When it comes to collecting rent payments, many landlords use peer to peer payment systems like PayPal. While this may seem like a convenient way to allow residents to pay rent online, it is not without drawbacks. When considering collecting rent payments through PayPal vs. PayRent, several factors are helpful to consider.

Some landlords rely on PayPal to collect rent. The popular online payment system allows tenants to make payments using a major credit card, a debit card, or their bank account; making collection simple. PayRent is the leading software for online rent collection. Landlords use PayRent to simplify the rent collection process, streamlining the entire process by providing an online system that tracks payments and allows landlords to control how funds are applied to tenant accounts.

PayRent vs. PayPal

Landlord Control vs. Tenant Control

Accepting rental payments with PayPal works fine until it doesn’t. One of the significant drawbacks of using PayPal to collect rent is that it puts the tenant in control of the rental payment transaction. Tenants can easily elect to pay partial rent, which means that you have to then try to collect the balance. Accepting partial payments, even involuntarily, can impede your ability to evict them.

If you plan to end the resident’s tenancy at the end of the lease, they can easily pay the next month’s rent without your consent. By accepting the rent payment, you can put your business into a legal bind if you ever have to take your tenant to court. With PayRent, you can block your tenants from making additional payments.


PayPal is free when users send money to friends and family, but if you want to use the platform as a business, and recieve payments for goods or services, like housing, it will cost you. PayPay charges 2.9% of the transaction amount to landlords.

PayRent has lower ACH fees charging .25% of the transaction amount with a cap at $5. Landlords can choose to pay these fees, split, or pass them on to their tenants. As a comparison, if rent is $1,000 and your tenant wants to pay using their bank account, you’ll lose $29 of rent if they pay via PayPal. If they use PayRent, you’ll pay a maximum of $2.50 for that transaction.

If your tenant would like to pay rent with a credit card, PayPal still charges the typical transaction fee of 2.9% to your business. Whereas, PayRent charges 3.5% of the rent amount +0.30. However, on PayRent, tenants are charged the credit transaction costs, not landlords.

Chargebacks Hurt Your Business

PayPal is heavily consumer-focused and often settles disputes between business and consumer in favor of the consumer. If your tenant ever decided to dispute a rental payment, the chances are high that PayPal would take their side and refund their money. This unfair bias can create a situation if a problem tenant pays their rent and disputes it later, as could case when tenants move out and don’t receive their full security deposit.

Imagine a scenario in which a tenant requests a repair that can’t be completed immediately. They can contact PayPal and ask for a refund for the funds they have sent, refusing to pay rent until repairs are complete. PayPal’s customer service reps, who are not property managers, could easily side with the tenant, causing your business to lose money.

PayPal Does Not Offer Features Landlords Need

If your tenants pay through PayPal, you still need to manually account for each tenant’s payments and keep track of which accounts are outstanding. Also, you can’t block partial payments or apply and enforce late fees automatically. PayPal does send reminders when invoices are overdue, but it does not send rent reminders beforehand. These features go a long way in saving time when landlords have other responsibilities like management, maintenance, and new tenant onboarding.

PayPal is Not a Specialty Property Management Application

Although PayPal works with small businesses, it does not explicitly work with landlords or understand the nature of the property management business. Consumers have come to associate PayPal with a fun way to pay friends for dinner out or reimburse a friend for gas money. Property management is a professional business, and your residents will take your business more seriously if you use online rental management platforms to manage their accounts.

Receiving help from PayPal in the case of an error or dispute is not the most straightforward process. With PayRent, you can always speak to a customer service representative who understands your business and how to handle common property management issues.

PayRent’s online rent collection platform is specially designed to streamline the rent payment process for tenants and landlords. With an easy to set up user interface that allows step-by-step customization, you will have a robust system that will enable you to collect rent, add transactions, and run reports with ease. Property managers love PayRent because they can log in and keep track of payments with ease. Tenants love it because it’s convenient, allowing them to pay online without worrying about checks, cash, or stamps. If you’re wondering about the benefits of PayRent vs. PayPal, sign up for free and try it for yourself today.

PayRent is on a mission to build a rent collection app that fosters a positive and productive relationship between renters and landlords. We focus less on transactions and more on the people behind them.