About six years ago, Steven Van Praagh received a call from a friend who owned a couple of rental properties in the Harlem area of Manhattan. Praagh, who was a commercial website developer, listened to his friend’s rant about being sick and tired of dealing with paper checks for rent payment.

What his friend really wanted to know: Was there a way create a payment service online?

Praagh listened, and then asked, “Would this be like PayPal for real estate?” And his friend’s response was, “Yeah, exactly.”

Six years later, ClickPay is a bustling business. In short, the company provides property owners and managers the ability to accept secure online payments (rent, homeowners association fees and dues, maintenance fees, etc.) from residents via e-check, credit and debit card.

Steven Van Praagh

What apartment owners and managers like about ClickPay is that they don’t need a bunch of workers to hang around opening envelopes, processing checks and visiting the bank. What tenants like about ClickPay is that it saves them time. They don’t have to write a check and drop it off at management.

Tenants who use online banking to mail their checks think they are paying electronically. In reality, a paper check still gets mailed, Van Praagh said. “What ClickPay does is form partnerships with the banking networks to keep the payments electronic. The banks like it because they save the on postage.”

In New York, where rents can easily be four or five digits, it has become a marketing tool for the landlords.

This is the way it works. Let’s say you are an owner of 750 apartment units in 10 New Jersey buildings of 75 units apiece and you want to use ClickPay.

Someone from ClickPay interviews you to figure out the size of the portfolio, management and types of tenants, as the company wants to make sure ClickPay is marketable to those same tenants. Then ClickPay talks to property management about accounting software to make sure its program can integrate. Once all that happens, ClickPay offers a couple of different services.

Once live on the system, ClickPay does customer training for all bookkeepers, controllers, property managers and asset managers. There are no setup fees or set costs.

Finally, tenants get a note to let them know their rent is due. ClickPay will send rent bills, including emailing a PDF of the bill. In the invoice there is a link that says, “Pay Your Rent Now.” If tenants click on that link, they will be forwarded to the ClickPay website. All they have to do is check in, change the password and take over their account.

Other tenants in other buildings can use the search engine, find their complex and see if ClickPay is available. If so, they find their unit, put in the leasing information, and as long as it matches up, they can use ClickPay.

Although ClickPay works with more than 100 property management companies, a couple of real estate investment trusts, Apollo Real Estate Advisors and hundreds of thousands of tenants, you’ve probably still never heard of ClickPay or its payment system. That because it is still Northeast-centric. Property management in Toronto embraced the evolving trend.

“We work with 10 percent of the top multifamily managers in the country, but in New York, we have 30-40 percent of the top managers,” Van Praagh said. “We have deals with most of the who’s who in New York.”

ClickPay’s penetration in the Big Apple is partly due to the fact it was the first 100 percent electronic payment system offered in the city.

“There were other lockbox services that had other types of electronic systems, but we were the first totally paperless,” Van Praagh said. “We are still the only one in New York.”

Other companies that facilitate electronic rent payments include RentPayment, PayLease, eRentPayment, PayYourRent.com, and SmartRentOnline.com.

“Until recently, it was a fragmented market, but now there are some big players,” Van Praagh said. “Companies that were in the utility payment business have now gone after payment of rent as a new business line.”

At the moment, Van Praagh is not dismayed by the new competition. “It’s not all they do, so they don’t focus 100 percent on it like we do. That’s good for us,” he said.

This is a relatively new product and new product sector, so there’s a lot of expected growth ahead.

Even in buildings where there is ClickPay, penetration varies.

“We range from 30 percent to 70 percent adoptions per building. We have some buildings that are 100 percent, but they are small,” Van Praagh said.

The concept behind ClickPay as a kind of PayPal for renters seems so apparent — a basic service that the industry needed — that it was somewhat of a surprise to me that such a system wasn’t invented back in the 1990s.

ClickPay was founded in 2006, and development was very slow at the start because real estate is a very complicated business due, for example, to the vast amount of federal, state and municipal regulations.

“There are a lot of nuances when it comes to processing real estate versus any other business,” Van Praagh said. “Then you get into places like New York City, which has so many of its own regulations. When you start dealing with large property owners, you quickly see they are dealing with such challenges as collection, rent subsidy, Section 8 housing, etc., so you need a lot of bells and whistles just to be able to tie your software to the property management and accounting software packages.”

I would have thought once ClickPay signed with a management company, it would offer incentives early in the game to entice clients to come over to the new system.

That doesn’t happen.

However, ClickPay, like your airline, does have a loyalty reward program. A client who uses ClickPay gets access to its perks network that boasts a couple of hundred thousand vendors giving rewards of one sort or another.

ClickPay figured it had to do something to make tenants feel better about paying those substantial rents in places like New York. If you’re paying $2,000 a month for a studio apartment, you might just want a toaster to help ease the pain.