It may be necessary to cancel a Venmo payment for rent if you send money to the wrong person. For example, suppose you are a tenant using Venmo to pay rent. In that case, the question of canceling a Venmo payment could be vitally important. With average rent payments around $1,400, sending this amount of cash by mistake could be a disaster. It could even lead to eviction if your landlord views this as non-payment of rent.
But what if you are a landlord using Venmo to collect rent. Sometimes you might need to cancel a Venmo payment for rent. For example, suppose you are trying to evict a delinquent tenant because they have missed monthly rental payments. In that case, canceling a Venmo money transfer for a partial payment is vital.
With most people conducting transactions online, it seems logical to use a cash app to collect rent. Many tenants already use peer-to-peer payment services for sending money to people they know — usually friends and family. So, tenants may ask you if they can use Venmo to pay rent. Are there any risks associated with using Venmo as a rent collection app? You may be surprised to find out that Venmo is not great for rent collection.
Of course, it makes sense for landlords to ways to accept online payments. But does this mean that Venmo is a good idea for landlords just because people use it for other types of payments?
This article explores a vital question for landlords and tenants — how to cancel a Venmo payment for rent. In addition, you will find out about dedicated rent collection apps that work better than Venmo for rent collection.
Can You Cancel a Venmo Payment for Rent?
It is impossible to cancel a Venmo payment for rent. According to the Venmo website, the cash is immediately available to the recipient (landlord) after money is sent. Additionally, you can’t reverse a payment to a Venmo account if it was an accidental duplicate payment, even if it was the right person.
If you accidentally send money to the wrong person, the only way to retrieve your cash is to ask the sender. For example, if you pay rent money to someone other than the landlord by mistake, you will have to hope that the recipient will return the cash.
Can you Cancel a Venmo Payment You Receive?
It is not possible to cancel a Venmo payment for rent that you receive from a tenant. If you collect rent with a cash app like Venmo, you should know that there is no facility to block, reverse, or cancel a partial rent payment. Your only option is to send the rent payment back to the sender.
Of course, the tenant can’t cancel the Venmo payment when you return the money. However, the partial rent payment you initially accepted means that the eviction process starts all over again.
Can Landlords Decline a Venmo Payment for Rent?
As it’s impossible to cancel a payment, landlords can’t decline a tenant’s Venmo rent payment. As soon as the tenant sends their rent, the cash appears in your Venmo account. So, there is no option in the peer-to-peer app to approve or decline a payment.
Even though Venmo is free to use, it could cost you as a landlord if you allow rental payments through Venmo. Additionally, Venmo is not free for business transactions. However, there are more compelling reasons to avoid Venmo if you want to run a successful rental business.
Venmo Cancels Payments
The only payments that get canceled in Venmo are if there is suspicious activity. Here are some facts stated on Venmo’s user agreement about canceling payments:
- Venmo reviews bank transfers. These reviews may result in “delayed, blocked or canceled transfers.”
- Venmo reviews payments at their discretion. If for some reason there is an issue, Venmo states regarding the transaction that “we will cancel it and return the money to you.”
- You can cancel preauthorized payments. Venmo states that you can do this “up to three business days before the date of the next scheduled payment.”
- Canceled Venmo accounts. If you violate the Venmo user agreement, they can cancel your account.
Is Using Venmo to Collect Rent a Good Idea?
Unfortunately, the inability to cancel a Venmo payment for rent is not the only reason to avoid this rent collection method. There are many other reasons why successful landlords use dedicated rental payment apps to run their businesses.
On the face of it, Venmo has some handy payment options for landlords. For example, tenants use multiple forms of payment to pay rent — for example, a debit card or credit card. Rent payments are easy to make because the tenant only needs your mobile number or email address. Additionally, rent payments appear almost instantly in your Venmo account.
Unfortunately, there are several reasons why Venmo is an awful idea for rent collection.
1. Venmo makes it impossible to cancel a rent payment
The most significant downside of using Venmo as a rent app is that you can’t block or cancel partial payments. This flaw makes it almost impossible to evict a tenant for non-payment of rent. Even if the tenant transfers a few dollars for rent, you can do nothing in Venmo to cancel or decline the payment.
Because you can’t cancel a Venmo payment for rent, it’s a good idea to look for alternatives for rent collection.
2. Venmo charges transaction fees for landlords
Landlords must pay transaction fees when accepting monthly rent payments. To use the digital wallet to collect rent, you must pay 1.9% plus $0.10. Although this amount doesn’t seem much, the lost revenue can add up if you manage several rental properties.
To use Venmo to collect rent requires setting up a business profile and having a Venmo business account. For example, a landlord could use their personal account to collect rent. However, accepting rent payments through a personal profile could result in a suspension or account cancellation. Not ideal for your business cash flow.
However, there are more fees that you might have to pay for Venmo transactions. For example, say you need to make an instant transfer. In that case, expect to pay a 1.5% fee for the service. Without paying this fee, you will have to wait for one to three business days for the money transfer.
But there are even more fees with Venmo. For example, say you need to cash a rent check. In that case, you must pay 1% of the price, with a minimum fee of $5.
So, although the payment app appears free to use, Venmo could be an expensive solution for rent collection.
Related reading: The best alternatives to rent checks.
3. Tenants cannot set up automatic payments with Venmo
A downside of paying rent with Venmo is that tenants can’t set up recurring payments. Many landlords agree that automatic rent payments are an excellent way for tenants to pay rent on time. Let’s face it, we all forget things sometimes. However, Venmo has no automatic payment option.
4. Venmo has no payment protection for landlords
The inability for tenants to cancel Venmo payment for rent means there is no payment protection for misdirected payments.
Suppose a tenant mistakenly sends their rent money to the wrong person. In that case, they have to hope that the recipient returns the cash. During this time, you are missing a rental payment. But what if the tenant can’t retrieve the money? If they default on a month’s rent, you must start expensive eviction proceedings.
The tenant can contact Venmo support. However, the lack of purchase protection means that the sender (tenant) must resolve payment issues.
Related reading: Ways to avoid tenant evictions.
5. Venmo lacks additional features for landlords
Venmo was never designed as a rent payment app. Instead, the app is typically for transferring money between family and friends. This means that using Venmo as a rent collection solution is not ideal.
On the other hand, dedicated apps for rent collection like RentDrop has all you and your tenants need to pay rent. Here are some of the landlord-friendly features of RentDrop that makes it straightforward to collect rent and pay rent:
- Tenants can set up automatic payments
- RentDrop automatically adds late fees
- You can send reminders about upcoming rent payments
- Tenants can split rent payment
- Set up flexible rent payments based on a tenant’s income schedule
- Receive payment receipts
6. Tenants cannot pay rent directly to the landlord’s bank account
Using Venmo to collect rent from tenants is not ideal because the money doesn’t go directly to your bank account — it goes to your Venmo account. Unfortunately, there is no way for a tenant to use Venmo to make a direct deposit to your bank account. This problem means that you have even more administrative work than you already have.
And, there could be transfer limits on how much money with Venmo you can transfer. For example, Venmo support clearly states that they can restrict the amount of money in bank transfers.
7. Venmo can decline payments
A severe drawback with using Venmo in a rental business is that Venmo can block payments. For example, the tenant could make a monthly payment in good faith. However — for an unknown reason — this could trigger one of Venmo’s automated security flags. So, the tenant may think they’ve paid rent. But, the rent payment never reaches your Venmo account.
Tenants should be worried about using Venmo to pay rent because Venmo holds the right to “review account and transaction activity at various times.” This clause in the user agreement could result in transfers being “delayed, blocked, or canceled.” Or the company could hold the money until they resolve the issue.
If you’re a landlord, a blocked or delayed rent payment could severely impact your cash flow. And your tenant may not be to blame. So, you then have the arduous task of sorting out a rent payment issue that is neither yours nor your tenant’s fault.
Alternatives to Venmo for Rent Payments
Rent collection services like RentDrop are designed with landlords and tenants in mind. The app has many features to streamline rent collection to maximize your revenue, save you time, and make rent payment easier for tenants.
Here are a few ways that RentDrop is a superior alternative to Venmo:
- Decline partial rent payments
- Tenants can set up automatic payments
- Give tenants the possibility to pay rent on their schedule
- Send reminders about late rent or upcoming rent payments
- Tenants can split rent if they live in a multitenancy unit
- Same-day ACH bank transfers
- Tenants can pay with credit cards or debit cards
- Report rent payments to credit bureaus to boost a tenant’s credit score
- Rent receipts
- Automatically calculate late fees
- Collect and process security deposits
Related reading: Nine tricks to avoid late rent payments.
RentDrop for Rent Collection
Do you want to use a rent payment app to make your life as a landlord easier? If so, you can try RentDrop for free. If the payment app works for you, you and your tenants can continue to use the app for free. RentDrop will always be free for landlords to use.
To ensure you always collect rent on time, you can include your preferred method of rent collection in the lease agreement. This way, you can prevent tenants from using P2P payment services to pay rent. So you will never have to face the issue of having to cancel a Venmo payment for rent.