Cash used to be king, but in today’s digital society things are changing. Online bill pay has increased in recent years with recurring payments chief among those. And why not? The customer – or in your case, the tenant – sets up recurring payments and it’s paid on time, every time. No need to remember to pay each month. You may have already set up a portal for your tenants to link their bank accounts for online rent payments, but have you considered allowing them to pay by credit card?
We’ve put together a few pros and cons to help you decide if accepting credit cards for rent payments is right for you.
One of the perks of accepting credit cards for online rent payments is the quick turnaround time.
There’s a lot of waiting around with a traditional check. It can be sent through the mail or your tenant may drop it off, but you’ll still have to find the time to deposit the check.
ACH payments are often more convenient, but may take 2-4 (business!) days to transfer to your bank account.
Payments made by credit card are faster and can be batched out as soon as the night of the payment.
Renter Benefits are a Selling Point
If you live in a competitive rental market, you need to find creative ways to stand out. Accepting credit cards is a selling point to many potential tenants. They can build their credit score and earn reward points by paying the rent with their card.
Get Paid on Time
If your tenant is a little short on funds, accepting credit cards is a great way to ensure they can pay for their rent within the rental agreement’s time frame.
No Bounced Checks
Traditional check payments and ACH deposits can take a few days before the bank notifies you of insufficient funds. That can throw your budget off. If a credit card is decline, it’ll be at the point of sale. Your tenant will receive an alert, and it will be up to them to make other arrangements. No more tracking them down in hopes that the second payment will go through.
Safe and Secure
One of the many reasons that credit cards are so popular today is they are safer and more secure than other payment forms. The service that you use will have a set of security checks for the card used. This could be the full number, the CVV code on the back, the billing address details, and more.
You don’t have to worry that the check will bounce or you’re being paid with stolen money, and you won’t ever misplace an envelope filled with credit card payments.
Saves You Time
The most overlooked benefit of accepting credit cards is that it saves everyone time. Instead of having to make individual calls to collect payments or wait for the mail to deliver them, transactions happen in the blink of an eye.
One of the biggest potential issues to weigh is that, by accepting credit cards, you open yourself up to the possibility of a disgruntled tenant canceling their rent payment on their card or disputing the charge. If this happens, you do have ways to state your case on why the chargeback is not valid.
When a credit card is used there will be an interchange fee. Depending on the service you choose to use, you may be able to shift those fees to the tenant.
A Learning Curve
As with any new technology, there can be a learning curve to a new form of payment acceptance, but it is pretty small. You can reach out to the service you use to clarify any questions.
Is It Worth It?
Accepting credit cards for rent payments has a lot of value for both landlord and tenant. You’ll save time and provide additional options that your tenant may not get when they rent from other landlords. If you’re ready to start accepting rent payments, let LandlordStation help you set that up today!