A UAE-based start-up has announced a 'Rent Now Pay Later (RNPL)' scheme for Dubai residents. The platform, which will be launched in July this year, will allow tenants to pay their annual rent in monthly instalments using a credit card.
In Dubai, rent is usually paid in the form of one to six promissory notes two to 12 months in advance. Keyper, a digital real estate investment management platform, said that through their new RNPL platform, tenants will be able to spread their rent payments over a 12-month period.
In an interview with the Halifax Times, Walid Shihabi, co-founder and CSO of Keyper, explained that the platform will charge tenants a premium to pay their rent in 12 installments. The actual amount depends on the number of payments the landlord expects to make.
As an example, he said that a flat with an annual rent of Dhs100,000 needs to be paid in four cheques. "Keyper will offer tenants 12 credit card payments of Dhs105,000 (Dhs8,750 per month), which equates to a 5% premium from four payments to 12 payments," said Shihabi.
The platform offers a new rate for tenants to pay in 12 instalments." Shihabi said, "Once the tenant accepts the offer, we contact the landlord and obtain their legal approval to offer the service.
The RNPL enables the landlord to receive a one-off advance payment of the rent if they choose. They can receive an advance payment at a reduced rate." Landlords can take advantage of the Keyper RNPL offer with or without the tenant accepting it."
If the tenant takes advantage of the RNPL offer and the landlord refuses to pay the rent upfront, there is no additional cost to the landlord. In this case, the tenant would pay in 12 instalments (at a higher premium) and the landlord would receive the rent in accordance with the original payment term - either 4 or 6 instalments.
Once the parties have agreed, the contract will be signed digitally and the tenant's credit card details will be collected. Once the lease is in place, tenants will be able to access a personalised dashboard with email and SMS reminders for payments. Tenants will be able to track their payments, add new credit cards and access their lease contract through the dashboard.
Currently, the company is focusing on new leases and renewals.
What happens if a tenant ends their contract early?
In some cases, a tenant may have to end their lease before the end of the term." When a tenant requests an early termination, we follow industry standards and apply the notice period and cancellation fees agreed with the tenant at the time of signing the contract."
RNPL is not a loan and will not affect a tenant's credit score or debt load." We are not offering a credit product as Keyper RNPL allows tenants to benefit by paying their rent in 12 instalments while accepting the terms required by the landlord."
Keyper is launching a waiting list for tenants to sign up in the pilot tranche." This means we are serving leases that start in July 2023 ...... We have a limited number of places available in the next few months. We are allowing tenants outside our network to sign up to our waiting list and we will select some of them as part of our pilot scheme. For those who don't make it into the pilot programme, we will gradually allow more tenants (to be part of it)," said Shihabi.
Omar Abu Innab, co-founder and CEO of Keyper, said traditional cheque payments were outdated, error-prone and did not provide a good user experience for tenants or landlords." We designed our RNPL service to address these pain points and enable our customers, tenants and landlords to better manage their finances with ease."
According to the company, through the platform, landlords have the potential to experience improved tenant retention and reduced default rates." Seamless monthly rent payments via the tenant's credit card reduce the risk of late or missed instalments."
