’s similar to the way Reliant Energy allows residents to pay their electricity bills at their local supermarket.
Verma agreed to test RealPage’s solution, and began rolling out the eMoney Order system in each of his properties in 2012. After three years, all of Verma’s properties use the system.
It took several months to teach residents about the new payment method, but they adapted quickly, Verma said. Now, none of Nova Asset Management properties accept cash or money order, and as a result, thefts and crime fell dramatically, Verma said.
“Our theft and crime has gone down to zero,” Verma said. “It’s really worked out for us. It’s been totally transformative for our industry.”