Credit/Debit Card Transaction Fees (Convenience Fees)

Allowing your tenants to pay rent with a credit or debit card is a feature available by enrolling in Online Payment Processing. 

You are charged a processing fee of 2.95% (3.5% for Amex) of the exact amount the tenant designates to send plus any transaction convenience fee that you decide to charge them. 

Understanding the Tenant Convenience Fee Charge

The fee your tenants will pay for the convenience of using a credit or debit card (instead of an ACH payment) is calculated in tiered $100 increments (see chart below). 
The fee you pay for processing is calculated by adding the amount the tenant processes plus the convenience fee you set. To cover your costs it's important to set your convenience fee high enough to account for the difference in those calculated figures. 
For example: 
If rent is $1000, a 3% convenience fee would equal $30 so the tenant will pay a total of $1030. However, the amount you pay for the credit card processing will not be 2.95% of $1000 but rather 2.95% of that total $1030 (payment plus convenience fee) resulting in a $30.39 fee you will pay for processing.   
If you had set the tenant convenience fee at 2.95% instead of 3%, it would result in the tenant paying only $29.50 which does not cover what you will be billed for processing ($30.39).
Note : Although the average is 3-5%, check your local and state laws and regulations to determine if you are allowed to pass the fee on to your tenants, and/or mark it up. 


Tiered Convenience Fee Increments


Transaction fees that you charge your tenants are tiered in $100 increments. For example, if you set the fee at 3%: 

A tenant with a payment up to $100, would have a $3.00 transaction fee.
A tenant with a payment from $101 - $200, would have a $6.00 transaction fee.
A tenant with a payment from $201 - $300, would have a $9.00 transaction fee.
A tenant with a payment from $301 - $400, would have a $12.00 transaction fee.
A tenant with a payment from $401 - $500, would have a $15.00 transaction fee.
A tenant with a payment from $501 - $600, would have an $18.00 transaction fee.
A tenant with a payment from $601 - $700, would have a $21.00 transaction fee.
A tenant with a payment from $701 - $800, would have a $24.00 transaction fee.
A tenant with a payment from $801 - $900, would have a $27.00 transaction fee.
A tenant with a payment from $901 - $1000, would have a $30.00 transaction fee, and so on.      

Transaction fees collected from tenants will be deposited into the settlement bank account you have set up on your merchant account, and will post to the property ledger in Rentec as income.  
Instructions for property managers who retain fees can be found here: Property Manager | Paying Out Convenience Fees and Late Fees.
Monthly, you will be billed 2.95% of the total collected ($1 minimum) from tenant payments and application fees*. You will either see this information on your Rentec monthly subscription invoice for subscribers on the newest bundled pricing plan or from billed directly from Forte if on an older pricing plan.   

Accepting an application fee requires an Online Payment Processing account with Credit Card processing enabled. Your account will be charged for the credit card processing fee and you in turn can decide if you would like to increase your application fee in order to help absorb the cost.

Further pricing for online payment processing can be found here: Online Payment Processing

Convenience Fee Settings

Your Rentec Direct software allows you to specify a convenience fee the tenant will pay to use this option to recover (markup) that processing fee. 

Commonly this is set between 3% to 5% and high enough to reimburse you for your 2.95% transaction fee for VISA, Master Card, and Discover (3.50% for AMEX) card processing. 

Instructions to set or change the default convenience fee for all tenants can be found here: Payment Processing Setup Part 2

Did this answer your question? Thanks for the feedback There was a problem submitting your feedback. Please try again later.