There is an app for virtually anything these days because let’s face it, apps are awesome. Money transferring apps have revolutionized how funds change hands, and their popularity has skyrocketed in recent years, and for good reason.
You no longer have to take out cash to pay your buddy back for that birthday-cake-cookie-dough cone. Now you can do so at the tap of a button, while telling all your friends about it in case they missed it on Instagram.
Apps such as Venmo and Zelle are great for transferring small amounts of money or paying for certain bills. But if you are considering using them to pay rent, which is typically your largest monthly expense, there are some things you should know first.
Let’s take a closer look at what these two popular apps offer, and what better options are available to pay your rent online.
Venmo – the App that Let’s You Split the Tab
If you haven’t heard of Venmo yet, you’ve probably been living off the grid somewhere for the past few years (welcome back to the internet!).
The hugely popular peer-to-peer payment app mixes in a social media component that makes it fun to pay back your friends. This also makes asking to get paid back much less awkward.
Venmo is now so synonymous with small cash transactions that in the first quarter of 2019 it reported 21 billion dollars in transactions. So what makes Venmo so convenient? And more importantly, why aren’t people using it to pay rent?
The Venmo Convenience Factor
- You can connect your credit card, debit card, or bank account using an account number
- Transactions happen immediately, although you will have to wait 1-3 days until you can withdraw funds
- All you need to send payment is someone’s cell phone or email address
- No fees when using a debit card or checking account, 3% per credit card transaction
- You can attach cool public or private messages to transactions
- Transfer limits start at $300 weekly, and once verified (requires your social security number and other personal info), goes up to $3,000 a week
Zelle, the Big Bad Bank Owned Payment Network
After realizing the opportunity for an app like Venmo, a group of banks in the U.S. released a Venmo competitor called Zelle. If you are banking with any one of the leading banks in the country, you likely already have Zelle embedded in your mobile banking app. So what makes Zelle different from Venmo?
Zelle transfers go directly from one bank account to another, as opposed to Venmo which holds your funds in your Venmo account until you choose to withdraw them. Unlike Venmo, Zelle doesn’t have a social sharing feature and is mostly used for larger transactions such as paying utility bills and splitting travel costs with friends.
This explains why even though it saw significantly fewer transactions than Venmo, Zelle processed higher volume with $39 billion dollars in the first quarter of 2019.
Quick Zelle Facts
- If your bank is a member of the Zelle community you only need to enroll
- If your bank is not a member you will need to download the Zelle app
- Transfer limits vary from bank to bank. They usually start around $250-$500 and as you continue to use Zelle the limits will gradually increase
- You can send payment through Zelle even if the receiving party doesn’t have it
- Transaction speed between enrolled Zelle users happens in minutes
- Takes 1-3 business days to process if the receiving party doesn’t have Zelle
- Transfers are currently free, be could include a fee in the future
- To send a payment you would need to be enrolled and have the recipients cell phone number or email address
- If the recipient is enrolled you will not be able to cancel a transaction
- You can cancel a transaction if the recipient has not enrolled
Using Venmo and Zelle to Pay Rent
Venmo and Zelle are clearly popular, mostly because they work great for what they are designed for – paying for small everyday transactions and certain bills. When it comes to paying rent, there are many factors you should consider before using either of these apps:
Both Venmo & Zelle have been plagued with fraud. No matter how many times they warn against sending money to people you don’t know or trust, scammers are out there tricking people left and right. When it comes to a large transfer like rent payment, you want to be absolutely sure that your money is being sent to the right person.
Relying on just an email address or phone number to verify the recipient would make most people uncomfortable sending large sums of money. This is further amplified by the fact that there is virtually no way of getting your money back in case of an error on your part.
2. Transfer Limits
If you do decide to take the risk and are confident your money is going to the right person, you might find that you won’t be able to pay your full rent amount at once using these apps.
Figuring out your transfer limit isn’t always easy and will usually require further research or contacting support in order to obtain. In most cases you could elect to verify your identity and increase your transfer limit, but that will require you to share sensitive personal information including your social security number.
3. Limited Payment Options
Venmo and Zelle predominantly rely on the ACH network to transfer funds, meaning you have to make payments with existing funds in your bank account.
4. Room for Error
Paying your landlord with these apps require you as the renter to always take the first action. While your rent payment amount is simple enough, you still have to remember when rent is due and what to do in the unfortunate event that you are late.
While some payment apps make paying rent easier, there’s a lot more to dealing with a landlord than just paying rent. Typically renters will still need to speak to their landlord about things like maintenance requests and move-in costs such security deposit and pet fees. Using a property management platform designed for the rental transaction will remove any doubt by showing you all the necessary details including due dates, late penalties, other costs, and reimbursements.
5. Lack of Additional Renter Features
Venmo and Zelle are not built exclusively for rent payment or rent collection. Therefore, these platforms lack many of the other benefits that renters can take advantage of. Using an app designed for rental transactions, renters can split rent with roommates, purchase renters insurance, take care of maintenance issues and more.
Why You Should Use the Zuby App to Pay Rent
Renters use Zuby to seamlessly pay rent for free, split rent with roommates, order local cleaners and handymen, purchase affordable renters insurance, and stay on top of things so that they never have to pay a late fee again.
So we encourage you to check out our app, and see if it deserves a small piece of real estate on your phone’s home screen in exchange for making your life better.