Letting agents should make much greater use of text messages to communicate with tenants in arrears.

Shawn Brown, who heads up PayProp, a payment specialist for the sector, said: “Tenants can ignore emails and letters, and block calls from numbers that are either anonymous or ones that they recognise.

“However, they cannot block texts, and they read texts before they delete them.

“Research shows that 97% of all text messages are read within three minutes of them being sent.

“We find SMS a highly effective way of dealing with arrears.

“Our own system automatically sends case-specific bulk reminders at the click of a button each day, from the day after a rent payment was due in full.

“Even if the shortfall is tiny, the text messages can still be sent, and continue to be sent daily.

“The tone is polite and friendly but firm, and it works.”

The automated texting is just one feature of a system that launched in the UK this year.

The system is also purpose-designed to stop fraud among letting agency staff, and to provide a permanent audit log of any transaction.

PayProp now has around 200 UK branches using the system – despite Brown admitting that the business’s biggest obstacle is setting up demos with agents in the first place.

PayProp has a direct feed into a high street bank, and is compatible with every software system used by letting agents in the UK while also able to automate traditional written records.

The two-year pre-launch period in the UK was so long because of having to find the bank prepared to act as partner, arrange the feed, and also see whether it needed to be regulated with the FCA – it doesn’t, but must nevertheless adhere to some regulations and protocol.

In a nutshell, what PayProp does is put a letting agency’s financial data online.

The ‘front page’ of PayProp gives a real-time snapshot of all reconciled payments in and out.

The crux is that it is the system itself which has made and reconciled those payments – which include not just rent paid in and out, but tax due to HMRC payments to contractors, and deposits.

Brown said: “The Payprop system trawls the client bank account every 15 minutes, so when a tenant says, ‘I paid yesterday’, the agent can check whether they did or didn’t.”

The system also has built-in fraud resistance and checks.

Unusual activity is picked up immediately and reported to the agency boss.

Brown said: “It is incredibly difficult to commit fraud with PayProp. I won’t say it is impossible, but is very difficult because the owner can restrict access to various parts of the system – for example, ultimate sign off.

“We are not here to police the industry, but we are here to protect it.”

Although new in the UK, PayProp has a strong global presence, with 200,000 properties currently under management.

Landlords, says Brown, like it because they get paid quicker and get transparent accounts. He says the system in other countries has proved an instruction winner for agents.

He claimed: “Typically, agents grow their business year on year by 23%, so by year four they have just about doubled in size.”

While the initial training offered to agents signed up lasts just two hours, the follow-up support is strong, and some agents make dozens of free support calls within the first few days of adopting the system.

Brown says the system saves agents a huge amount of time, because so much is done at the click of a button, adding that accounts which previous took a typical agent customer 40-50 hours a month can now be whittled down to two.

However, he also admits that it is a “leap of faith” for an agent to hand over its entire financial data to a third party.

The business, which began in South Africa, also has a unique background, as its founders are philanthropic brothers Jaco and Johannes van Eeden who started the international GivenGain Foundation and needed an international platform for charity donations, since Paypal does not work in all countries.