How can I accept ACH payments or direct deposit on my website?

23 Replies

Hey folks- I want to re-vamp my rental website to allow tenants to pay rent on the page with their checking account. 

I don't want to use a third-party like Dwolla or WilliamPaid. I simply want them to go there, type in their account number and routing number and name/address - and send the money. I also would like to have the ability to set up reoccurring direct deposit from the tenant to my checking account. 

Anyone have any good tips on how to make this happen? Is my bank's "merchant services" the only one that can do this? 

Thanks!  

Those dudes at BiggerPockets should set something like this up.  

With their existing user base of landlords it would be a natural fit for their audience and a way to monetize their community on an opt-in basis.  

@Brandon Turner

Does your rental website host have ACH or any other type of "shopping" cart or merchant services available? Depending on your hosting site and plan they either have this or give you the ability to program it yourself. However, you still need to know if your bank allows connectivity directly from third party like that using Direct Connect or other OFX solution. The solutions exists because that is what Dwolla and others are using.

Well, I use Buildium for my accounting ACH services.  $30 per month gets you to 40 units I think.  Anyways, its typically $99 setup fee for ACH but they've got a referral program going on if you sign up under me that will waive the fee.  Let me know what you think.

Probably not what you're looking for, but Intuit, makers of Quickbooks, have a cool rent collection tool that is only $1 fee per rent payment

www.billandpay.com is the way to go. Flat monthly fee of $16.00 and .55 a transaction. Tenants have a portal, the flexibility is endless. They have a referral program. Our clients LOVE it. You have a portal on your website and more.....

You have an option to integrate with QuickBooks. It syncs all the invoices, payments, send reminders and WE love it too.

Do mention my name.

@Brandon Turner  this isn't exactly what you are wanting - but I feel like it will get you the end result.

Go to your bank and get their ACH form for customers (that is you).

Simply integrate this form in your application/lease signing process.

Done!

One other thing - I would caution against using your website for ACH activity even if its just the front-end because of the fraud/risk/liability...

Great discussion!

Originally posted by @Brandon Turner:

Hey folks- I want to re-vamp my rental website to allow tenants to pay rent on the page with their checking account. 

I don't want to use a third-party like Dwolla or WilliamPaid. I simply want them to go there, type in their account number and routing number and name/address - and send the money. I also would like to have the ability to set up reoccurring direct deposit from the tenant to my checking account. 

Anyone have any good tips on how to make this happen? Is my bank's "merchant services" the only one that can do this? 

Thanks!  

 

From what you posted, you would be processing ACH payments as an ACH Operator. The first question regarding ACH processing will be "Are you part of a federally insured depository financial institution?" If not, you really can't process ACH, just use ACH.

If you become a basic member of NACHA you can view the 250 or so pages of ACH Rules. I think you will realize you don't want to be an ACH operator or payment processor and/or aggregator.

https://www.nacha.org/members

Article 4, Sections 4.1, 4.2...

@Brandon Turner  

<ProjectManangerHat>
Exactly what are you trying to accomplish?  
What is the end result you want to see from your website?
Are you simply looking to get paid?
Are you trying to protect the Brandon Turner brand by not showing logos of collection companies?
Are you solving payment issues for your tenants?
</ProjectManangerHat>

I'm not sure where your site is hosted, but here is GoDaddy's payment system:

https://bookkeeping.godaddy.com/get_paid?ci=90620

I've installed 5 or 6 different payment systems for my clients over the years and now they've all gotten cheaper and easier to use.  They all work pretty much the same way:
1. You give them a destination bank account
2. They present a front end to the customer
3. They hide all transaction data from both parties
4. They email both parties when the payment has gone through

I still recommend Dwolla.com because they have no setup fee and transactions as 25 cents each.

Another vote for Buildium.  I've never had a problem with them and it makes it SUPER easy for the tenants to pay - always a good thing.  For those who don't have a website yet, they create one for you as part of their monthly fee.

Regardless of who you use, please make sure you have the appropriate encryption on your payment page in order to accept payments.  This happens often and makes it very easy for dishonest folks to steal from you.  

@Brandon Turner  

You will want to use a third-party payment processor - whether visible such Dwolla or behind the scenes (your hosting provider).   

To set-up for payment processing on your own and pass PCI and/or ACH requirements can be expensive (development, audit and assurance) and, as @Jimmy Moncrief  warned, the liability is almost certain to outweigh the benefit of brand control.

For a small operation, I would recommend you find a storefront hosting provider or payment gateway and simply throw the session to it from your website.

@Brandon Turner

If you are looking to handle the integration yourself you might want to look at PaySimple's solution or Balanced Payments.

There's also this funky software that basically lets you print check drafts yourself. I suppose if you have a tenant's written authorization you should be good to go. It's old school with paper and deposits but really cheap. It's Called Echeckdirect.

On the pure property rental side you have these, of many options, although they are always looking for volume:

Have you looked at PayLease? or RentPayment (

https://www.rentpayment.com/now/)

As mentioned above, Buildium does this. I am pretty sure rent manager does too.

@Brandon Turner   From your description it seems like you don't want to use third party wallet providers; but they are best suited for this purpose and there are lot of options in this space. 

Are you open to connect to gateway directly? If so, you may be able to find a gateway that gives you account and processes ACH. GlobalConnect, Authorize.net. If you are running smallish volume,  Auth.net is more likely to give you an account than GlobalCollect. 

Beyond these two layers; if you want directly talk to ACH network then @Chris Martin correct. You gotta be a bank and you don't want to go that route. I used to work for PayPal and even they are not bank :)

Teaching your tenants to do BillPay may be a good option too.

This post has been removed.

At one time if you had to account with US bank, they would give you a portal to put in your website so your customers could pay and US bank is their own gateway.


Joe Gore

I think Jimmy Moncreif is right on the money, so to speak. I've taken a slightly different route though.  I don't just want the rent to come in automagically and electronically, I want the application fee, the security deposit and any other $ to follow the same path.  So I've begun using Square Cash.  

Brought to you by the folks who do the Square credit card reader, Square Cash is more similar to Paypal than anything else I guess, but there are no fees.  Resident sends me an email, copies Square Cash and poof!, the money's on the way to my account.  

Set up involves sender and recipient each giving their respective debit card number to Square cash.  So, in effect, their debit card pays your debit card, but neither of you see the other's card info.  In the words of one of my residents: "It's easy."  (She's not very excitable.)

Here's the info I provide to my first-time users.

Not perfect by  a long stretch, but it has worked really well, has met with good adoption by residents, and it has reduced the time spent banking.

My $.02.

@Chris Martin  - I guess what I'm noticing is that there is no perfect solution. That said, I'm still looking. I mean, I can go on a lot of sites and check out using my Checking Account number, and those sites are not banks - so I think the solution is probably with the Merchant Services at the bank, who I have not yet talked to. I still plan to do that this week. 

@Brandon Turner  

I guess it boils down to what "perfect" is.

Please post back what you find out about your Merchant Service inquiry. I'm curious to learn if it has become cost effective yet (last I checked was 2011...)

I've been searching for an easy, low-cost way to collect rent automatically every month for some time. After reading these posts and looking around online I decided to go with Dwolla to handle it. I've had a few tenants request automatic draft and this seems to be the most cost effective option out there that I've seen. I have not tried it yet so I can't comment on how well it works, but for the money it looks like a good deal. 

@Brandon Turner  - It looks like they offer Dwolla API applications & buttons which may work for you and your site. I believe the payment services would be handled on their site, but then re-route the payer back to your site afterwards. Similar to shopping websites that forward to PayPal during checkout, and then back to the original site.

Hey @Colby Jacobs  I actually use Dwolla and their api stuff right now, but the problem I have with them is that they require the tenant to supply their online bank login information and password. Like, not their Dwolla password, but their actual "Bank of America" "Wells Fargo"  "USBank" login info and password. This freaks all the tenants out. And rightfully so. 

Plus, every single month we have multiple tenants who can't pay for one reason or another, and when they call Dwolla for support, Dwolla has them set up a whole new account for themselves because their support team isn't real good at understanding the API side of things. In the end, the tenant ends up paying themselves, to their own Dwolla account, but don't actually pay us. Which then we file a 3 day notice, they get mad because they no longer have the money, and it's just a colossal waste of effort. 

Ok, my vent is over :) 

@Brandon Turner  

CURRENTLY.  I have great relationships with my tenants and I'm invested in only Class A/B properties so... I personally leave it up to tenants to deposit the rents directly in my account.  They have my bank account number and either deposit it at the branch or automatically through their bank.  I've written into the lease agreement that "all rents must be actually RECIEVED by the 1st of the month".  This addresses the 3 days it usually takes for automatic deposit to actually be "posted" to your account.

I'm scaling my operation currently and will likely utilize the next two options shortly:

DEPOSIT ONLY CARDS.  I would say a better option might be to talk to you bank about getting you some "deposit only" cards for your tenant.  This allows your tenant to go to any ATM of your bank and deposit the rent directly.

BUILDIUM.  I'm planning to use this property management software, which, based on my research, is the highest rated currently on the market.  It integrates several payment features into it's system.

We use Appfolio and they do a great job with ACH payments. At first i was concerned that tenants would not switch from "old school" payment methods, but they have easily made the switch.  They like that they each get to create their own portals, which they also use for making repair requests.   When tenants have questions, we walk them through the process the first time (over the phone) and they usually figure it out by the second usage...saving us both time.

 @Brandon Turner , you should have enough properties to make this work efficiently for you.  I think the magic number is something like 40-50 properties last time I checked where it begins to make economic sense.

My daughter used PayPal and she and the tenants loved it.  There is no fee for either party if they just choose the "pay friends and family" option.  I called PayPal at the time she was setting this up, and they said that was correct for rent payments.  If the tenant chooses to pay with a credit card, then have them select the option that they will pay the fee for that.  It's free if they use their bank account.  And free to you.

You can also set up recurring payments with PayPal.  I'm not sure if there's a fee for that.  

The only downside, is it can take a few days for you to transfer money out of PayPal into your bank account.

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