How to accept credit card payments depends on what you're collecting for
If you're a landlord, property manager, or housing provider collecting rent or fees, you have several paths to accept credit cards. The main ones are a merchant account (which lets you process cards directly), a payment processor (which handles the transaction for you), or a third-party payment platform (like PayPal or Stripe) that sits between you and the card networks. Each has different costs, setup time, and rules about who can use it.
The choice depends on your volume, your tenant base, and what you're willing to pay in fees. A single-property landlord might use a simple online payment link. A larger management company might set up a dedicated merchant account. Tenant protections and local law also matter — some jurisdictions restrict how much you can charge tenants to use a card, or require you to offer a no-fee payment method as well.
Key Takeaways
- Merchant accounts, payment processors, and third-party platforms all work, but they differ in setup cost, monthly fees, and per-transaction charges.
- Many states and cities cap or ban credit card fees on rent payments, so check your local rules before charging tenants a processing fee.
- Payment platforms like PayPal, Stripe, and Square are fastest to set up and require no merchant account, but charge higher per-transaction fees.
- Tenants cannot be forced to pay by credit card — you must offer at least one no-fee payment method like check, bank transfer, or cash.
- Processing times vary: some platforms settle funds in one to two business days, others take longer.
Merchant accounts: the traditional route for volume
A merchant account is a contract between you and a bank or payment processor that lets you accept credit and debit cards. You apply through a bank, a payment processor (like First Data or Global Payments), or a specialized provider. The bank or processor vets your business, checks your credit, and sets up the infrastructure to process transactions.
Merchant accounts typically cost an application or setup fee (ranging from zero to several hundred dollars), a monthly statement or gateway fee (usually $10 to $30), and a per-transaction fee (usually 1.5% to 3% of the transaction amount plus $0.20 to $0.30 per card). Some also charge a batch fee when you settle transactions at the end of the day. If you process hundreds of rent payments a month, these fees add up, but the per-transaction rate is usually lower than payment platforms charge.
The downside is setup time — approval can take one to two weeks — and you need to meet the bank's underwriting standards. If you have a thin credit history or operate in a high-risk category (some banks view landlords as higher risk), you may be declined or offered worse terms. You also need a business bank account and an Employer Identification Number (EIN) or Social Security Number tied to the business.
Payment platforms: fastest setup, higher per-transaction cost
Services like PayPal, Stripe, Square, and Clover let you accept cards without a merchant account. You sign up online, link a bank account, and start processing within hours or a few days. They handle the merchant account relationship behind the scenes — you're technically their customer, not the bank's.
Per-transaction fees are higher than a merchant account: typically 2.2% to 3.5% plus $0.30 per online transaction, or 2.75% plus $0.15 for in-person card swipes. Some charge monthly fees ($0 to $50 depending on the plan), and some charge additional fees for invoicing, recurring payments, or chargebacks. Funds usually settle to your bank account in one to two business days, though some platforms hold a reserve (a percentage of your monthly volume) for the first few months.
The trade-off is convenience for cost. If you collect rent from 20 tenants a month at $1,500 each, a 2.9% fee costs you $870 per month. Over a year, that's $10,440 — significantly more than a merchant account would cost. But if you collect from only a few tenants or collect sporadically, the lower setup barrier and no monthly fee make it worthwhile.
What local law says about charging tenants for card payments
Many states and cities restrict or ban credit card fees on rent. California, New York, and Illinois prohibit landlords from charging tenants a fee to pay rent by any method, including credit card. Other states allow it only if the fee does not exceed the actual cost of processing. A few states have no restriction.
The rule varies even within states — some cities impose stricter rules than the state does. Before you set up card processing, check your state's landlord-tenant law and your city or county's local ordinances. If you're unsure, contact your local housing authority or a landlord association in your area.
If your jurisdiction allows a fee, you can pass the processing cost to the tenant, but you must disclose it clearly before they pay. You cannot surprise them with a fee at checkout. You also must offer at least one no-fee payment method — check, bank transfer, cash, or money order — so tenants are never forced to pay the processing fee.
Setting up online payment links for rent collection
Many payment platforms let you create a payment link or invoice that you send to tenants via email or text. The tenant clicks the link, enters their card details, and pays. You don't need to collect or store card information yourself — the platform handles it securely.
To set this up: create an account with a platform like Stripe, PayPal, or Square; generate a payment link or invoice template; and share it with your tenants. Some platforms let you set up recurring payments so tenants can authorize a monthly charge (though this requires their written consent and compliance with the Electronic Funds Transfer Act). Others let you set a due date and send automatic reminders.
The advantage is that you never touch card data, which reduces your liability if there's a data breach. The disadvantage is that tenants see the processing fee at checkout and may balk at it — some platforms show the fee before payment is final, giving tenants a chance to cancel. If your jurisdiction allows you to absorb the fee instead of passing it on, that can improve payment rates.
In-person card processing if you collect rent in person
If you meet tenants face-to-face to collect rent, you can use a mobile card reader. Square Reader, PayPal Here, and Clover Go are small devices that plug into a phone or tablet and read card data. You swipe or insert the card, the device processes it, and you get a receipt. Setup takes minutes, and per-transaction fees are similar to online platforms (2.75% plus $0.15 for in-person swipes with Square, for example).
The benefit is that you can collect rent immediately and confirm payment on the spot. The downside is that you're handling the card (though the reader encrypts the data), and you need a phone or tablet with internet access. If your internet drops, some readers can store the transaction and process it later when connection returns.
Protecting yourself and your tenants during card processing
If you process cards, you're responsible for keeping card data secure. The Payment Card Industry Data Security Standard (PCI DSS) sets rules for how card information must be handled. The simplest way to comply is to never store card data yourself — use a payment platform or processor that handles it for you. If you use a payment link or mobile reader, the platform stores the data in an encrypted vault, and you only see the last four digits and transaction confirmation.
You should also have a clear privacy policy explaining how you collect and use payment information, and you must comply with any state data breach notification laws. If a tenant's card is compromised, you may be required to notify them and potentially offer credit monitoring. Using a reputable payment processor reduces this risk because they carry cyber liability insurance and have security teams monitoring for fraud.
Tenants also have protections: if they dispute a charge, the card network (Visa, Mastercard, etc.) can reverse it and require you to prove the transaction was authorized. Keep records of payment authorizations, lease agreements, and any written consent for recurring charges. If a tenant claims they never authorized a payment, you'll need documentation to win the dispute.
Frequently Asked Questions
Can I require tenants to pay rent by credit card?
No. You must offer at least one no-fee payment method — check, bank transfer, cash, or money order. Tenants cannot be forced to pay by card or charged a fee for choosing another method. If your jurisdiction allows credit card fees, you can charge them only to tenants who choose to pay by card.
What happens if a tenant disputes a credit card charge?
The card network investigates and may reverse the charge, pulling the money back from your account. You can dispute the reversal by providing proof of authorization (a signed lease, written consent for recurring payments, or a payment confirmation the tenant received). If you lose, you refund the tenant and lose the transaction fee too.
Do I need a business license to accept credit cards?
Most payment processors and banks require you to have a business license or EIN, but requirements vary. Some platforms accept sole proprietors with just a Social Security Number. Check the specific processor's requirements before signing up. You may also need a business bank account, though some platforms allow personal accounts.
How long does it take to get paid after a tenant pays by card?
Settlement time depends on the processor. Most deposit funds in one to two business days. Some hold a percentage as a reserve for the first few months. Check the processor's terms before signing up if you need the money quickly — some offer next-day settlement for a higher fee.
What if I'm in a state that bans credit card fees on rent?
You cannot charge tenants a fee to pay by card. You can still accept cards, but you absorb the processing cost. Some landlords do this to encourage faster, more reliable payment. Others choose not to accept cards at all and stick to check or bank transfer only.