Though providing homeowners with the option to pay their HOA assessments online certainly isn't a new concept, recent world events such as the COVID-19 pandemic have driven home just how essential electronic payment options are. Allowing association members to pay their assessments securely through owner portals using Automatic Draft, Credit/Debit Cards, or E-Checks not only eliminates the potential for late or misplaced payments, but also puts the owner in control of his or her account. These types of payment methods may sound the same, but there are differences association members should be aware of before deciding which one is the best for them.
Automatic Draft (or ACH)
Automatic Drafts (sometimes called ACH which stands for Automated Clearing House) use debit transfers or electronic credits that enable HOA members to pay assessments directly from their bank accounts. Once enrolled in ACH, the set payment amount is withdrawn from an owner's account on or around the same day each month (for CAMS this falls around the 10th of each month).
There are additional advantages to enrolling in automatic drafts besides the perk of not having to remember to make a payment each month. Online payments like ACH are sure to be applied immediately and accurately to homeowners’ accounts. Furthermore, if an assessment amount changes, the draft amount will be automatically updated without the account owner having to make manual updates. Please note, however, that this may not be the case for special assessments depending what has been decided by an association's Board of Directors.
Overall, paying by ACH can be considered a 100% predictable and reliable payment method and the fact that the account information is always accurate ensures that proper payment credit will always be received. Another upside of ACH is that this form of payment has zero cost to the homeowner.
E-Checks are very similar to ACH payments in that they come directly from a homeowner's bank account and are made through the owner portal. Also, like ACH payments, these amounts will post directly to the owner's accounts instantly when initiated, eliminating the chance of late payments. The main difference between E-Checks and ACH payments is that with an E-Check, an owner must go into their portal and initiate the payment each time one is due versus the automatic status of an ACH payment. E-Checks are another form of payment that may be made at no cost to homeowners.
Just as with an E-Check payment, using debit and credit cards to pay HOA assessments allows homeowners to control when their payments are issued. Credit and debit cards also allow for instant and accurate payment processing and ensure that credit is applied to the proper account.
The downside, however, to paying with credit cards is that there is typically a fee associated with this form of payment. This fee is charged by the card processing service provider and is either a minimum transaction fee or a percentage of the transaction (usually somewhere around 3%), whichever is greater. Opting to pay with a debit card generally carries a lower fee than a credit card and sometimes has an option to setup recurring payments at no additional cost.
So, What's the Best Option for Me?
For association members who want to be in control of their payments and ensure their payments are on time and accurately processed, these secure, online payment options are the best way to go. Though it is certainly up to each homeowner if they choose to utilize ACH, credit/debit cards or E-checks, automatic drafts by far have the least chance of human error that could potentially result in a late payment. This works great for the homeowner in that they don't have to remember to initiate the payment each month and that there is no cost to utilize this option.
At CAMS, we have fine-tuned our homeowner portals to make them user-friendly for our clients. With the ability to easily login right from our website, HOA members can see their account details and setup or make payments with just a few clicks. Learn more about all of your payment options or get setup with ACH or one of the other secure online payment options CAMS has to offer here.