Venmo to start charging high fees. Alternatives?

Question

We've been using Venmo to accept rent payments. It has its pros and cons, but one of the pros has been the lack of fees. Beginning August 2, they will start charging 1.9% for accepting rent and 1.5% for sending an instant payment. What are you using to accept rent payments?

John Underwood · Answer

Zelle. It's free, supported by the major banks and transfers in seconds.

I also use PayPal, ACH and my favorite is they just deposit directly into my business account.

Patrick M. · Answer

I spent the other day chatting with Venmo and point blank asked them if it would be applicable to rent. They repeatedly stated that it is 100% on the payees side, that if they (the payee) mark it as a payment for services then the fee will be imposed to "protect" the payee. They gave me a lot of run around to get to that point and would not address my question directly.

This goes 100% against what has been reported in the WSJ and elsewhere: That Paypal is very concerned with revenue generating and as previously stated, the "business designation" was a dud. So- I would foresee them looking to hit rents.

As @Joe Splitrock mentioned- we all knew that this was outside of the intended use. I allowed it as a convenience to some of my tenants, but they will be told to switch over to Zelle like the rest beginning with the August payment.

Al Pat · Answer

@John Underwood

I have been using Zelle, Cash App and tenant driving up to my bank to put into my account.

Lance S. · Answer

@Bob Langworthy

Has anyone just used Quickbooks so all accounting is in same program? Pros, Cons?

Scott M. · Answer

Zelle, ACH are great free ways for some tenants to pay rent.

Joe Splitrock · Answer

@Bob Langworthy Venmo has long stated that it is not for use in business, so landlords collecting rent with it were using outside of terms of service. Last year they tried a feature where the person sending money could opt for "buyer protection" when buying goods or services. That added an additional 3% fee on the side of the person sending money. I don't think it was popular so now they put it on the 1.9% on the receiving side. The key is the person sending money has to select between sending to friends or sending for goods or services. If they select "friend" then it is still no charge. I would not advocate using it that or any service outside it's intended use because it could be seen as fraud. It could result in funds frozen or the account closed.

I would recommend using an ACH based rent payment system which is what most all electronic bill pay uses. There are many services that offer this for free like Apartments.com or Zillow.

Here is the bottom line. Companies offering "free" services will look for ways to monetize. It is only free as long as they are building a customer base, then the charges come. Monetization may be direct fees, selling add on services or advertising. Rest assured, nothing in life is free. Paypal owns Venmo and they are struggling. The other side of this is consumer protections. Electronic payments are riddled with fraud, so these companies are forced to introduce consumer protections. ACH, credit card, etc. all have consumer protections. So on top of the 1.9% fee, you are now subject to customer dispute when someone pays with Venmo. That means opportunity to pull back payment later. That is probably more dangerous than the 1.9% fee. I don't trust PayPal, after being the victim of scams of Ebay this year and watching PayPal do nothing. Six months later and the scammers PayPal account is still open. Very scary.

Alecia Loveless · Answer

@Anthony Vander Meer If you don’t mind me asking, what software platform do you use? I’m pretty small, just starting out snd only have 8 doors. Thanks!

Anthony Vander Meer · Answer

@Bob Langworthy

Depending on how many units you have I would spend a few dollars a month and get one of the many PM softwares available. On the highest end you’ll pay $35 a month and it will take care of reporting, bill pay, year end taxes etc.  Many are free of charge as well if you don’t mind the 2-3 day deposit hold over.

William Bucklin · Answer

Its better than Buildiums 2.95 percent Fee

David P. · Answer

I think that new release is misleading. Based on what Im interpreting from the new fees is that only instant transfer and collecting money for goods or service are there fees. I normally do the standard no fee 1-3 business days transfer which will remain free. If your sending for good or services there is a fee but if its just to friends family i believe there is still no fees.

Venmo to start charging high fees. Alternatives?

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