Rent should be the easiest money an agency collects. The amount is agreed in writing, the date never changes, and the tenant knows it's coming. Even so, most agencies we talk to lose hours every month working out who has paid, who hasn't, and which payment belongs to which tenancy.
When we dig into it, the tenant is rarely the problem. The payment method usually is. Standing orders, Direct Debit, cards and manual transfers were all built for other jobs and then bent to fit lettings, and every one of them leaves a gap that someone in the office ends up filling.
This guide goes through the main options, where each one causes trouble, and what changes when rent is paid by open banking instead.
Standing orders
Most UK tenancies still run on standing orders. Tenants like them because they're free and familiar. The difficulty is that the tenant controls everything about them, and the agent can see none of it.
An agent has no way of knowing whether a standing order exists, has been amended or was cancelled last week. The first warning is usually a gap on the bank statement. References are another headache. A tenant types one in when setting up the payment and it might be a flat number, a misspelt surname or nothing at all. And after a rent increase, the standing order only changes if the tenant remembers to change it. A lot of them don't.
Direct Debit
Direct Debit gives the agent control of the amount and the date, which solves the rent increase problem. It brings a different set of issues.
Collections take several working days, so the money isn't there on the due date. Failure rates have been climbing for a while. Modul reported this year that Direct Debit failures have gone up five years in a row, and were 9% higher in 2026 than in 2025. Then there's the Direct Debit Guarantee, which lets the payer ask their bank to reverse a collection. Rent that looked settled can come back weeks later, sometimes after it has already been paid out to the landlord, leaving a client ledger short.
Cards and manual transfers
Very few agencies take monthly rent by card. On a £1,200 rent the processing fee is noticeable, chargebacks carry the same reversal risk as Direct Debit, and holding card data brings PCI obligations nobody in lettings wants. Cards tend to show up only for holding deposits and one-off charges, which happen to be the payments fraudsters target most.
Manual bank transfers cover everything else: first month's rent, part payments, someone clearing arrears. They arrive quickly over Faster Payments, but the reference is whatever the tenant decided to type, and the agent had no say in the amount.
What paying by open banking changes
With open banking, or pay by bank as it's often called, the tenant pays straight from their bank account using their banking app. A regulated provider sets up the payment, the tenant's bank checks it's really them using its usual security, and the money moves over Faster Payments.
For the agency, the difference comes from who sets the details. The agent creates the payment request, so the amount, the payee and the reference are all filled in before the tenant sees anything. The tenant checks it and taps to approve. Nothing gets typed, so the reference is right every time.
The money lands in the client account within seconds, and the agent gets confirmation of which request was paid. There's no chargeback scheme on these payments and no indemnity claim to worry about later, because the tenant authorised the transfer directly with their own bank. And because no card is involved, there's no card data to look after.
Standing order | Direct Debit | Card | Pay by bank | |
|---|---|---|---|---|
Who sets the amount | Tenant | Agent | Agent | Agent |
When funds are available | Same day | After several working days | After settlement | Within seconds |
Can it be reversed later | No | Yes, under the DD Guarantee | Yes, by chargeback | No chargeback route |
Who sets the reference | Tenant | Agent | Agent | Agent |
Agent sees status straight away | No | Partly | Yes | Yes |
Where it fits in a tenancy
Pay by bank isn't only a replacement for the monthly rent run. It's often most useful at the points where agencies carry the most risk.
Holding deposits are a good example. Asking an applicant to send money to an account number in an email is exactly what rental scammers do, so a genuine request that opens in the tenant's own banking app, showing the agency's verified name, is a far safer experience for everyone. Move-in monies matter more than they used to as well. Since 1 May 2026, agents in England can't ask for more than a month's rent in advance, which makes the first payment and the deposit the whole of the upfront money.
For monthly rent, a payment link sent a few days before the due date gives the tenant a quick way to pay the right amount. When someone falls behind, a request for the exact arrears figure takes the guesswork out of catching up. Agreed end-of-tenancy charges can be handled the same way.
Recurring rent and VRPs
The question we hear most is whether pay by bank can take over from Direct Debit completely.
At the moment, recurring rent by open banking usually means a payment request each month that the tenant approves. The agent controls the amount and reference, and the tenant stays in control of their account, but it does need a tap every month.
Variable Recurring Payments will remove that step. A tenant gives permission once, within limits they choose, and payments are collected automatically after that. Commercial VRPs went live through the UK Payments Initiative on 2 June 2026, starting with utilities, financial services, charities and government. Other sectors are expected to follow. Rent is an obvious candidate, and agencies already using pay by bank will be in a good position when it opens up.
A few questions worth asking about your own setup
How many of your tenancies pay by standing order, and how many of those were updated after the last rent review? How much time does the team spend each month matching payments with missing or wrong references? How many Direct Debit failures and indemnity claims did you deal with last year? And do your landlords get their money on rent day, or several days later?
If the answers are uncomfortable, the payment method is a good place to start.
How Fena helps
Fena is an FCA-regulated open banking provider. Letting agents and property managers use us to collect holding deposits, move-in monies, rent and one-off charges through payment links, QR codes and recurring payment requests, paid straight into their client account. The same platform sends bulk payouts to landlords and contractors and provides bank-verified account data, so collecting, paying out and checking who you're dealing with all happen in one place.
Common questions
Is pay by bank safe for tenants?
Yes. Tenants approve every payment in their own banking app, with the same security they'd use for any other payment. They don't share login details or card numbers with the agency, and the payment is set up by an FCA-regulated provider.
Can a tenant dispute a pay by bank payment?
There's no chargeback scheme, because the tenant authorises the payment directly with their bank. Tenants keep their normal consumer rights and can raise any problem with the agent or landlord.
Can the money go into our client account?
Yes. Payments can be settled directly into a designated client account, so client money stays separate as Client Money Protection rules require. It's worth confirming the setup with your provider and your CMP scheme.
Does it work with our software?
Payment links work without any integration. For deeper connections, ask whether your property management or accounting software is supported through an API or plugin.
Article by
Gosia Furmanik
CEO and Founder
Published on
