Fastest AND cheapest ways to accept payments from tenants

[Eugene Lavatman]

Hello BiggerPockets community, we have been accepting payments from tenants using Zelle, Venmo and Paypal. Zelle and Venmo requires  tenants to have an American bank account. We can receive the payment INSTANTLY and FOR FREE, no processing fee.

The problem is Venmo limits you to $20,000 withdrawn per week.

Zelle can only be used for folks who use major USA banks (some folks have unsupported banks and cant use Zelle).

PayPal we use as a back-up if tenant does not have an American bank, but there is a 3% processing fee, we require tenants to pay that 3%  processing fee if they use PayPal.

All three payment methods allow us to do instant transfers. We have been able scale our business for a while but are now just a bit too big to use these methods for accepting payments. It takes too damn long to do accounting and limitations wont allow us to scale.

We are interested in receiving payments using REAL TIME PAYMENT network from clearing house (push payments) or SAME DAY ACH / NEXT DAY ACH. Venmo recently created Venmo for business but they charge 1.9% + $0.10 per transaction. Traditional gateways like Stripe charge 3% processing fee and Appfolio takes too long to process ACH payments. Please help!

[JD Martin]

Originally posted by @Eugene Lavatman:

@JD Martin we master lease the properties and thus we are treated like tenants, many contracts state payment required by the 5th latest or else penalties. Some landlords are strapped for cash, especially during pandemic and on the first of every month we get a phone call lol.

We are ok with paying processing fees up to 0.75 - 1.00%, its 2021 and the technology that is available is truly remarkable, Real time payments via clearing house only charge banks/gateways $0.01 - $0.10. Same day ACH cost a bit more but definitely not 1.99%. No point of wasting tens of thousands of dollars on processing fees.

Millennials have expectations of instant payments or same day with minimal processing fee and so do we. 

Facebook is supposed to launch Diem.com this month (used to be called "Libra", a blockchain stable coin) things are changing but I guess not fast enough. 

 It's not that the technology isn't available, it's that someone wants to get paid for developing, maintaining and deploying that technology. Millennials can expect all they want; that still doesn't mean that others should work for free. If anything, the expectation (largely brought about by the internet) that everything should be free is causing a lot of economic damage. Let's put it in perspective: if you collect $1 million (since you can't withdraw more than $20k/wk, so there's the 1 mil) on 165 units and pay a 2% processing fee, that means that averaged out you are collecting $6k per unit annually and paying $120 per unit to collect that money. Pretty small potatoes if you ask me.

You know there's an old saying that pigs get fat and hogs get slaughtered. I'm not telling you not to try to save money, but things cost money for a reason: they deliver value. Anything you think is free is either worthless or they are getting paid in some other fashion. If I didn't want to wait 5 days for an ACH to clear I wouldn't have any problem paying what amounts to $10/month in your example to have it same day/next day. I want the company/companies that deliver my money to be healthy and long-lasting, not go out of business because all of its customers robbed it of a few pennies enough so the entire enterprise fails.