Mobile pay—the use of a cellphone to complete transactions without cash or credit cards—has been dominating discussions in the retail world. Thanks in large part to the growing popularity of Apple Pay, which the tech giant rolled out in October alongside its iPhone 6, you almost can’t avoid discussions about this technology.
A Jan. 15 report from Business Insider claims that “mobile payments are poised to explode this year” and that it’s going to “grow much more quickly than many observers believed.” According to the report, mobile payments accounted for just 0.1 percent of retail transactions in 2014. By 2016, however, Business Insider expects that figure to jump to 3.8 percent. In 2019, that number is predicted to hit 15 percent.
Business Insider isn’t alone in its bullish prediction. According to a recent report from financial advisory firm Deloitte, in-store smartphone payments will soar by more than 1,000 percent worldwide from 2014 to 2015, and 5 percent of the world’s smartphone users will make an in-store smartphone payment at least once a month.
Mobile payments in self-storage
But will this new chapter in retail technology, with Apple Pay being embraced dozens of banks and credit unions, find its way into the self-storage industry? And, better yet, should it?
“I think that the industry leaders will all have some form of mobile payment option by the end of this year, and that the bulk of self-storage facilities will incorporate it by 2016 at the latest,” self-storage owner and consultant Marc Goodin said. “Personally, I don’t have anything like it yet, but I will by the end of this summer.”
To be clear, the term “mobile pay” can be fairly sweeping. It includes technology like Apple Pay—which lets consumers “swipe” their phones to make payments instead of pulling out their credit or debit cards—but it also includes things like apps that let self-storage tenants remotely manage their accounts and pay their rent.
Not a big deal?
Some self-storage experts say facility owners need to first figure out what type of mobile payment technology is right for them.
“Mobile pay, generally speaking, isn’t anything new,” said Robert Chiti, president and CEO of Open Tech Alliance, which provides technology and services to the self-storage industry. “People have been able to pay their self-storage rent from a mobile device for about five years now. But what we’re talking about when we talk about something like Apple Pay is just another way of handling someone’s credit card information.”
Indeed, that’s the basic premise behind Apple Pay, whose hook is that it allows consumers to pay for services through a credit card account without making them swipe the card itself (or fret about the potential of compromised financial data). But that, Chiti said, isn’t really a big deal. At least not in the self-storage industry.
“I don’t see any consumer saying, ‘Oh, I’ll rent with you because you let me use my Apple Pay for my rent.’ And so I don’t really think it should be anywhere close on the radar of concerns for self-storage operators right now,” Chiti said. “I think the impact, right now anyway, is nonexistent. Accepting mobile pay won’t help you get more customers, and it won’t help you keep the ones you already have. It’s a solution creating a problem. Maybe not in every market, but certainly in the self-storage marketplace.”
Chiti said self-storage owners should focus more on revenue management rather than on how tenants’ payment methods.
“There’s high occupancy all over the place. The average facility isn’t worried about getting people in the door,” Chiti said. “Most operators have plenty more to think about than worrying about how they take payments. The money’s coming in, so focus instead on getting the most out of it.”
‘It’s all about convenience’
Away from the mobile payment debate, both Chiti and Goodin said there’s a growing trend toward sending email and text payment alerts to self-storage tenants. These alerts not only let a tenant know his or her rent is coming due, but they also let a tenant make an immediate payment by clicking on a link in the email or text.
Atlanta, GA-based Storage Post made headlines in mid-2013 when it started offering a mobile pay option for its New York and New Jersey locations. With help from web design and development company Automatit, Storage Post rolled out an app that enables customers to make rent payments directly from their smartphones, and enables the operator to collect more on-time payments.
“Technologies like this will create a huge boost in income and efficiency,” Goodin said. “I think this is going to become part of most management programs over the next year, if it isn’t already. When a client is late, just hit a button, send him a text or email, and he can make a payment right then and there. That’s going to make payments easy and fast.”
That technology, Chiti said, is worth getting excited about.
“That’s one iteration of mobile pay that seems to make sense, because it will definitely encourage more tenants to pay in a timely fashion,” Chiti said. “Everyone is trying to make payments frictionless, effortless and automated. And that, in the end, is the way the world is headed. It’s all about convenience.”