Earlier this year, the Philadelphia Housing Authority began providing tenants with an alternative option for paying rent through five-year-old New Jersey-based electronic payment service Rezzcard. The service, already established in New York and parts of New Jersey, eliminates money orders and check cashing – a time and money vacuum that infamously afflicts lower-income renters and affordable housing tenants – by making bill payments electronic.
Here’s how it works: Instead of waiting on property managers’ to open their offices doors so tenants can pay rent in person, Rezzcard provides those tenants with the ability to pay their bills when they need to, either online, through the mobile app, over the phone or via text message.
“It’s more efficient and cost-effective,” founder Alex Cooper said. “It helps the resident pay their bills on time, it gives them proof they made their payments, and can be used to help them build credit.”
“Everybody has to pay bills, regardless of whether you’re rich or poor, school of hard knocks or school of Wharton,” Cooper said. “We’re unique in terms of our focus on affordable housing and low-income customers.”
Cooper said that right now, the fee Rezzcard charges is “more or less neutral” compared to the cost residents are currently paying for money orders – but credit building and payment tracking provide benefits for the user. Actually, Cooper explained that keeping tabs on money order replacements is one way Rezzcard is measuring its social impact.
“Right now in the evolution of our business model, the main thing we do is we enable a payment that replaces the money order,” he said. “We can measure how many money orders and how much value in money orders we replace.”
To date, that’s nearly 155,000 money orders replaced in every Rezzcard market – $55 million in rent dollars processed for the 30,000 tenants the company services.
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Rezzcard plans to eventually offer products such as online credit reporting and prepaid debit cards that they hope will open new avenues for impact metrics, i.e. the activation rate of prepaid cards.-30-
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