Is Stripe Right for Your Growing Rental Business? Pros, Cons & Alternatives

Mar 5th, 2024

Payment ProcessingGeneral

Every rental business, whether equipment rentals, event rentals, or long or short-term property rentals, should work with a qualified payment processor to collect funds from customers and, if necessary, distribute payments to owners and vendors. For rental managers just starting out, this often means signing up with a payment processor with broad brand recognition like Stripe. The choice might also depend on your rental management software and what processing options it provides.

Stripe can be a good general-use payment processor for some companies, but it has limitations for enterprise and growth-oriented rental companies. If you started with this payment processor, you might be wondering if they’ll continue to be a good fit for your rental business in the long run. 

Let’s take a closer look at Stripe’s pros and cons and how to recognize when it’s time for a change.

 

Stripe Pros and Cons

The Stripe platform has plenty of pros, making it a popular choice for startups and small businesses. With fast, straightforward payment processing and strong security measures, it’s easy to sign up and start selling right away. It's especially appealing to those just starting out in the rental industry, thanks to its user-friendly platform, integration with many software platforms, and ability to handle various currencies.

But as your rental business grows, managing multiple properties or assets starts to get more and more complex. Your payment processor must be able to handle more frequent, complicated transactions – without eating too much into your bottom line.

Some of the main cons of Stripe for rental businesses include:

• High Fees: Stripe's flat fee pricing model is straightforward and easy to understand, which can simplify bookkeeping for a small company. However, an interchange-based pricing solution might be cheaper for you as your business grows. Additional fees can also make the advertised flat fee more of a starting cost than a true cost.
• Lack of Rental-Specific Solutions: Stripe’s generalist approach checks a lot of boxes – but it doesn’t have everything. Rental businesses need specific tools and capabilities, like easy handling of security deposits, complex cancellation policies, and compliance with local or state regulations. Going without these rental-specific features can complicate business operations and take up more of a rental manager’s time.
• Limited Control over Finances: Stripe is the Merchant of Record (MOR). Small businesses might see this as a plus, since it’s one less thing to worry about while you’re still learning the ropes. Growth-oriented rental companies, however, will want to be the Merchant of Record since it offers far more control and flexibility over payments and finances.
• Generic Customer Support: One of the most common complaints about Stripe is their customer service. Since they’re such a large company with so many customers, it can be hard to get a hold of their team when you need it. When you do get in touch with them, they can only help with technical support – not industry-specific tips and advice for growing your rental business.

 

When Is It Time to Move Off Stripe?

If your rental business hasn’t felt the impact of Stripe limitations yet, the good news is that you’re perfectly fine to stay where you are. Especially for individuals who just want to maintain a small side business with low transactional volume, Stripe does the job well if your operations are fairly straightforward.

But for rental businesses that want to scale up operations and manage dozens, hundreds, or even thousands of rental assets, then you may find yourself needing a more specialized payment processor.

Some key indicators that it’s time to explore other options include:

• Increasing Operational Complexities: As you add more rental assets and deal with more complex transactions, you’ll find yourself encountering more situations where Stripe isn’t as efficient or simply can’t do what you need it to do.
• Cost Concerns: When the fees associated with Stripe begin to cut significantly into profits, it’s time to consider alternatives that offer more competitive rates for high-volume transactions.
• Financial Limitations: If you want more control over rates, direct access to a processor for chargeback help, and other benefits that only come with being the Merchant of Record, you can only do so by moving off Stripe and becoming the MOR.

In short, if you ever feel like your payment processor is holding you back, it’s time to consider a more specialized tool.

 

Rental-Specific Payment Processor Features

If you’ve decided that your rental business has outgrown Stripe, what’s next for you?

The basic bones of payment processing will be similar, but industry-specific solutions like Ascent will have extra features and capabilities suited to your needs. You’ll want to look for:

• Reservation and Reconciliation Handling: Rental businesses require more complex fund handling like collecting and refunding deposits, holding funds in escrow (trust accounting), managing cancellations according to company policies, scheduling recurring payments, and managing chargebacks and disputes.
• Guest Financing: For vacation rental businesses, Book Now Pay Later payment options lead to increased revenue, increased length of stays, and trip upgrades.
• Industry Partnerships: Secure integrations with leading rental solution providers to give you access to a wide network of tools you need to thrive.
• Industry Knowledge and Expertise: Beyond technical support, customer service teams who understand the rental industry can give you tips and advice to improve your business operations.

 

The Ascent Difference

When your day is already so busy, migrating to a new payment processor may sound like it's more hassle than it's worth. But the right switch will save you time and money in the long run, giving your rental business the freedom it needs to flourish.

For more than 20 years, Ascent Payment Solutions has provided payment processing services to the rental industry. After identifying a lack of security and technology integrations, lofty credit card rates, and complicated reservation and reconciliation processes for merchants, we set out to create a complete solution tailor-made to the needs of rental businesses.

Contact us today to see how Ascent can help your business thrive.