Rent Collection

8 Myths of Online Payments

July 14, 2020

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The Myths Of Online Rent Payments

It’s no secret that people prefer to shop online. If the massive growth of online stores like Amazon is not evidence enough, let’s look at a few stats. In 2018, an estimated 1.8 billion people worldwide purchased goods online. In that same year, global e-retail sales amounted to $2.8 trillion. Projections show that this number will grow to more than $4.8 trillion by 2021.

Just as retail shopping (and virtually all other sectors of business) has moved online, real estate is becoming digital. Landlords and tenants have access to tools that enable them to collect rent payments, sign leases, screen tenants, field maintenance requests, and manage tenants all online with the help of property management software.

Moving your real estate business online might feel risky — especially when you’re dealing with online payments — but it shouldn’t. Here is a list of common myths related to online payments:

  1. Accepting online payments is too expensive.
  2. The security of personal information is at risk.
  3. Tenant’s don’t know how to use the required technology.
  4. Online payments are too complicated to set up.
  5. Switching to online payments means you can no longer accept cash or checks.
  6. Online transactions aren’t secure.
  7. Small businesses don’t need to accept online payments.
  8. There is a risk of bounced eChecks and chargebacks.

Below we’ll explore these eight myths and dispel your hesitancy toward online rent collection.

Myth #1: Accepting online payments is too expensive.

Online payments have a reputation for being expensive, but it isn’t entirely warranted. As paying for goods and services online has become more common, cheaper methods of payment have emerged. Of course, some methods still incur higher fees than others, but overall, collecting rent online is more affordable than it has ever been.

Credit cards tend to be more expensive than ACH payments. Average credit card fees online usually float between 2.5% to 3.5% through most services. ACH transactions, on the other hand, have a flat fee of $0.20 – $3 or a percentage of 0.5% – 1.5%. Some services, however, even offer these payment methods at no charge to you as the landlord (Innago being one of them).

The difference in fee amounts depends on a wide variety of factors including the service you choose to work with, the volume of your transactions, and whether or not you want to register as the merchant on file (a more time consuming, expensive setup process). Shop around and find the best fit for your business.

Myth #2: The security of personal information is at risk.

One of the most prevalent and long-lasting concerns associated with online payments is the perceived security risk. Whether you’re using credit cards or ACH to collect rent online, landlords and tenants must input sensitive information, which can feel risky. However, when you dig deeper, you might be surprised by how secure online payments actually are.

National and international regulating bodies require that all online entities protect their customers from data breaches. One example of this is in modern encryption technology. If you’re unfamiliar, encryption is the process of encoding information so that only authorized parties can decipher the encrypted information and access the original content. Encryption is what prevents cyber-hackers from accessing your info and any online processor worth it’s salt encrypts account numbers, routing numbers, card information, and personal info related to the transaction.

Encryption isn’t the only method of protection, though. Reputable processors also come equipped with SSL certificates (to protect data in transit), firewalls, and regular systems scans. While no payment is guaranteed to be 100% secure — even offline payments come with some amount of risk — there’s no need to stress. No online processor wants to deal with a security breach anymore than you do, which is why they take protective measures seriously.

Myth #3: Tenant’s don’t know how to use the required technology.

Some landlords fear that their tenants are unfamiliar with the technology needed to pay rent online. Since the whole point of collecting rent digitally is to simplify and streamline the process, teaching tenants how to make online payments sounds like a headache that isn’t worth the trouble.

Paying bills online is not a new phenomenon. In 2017, 56 percent of all bills were paid online. This number has undoubtedly grown over the past 3 years, and it doesn’t include all of the other products and services that are paid for digitally. Your tenants are probably better versed in online payments than you think.

Even if you do have some tenants that aren’t familiar with making payments online, many platforms that facilitate online rent payment are intuitive and easy to use. Online bill pay and property management software also enable tenants to automate payments. While some tenants might require a little help setting things up initially, they should have little need for assistance later on.

Myth #4: Online payment is too complicated to set up.

With so many methods of online rent collection to choose from, getting setup can feel overwhelming. Landlords can set up payments through their bank, online bill pay, P2P platforms like PayPal and Venmo, or property management software — to name a few.

We recommend that you assess your individual needs and determine what is best for you and your business. After you have a clear idea of what factors are most important to your business, begin your hunt for the form of online rent collection that best matches those needs. You will likely find that it is easier than you think if you know what you’re looking for.

After you’ve found your preferred platform for collecting rent online, setting up should be a breeze. These platforms aren’t meant to be difficult to use and most will have support available to help make the process even easier.

Myth #5: Switching to online payments means you can no longer accept cash or checks.

Many people think that as online payments become more popular, we will see the death of offline payments. This is simply untrue. Cash and checks still serve many purposes. Accepting rent online does not mean that you can’t allow tenants to use offline methods of payment if they so choose.

Offering online rent payment as an option for your tenants is just that — an option. There is nothing prohibiting tenants from still using cash or checks to pay their rent. Landlords can still deposit cash and checks at their bank, write out physical receipts, and update their books manually while also accepting online payments from other tenants. Some property management software even allows landlords to input offline payments manually so that they don’t have to worry about inconsistencies with their digital records.

All of this being said, it is possible to require your tenants to pay using a single method. We do advise, however, if you wish to do this, first consult an attorney. There may be laws and rules in your area that regulate how you can go about doing this.

Myth #6: Online transaction aren’t secure.

Your tenants may express hesitancy about paying online out of fear that the transaction itself won’t be secure. What they may not know is that transaction fraud is quite rare. It can easily be avoided with a few key steps.

Encourage your tenants to do the following:

  • Use a Secure Connection. It is important to avoid public wifi connections when completing online transactions. If this is your tenant’s only option, they should use a VPN (virtual private network) for added security.
  • Use a Trusted Website. This responsibility falls to you. When picking your method of online rent collection, be sure to check its security policy so that you and your tenants’ information will be kept safe.
  • Opt for Credit over Debit. If you choose to accept credit and debit cards as a form of rent payment, your tenants might benefit from using credit rather than debit. Paying with a debit card draws real funds straight from your tenant’s bank account, making it more difficult to recover lost money.
  • Keep an Eye on Your Accounts. While automating rent payments has its benefits, setting it and forgetting it is not recommended. Your tenants should stay on top of their transactions and statements. If they see anything suspicious, it is better to report it sooner rather than later.

Myth #7: Small businesses don’t need to accept online payments.

It’s true that you could continue operating your real estate business without accepting any online payments, but this is not advised. There are significant benefits to accepting online payments that you should consider as a small business owner.

For one, accepting online payments will enable growth. As we discussed in the introduction, people prefer buying and paying online. Offering it as an option is a selling point for prospective tenants and might be the difference between you and your competitors.

What’s more, providing tenants with the ability to pay rent online results in added convenience. They won’t have to drop off cash or checks, and you won’t have to count their cash or write receipts. The ability to automate payments is an attractive feature of online payments, as well. It means less late fees for tenants, and more on-time payments for you.

Speaking of landlords, online rent collection will simplify your bookkeeping. With digital payments, transaction information is automatically recorded and displayed on an online portal. This lets you see who paid, how they paid, and when they paid.

Myth #8: There is a risk of bounced eChecks and chargebacks.

Just like with paper checks, there is a chance of bounced eChecks, and credit cards produce the added headache of chargebacks. If you keep consistent records, this doesn’t have to be an issue.

eChecks, otherwise known as ACH payments, are electronic payments funded by your tenant’s bank account. eChecks must clear the bank before they’re credited to landlords. If a tenant has insufficient funds at the time of payment, the transfer will not go through. Encouraging your tenants to stay on top of their automated payments will help prevent this, but if a bounced eCheck does occur, you should follow the same procedure you would with a bounced paper check.

A chargeback, however, is a charge that is returned to a payment card after a tenant successfully disputes an item on their account statement. Chargebacks may occur on debit or credit cards. The good news is that if a tenant wrongfully claims that a rent charge is fraudulent, you can dispute their claim as long as you have evidence that proves the validity of the charge. Well-kept records like a signed lease document or an invoice (all of which can be provided by property management software) should be strong enough evidence to prove the charge’s validity.


Transitioning your real estate business to online payments might feel daunting, especially with all of the misconceptions surrounding online payments. Hopefully our discussion of these 8 myths has boosted your confidence. The many benefits of collecting rent online far outweigh the few drawbacks. eCommerce is the growing rapidly, and if you haven’t considered digitalizing your business, now is the time.

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