October 29, 2015

How to Collect Rent Online

Collecting rent can be a hassle—checks bounce, tenants pay late, payments get lost in the mail. As paper checks become a thing of the past, renters are sometimes shocked to learn that they must pay rent with a physical check. In fact, many millennials don’t even have checkbooks.

Recently, we’ve come across several services that allow tenants to send their landlords rent payments online—but this convenience comes at a cost. Many of these services charge either the landlord or tenant a flat fee or a percentage of the rent in order to send the funds electronically.

However, there are also many free payment apps available, so there’s no reason to use services that charge fees up to 3% of the monthly rent. Today, we’ll share some of our favorite options for receiving online rent payments.

PayPal
How it works:
PayPal allows users to send payments from their PayPal account balance, a bank account, a debit card, or a credit card. Both parties must be registered users to send and receive funds. The funds are transferred to the recipient's PayPal account and can then be transferred to a bank account or used to make a future transfer.
Fee: Sending money from a bank account is free. If sending money using a debit or credit card, users are charged 2.9% of the amount being sent plus a $.30 fee. The sender is able to decide which party will pay the transaction fee.
Timeframe: 3-4 business days
Limit: $10,000 per transaction

Google Wallet
How it works:
Like PayPal, Google Wallet allows users to send payments to anyone with an email address, however, both sender and receiver must first sign up for Google Wallet accounts. Funds can be sent as an email attachment from Gmail accounts. Money received lands in the user’s Google Wallet account and can then be transferred to the bank.
Fee: Sending money from a bank account is free, however, the sender must pay a 2.9% fee if using a debit or credit card to send funds.
Timeframe: Almost instant to several business days
Limit: Initially, there is a $1000 limit. Once the account is verified, the limit is increased to $10,000 per transaction and $50,000 per five-day period.

Direct bank transfers
How it works
: Most banks can move funds from one person’s account to another account, whether both accounts are held at the same institution or two different banks. Because funds are processed through the Automated Clearing House network used by banks, this is also called an ACH transfer. Banks will also send paper checks to recipients who do not accept payments electronically.
Fee: Fees vary by banking institution, but most banks offer direct transfers for a nominal fee, often less than a dollar, or for free. 
Timeframe: 1 to several business days
Limit: None

Chase QuickPay
How it works:
Payments can be sent electronically to anyone with an email address. To use Chase QuickPay, either the sender or receiver must bank at Chase. Both parties must register for Chase QuickPay accounts in order to send and receive payments. The funds are withdrawn from the sender's bank account.are transferred directly to the recipient's bank account.
Fee: None
Timeframe: Same business day for a transfer between two parties who both bank at Chase, and 1-2 business days if one of the parties does not bank with Chase
Limit: $2000 per transaction and $8,000 in any seven-day period

Venmo
How it works:
Like its parent company, PayPal, money is received in the recipient’s Venmo account. It can then be “cashed out” and transferred to the user’s bank account or used to complete future transactions. Venmo’s app offers a great mobile experience with a social feed and is popular among millennials. Both parties must create Venmo accounts prior to sending and receiving payments.
Fee: The service is free if using Venmo balance, a linked bank account, or a major debit card, but the sender must pay 3% of the amount being sent if using a credit card or non-major debit card.
Timeframe: 1-2 business days
Limit: Users start out with a limit of $299.99 per week. Once the user’s identity has been confirmed, the limit is raised to $2999.99.

Square Cash
How it works:
Users can only send payments through Square Cash using a debit card. Unlike other payments apps, funds are deposited directly into the bank account associated with the recipient's debit card. Both parties must register for accounts before sending and receiving funds.
Fee: None
Timeframe: Almost instant to 2 business days
Limit: Initially, there is a weekly limit of $250 per week. The limit is increased to $2,500 if the account is verified by linking a mobile phone number, Facebook account, or adding part of your social security number or date of birth.

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