When I started building ExactEstate, I got a firsthand look at what my clients were actually paying each month for payment processing through their existing systems.
The numbers shocked me.
One client had 2,500 tenants. Most paid rent over $1,000 per month. Most used credit cards. The processing rate was 2.95%.
Do the math. That's $885,000 per year. Just for credit card processing.
And that was before ACH costs came in.
Why Nobody Questions the Cost
My clients weren't questioning these fees because they thought it was a standard cost of business.
Everyone pays it. It's just how things work. But I couldn't accept that.
I started reaching out to payment providers directly to see what they could actually offer if I integrated credit card and ACH payments into our own system. I wanted transparency, not a black box.
What I found changed everything.
The rates I could negotiate were significantly lower. Half a percent lower for credit cards. Way lower for ACH transactions, too. The gap between what property managers were paying and what was actually available was massive.
Where Your Money Actually Goes
Property managers are told they're paying for convenience, built-in compliance, and integration. In most cases, they're paying for layers of companies sitting between the tenant and the bank.
Each layer takes a cut.
The transaction is split among middlemen — gateways, aggregators, and the PMS vendor — each taking a revenue share. By the time it reaches the processor, the total cost is bloated.
Here's something most people don't know: gateway fees are pure profit. They typically run $10-25 per month. They cost the processor nothing. If your property management software isn't offering passthrough rates on gateway fees, they're profiting from this charge on top of transaction fees.
Those fees are everywhere. If they're not visible, they're baked into higher transaction fees.
The Three Layers Taking Their Cut
Every credit card transaction splits into three components:
- Interchange fees go to the tenant's bank. Usually, 1-3% of the transaction.
- Assessment fees go to card networks like Visa and Mastercard. Typically 0.13-0.15%.
- Processor markup is the fee that payment processors and PMS vendors take.
Each layer takes a piece. The total adds up fast.
The ACH Advantage Nobody Talks About
ACH transaction fees typically range from $0.20 to $1.50 per transaction. A flat fee regardless of the payment amount.
Compare that to credit card processing fees of 2.5-3.5%. A $1,500 rent payment costs $37.50-$52.50 to process via credit card. The same ACH payment costs about $0.50.
Property managers do push tenants toward ACH. But here's the reality most articles about payment optimization ignore: some tenants don't have that amount of money in their bank. They must use credit cards.
As of 2024, 14% of U.S. renters were behind on payments. This complicates the decision about whether to absorb processing costs or pass them to tenants who are already financially stretched.
The Convenience Fee Decision
At ExactEstate, we offer an option to allow clients to partially pass fees to their tenants. We don't make that choice for them.
Everyone is aware of convenience fees for online payments. The only way to 100% avoid that is to pay with a check, money order, or cash if the landlord accepts it.
The landlord can either add a minimal cost to each tenant based on industry norms, or incur a huge cost because each tenant's payment fees compound and are paid by them.
There's no perfect answer. But transparency helps property managers make informed decisions.
What We Did Differently
When we built ExactEstate, we partnered with Payabli. Their platform and expertise made them the perfect partner.
We offer the lowest payment processing fees in the industry. Our clients sign a contract with all fees shown upfront through Payabli before they get access to a merchant processing system.
Each transaction and the amounts of fees are available within reports and monthly statements. No surprises. No hidden charges.
We even built an ROI calculator that shows the savings compared to what they're currently paying.
Why This Matters
Payment processing should not be a vendor profit center.
Property software companies generate most of their revenue from payment processing fees. That creates a misalignment of incentives. The more you process, the more they make.
We believe transparency builds trust. When property managers can see exactly what they're paying and why, they can make better decisions for their business.
65% of tenants prefer to make rent payments online. This isn't optional anymore. Digital payments are a business requirement.
But that doesn't mean property managers should accept inflated fees as the cost of doing business.
What You Can Do
If you're currently paying 2.95% or higher for credit card processing, you're likely overpaying.
Look at your monthly statements. Calculate your effective rate across all transactions. Identify the line items that seem unnecessary.
Ask your current provider about gateway fees. Ask if they're passing those through at cost or marking them up.
Compare your current costs to what's actually available in the market.
The property management industry has accepted high payment processing fees for too long. We built ExactEstate because we experienced this problem firsthand as property managers.
Transparency wins. Every time.
