The Motley Fool Discussion Boards
Financial Products & Services / Online Banking
|Subject: Re: Automated periodical transfer||Date: 10/21/2012 12:49 AM|
|Author: joelcorley||Number: 24208 of 24279|
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