Investing Assets & Markets Real Estate Investing Landlord Tips Should You Use Venmo to Collect Rent? The Pros and Cons of Accepting P2P Payments By Erin Eberlin Erin Eberlin Erin Eberlin is a real estate and landlord expert, covering rental management, tenant acquisition, and property investment. She has more than 16 years of experience in real estate. learn about our editorial policies Updated on September 15, 2022 Fact checked by Sarah Fisher Fact checked by Sarah Fisher Sarah Fisher is an associate editor at The Balance with two years of personal finance and business writing experience. She has written about personal finance for SmartAsset, and has held internships at the Consumer Financial Protection Bureau and Senator Kirsten Gillibrand's office. learn about our editorial policies In This Article View All In This Article Rent Payment Methods Landlords Need to Accept Collecting Rent Online Pros and Cons of Collecting Rent Online Pros of Using P2P Apps Cons of Using P2P Apps Frequently Asked Questions Photo: Shutterstock Both landlords and tenants want tenants to be able to pay their rent quickly and easily. Companies like Venmo and Zelle allow funds to be transferred electronically. While it sounds simple, there are pros and cons to these payment options that every landlord should know about. Key Takeaways Rent payment laws vary from state to state Apps like Venmo and Zelle allow tenants to pay quickly and easilyTenants may not be able to get a refund if they pay the wrong person through a P2P appLandlords cannot decline payments on Venmo and Zelle Rent Payment Methods Landlords Need to Accept Landlords may not always have the right to determine what forms of rent payment they will accept, depending on the state laws and the terms of the lease. For example, in Texas, if there is no specific method of payment listed in the lease, the landlord cannot refuse to accept cash payments and must provide a written receipt. You should check the laws in your state and see which forms of rent payment you are legally obligated to accept, if any. Collecting Rent Online 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 when using Venmo or Paypal for business transactions. Pros and Cons of Collecting Rent Online Pros Funds Transfer Quickly Payment is Easy There's a Record Cons Paying the Wrong Person Transaction Fees Partial Payments Automatically Go Through Pros of Using P2P Apps There are some great advantages if you allow your tenants to pay rent using payment options like Venmo or Zelle. Funds Transfer Quickly These payment apps allow the funds to be deposited directly into your account. The tenant will enter your contact information and the amount they owe 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. Payment is Easy It's very simple for tenants to pay via PayPal, Venmo, or Zelle. 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's a Record Some P2P services will show you a record of payments from an account holder. Although you should keep your own records, it can be helpful to have a digital trail of payments in case either you or your tenant needs to clarify a misunderstanding. Cons of Using P2P Apps There are some potential problems you should be aware of if you decide to accept rent payments through P2P apps. Paying the Wrong Person If your tenant doesn't have the correct contact information for you, they might pay the wrong person and might not be able to get their money back. Typically, the tenant would have to contact the person the money was incorrectly sent to in an effort to try and get the money back. Tip If a tenant sends money to the wrong person via Venmo or Zelle, they can cancel the payment if the recipient doesn't have an account. You can cancel a PayPal payment if the payment is labeled pending or unclaimed. Transaction Fees Zelle does not charge any fees, but Venmo and Paypal charge small processing fees 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 Partial payments will automatically go through on Venmo and Zelle. On PayPal, you can decide to not automatically accept payments. Since you cannot decline a payment, a tenant could send you any amount they want, and the funds are automatically transferred to you. 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 theoretically pay you one dollar through Venmo and stop or delay the eviction process. Frequently Asked Questions Is Venmo a Safe Way To Pay Rent? There are some risks to having a tenant pay via Venmo. They might send the money to the wrong person. In addition, you cannot decline payments on Venmo, which could impact eviction proceedings. Can I Use Zelle To Collect Rent? You can use Zelle to collect rent. Zelle does not charge any transaction fees. Want to read more content like this? Sign up for The Balance’s newsletter for daily insights, analysis, and financial tips, all delivered straight to your inbox every morning! Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. Texas State Law Library. "Rent."