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7 Reasons To Avoid Venmo, Zelle, & PayPal for Rent Collection

In this article, we'll cover 7 important reasons why you shouldn't use Venmo, Zelle, & PayPal for rent collection

The pandemic has forced everyone to do more on their phones & computers than ever before. And that includes landlords. Paper checks remain the most used rent collection method in the US. But a growing number of landlords are using mobile payment apps, especially Venmo, Zelle, & PayPal.


This is understandable for several reasons. First, many Millennial & Gen Z renters already have these apps on their phones. So it is easy for them to pay this way. Second, using these apps is also easier for landlords. They send notifications when payment is sent. And they don't need to wait for a check to arrive in the mail.


But the reality is that these payment methods have a ton of issues. So in this article, I'll share 7 reasons why you shouldn't use any of these apps for rent collection. 

1. Hidden Fees

One thing landlords love about these apps is that it is free to send payments. But that is not really true. These apps distinguish between peer-to-peer payments (like splitting a restaurant bill) and business payments (like paying a barber).


And if you are a business payment, the fees can be massive:

And the reality is that rent payments are business payments. So if you are caught, these companies may automatically start charging you for collecting rent with their apps.

2. Send Limits

These apps cap how much someone can send at once. So if you charge rent that is higher than the daily or weekly limit, your renter will have to send you two separate payments. This problem is more significant for Zelle than the other two options. You can see the limits below:

3. No Renter Autopayment

One of the easiest ways to ensure on-time payment is by offering autopay. That's how most subscription services operate, including Netflix, Spotify, & HBO.


The reason companies do this is because people are forgetful. For example, if someone needs to remember to send money every month, it's a sure bet that one of those months they might forget. Even if they have the money to make the payment.


None of the 3 apps mentioned offer an autopay option. And that means one of two things. Either you are manually requesting payment every single month, or your tenant is manually sending the rent each month.


A system like that invites late payments and lots of frustration. 

4. No Automatic Reminders

When a renter does forget to make a payment, landlords shouldn't have to nag them to send the money. Instead, the software should handle late payment reminders automatically. 


Better yet, the app should remind renters ahead of time that they have a rent payment coming up so that they can take action to guarantee it is paid on time.


Venmo, Zelle, & PayPal offer no such reminders.

5. No Automatic Late Fees

Connecticut allows landlords to charge a late fee after a 9 day grace period. But keeping track of how many days have passed since rent was due is tedious. A rent collection system would handle that for you. And none of the 3 apps mentioned have built-in late fees. 

6. Bad Reporting

If you've used any of these apps, you'll know what I mean. The Venmo payment record is a jumble of payment amounts (both sent & received). You cannot separate payments by type, so everything is shown together. The transaction notes aren't helpful. And if you want to add the data to a spreadsheet, you have to do it by hand.

1 Venmo Transaction Log


In fact, the reporting is so bad you could argue that paper checks are actually easier to report on.


Landlords should use a rent collection app that makes reporting easy, not more challenging than checks.

7. No Credit Bureau Reporting

Since Connecticut allows a 9 day grace period on late payments, landlords must find other ways to encourage on-time rent payment. In my experience, the best way is to report rent payments to the credit bureaus.


Reporting rent payments to the credit bureaus is both a carrot and a stick for renters. Good renters who pay on time will see their credit scores improve. And renters who consistently pay late will see their credit scores decrease. 


None of the payment apps mentioned offer this feature because they aren't built for rent payments.

A Better Alternative

My company Rentdrop offers a rent collection app that solves landlords' problems when using Venmo, PayPal, & Zelle. That includes:

  • No fees on direct bank-to-bank transfers
  • High send limits of $5,000 or more for all renters
  • Autopay option for renters
  • Automatic payment reminders
  • Automatic late fees
  • Straightforward reporting
  • Reporting rent payments to the credit bureaus (coming soon)

We have built an experience that landlords love because we know they deserve better than Venmo, PayPal, & Zelle.

Want to check out the Rentdrop app? You can sign up here or reach out to me via email at to learn more.




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