Today (June 2024), we are officially releasing AutoPay using PayTo.

AutoPay means rent payments are initiated by Cubbi automatically when rent is due. It’s like a smart schedule.

PayTo means the transactions are instant.

It literally takes 60 seconds from the moment Cubbi initiates the payment to the funds being received and receipted in Cubbi, and in the owner's bank account. All in 60 seconds 24/7.

When combined, it’s simply marvellous, if you ask me.

No more rent payment issues. Rent should just get paid without hassle in the background.

Why Direct Debit WAS the King of Rent Collection

Direct Debit rent collection is where the real estate agency debits the rent from the tenants bank account. So as long as the tenant has the funds in their account the rent gets paid.

When the rent gets automatically paid, the chances of the tenant paying rent on time dramatically increases.

Before we started Cubbi, I managed 180 properties as a traditional property manager, all without Direct Debit rent collection - meaning all the tenants would transfer the rent directly into the agency’s trust bank account themselves. To me, at the time, this was normal and I didn’t see any issues with it.

Years later I moved interstate and started working at another real estate agency. Moving to this new agency I was sceptical because I was the 3rd property manager in 18 months! This typically means the properties have been managed very poorly and as a consequence a lot of frustrated owners and renters. While that turned out to be a real nightmare, surprisingly there were very few tenants late in rent. So although I was busy putting out a lot of fires due to all the issues, I was actually spending a lot less time dealing with late rent payments (compared to my previous company).

My first reaction was; this new agency had better renters but I later realised that definitely was not he case. However, the big difference is they did have all their renters on Direct Debit rent payments.

I had heard Direct Debit was good to reduce late rent payments but after experiencing it for myself, I knew I was never going back.

This is the reason at Cubbi we only offered Direct Debit as the sole payment option to renters when we first released our rent collection feature for self managing landlords back in 2017.

The reason why Direct Debit is so powerful is because it does not rely on the tenant to make the rent payment. As long as they have enough funds in the bank the rent gets paid.

So what could go wrong?

All Direct Debit payments take 3 business days to process. Meaning, if the Direct Debit payment leaves the renters bank account on Wednesday, the banks don’t complete the payment until Monday the following week.

Yep, and this goes for all Direct Debit payments in general, not just in Cubbi.

Direct Debit is an old payment method and it’s not very safe so banks delay the payment for 3 business days to allow enough time for a victim of fraud to contact their bank before they complete the payment (and the funds are gone forever).

By time the payment completes the rent is 4 days late and renters are confused why their rent has taken so long to be recorded (especially considering it’s common for the funds to be debited from the renters bank account on the first business day). Meanwhile owners are scratching their head wondering where their rent is.

Renters are your customers, and as an investor you want your customers looked after.

All in all it’s totally unfair for renters, particularly because it has a negative impact on their rent payment history. (because a payment cannot be recorded until the bank completes the payment)

So the next best option was to deduct the rent before the due date (which PS was the default option we provided to all new renters in Cubbi). Forcing a tenant to pay rent early is not fair and also not legally enforceable. To increase fairness it’s possible for renters to control the date the payment was deducted from their bank account from their Cubbi dashboard.

As you can probably tell Direct Debit is a winless battle.

So we added more payment options

Due to the frustration with Direct Debit, we released 2 more additional rent payment options for renters - PayID and BPAY.

PayID is an instant bank transfer from one bank account to another, exactly the same as any normal transaction (initiated by the person paying the money) however instead of entering a BSB and Account number, you enter an email address (or mobile number) that is linked to the bank account you are paying.

Fast payments are amazing. When a renter makes a rent payment via PayID it is all receipted in Cubbi and in the owners bank account within 60 seconds. The problem with PayID is that the payment is initiated by the renter. Meaning we are relying on the renter to initiate the payment and not forget (and therefore more late rent).

BPAY is similar, it’s initiated by the renter but that takes 1-2 business days for the funds to reach Cubbi.

Still no perfect solution until now.

Welcome to AutoPay with PayTo

PayTo is an instant payment just like PayID however PayTo is initiated by Cubbi (not the renter).

It’s a brand new payment infrastructure offered by the banks.

PayTo is mostly just the payment method itself but our AutoPay is the smart system that knows when to deduct the rent from the tenants bank account. AutoPay automatically deducts the rent when it’s due. It’s not as basic as every fortnight or month like 99% of all Direct Debit systems out there, AutoPay adjusts the amount to pay and the date based on the rent due date. So if the rent has already been paid, AutoPay will not trigger another payment. Or, if the rent increases or changes in frequency, AutoPay adjusts when and how much rent to debit from the renters bank account. If the payment fails, the AutoPay system will retry the payment in 24 hours. It’s like a super smart Direct Debit system.

The end result is, rent is automatically and instantly paid on the day rent is due 24/7 365 days per year regardless if it’s a public holiday or weekend. Just the way it should be - rent paid without hassle in the background.

AutoPay with PayTo is finally live!

If you own a rental property and want the rent paid on time without hassle, and you want to provide your renters with the best experience, learn more about what we do here.

AutoPay with PayTo has officially already replaced Traditional Direct Debit payments. All current renters on Direct Debit can choose to upgrade to PayTo anytime by connecting to PayTo or simply stay on Direct Debit. Your choice.

Learn more Cubbi’s payment options here.

What’s next: While AutoPay is only used for rent payments now, soon we’ll make paying property bills (like council rates) seamless for owners who manage their property on Cubbi. Currently, as a Cubbi owner you can upload property expenses (for tax reports etc) but you can’t pay the bills through Cubbi. Soon it will just be a matter of having your property bills forwarded straight to Cubbi for processing.