What are the Risks of Using Zelle, Venmo, Cash, or Checks for Rent Payments?

Venmo, Zelle, cash, and checks may seem like easy ways to collect rent, but each comes with its own trade-offs. Some lack solid records, whereas others offer no real protection. A few open the door to avoidable disputes.

In this article, we’ll break down the risks behind each rent payment method and explain why convenience doesn’t always equal reliability. If you’re a landlord or tenant looking to avoid costly mistakes, we’ll help you understand how these widely-used payment options actually hold up when problems arise.

Risks of Venmo

Venmo is the ubiquitous payment app that everyone uses to split pizza with friends, but how does it do as a rent collection service? There are several issues with Venmo, and one of the biggest is that it charges a 1.9% business fee for every transaction.

If you pay the median rent of $1,379, that amounts to $26 every month, which is coming out of your bottom line. Furthermore, Venmo charges consumers an additional 3% fee to send money using a credit card, which will surely ruffle your tenant’s feathers.

Venmo makes it easy to pull tax forms, but instant transfers cost extra, with a maximum fee of $15. Just like Zelle, Venmo also has the risk of a tenant accidentally paying the wrong person. Additionally, they don’t block partial payments, which can complicate eviction proceedings.

Venmo does not offer a recurring payment option, so your tenant will need to make a new payment every month, which may result in late payments. Since Venmo is an all-purpose payment app and isn’t tailored for property management, it lacks useful rental features like automatic late fee calculation, which could create more admin work for you.

Another noteworthy downside to Venmo is that it’s impossible to cancel a payment made through the app. Their policies don’t allow a refund to the renter if the tenant pays the wrong amount. In the unlikely event that Venmo chooses to get involved in a payment dispute, they usually side with the buyer, which in your case could take more money out of your pocket.

Risks of Zelle

Zelle markets itself as the best method for sending money to friends and family, and you may have tenants wanting to use it to send you monthly rent payments. Zelle works directly with banks, so its functionality depends on whether your bank (or your tenant’s) accepts Zelle.

If they do accept Zelle, each bank will still have limits on daily and monthly payments. These limits may be as low as $1,000 a day and $5,000 per month. If a tenant’s bank does not accept Zelle, the limits are even stricter, with a weekly send limit of just $500.

According to a recent Apartment List report, the median rent in America is $1379 per month, so Zelle’s payment limits will definitely complicate your ability to collect.

Beyond the limits, Zelle is also risky for rent collection due to the potential for your tenant to accidentally pay the wrong person. Zelle payments are not easily trackable for your business, and partial payments go through instantly, which could halt a nonpayment eviction from proceeding with just a $1 payment.

Zelle is also rife with scams to look out for.

Risks of Cash

You may have read the risks of Venmo and Zelle and thought to yourself that this all feels overly complicated. If the goal is to collect rent, why not resort to the tried-and-true method of cold, hard cash?

Cash doesn’t include any extra fees, banks won’t bat an eye at depositing it immediately, and if your tenant can’t afford rent then it’s extraordinarily obvious since they also can’t deliver the right amount of cash.

On the other hand, cash definitely carries its own risks for making rent payments. The most obvious problem is that you have to physically collect cash, which can be time consuming and complicated, especially if you’re managing out-of-state rentals.

Cash is easy to misplace and can be hard to properly document. Say, for instance, that a payment is a few bills short but the tenant insists they paid in full. How do you prove it?

There are fantastic platforms to streamline your rental management. If you’ve digitized all the other parts of your rental process (marketing, screening, leases, etc.), then why still require cash payments?

Risks of Checks

Checks carry many of the same risks as cash. If it’s easy to misplace a stack of cash, then it’s even easier to lose a single check – or for your tenant to insist they sent the check but it got “lost in the mail” without any proof.

Another important thing to keep in mind is that checks are no longer used much, and tenants under 40 may not even have a checkbook or be particularly comfortable writing and delivering a check every month.

Another serious risk of accepting rent via check is that the check can bounce, and it may take some time for you to even notice. This causes you extra money and time, and especially if you have multiple rental units then this can become a serious headache.

Checks can also be canceled by tenants, and there’s no automated way for you to give your tenant a receipt for their payment each month.

The Best Rent Payment Option

Now that we’ve pointed out the flaws of some of the most common payment methods, allow us to point you to the best option.

TurboTenant’s rent collection features are custom made for landlords. We make it easy for landlords and tenants to connect their bank accounts, and renters can also pay by credit card.

We include customizable late fees, and tenants can set up automatic rent payments.

All payments are documented in your account, and our support team is available 7 days a week to troubleshoot any issues that you or your tenant may face.

Sign up for a free TurboTenant account today to get started.