Rent-tech platforms sidestepping credit card surcharge ban with new fees and paid ‘memberships’

Tenants are being encouraged to seek free payment options as online property management platforms introduce new fees or push for paid "memberships" to circumvent processing costs associated with card payments following the Reserve Bank's ban on surcharges.

In Australia, at least 1.2 million rent payments are processed monthly through these platforms, often at the direction of property managers and typically incurring an extra transaction fee. With the Reserve Bank's ban on surcharging effective from October 1, the rent-tech platform OurProperty announced it would stop accepting direct card payments nationwide.

Russell Burstow, the founder of OurProperty, stated that the platform previously charged a 1.95% surcharge. Now, payments will be routed through Pay4it, a platform Burstow founded in August, which imposes its own 1.95% "service fees". Burstow explained that the costs would ultimately be passed on to tenants, as real estate agencies would not absorb these expenses.

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"There’s no way that the agency would absorb that sort of money. They would just pass it on to the landlord, who would just push the rent up," Burstow said.

In Victoria, where rental providers and real estate agents will be banned from charging fees for rent payments later this month, OurProperty plans to introduce a new system of "memberships". Starting Tuesday, tenants who opt for a "platinum" membership, costing 1.95% of their monthly rent, will have the service fees waived for card payments via Pay4it.