46% of Americans didn’t write a check in 2023, reports a survey conducted by GOBankingRates.

17% wrote a check once a month, and 4% wrote more than 12 checks in a year.

Though writing checks remains a trusted way to pay for expenses, this old-school technique has been overshadowed by newer and faster online payment options.  

However, if you manage an HOA, you may be dealing with paper checks on a daily basis.

While this isn’t inherently bad, it can be a costly process. Below, we’ll address the less obvious costs associated with accepting checks.

Table of contents

• Why do some HOAs prefer checks?
• The hidden costs of accepting checks
• Why should HOAs take online payments?
• What are some alternatives to check payments?
• How do HOAs get started with online payments?

Why do some HOAs prefer checks?

Whether it’s the members, the association, or a combination of both, some communities prefer check payments for dues, fines, passes, and other fees.

Though payors sometimes have to pay for checks, there is generally no processing fee charged to them when using checks. This is a top reason some people still prefer this payment method.

Writing a check also provides a paper trail of the transaction, which can be useful for owners and staff for record-keeping and dispute resolution.

And, unlike electronic transfers that are instant, check payments can be scheduled for a later date, providing some flexibility to owners.

Accepting checks is more work for associations; there may be fees charged to the association for processing checks, manual check processing can be laborious and time-consuming, and the HOA has to wait for the money to become available.

However, the process is familiar. It’s how communities have always done things, and even if processing times are slow, the system works well enough.

The hidden costs of accepting checks

Today’s digital landscape has already affected how money is transferred. Instant card, e-transfer and mobile wallet payments continue to gain popularity while cash and check payments diminish.

In addition to the inconvenience, processing paper checks can be costly.  

Financial loss

According to industry studies, check-writing may cost a business between $3 and $5 per check. Check-writing includes:

• the cost of the check
• an envelope
• ink
• postage
• employee time

Processing paper checks is even more expensive. Costs associated with processing a single check can range from $4 to $20, depending on:

• bank fees
• labor costs
• postage

Security risk

More time is wasted if a check is lost, damaged, or processed incorrectly, resulting in delays and financial losses. Keeping track of hundreds of checks every month is a challenge, even for the most responsible people.

Opportunity loss

Time spent reconciling checks, issuing receipts, and getting them to the bank is time that could be used to help owners or work on major projects.

Why should HOAs take online payments?

Your HOA doesn’t have to give up paper checks entirely, but adopting additional electronic payment options can be very advantageous.

Lighter workloads for staff

For starters, the HOA will be able to decrease expenses associated with labor costs since online payments are automatic. Staff do not have to be physically present to accept or deposit payments.

Higher resident satisfaction

Some communities also report that online payments help to reduce late payments. Owners can settle their dues online using a credit card or ACH transfer at a time that is most convenient for them.

They may be able to pay from a mobile app, and even set up recurring payments to ensure they never have outstanding assessment fees.  

Streamlined workflows

Another benefit of online payments is that there is less manual accounting work. Payments are received and processed automatically, and instantly. This helps to reduce cashflow issues.

The HOA gets an electronic record of all financial transactions, and owners get electronic receipts, too.  

The likelihood of lost checks and undelivered statements is drastically reduced, as are questions about whether a payment was made on time.

What are some alternatives to check payments?

Below are some of the most popular electronic payment options available to HOAs.  

• Electronic funds transfer (EFT)

EFT allows for the safe electronic movement of funds between bank accounts, resulting in faster processing and enhanced traceability.  EFT is an umbrella term; many types of transactions and transfers that take place electronically are considered EFTs.

• Debit and credit cards

Debit and credit cards are the most commonly used payment methods to replace checks. They don’t require owners to perform any additional setup. Just type in your information, hit pay, and you’re done.

• E-checks

Electronic checks are digital versions of traditional paper checks. To initiate an e-check, owners would provide the recipient (the HOA) with an electronic check representation, including the routing number, account number, and payment amount. The HOA then deposits the e-check into its bank account, where the funds are electronically transferred.

• Automated clearing house transfer (ACH)

ACH transfers are electronic transfers between two financial institutions made using the ACH network, which connects and facilitates transactions between banks and credit unions in the U.S.

ACH transactions are a type of EFT, but not all EFTs are ACH transfers.

ACH transfers are generally safe and convenient. They are typically free, or low-cost.

How do HOAs get started with online payments?

Making the switch to online payments might seem complex, but companies have made the process very easy. Your HOA could be accepting online payments by next month!

Choosing an online payment platform

You will need to choose a platform to facilitate online payments. Many HOAs use a payment processing company because of its simplicity. Plus, most companies integrate with HOA management software, allowing you to control everything from one command center.

Banks – Your local bank can oversee electronic payments via bank transfers. Banks can oversee electronic payments via bank transfers, and will likely have an online platform that both the association and owners can use.

Banks can also support recurring payments and electronic withdrawals. Just make sure to check with the bank’s requirements. For example, all owners may be required to set up an account with that bank in order to pay online.

Payment service provider – There are many payment service providers, like Stripe, Zego and Rotessa, that can handle your HOA’s online collections.

These platforms provide owners with different payment options such as credit card, debit card, and e-check. Payment service providers make the integration process as simple as possible so that establishing online payments is a frictionless experience. 

Note that different platforms will have different fees, and most charge per transaction. 

In-house online payments –An in-house online payment system is also an option. This choice provides the HOA with more control. However, it also requires more work. The board or management company will need to hire professionals to build a payment page, set up a secure server, obtain SSL certification, and test the platform.

Promoting online payments

Once the HOA has the ability to accept electronic payments, it’s time to introduce the process to your owners.

Have a plan in place to help them access the new payment option. Many people won’t need much guidance, especially if online payment options integrate with an existing owner portal.  However, it doesn’t hurt to host a workshop or make a tutorial for those owners who aren’t entirely confident using technology.  

Conclusion

Some owners will always pay using checks. But if the majority of your HOA owners would prefer to pay dues and other fees online, consider making the switch.

Online payments are much quicker, and significantly more convenient for everyone. Money gets to the association’s account almost immediately, and records are created automatically.

Fewer late payments, less manual work. It’s no wonder more HOAs are adopting online payments.