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Merchant success stories
Fast, flexible payment processing powers PadSplit’s mission

Fast, flexible payment processing powers PadSplit’s mission

Nov 1, 2022

Imagine if an Airbnb-style online marketplace could help solve the housing crisis in U.S. cities. The team at PadSplit is working hard to make that idea a reality.

PadSplit is the country’s largest co-living marketplace, designed specifically for the workforce. The company offers flexible, furnished and affordable housing without requiring a security deposit or credit score. With over 5,000 units and housing over 11,500 individuals, PadSplit’s data shows its residents can build their credit profile and save money, opening access to more mainstream financial services and opportunities.

PadSplit’s service launched in 2017 in Atlanta and has since expanded to help more people in 10 other US cities, including Tampa, Dallas and Jacksonville.

As PadSplit grew, so did its operational complexity and cost base, affecting its ability to provide affordable housing to its members. The team identified payments, in particular, as a significant line item that was underutilized. "PadSplit members pay their weekly dues through a variety of debit and credit cards, but we were paying credit card-type fees for all payments, driving up the cost of our payment processing," says Gayle Abrahams, CFO at PadSplit. "And it frustrated us that our previous payments provider wouldn’t collaborate to lower these fees or work with us to make payments a strategic lever."

PadSplit had little choice but to look for another provider. "It was a chance to return to the drawing board," Gayle says. "We didn’t want a payments provider that offered the same service and capabilities as our last provider at lower rates. Instead, we wanted a provider to take on an active role of partnering with us, to solve our immediate issues and guide us to get full value from payments as our business scales."

PadSplit chose to be that partner.

Flexibility, transparency and cost control with Interchange++ pricing

PadSplit’s payment pricing issues with its previous provider were largely because of its "blended" pricing model. This model sees the payments provider set a flat rate for every transaction, regardless of the card type used and the associated interchange rate.

"The blended model is appealing because it’s simple and provides a degree of certainty," says Gayle. "It’s why many young businesses, including PadSplit, see it as the best option. But the problem is it lacks flexibility and transparency: you know what you’re paying, but you’re not sure what you’re paying for." offers merchants an alternative pricing model: ‘Interchange++’. This pricing model unbundles the cost of each transaction, allowing merchants like PadSplit to see what they’re paying at each stage of the payments chain.

PadSplit benefited from the switch to and Interchange++ pricing immediately, achieving a 1% reduction in payments fees.

"We realized this saving because 88% of our members use debit cards to pay their rent, and processing debit card payments are cheaper than processing credit cards," says Gayle. "One percent may seem small, but it’s made a significant difference, allowing us to offer lower rents to members."

Realizing the full potential of payments

The ability to leverage Interchange++ pricing model relieved PadSplit’s immediate pain, but there was more to its decision to make its payments partner. "The level of support and dedication provided was outstanding from day one," Gayle says. "We could contact the team directly with questions throughout the onboarding, and they continue to be incredibly responsive now we’re live." is also working proactively with PadSplit to ensure its payments meet its business goals. " pays constant attention to our account, analyzing our data and making recommendations, as well as informing us of the latest payment trends that’ll affect our business."

Building for the community

Since launching, PadSplit has expanded to 10 cities throughout the country. And it’s not slowing down as it looks to solve one of the major crises affecting the US. It has plans to expand further into other cities and double the number of units annually. PadSplit is also bringing on board a Director of Payments to focus on its payment strategy.

"Historically, the payments team focused on chasing outstanding balances and reminding members to pay," Gayle explains. "But since working with, we’ve seen the immense value payments can bring to our business. The incoming Director of Payments will focus on working with to build on that success and make payments an enabler of our goals and our mission."

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