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To EFT or Not To EFT – That is the question.

When selecting an electronic payment option there are some key differences between Bill Pay through a financial institution and Electronic Funds Transfer (EFT) directly from your bank account to a vendor (generally established with the vendor).

Bill Pay is a service offered by many financial institutions.  Sometimes there are fees for these services, Quicken Bill Pay for example, and in some cases there are not.  Many Banks offer Bill Pay as a free option to their customer base as part of their basic online package or included in the bank charges for the account.    What you need to understand about Bill Pay is that while it may initiate an EFT, more often Bill Pay only gives the illusion of an electronic payment. 

When the user initiates a bill payment the bank will make an EFT to the payee if they have already made arrangements with the payee to do so.  You can tell which vendors support electronic transactions by several means including iconic markers such as lightning bolts which indicate very rapid payment and by the estimated transaction times which range from immediate up to 3 business days depending on the agreement between the vendor and the bank.  At the time of this writing utilities, other banks and financial institutions including major insurance carriers are the most likely to have made these arrangements.

If the date range is 3-5 days and there is no little lightning bolt displayed your bank will cut a PAPER CHECK and mail it to the payee via the United States Postal Service.  While this method offers the user the convenience of paying bills 24/7/365 and or scheduling automatic payments it is missing two factors that are available through electronic payment directly to a vendor via EFT: immediate credit to your vendor account on the date specified, and improved security by removal of the paper document and multiple touch points required for processing of the payment.

EFT direct to the party that you are paying frequently has a convenience fee associated.  The reason for this is that there are costs associated with the transaction and the person accepting the payment has nothing to offset those expenses.  Banks offset the cost because they profit from balances held in their institutions even so Banks may place a limit on the number of transactions. 

Merchants and other vendors set their prices in anticipation of the fees that they will have to absorb when you pay by credit card or EFT. But in other areas (such as payment of rent) these fees are not accommodated in the pricing and therefore are passed on to the consumer.

The fees for EFT are generally small.  When you pay rent to Real Property Management Sac-Metro though a tenant portal or make an owner contribution through the owner portal there is a $4 fee to process the transaction.  If you can schedule your payment for free through your Bank, you may wonder why you should consider making the e-payment direct.

There are several reasons to consider using EFT:

1)      Your electronic payment is automatically applied to your account as of the moment that you click submit.   When you use your bank to make the payment it can take them 1-3 business days to create and mail the paper check then it is mailed using USPS adding another 2 days if it is not lost or misdirected.  ($4 is always less expensive than a late fee!)

2)      Eliminating touch points where error can occur.  Even with the best of intentions and highly competent personnel companies that process high volumes of transactions may make mistakes.  Every time a human being handles your paper check there is an opportunity for error.  USPS, Admin, Accounting and the financial institution processing your check all create opportunity for your payment to be lost, or delayed.

3)      Secure, less opportunity for check fraud, or theft.  With no paper the possibility that someone will intercept your document and use it for illegal purposes is non-existent.

4)      With Real Property Management Sac-Metro when you make a timely payment online through your tenant portal or set up auto-payment of your rent through your tenant portal you become a member of the RPM Tenant Club and have access to PURQZ that provides discounts and coupons for groceries and local and national attractions which provide the opportunity to offset the cost of the transaction many times over.  It is like getting an Entertainment Book every month just for paying your rent on time. 

If you need assistance accessing your tenant (or owner) portal or setting-up payments, give Real Property Management Sac-Metro’s friendly staff a call at (916) 452-5000.

Real Property Management Sac-Metro has two offices serving Sacramento County and S. Placer County.

4427 Freeport Blvd., Sacramento CA  95822  – Phone (916) 453-5000.

151 N. Sunrise Ave., Roseville CA 95661 – Phone (916) 780-1600.

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