Less than 10 years ago, cash, checks, and money orders were the go-to methods for paying rent. The problem with these traditional payment methods, however, is that they actually cost money and take up valuable time. These practices also create more work for property owners when it’s time to collect rent. The hassle of personally collecting rent, going to the bank, cashing checks, and updating bank statements, plus the additional cost of up to $10 per check or up to $5 per money order are some common disadvantages of going manual. But in today’s time, it is now possible to skip all these inconveniences through a quicker process just by using the best online rent payment systems available.
COVID-19 indeed helped the rise of online payments. According to a 2020 National Landlord Association report, digital payments almost doubled in Q4 of 2020 by 33% from only 17% in Q4 of 2019. In April 2020 alone, online payment portal user registrations spiked by 138% from March of the same year. Evidence shows that the pandemic made online payments a necessity for everyone because of social distancing. Contactless payments allow owners and tenants to have a smooth transaction without having to meet in person.
However, the increasing popularity of online payment systems comes with the risk of fraud and online scams. Owners can easily become victims if they use untrustworthy online payment systems. To avoid falling prey to such misfortune, we’ve listed some of the best online rent payment systems for prompt, secure transactions.
PayPal
For years, this payment system has been very popular and considered the best payment app by many of its users. Available on both Android and iOS with over 400 million users, PayPal is free to download and can be linked to bank accounts and credit cards. Security features include two-step authentication, data encryption, and email confirmations for each transaction.
Another advantage of using PayPal is its high transfer limits. Depending on eligibility, one can send up to $60,000 in a single transaction. Transfers usually take just one business day. An instant transfer is available with a 1% fee.
Venmo
Exclusive to US users with US bank accounts and phone numbers, Venmo does not charge customers for sending money from linked banks, debit cards, or Venmo accounts. A 3% fee is charged for payments made through a linked credit card. Transactions usually take one to three business days, but users can choose instant transfer for a 1% fee ($10 maximum). Similar to PayPal, Venmo also supports QR codes to make sure owners will receive payments directly to their accounts. Multi-factor authentication is required when signing in to ensure the security of all transactions.
Zelle
Zelle is considered one of the best online rent payment systems and the fastest money-sending method in the US for users. To enjoy free instant transactions, senders and recipients must enroll their email and mobile numbers. Transactions take only minutes to be processed compared to other channels that usually take a day at the least.
Homeowners who wish to use Zelle in accepting payments from renters need to ensure all parties have an account set up. In case you, the recipient, has not signed up yet, the payment sent by tenants will expire in 14 days and will be returned to their account. Zelle secures payments through authentication and monitoring features so users can feel at ease after sending payments.
Cash App
Cash App is free for both senders and receivers using either iOS or Android. Cash App saves users money, especially when paying monthly bills and making online purchases. One to three business days are required to complete each transaction, but instant transactions are also available for a 1.5% fee (with 25 cent minimum). To ensure customer safety, the app uses data encryption and fraud detection technology, two-factor authentication, and one-time login codes.
In addition to using Cash App to collect rent, you can also use this channel to invest in stocks. For first-time investors, no need to worry because the app’s interface is user-friendly even for beginners.
PayRent
PayRent features include rent reminders, express funding, scheduled auto-pay, automatic late fees, rent reporting, tracking, and multiple payment options. This system also allows homeowners to take partial rent payments and cancel transaction fees as a reward for tenants who pay on time or early.
ACH (Automated Clearing House)
ACH is a very popular alternative to check and credit card payments used by businesses. Aside from being more reliable and faster than checks, it is also cheaper than wire transfers. Some ACH processors even charge rates as low as $0.25 to $0.75 per transaction. The typical transfer speed, however, is about 3 to 5 business days, which is slightly longer than the other systems on our list. ACH is a great fit for homeowners who accept recurring payments.
Unlike most ACH users, Poplar Homes has a proprietary ACH system built to integrate directly with banks for faster same-day rent collection. Poplar’s Resident Dashboard allows renters to create auto-scheduled payments so missing a due date is never a problem.
ACH is managed by the federal government and NACHA. The latter requires the encryption of transaction details using “commercially reasonable” technology, which means that sensitive information cannot be received or sent through unencrypted email and web forms.
Stripe
Compared to the other payment methods listed, users must pay more to be able to use Stripe. Transactions usually cost 2.9% plus 30 cents per successful charge. Despite being more pricey, Stripe enables customers to reach more people than other online payment methods as it is available in over 35 countries and supports more than 135 currencies. Companies like Instacard, Google, Shopify, and Amazon use Stripe in their transactions. Having an account with Stripe surely includes a lot of perks.
Conclusion
Aside from hassle-free, contactless rent collection, other advantages of using the best online rent payment systems on the market include more secure payments, easy-to-trace transactions, and quicker processing. Minimal processing fees are a small price to pay for so many benefits, and then again, most platforms don’t even charge a fee! It’s just a matter of selecting which method will best suit your needs. Just be sure not to engage with suspicious payment processors to avoid being scammed.
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