Proptech has shifted the standard of user experience in the property industry. Combined with embedding payments, it promises a truly end-to-end approach.
If you’ve never stressed about property, you’re either blessed with youth or you should buy a lottery ticket as you’re the luckiest person in the world. The hassle of paying rent, getting a mortgage, missing payments from tenants, difficulty getting anything fixed or renovated - all things that have prematurely turned our hair a little greyer.
Then proptech came along. The way we find, buy, sell, rent and manage property has been digitally transformed, simplifying large parts of the industry for tenants, buyers and landlords.
This can be seen in countless new features, from virtual tours of properties for sale to building management software. But there is one area where the user experience (UX) has lagged behind: payments. The property industry has unique payment flows which pose a challenge to even the most innovative proptech companies. With an embedded finance solution, this can finally change.
Let's look at two examples: rent collection and mortgage lending, where payments infrastructure is vital to the success of any proptech company
There are a number of proptech companies already working to improve the way landlords and their tenants interact, across rent payments, property maintenance, tenancy management and communications. And underlying all those processes will be complex payment flows.
For a rental management platform, this can create huge reconciliation issues. They’re accepting regular payments from thousands of tenants, sending payments to hundreds of landlords and maybe also managing additional payments to third-parties like plumbers, electricians, insurance companies, or government agencies. Weaknesses in the underlying payments infrastructure will affect the UX of the entire service.
This is a problem that embedded finance solves. By assigning a virtual IBAN to each tenant, the rental platform can give the landlord full visibility of exactly who has paid, and how much, in each of their properties. The strong UX that the rental platform has been built upon therefore doesn’t end at the point of payment - it incorporates the entire journey.
Of course, tenant management software is just one example of the proptech revolution. Platforms that help people to purchase houses have also improved in recent years, though for many, the rigorous application process for obtaining a mortgage continues to be painstaking.
Antiquated methods of collecting bank statements and employment references are still commonplace. These sources of information may not reflect an individual’s financial health, making the whole process less accurate or at the very least, more drawn out. It is another area where the user experience is hampered by the underlying processes and infrastructure.
With an embedded finance solution, proptech businesses can benefit from Open Banking. This would allow them to get an instant, comprehensive view of a buyer’s financial health through the use of an Account Information Service (AIS), which gives a third party access to personal banking data if it is authorised by the individual.
Mortgages can be offered, accepted and issued faster, streamlining the entire buying journey. This also applies to the onboarding process. The most effective methods for performing due diligence, KYC/KYB and AML can be directly incorporated into your onboarding journey, reducing the time it takes for customers to move forward with their property purchase. The easier that process is, the more likely it is that your business will be chosen over competitors.
Finally, an important development with embedded finance is that these features can all be offered within your own product ecosystem. You’re not sending your customers to other services or making them create their own accounts on another platform. All of this functionality lives within your product - fully branded and designed by your business.
Embedded finance is therefore taking very good proptech products and making them all-encompassing hubs for a property journey. We have seen in recent years an increasing number of ‘super apps’ that combine multiple financial services into one everyday-use service. With embedded finance, proptechs can do the same. The focus on UX is carried through all elements of the product and service, not halting when financial services are introduced. .
OpenPayd gives you access to full-suite payment and banking services via a single API, with an average integration time of two weeks. If your business is ready to go from very good to indispensable, get in touch with our team today.
We’re sure you’ll understand embedded finance by the end of this article.