If it’s possible to purchase a home online, why are some HOAs still asking owners to pay dues with a check?

Online payments make life easier for the association and for owners. Associations are required to process thousands of dollars from owners each year, and all of that money moves a lot faster when it is sent electronically.

Some communities may be reluctant about offering digital payment options because they think it will be too hard to set up, or too challenging for owners to use.

But, if you have a good website and a trusted third-party payment processor, you might be surprised by how easy it is to collect dues online.   

Table of contents

• Why does my HOA need a website to collect dues online?
• How do online payments work?
• Types of online payments
• How to make online payments available on your website

Why does my HOA need a website to collect dues online?  

Think of an HOA website as a hub for members and staff. Anything related to HOA operations, communications or events can be added to the site.  

Having an accessible, user-friendly website is invaluable.  It’s the simplest way to keep your owners informed and engaged. Plus, having information on the site means staff aren’t spending so much time answering questions or printing off documents.

Not sure when the next member meeting is? Check the website. Can owners install a personal surveillance camera on their front porch? The website contains all of the association’s rules and policies. Want to pay your monthly dues online? You guessed it. Submit your payment through the website.

The HOA website is the starting point for many actions, and adding online payments to your site is the simplest way to present this convenience to owners.  

Is it possible to collect dues online without a website? It is possible if your management company has a website that accepts online payments from owners. But, members generally prefer to use a secure site that belongs to them.

How do online payments work?

Let’s say you already have a website (maybe you do, and that’s great), but you don’t have a way to collect dues and other payments online. You’re already on your way to changing that by reading this article.

There are four parties involved in an online payment transaction. They are all required to successfully move money from the payor to the payee.  

Payor

The HOA owner or person making the payment.

Payee

The HOA.

Acquirer

The bank that processes payments on behalf of the HOA and routes them through the appropriate networks to the issuing bank. Acquirers may also partner with a third party to help process payments.

Issuing bank

The bank that extends credit and issues cards to payors.

First, the HOA needs to have a bank account and establish a relationship with an acquirer or payment processor. Acquirers and processors are like assistants that help route payments from the HOA website to networks, such as Visa and Mastercard. Depending on the setup, the HOA may have a separate acquirer (often a bank that maintains network relationships) and processor (partners with the acquirer to support transactions), but some arrangements include both services.

To securely capture payment details, you may also need a gateway. Gateways use tokenization to anonymize payment details and keep sensitive information out of the HOA’s system.

When an online payment is made, the gateway encrypts the data and sends it to the acquirer, and then to the networks. The networks then communicate with the issuing bank, which will confirm or deny the payment.

The issuing bank will send the response back to the gateway or acquirer, and then the HOA can let the owner know if their payment was accepted or declined.

Types of online payments

Depending on the company or system you select, owners can pay for dues through the HOA’s website using debit, credit, ACH or eCheck.

Debit and credit cards – these are the most straightforward payment options. Owners enter their debit or credit card information to pay dues. Owners may have to pay processing/service fees when payments are made using cards.

eCheck – this is similar to a debit card payment in that the money comes out of a checking account. The difference is that there is often no fee associated with paying by eCheck.

Bank transfers or electronic funds transfers (EFTs) – with this payment option, owners agree to electronically transfer money from their bank accounts to the HOA’s bank account. Many types of payments fall under the category of electronic fund transfer, including eChecks, wire transfers and direct deposit.  

Automated clearing house (ACH) – ACH is a network used for moving money electronically from one bank to another. Homeowners will generally prefer this option because the processing fees are less than what is charged for paying with a card. It’s also an effective choice for recurring charges such as HOA dues. However, owners do have to provide their bank information, which could make some people nervous (but it shouldn’t; this information stays with the bank).   

How to make online payments available on your website

In most cases, HOAs elect to partner with a trustworthy payment processor like Zego, Stripe, or ProPay. That’s because it is the simplest solution to implement, and the company takes care of the complicated stuff. However, there are other ways to collect dues electronically.

Third-party payment processor

Start by selecting your third-party payment processor. Assess the fees, policies, and customer support. You should contact a representative first to ask questions and confirm pricing.

Once you are happy with your decision, create an account. We will use Stripe as our example since that is the company we work with.

You will receive an email asking you to verify your email address.

Once the email is confirmed, you will stay on the Stripe website to activate your account. You will need to enter some important information, including the HOA’s address, business representative, and banking details.   

Once all required fields have been filled, you will return to your HOA website to activate online payments. This action needs to be completed on the backend of the site. Feel free to reach out to us, or your website provider, for assistance.  

Owners wishing to use the online payments feature will need to have an active account.

They will need to log in to their account and access the page or space where they can pay dues.

Depending on what payment types are available, owners simply enter their card information or bank information to pay their dues.

To encourage owners to pay online, make sure to share a step-by-step guide about how to pay online.

Distribute the information using your website, email, and physical mail if some owners prefer to receive communications that way.

Make sure to address questions about recurring payment options, transaction records, and who can help if an owner believes there is an issue with a payment.  

Work directly with a bank

It may be possible to work with the HOA’s bank. Owners would submit payments through the bank’s online platform. Banks can support recurring payments and electronic withdrawals. However, there would likely be a requirement for homeowners to have an account with the HOA’s bank of choice, and that would be a dealbreaker for some.

Establish an in-house online payment system

It is also possible to build an in-house payment system. This setup gives the HOA the most control over online payments, however, it requires the most work. Experts will need to write the code to set up a secure server, build the payment page, obtain SSL certification, and attend to issues when something goes wrong. This is an expensive option, which is why most associations avoid it.

Conclusion

Many HOAs still receive the bulk of dues in the form of paper checks. But it doesn’t have to be that way!

Online payments are quicker, and significantly more convenient for owners and staff. Owners can pay at any time, and they don’t have to leave their couches to complete the transactions. Once the money has been sent, it gets to the association’s account fast.

Some people will always want to pay with checks, and that’s okay. That option is still available. But many will prefer the convenience and ease of online payments.