Rent now, pay later: Canadian company introduces flexible payment option for renters
Buy now, pay later.
It’s an option that’s commonly used for expensive purchases like electronics and has increasingly become more available on retail sites thanks to apps like Afterpay, Klarna, and Paybright.
If you can pay for a pricey pair of sneakers in four installments of $30, why can’t you do that with one of the most important payments you make monthly — your rent?
Calgary-based company Zenbase is trying to change that by introducing a more flexible payment option for renters.
“We help residents with their household finances by allowing them to pay their rent in smaller installments throughout the month and providing cash advances when they most need it,” reads the site.
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Co-founder Koray Oztekin says the company sees itself as more of a budgeting tool that helps people stay on top of the most important expense of the month.
“We’re helping people to smooth their cash flow instead of them having to spend 40% of their income on the first of the month, and therefore have no buffer in between two pay cheques,” he told Daily Hive over the phone.
How it works
“Never pay your full rent on the first of the month” is the company’s tagline.
The site says it recognizes that rent is usually due at the beginning of every month, but that that schedule may not align with most people’s bi-monthly pay cycle.
“We’ve fixed that misalignment and provide other financial tools to help level the playing field,” the company stated.
So, how does Zenbase achieve this rent now, pay later model?
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The company pays your rent directly to your landlord at the beginning of each month, so that you can split payment into two installments.
According to the site, users are required to pay the first installment by 12 pm MT on the third business day of every month.
Your second installment can be paid on any day until the 26th of each month. The site says it’s automatically withdrawn from your bank account through electronic transfer.
If you want to sign up for Zenbase’s payment plan, you’ll have to do it by the 26th of the month if you want to split your rent payment next month.
Residents can only use the service if their landlord has a partnership with the platform.
Oztekin says Zenbase is currently available in Alberta, Saskatchewan, and Manitoba. The company aims to Launch in British Columbia, and Eastern Canada next year.
How much is the payment plan?
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Zenbase has a monthly membership fee based on how much your rent is:
• Up to $1000 monthly rent: $9.90
• Up to $1500 monthly rent: $14.90
• More than $1500 monthly rent: $19.90
The site says the fee helps avoid expensive overdraft and late fees that can add up to over $150 for a single late rent payment.
If you’re able to pay your rent in full by the third business day of the month, you don’t need to pay this fee. You can also cancel this payment plan at any time with no penalty.
For this reason, Oztekin says many use the service as a lifeline, in case a resident does need more time to come up with enough funds to pay rent, or if they want to use their first pay cheque of the month to invest in other things.
Other rent now, pay later services
While Zenbase says it’s the first to offer this service in Canada, there have been other companies that have tried to execute this payment model.
Chroma Technologies, also a Calgary-based company, also offered a similar service. Unfortunately, the company “couldn’t carry on” just months after its launch in February.
“Short-term lending in a rising interest rate environment due to a period of unprecedented inflation not seen in a generation meant our business model was fundamentally challenged,” reads a statement on the site.
There are other companies across the country tapping into this rent now, pay later model.
Padder, a Toronto-based company that helps landlords manage their properties, says it’s planning to launch a rent installment service Canada-wide next year.
“Rent now, pay later has been a requested feature to help tenants align their most significant expense (rent) with their pay schedule (bi-weekly),” Co-Founder Daniel Moss told Daily Hive in an email.
Billi, a Victoria-based money management app, is also looking to create a similar service, reported CBC.
Would you rent now and pay later?
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