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URL:  http://boards.fool.com/mnu34-you-wrote-i-assume-this-feature-must-30331965.aspx

Subject:  Re: Automated periodical transfer Date:  10/21/2012  12:49 AM
Author:  joelcorley Number:  24208 of 24247

MNU34,

You wrote, I assume this feature must exist, but what do I need to tell my tenants they have to tell their bank to do or look for in their online banking?

For your tenants, we have something called online (or electronic) bill-pay. There is a related service called e-bill or bill-presentment. These are services banks offer in the states. http://en.wikipedia.org/wiki/Electronic_bill_payment

Bill-pay is a service banks usually have to buy from a 3rd party processor - though a few like Citibank I believe have their own in-house service. Bill-pay usually uses a system known as ACH (automated clearing house) to transfer funds between accounts. This feature allows the 3rd party service to pull funds from the customer account and direct it to a payee's account (sometimes the bill payer service will run the funds through their own account first). But if the payee is not well known to the payment processor, the bill pay service simply sends a paper check.

The way bill-pay works does not depend on the payor knowing the payee's bank information. In fact, most potential payees would receive a paper check. But bill payment services contact frequently used banks and major commercial vendors and merchants to obtain their banking information in order to expedite payment processing. As far as I'm aware, the selection of available electronic payees is not under the payee's control. The bill-pay service will contact you when the volume of checks becomes significant enough to get flagged in their computer systems. However assuming you are not a major US merchant, I don't think you'll find any way to get a payment processor to work with you.

With that said, some banks do offer automated recurring electronic transfers; but I think those are usually between accounts with the same institution. Finally, some commercial U.S bank accounts will offer a feature that allows a company to set up recurring payments/deposits from the company's customer's account.

FWIW, no one "wires" rent to a landlord here. Some landlords might have auto-draft arrangements and a few will process a credit card. Most people just set up a recurring bill payment with their bank. There are almost certainly some large commercial and apartment management firms that are set up to receive payment by ACH from payment processors - especially the bigger REITs that manage a lot of rental properties. But if you're a small landlord, you're probably going to have to manually deposit paper checks.

Wire transfers here are generally confined to large money transfers. Usually for things like real estate purchases or when transferring something like a brokerage account.

BTW, some US banks will let you deposit checks by sending in a photo of the check using their cellphone app. This might be a reasonable way for you to handle this end of the problem. You just endorse the back, open the app and take a picture of both sides. The bank doesn't actually need the paper check to process the deposit - just an image of it.

Regards,
- Joel
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