Should You Collect Rent With Venmo?

The Pros and Cons of Accepting Online Payment

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Landlords want their tenants to pay their rent on time and in full. Landlords dream of a hassle-free, streamlined rent collecting process. Companies like Venmo and Zelle allow funds to be transferred electronically. While it sounds easy, there are both pros and cons to these payment options that every landlord should be aware of.

Can a Landlord Decide What Forms of Rent Payment to Accept?

Landlords typically have the right to determine what forms of rent payment they will accept. Allowing at least two different forms of payment is the general rule to allow tenants who may not have a bank account or online access to pay their rent. For example, if a landlord accepts rental payments online, he or she must accept another form of offline payment, such as a check. If a landlord accepts cash for rent, he or she must also accept another form, such as a check or money order.

Collecting Rent With Online Payment Services

There are many sites and apps that allow tenants to transfer funds to a landlord. These include sites like Venmo, Paypal and Zelle, all of which require both parties to create an account or to download an app.

Funds will then be transferred electronically between the accounts. Transfer times vary from instantly, when using Zelle, to 30 minutes to 1 business day, when using Paypal. Zelle does not currently charge any transfer fees, but you will incur a fee of about 3% when using Venmo or Paypal for business transactions.

Pros and Cons of Collecting Rent Online

  • Funds Transfer Quickly

  • Requires Little Effort

  • Misdirected Payments

  • No Protection for Tenant or Landlord

  • Payment Processing Times

  • Transaction Fees

  • Partial Payments Automatically Go Through


There are some great advantages of allowing your tenants to pay rent using online payment options like Venmo or Zelle.

  • Funds Transfer Quickly – These online payment sources allow the funds to be deposited directly into your account. The tenant will enter your contact information and the amount they want to pay and the funds will transfer directly to you. Zelle will transfer the funds instantly if both users have an account, Venmo can take 30 minutes to process and Paypal can take 30 minutes to 1 business day to process the transaction.
  • Requires Little Effort – A second attractive feature of allowing tenants to pay rent online is how easy it is. Neither party has to head to the bank to withdraw or deposit funds. Neither party has to drive to another location to pay or collect rent. With the click of a button, money is quickly transferred from one party to the other.


There are several red flags to be aware of when you collect rent using these online direct payment sources.

  • Misdirected Payments – When using these direct-pay methods, the person paying, this case being the tenant, is responsible for inputting the information of the person receiving the funds: the landlord. If a phone number or email address is entered incorrectly, the funds will be transferred to the wrong person. The tenant thinks they have paid their rent, the landlord never receives it, so the rent is considered late.
  • No Protection for Tenant or Landlord – Sites like Venmo and Zelle do not offer any protections when transferring funds. They say that by transferring funds, the person making the payment authorizes the transaction, so it is a valid payment. If the funds are transferred to the wrong person because of an error inputting contact information, they will not refund the money to the tenant or send it to the landlord. The tenant would have to contact the person the money was incorrectly sent to in an effort to try and get the money back.

Paypal offers a bit more protection. They will refund money if there is a valid dispute. However this process can take several days to several weeks to get straightened out, and during this time, the tenant is considered late on their rent.

  • Payment Processing Times – A tenant may think they are making an instant payment, but many of these sites take time to process the payment. A tenant may submit the rent payment on the date rent is due, but it might not actually process until the next business day, so it could be considered late. The landlord then has to deal with charging late fees and getting the tenant to pay the late fee when they believed their payment was on time.
  • Transaction Fees – At the moment, Zelle does not charge any fees. Venmo and Paypal charge a 3% processing fee for business transactions. People try to get around this fee by not declaring it a business transaction, but you risk having your account closed if the company finds out.
  • Partial Payments Automatically Go Through – One of the most dangerous parts of these automatic payments is that the tenants can pay any amount they want, and the funds are automatically transferred. If you are evicting a tenant for nonpayment, the eviction can be cured or stopped if you accept any payment amount from the tenant. Therefore, a tenant could pay you one dollar through Venmo and stop the eviction process since there is no option to decline a payment transfer.