When opening up a new credit account or establishing new service for say cable or utilities, are you asked if you’d like to set up automatic payments each month to ensure your service is never interrupted as well as saving you precious time? Sure you have.

collecting rent

It seems that every service provider makes that pitch to you and while it is convenient to set up an auto-pay, the benefit is far greater for the creditor rather than you. Would you like to establish a system where your tenants can set up auto-pay?

There are a few steps but the benefits are worth it, especially if you’re the owner of multiple rental properties. To get started, you’ll first need to set up a merchant account. A completed merchant account is little more than entering your business name, your bank’s routing information and the account number. Merchant account services charge a small transaction fee for each payment made to you, that’s how they make their money providing the fund transfer service.

Funds are transferred in a couple of ways, one by way of the Automated Clearing House, or ACH. ACH is the electronic version of a check and when a renter enters their routing and account numbers along with the rental amount the funds are transferred to you overnight just as a direct deposit would. An Electronic Funds Transfer, or EFT is another term used describing digital transfer of money. You can accept funds in either fashion.

But when all is said and done, you’ll be able to collect rent:

  • Automatically
  • No bounced checks
  • Pay on your website if desired

Sound like a good thing? You bet it is. There are various companies you can find online that can get you set up for auto-pay and perhaps the best place to start is your own bank, but make sure you shop around because the fees for these services vary.