Embracing digital payments can future-proof housing associations

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Written by Andrew Marshall

Published October 2019

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According to a recent survey, 55% of procurement managers, directors and supply chain officers at housing associations believe financial constraints have the biggest impact on their work and decision making. The social housing sector has not escaped budget reductions, so needs to establish new ways of freeing up capital for investment and support of local communities and those in need of housing preparations.

Taking appropriate action

In times of economic pressure, it can be all too easy to opt for the first solution which appears to alleviate those constraints. In the case of housing associations, this could be increasing rent once the government’s rent reduction policy wears off in 2020. Although the intention here might be to minimise service disruption, this is not a long-term answer. Upping rent in 2020 or similarly, trimming employee headcount or squeezing supplier costs does not deliver sustainable savings.

Instead, forward-thinking associations will look inwards, evaluating existing processes and procedure to identify how they can be fine-tuned and become more efficient. Nowadays more and more organisations are turning to a digital-first approach - technology has ubiquitous benefits and in social housing, this is no different.

Importantly, most tenants today are accustomed to using technology in their everyday lives, giving the green light to housing associations to make a successful switch from manual to automated or digital processes. That being said, it’s crucial that associations are smart with their technology investment. Working with tight budgets, procurement and supply chain managers must ensure the solutions they onboard are sustainable, align to the needs of their tenants and match their long-term savings goals.

A revolution in real-time payments

Tenants in social housing can face a variety of challenges when it comes to paying rent which can result in finding themselves entering arrears or unable to afford the rent charges. This is an issue which does not discriminate against housing associations, large or small.

Thankfully, over the last few years, there has been considerable innovation in this space to help associations offer a variety of payment options to their tenants. Giving tenants choice and convenience over how and when payments can be made, has meant the likelihood of missed payments is reduced

Arguably, the most important innovation in this space is the development of real-time payments. Traditionally, tenants have made payments online and have had to wait up to five days for the funds to clear. This can cause issues if the rent clears late and the association considers the tenant to be in arrears, or if a tenant needs to prove to a judge that the payment has been made. It places needless stress and tension on vulnerable tenants. With the onset of real-time payments, tenants do not need to check that the rent has gone through, and equally, housing associations do not need to spend time confirming that payment has been received. Instead, employees can focus their attention on higher need, more complex cases or more strategic work. This saves considerable time and expense, freeing resources to make a difference where it matters.

Staying agile at the centre of the community 

To accompany the onset of real-time payments, technology is empowering housing associations to embrace an agile approach that keeps community service at their heart.

In social housing, many tenants are unable to afford or access a computer, so require flexibility from their local associations in how they make their payments. In the past, this has consisted of visiting the association in person to pay via cash or card. However, digital payments are a much safer option and are often easier to manage and budget for.

Therefore, to support those tenants who have mobility issues, digital solutions have been developed which allow social housing employees to use mobile applications to take rent payments on-the-go. It means tenants don’t have to leave their homes to make the required payment - housing associations can authorise secure card payments on their doorstep – with a quick and simple process with only a debit or credit card required to complete payment. It’s an innovative solution which helps tenants to keep on top of their payments, and in turn, helps housing associations to manage their monthly budgets and income.

Ultimately, housing associations are like any other business, they must continue to accommodate the needs of their customers, even in the face of budget challenges. When it comes to tightening the reins, going digital is arguably a more sustainable remedy than increasing rents or reducing staff. The onset of digital payments can improve efficiency, alleviate staff time to focus on strategic projects or emergencies and provide a variety of ways for tenants to avoid arrears and pay their rent on time.

Further Reading

For further reading on how turning to digital solutions can future-proof housing associations, please visit Pay360’s social housing solutions here.

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