ACH vs. Credit Card Rent Payments: Which Should You Accept?
May 8, 2024Both ACH and credit card payments get rent from the tenant's account to the landlord's — but the cost, speed, and who ends up paying the processing fee differ enough that it's worth understanding before choosing what to offer.
ACH: lower cost, a few days to clear
ACH transfers move money directly bank-to-bank, so processing fees are typically a small flat fee rather than a percentage of the payment — a meaningful difference on a $2,000 rent payment. The tradeoff is settlement time: funds usually take 3-5 business days to clear versus near-instant for a card.
Credit card: faster, more expensive
Card payments typically settle faster but carry processing fees in the 2.5-3.5% range — on a $2,000 rent payment, that's $50-70 per month in fees. Someone has to absorb that cost: either the landlord eats it, or it gets passed to the tenant as a convenience fee, which some states restrict or prohibit for rent payments specifically.
Why most rent collection platforms default to ACH
For a recurring, predictable payment like rent, the lower cost of ACH usually outweighs the few extra days of settlement time — especially since rent is typically due on a fixed schedule the tenant can plan around, unlike a one-time purchase where speed matters more. That's why most dedicated rent collection tools, including LeasePilot HQ, default to ACH as the primary payment rail.
Frequently Asked Questions
Can I offer both ACH and credit card for rent?
Yes — some platforms support both, letting the tenant choose. Just be clear about who pays any card processing fee, and check your state's rules on passing convenience fees to tenants.
Why did my ACH payment get rejected?
Common reasons include insufficient funds, an incorrect account or routing number, or the tenant's bank flagging the transfer — a rejected ACH payment typically triggers a notification so you can follow up with the tenant.
Is there a maximum amount for an ACH transfer?
Limits vary by payment processor and the tenant's bank, but most rent payments fall comfortably within standard ACH limits — check with your specific processor if you have unusually high rent amounts.