The self-storage industry is one of the fastest growing sectors of the commercial real estate market. U.S. Census Bureau data reveals self-storage construction spending rose from just over $1 billion in 2004 to about $4.5 billion in 2017. The market, now with around 50,000 storage facilities, is valued at $38 billion, and 9.4 percent of households use a storage unit.
Jeff Spinabella, director of ISV business development for First American Payment Systems, says this growth, coupled with technological advancements, is creating opportunities for ISV to develop new solutions for this booming market.
“Most facilities use legacy self-storage management software installed on-site,” says Spinabella. “But more facilities are moving to cloud software.” He explains that most self-storage companies have multiple sites, and cloud software allows them to access their applications wherever they are working – or even from mobile devices. Managers also benefit from cloud-based reporting. “They can see trends, use the data to make recommendations, and make changes on the fly without having to go to the site,” he says.
Spinabella points out that although some established software vendors in this market have developed cloud-based systems, “there is certainly room for new players. You can jump in more quickly and do well with cloud-based solutions.”
Tips for Integrating Payment to Self-Storage Solution
Spinabella says it’s vital that you integrate self-storage management software with a payments solution that gives operators the functionality they need to operate efficiently and meet consumer demands.
Traditionally, a self-storage unit renter would go to the facility’s office and sign a contract. Spinabella says, however, “There’s a new sheriff in town. Consumers in the millennial demographic have grown up embracing technology, and if they can go online or on their smartphones to rent a storage unit, they aren’t afraid to do so. And if they go to the facility office in person, they may want to use Apple Pay or Google Pay.”
In addition, the majority of self-storage facility operators prefer the ability to set up automated recurring payments. “It’s a convenience, not just for the self-storage facility but for the customer also,” Spinabella explains. And, with so much of their revenue coming in on a recurring basis, self-storage businesses will also benefit from payment solutions that automatically keep card data on file and up to date. “Not every consumer remembers to update their information when they get a new card or when a card is lost or stolen and is replaced,” Spinabella says. “Keeping the card data on file up to date lifts a huge burden from the facility’s shoulders.”
Spinabella says it’s also beneficial to choose a payment integration partner with a proven track record of providing excellent customer service to self-storage facilities. “Your clients may be thrilled to get the lowest pricing, but that excitement goes away when problems arise. Your clients’ time is valuable and support issues need to be taken care of immediately,” he says.
Security: Insist on the Total Package
Spinabella says one mistake ISVs make is assuming that self-storage facilities don’t need the same level of security as other types of merchants. “Security may be overlooked at these facilities. You may assume they only need a card reader with EMV. But they need the whole package including tokenization and encryption for PCI compliance and security,” he says.
Spinabella also comments that only focusing on one aspect of security can create vulnerabilities in data security. “Some people are out there denigrating the importance of EMV or ignoring other aspects of security,” he says. “It’s all part of one, total package that makes sure your client is secure.”
Take Your Responsibility Seriously
Integrating payments with self-storage management software will impact your client’s business operation and how efficiently they collect payment. “Do your due diligence to find the best payments provider for your client,” says Spinabella. It’s up to you to vet the company, understand costs, and confirm that they will provide your client with the support they need. “Know that what they tell you is the reality,” he says.