Selcom digitises the collection of rent and service charges for the real-estate sector in Tanzania
The collection of rent and service charges for residential properties, which is typically highly cash-centric and labor-intensive in Tanzania, is of late showing promising signs of going digital, thanks to Selcom’s simple, secure and automated payments module for recurring payments under the Selcom Pay/Mastercard QR system.
A tenant dials in the USSD short code to pay service charge and utility bills with Selcom Pay/Mastercard QR.
The recent availability of affordable residential housing inventory in Tanzania has seen an upsurge in rentals for property owners across all social classes. The manual collection and booking of rent and services charges on a recurring basis can be laborious, error prone and highly frustrating, especially for proprietors with multiple properties across districts, towns and cities.
According to the Ministry of Lands, Housing and Human Settlements Developments, the property market is set to grow even further over coming years as urbanisation continues, indicating that housing demand is on the rise at a rate of approximately 200,000 units annually, with the current housing deficit estimated at three million units. Within the real estate and property management sector, it is typical for tenants to pay through direct bank transfers, cheques or cash. Not only is cash-handling an inherent security risk but so is the inaccurate booking of proceeds, causing further inconvenience to tenants who are increasingly seeking ways to conveniently pay digitally using their phones.
Earlier this year, Selcom collaborated with a select group of property managers and owners to pilot suitable solutions to resolve their payment collection challenges. Following an intense exercise in understanding and identifying their most urgent pain points and use cases, Selcom enhanced and adapted its existing request-to-pay (RTP) platform to address this sector’s needs for digitisation and automation.
By assigning and placing unique QR codes within each apartment unit, coupled with deep integrations into ERPs and billing systems in some cases, Selcom enabled tenants to pay their dues for rent and services charges directly from their phones using mobile banking, mobile money and cards linked to the Selcom Mastercard app as soon as they received payment claim notifications by SMS or email from their landlord. Payments covered are rent, generator fuel surcharges, service charges, water, electricity, cleaning charges, and in some cases repair or maintenance fees. Landlords also have real-time access to reports to track payments, trigger reminders, export raw data for further analysis or manipulation, and automated data dumps to be imported into billing and accounting systems.
Unique QR codes placed inside an apartment unit to enable the tenants to pay dues for rent and services at their own convenience.
Collections also take place in real-time and are remitted automatically to the landlord’s local bank account of choice either instantly or daily basis at midnight seven days a week. Two of the many clients Selcom piloted this collections approach with are Property Managers Limited (PML) and AllStar Assets Limited, both servicing large inventories of apartment units and complexes in Dar es Salaam.
In order to adapt to the evolving landscape, digitising the traditional way of collecting payments was needed for the business, believes Manish Heda, the General Manager at PML.
“Technology has become an integral way to communicate with residents and conduct basic business operations. Partnering with Selcom to digitise basic service in managing the property has been a crucial step for us to not only streamline our business in managing PML properties but also, track our payment plan and at the same time provide flexibility to our tenants.”
Selcom set up a digital rent/services payment portal for PML tenants at Canal Residency, Canal Complex and Swiss Tower, offering tenants flexible ways to pay their dues and helping streamline day-to-day operations for management staff.
Unique QR codes placed inside an apartment unit to enable the tenants to pay dues for rent and services at their own convenience.
“The marginal cost of digitising payments and collections is justified a hundred times over by the financial and operational efficiencies realised by landlords in improved cash flow, accounting accuracy, timely payments and the man hours and human resources saved by not having to chase tenants to pay. We are constantly striving to make digital collections a mainstream and seamless feature across all sectors in Tanzania. Every business needs to get paid and therefore payments can not be a competitive advantage, payments need to be an integral core competency in every business. The time spent chasing payments manually can be better spent growing revenues through research and development, geographical expansion, market expansion, skills development, amongst a whole set of other growth levers available to businesses. It’s a slightly unorthodox way of thinking where merchant charges or enablement costs are viewed as investments, saving merchants interest fees, timely cash in the bank for investment and business improvements, better record keeping for tax and audit purposes, which can ultimately have a positive 10X effect on businesses very quickly within a few quarters.”
About Selcom Pay/Mastercard QR:
Launched in 2018, Selcom Pay/Mastercard QR is an open-loop payment system for businesses to collect payments for goods and services electronically through mobile banking, mobile money, cards or cash at Selcom Huduma agents.