paying echeck for property management, SAFE?

Question

Is it safe to use eCheck? PM is asking for payment, and one option is eCheck. Otherwise they charge like 3% for credit card.

I am wondering if someone use my bank account number and router number there, they can do withdrawal.

It seems there is no protection using echeck. Am I missing something, it should be more secure.

Paul Ronto · Answer

Here's a more in depth response about different payment methods. There are many ways to take payment, cash, check, money order, ACH, credit card, wire transfer so you just need to understand the pros and cons or each so you can make the best choice for you. Cash: Cash may seem great, it's real and doesn't bounce, however, it usually means you have to meet your renter in person to collect which can be a pain and it's hard to keep track of. You need a system that you manually enter amounts and dates and it's easily lost without any way to recover those funds. I would warn against cash. Personal Check: This is the number one way tenants pay rent. It's easy for renters and landlords. They can be mailed and deposited from afar. The downside is bounced checks which cost you, the landlord, extra money and time to deal with. They can be canceled by the tenant at any point as well.Money Orders/Cashiers Check: These are considered safer than personal checks because you need to use verified funds to purchase them, however, although it's harder they can still be canceled before you deposit them and they are a burden for the tenant to get and for you to electronically deposit through most bank apps, which means you have to take a trip to the bank. ACH: This is a direct deposit from tenant to a landlords banking account, is usually free to both parties but can take 4-7 days to process. It's easy but not quick. Credit Card: Easy for everyone usually involved but there tend to be steep charges to the person collecting, typically 2-4% of the total amount, so on a 2K rent, you could be paying out 80$ just to accept payment. Also, Credit cards are easy to reverse the charges on up to 120-180 down the road. So although you get payment today, if your tenant decides to charge back 6 months down the road because they are unhappy with you about something they can, and most large CC companies like Visa protect the end user over the person collecting the payment.Wire Transfer: These are bank to bank transfers and are usually the safest way to transfer money, they are fast, almost immediately in most cases and cannot be easily reversed. However, they tend to cost 20-30$ per transfer.Anyway, there's the quick rundown on a few of the most common payment methods. Our suggestion is to find an online payment system that helps you navigate these and track them in one place. I would urge you not to share your personal bank information with a tenant like an account and routing number as mentioned above, some online payment systems out there let you sign up and submit all your bank info, and then invite tenants to pay. They are connected to your account but never actually see or have access to your sensitive banking info.Hope this helps! Feel free to reach out directly if you have any other questions about collecting rent payments.

Rick S. · Answer

@Peter Sik in order to debit funds from an account most of the software providers and banks they work with are now requiring some type of bank account verification, such as micro deposits, before the debit can occur. So that may just be a way for the manager to deposit funds to your account, but not debit, depending on the authorization.Also, worst case scenario you could file an Unauthorized claim with your bank and have the debit attempt reversed as an R10 as that is the return code they use if returned within the specified time, which is typically 60 days from the time it appears on a statement.ACH is very common and much more affordable for transfers as @Paul Ronto mentioned. Thanks!

Peter Sik · Answer

@Frank Chin For credit card, i can charge backAccount Closed I don't have Echeck account. Just checking and saving. I checked online, it seems Chase does not have Echeck account.For example, what if I enter someone's bank account number and routing number, this web can withdraw the fund? There is no such authorization number existing using this called Echeck function in my Chase bank nor this PM web site. If fund can be withdraw with only routing and account number then this is very dangerous.

Paul Ronto · Answer

@Kaycee Wegener hit the nail on the head, and eCheck is an ACH transfer. They are secure, like a wire transfer but two differences, wires cost money and are almost instant, ACH is much cheaper but take a few days to deposit the funds. The nice part is these are "verified funds" from one bank to another. If something goes wrong your bank will help you sort it out, where as with cash, CC or checks it can take time and energy if something goes wrong. Be confident, eChecks are a good route to go.

Kaycee Miller · Answer

@Peter Sik your PM is probably using a property management software program to process this echeck. echeck's are essentially identical to ACH payments and are super secure. It's exactly what power companies use for an online bill pay system, student loan payments, and mortgage payments are done this way too. I doubt your PM would put his business at risk by using a system that doesn't protect his tenant's information and all the bank and accounting information he has on his end (to pay employees, disperse funds to owners, etc.) In most cases, for a pm to get set up as a merchant processor for managing rent payments, he has to get approved by a bank or merchant provider that ensures bank grade security by the software. He will also has to prove to be PCI compliant. If you still feel insecure, talk to your bank and ask them what kind of protection they provide you against theft via authorized payments. You should be able to dispute an unauthorized payment, but it might take a little longer than doing a credit card charge back.If you still don't feel comfortable with online rent payments, check with your state laws - in most states a landlord HAS to accept more than one form of payment, like cash or check on top of e-payments. (Unless a tenant has a history of late payments or bounced checks). Good luck!

Shaun Patterson · Answer

@Peter Sik every form of payment has its faults. Checks have the same account and routing number printed in the check it self. That means that someone at the office can take your info down. Or someone can steal your check info from out of the mailbox. Credit cards can be hacked the same way if you are putting them in online or giving them face to face. I worked in banking for 7 years. You can get hacked and swindled no matter what you do. I think you might be focusing on this to much of it personally bothers you then I would ask the management company for a different way to pay like say certified checks. The only downside is that their has been a lot of fraudulent cashiers check and bad checks going around so they will wait for funds to clear on their side before anything is done

Peter Sik · Answer

@Shaun Patterson credit card , you can do dispute. check, you need to have the paper check at least. But for the ACH, you just need routing and account number. This is the dangerous method to send money. Because many people knows your account number then they can search the routing number on line. "I know in our system we don't see the clients information and the funds are taken right out of their account and deposited into ours."At the back end, they can do coding to record all the information you typed in the web. Trust me on this. I was a web programming and also maintain many e-commerce sites. Also once a hacker find a way hacked your site, they will place a code and do their recording silently.

Shaun Patterson · Answer

As said before Echeck is just a faster more secure way to get funds from tenants and landlords. It works almost like a Ach. I know in our system we don't see the clients information and the funds are taken right out of their account and deposited into ours. If your worried about echeck then every paper check you sent out should be scaring you. It's also the same process with credit card payments the only difference is the merchant processor charges 3%.

Peter Sik · Answer

@Fred Heller I am a IT guy worked with many E-Commerce sites. The payee (PM) can record my data in their database before passing my data to the bank because I am still in their web site when entering my bank data. Unless they forward me to bank's web site before entering my bank account info then PM web site cannot record my data. Just like e-commerce web site with Paypal, you will forward to Paypal web site before entering your Paypal login and pw for payment then other party does not have chance to record your login normally.Yes, I agree to use Quickpay is the best but i think this PM doesn't take it.

Fred Heller · Answer

The payee doesn't see your account info when you use an online payment system. I use Chase, and they have QuickPay, which I love. The funds transfer directly from your account to the payee's account. The only problem is it only works on banks on the network. And only the big guys are on the network, like BOA, Chase, Wells Fargo, and Capital One.