RentalsTechnology

Rental startup’s free digital rent service is a Trojan horse

RadPad hopes its revamped rent payment service will generate high-quality, valuable leads for landlords, rental brokers

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My rent check is one of the few checks I write on a regular basis, and each month the process of filling it out, sliding it in an envelope and dropping it in my landlord’s mailbox feels slightly irritating and increasingly anachronistic.

When I learned in April that rental site RadPad has launched a new service to help renters pay their rent digitally, and it includes no fee for renters and doesn’t require landlords to do anything other than deposit checks, my ears perked up.

A swath of other rental startups like Cozy, Lovely and RentMoola give renters the ability to pay their rent online, but either their landlords have to sign up for the platform or there’s a fee — or both.

Not RadPad. In a new tweak to its 7-month-old service, the Los Angeles-based startup allows renters to pay their rent digitally for free using a debit card, and landlords don’t have to be involved other than to process the check RadPad sends on renters’ behalf.

The latter, paired with a no-fee pay option, was an important differentiator and spurred me to sign up for RadPad’s payment service, because, like the well-worn reputation of landlords everywhere, mine’s responsiveness is poor — I question his pulse at times.


An ad for RentMoola captured my attention — and likely many renters’ frustration at writing their monthly rent checks. Its digital rent payment service is free for renters, but landlords must sign up to receive payments through its platform.

Given that a text response from my landlord feels like a gentle miracle, I wouldn’t dream of asking him to sign up to a service he’s never heard of to accept my rent payment in a whole new way. And I don’t want to pay a fee just to pay my rent!

So, I decided to sign up for RadPad’s service.

First step in the process renters take to begin paying rent digitally with RadPad.

First step in the process renters take to begin paying rent digitally with RadPad.

After confirming the mailing address for my rent check with my landlord (it took five days of eight unanswered texts to get a response — case in point), it took just five minutes to sign up with RadPad.

The sign-up process involved: entering and confirming my apartment address; entering my debit card information; and creating a RadPad account by assigning a password and then entering my phone number. RadPad sent me a text to confirm my phone number and I was done.

(My sign-up involved an extra step not required of all renters: In an email a few hours after signing up, RadPad asked for a copy of a photo ID and my renters insurance. After sending that information early the next morning, I got the all-clear from RadPad.)

I hope to never write a rent check again.

After completing the onboarding process, RadPad sent me an email stating, “As you pay your rent every month with RadPad, we’ll store your payment history so you can use it next time you move.” (Bold in the original message.)

That note gets at the heart of RadPad’s fee-less rent payment strategy, something every subscription business battles with: cutting down churn.

As a rental site, it’s especially hard for RadPad to stay top of mind with renters who need to use a platform to find a new place only infrequently, RadPad CEO Jonathan Eppers told Inman.

Jonathan Eppers

Jonathan Eppers

By handling renters’ rent payments, RadPad’s betting it will greatly increase the likelihood they’ll use RadPad when they’re ready to move, Eppers said.

Printing and mailing the check is not free for RadPad, obviously. Eppers wouldn’t say how much it costs the firm per rent payment event, but Eppers views it as a marketing cost for the firm.

With each rent payment, it includes RadPad marketing to landlords, highlighting the following points:

  • It’s a way to give their renters more options to pay them (credit and debit).
  • It’s free for the landlord.
  • At some point, they’ll be able to accept electronic payments (we tease them that this is coming).

There’s a “huge opportunity” for the firm to make money off landlords related to collecting payments digitally, Eppers said. But other than saying it’s coming soon, he wouldn’t reveal the firm’s plans around this feature right now.

RadPad’s digital rent payment service
For renters wanting to use a credit card, the firm charges a fee of 2.99 percent of every rent payment as a fee.
When RadPad first launched its online payment service in October 2014, it charged debit card users a $4.95 fee for every transaction, but a larger percentage of renters (approximately 50 percent) than it originally thought use their credit cards. Those fees allow it to make the debit option free.
RadPad charges a renter’s debit card or credit card five days before renters designate when their rents are due and then prints and mails out a check to the landlord on that same day.
Like other online rent payment services, RadPad allows roommates to digitally carve up their rents and pay their landlords in one electronic sum.

Source: RadPad

Wiggling between renters and landlords with its rent payment service is not just about getting landlords to sign up for RadPad’s soon-to-come rent payment service — it’s also a Trojan horse.

“No one owns a relationship with a renter and has all this rich data on them,” he said. The rent payment data will help landlords better understand which rental applicants will likely make the best, most stable renters, and RadPad’s betting its business that they’ll pay well for that.

Like many firms who want to master the rental space, all three legs of RadPad’s rental stool must be sturdy: listings coverage, landlord and rental broker engagement, and a large renter audience.

A batch of other rental sites, including Zillow, apartments.com, Trulia, realtor.com, Rent.com, Zumper, Apartment Guide and others, are also in the process of building up rental inventory and a rental audience.

A few, like RadPad, are out to create stickier relationships by helping landlords conduct credit and background checks and renters apply for places online, and help both set up digital rent payments.

After launching in Los Angeles in January 2013, RadPad has grown its listings coverage to metros across the U.S. The firm currently has approximately 600,000 listings, according to Eppers.

In the seven months the digital rent service has been live, RadPad has processed over $8 million in rent payments.

When RadPad unveiled its new no-cost rent payment service in April, it also announced a $9 million funding round, which brings its total funding to date to $13 million.

Some of the players in the online rent payment universe

Digital Rent service Fee for renters Landlord must sign up?
RadPad Debit card payments free; credit card payments come with 2.99 percent fee No
RentMoola Free for debit, up to 2.75 percent for credit card Yes
Rentmatic (owned by RentPath Inc., operator of Lovely, Apartment Guide, Rent.com and Rentals.com) Varies. Electronic fund transfer fee, $0.25 per transaction Yes
Cozy Free Yes
RentShare $1.95 when paying with a bank account; 2.9 percent fee from debit/credit cards. No
PayYourRent Varies, depending on landlord’s deal with PayYourRent Yes
RentPaidOnline Unclear Yes
PayLease Unclear Yes
RentPayment Unclear Yes

Sources: RadPad, RentMoola, Rentmatic, Cozy, RentShare, PayYourRent, RentPaidOnline, PayLease, RentPayment.

Email Paul Hagey.

Editor’s note: This story has been updated to note that renters can pay their rent digitally without their landlord’s involvement using RentShare. A previous version incorrectly stated they couldn’t.