Online rent payments are now the norm, and offering tenants a convenient way to pay can significantly reduce late payments and improve the renter experience. While accepting rent via apps like Zelle, Venmo, and Cash App may seem like an easy solution, they weren’t designed for rental businesses, which can introduce some risks and obstacles.
Zelle, Venmo, and Cash App represent a growing wave of payment apps designed to make sending and receiving money fast and convenient. It’s no secret that landlords and tenants alike benefit when renters are given easy ways to pay rent. Making rent collection seamless and hassle-free is a great way to reduce late payments and improve the tenant experience.
For this reason, it can be tempting to offer these alternatives to accept rent payments from Zelle, Venmo, and Cash App, but are these services the best way to collect rent electronically? Unfortunately, the answer is no. There can be some unexpected risks of allowing these services as a landlord or property manager.
Online Payments Are Here to Stay
Online payments are an essential service to offer your tenants. Ten years ago, just 1 in 25 tenants paid rent online. Today, it’s 1 in 2. New data shows that offering online payments pays off with fewer late fees and more on-time payments. In fact, over the past decade, tenants who make offline rent payments have consistently had the highest rates of late payments, peaking at 25% in 2025.
Learn more: Online Rent Payments More Popular Than Cash or Checks, Data Reveals
The prevalence of online payments and the ease of use for landlords or managers and tenants alike may make you consider offering any service to accept rent electronically. Unfortunately, not all payment processing options are created equally, and many are not designed with landlords and renters in mind.
Landlords and Property Managers Should Avoid Venmo, Cash App, and Zelle for Online Payments
In short, landlords shouldn’t accept rent from these Peer-to-Peer or gateway services. But keep reading, and we will cut through the marketing hype and dig into the details of these and other services to help you decide which online rent payment options are best for you and your tenants.
Peer-to-Peer (P2P) services such as Venmo and Cash App, and most gateway services like Zelle, were designed to make it easy for people to send money to each other, but they weren’t designed for business use. They were created to send money electronically as a gift to a relative or so that a group of friends can pay each other back for the bill. They were not designed for managing rental income. Since they weren’t built for businesses, they don’t include many of the safeguards and tools landlords rely on to protect payments and stay organized.
P2P has the funds sent and delivered from person to person through an app that acts like a digital wallet. A gateway service is different in that it is connected to a financial institution to allow that institution to send and receive those funds.
Understanding the Risks of Accepting Rent Payments from Zelle, Venmo, and Cash App
Although tempting to allow tenants to pay with these convenient services because they were designed for other purposes, they lack some of the more important features a landlord relies on for receiving tenant rent payments electronically.
Legal and Compliance Concerns
If you have your properties structured in an LLC or other entity, this could be considered co-mingling funds and open you up personally to liability on your rentals.
Tax Reporting Complications
The income from these apps must report to the IRS that you personally received the funds rather than the funds going into your rental entity, which could complicate your tax reporting and increase your audit risk.
Tenant Chargebacks
Tenants can issue chargebacks to most of these services for up to 6 months, and there is no recourse for landlords when they are accepting personal payments via any of these platforms. Imagine losing 6 months of rent suddenly!
Slows Cash Flow | Transaction and Transfer Limits
P2P and gateway services like Zelle and Venmo have stricter (and arbitrary) limitations on the amount allowed to be sent as well as the amount allowed to be transferred.
If a landlord receives rent through Venmo, they can only transfer up to $19,999.99 in total a week, and each transfer can be no larger than $2999.99. Most rents are paid by the 1st of each month, but landlords may have to wait weeks for those funds to reach their bank accounts. This can spell very bad news for property management companies that need that cash flow to pay the owners their disbursement (also known as an owner draw or owner distributions).
For Zelle, the limits vary by financial institution. For example, according to Bankrate, one bank limits tenants from sending more than $600 a day, while a few others are as low as $1,000. This could mean the tenant would need to make multiple rent payments before the due date if their rent and charges exceed the bank’s respective limit.
Merchant services that many top property management software options utilize, such as CSG Forte, also have limitations, but because those services are designed for businesses, their limits are not arbitrary because each application setup is unique to the business needs of the landlord or property management company.
Possibility for Errors
With services like Zelle, Venmo, and Cash App, if the tenant accidentally enters the landlord’s details incorrectly (such as the phone number), funds can be inadvertently sent to the wrong person.
That kind of mistake can be very complex and time-consuming for the tenant to resolve. There is not much protection for that tenant through those services, and there is no guarantee they will recover those funds. In the meantime, they may receive a late fee and late notes from you.
Bookkeeping Tasks Increase
These payment services do not integrate with property management software, so you’ll need to enter data manually. Even if it is convenient for your tenants, you’ll spend valuable time typing those transactions into your property accounting system. Human errors are more likely when electronic payment entry is not automated.
And with the transaction limits mentioned above, tasks such as remembering to transfer funds from the app or service to your bank account and then recording those on your landlord software bank ledger is just one burden on your already full plate.
Lack of Automation
Bookkeeping automation aside, using Zelle, Venmo, or Cash App doesn’t allow a tenant to schedule payments online through their tenant portal. They will need to remember to manually send money each time. And if there is a delay in data entry into the property management system, the tenant may receive unnecessary reminders and late fees.
Payments Can Not Be Refused | Eviction and Violation Concerns
Once you allow tenants to pay rent through a platform that is not integrated with your property management system, you cannot stop or refuse payment. If you’ve started an eviction process for nonpayment or served a notice of nonpayment, any amount received (even one dollar) can void the process completely. These P2P and gateway services can essentially create a legal loophole.
What Online Payments Systems are Best for Landlords and Property Managers?
Unfortunately, allowing your tenants to send their rent directly to your bank account for processing or using your bank’s merchant services carry the same concerns of systems like Venmo and Zelle; namely controlling who is allowed to make a payment and automation. If someone is late in rent but the bank deposits payment received from them (any amount) it can cure a late payment notice and halt an eviction process.
The best online payment options are those designed for landlords and property managers that integrate with your property management software such as CSG Forte and a Cash Payment Network. Online payments through these methods ensure bank-grade encryption and security measures are in place for payments, along with other benefits specific to the rental process.
The benefits are worth the investment in time setting up your software and enrolling in those options. With property management software and integrated merchant services you can:
- Offer tenants the ability to schedule online payments through their tenant portal
- Offer tenants a Cash Payment Network option that allows them to find locations to pay electronically instead of by cash, check, or money order.
- Turn on/off those services on a per-tenant basis (especially useful in handling evictions)
- Pay owner disbursements
- Sit back and let the payments automatically populate your software ledgers and reports.
- Have peace of mind that those services will help with all the different compliance regulations regarding accepting rent payments.
Final Thoughts
Every landlord wants to receive rent in full and on time, so it might be tempting to allow a tenant to send their rent from these P2P and gateway platforms and services like Venmo, Zelle, or Cash App. But, it’s clear that not every electronic payment option is in the best interest of the landlord and tenant. Although convenient for renters, these methods could be putting your business at risk.
A better solution is to make sure you are using a property management software, like Rentec Direct, that integrates with merchant services to keep your rental business running smoothly with optimal cash flow.
