How to collect money from friends and family

Asking for money in person may feel awkward. So how can people collect money from friends, family, or a group quickly and easily? One option is to move the transaction into the digital world by initiating an online bank transfer or using a digital payment app.

This article includes tips, suggestions and general information. We recommend that you always do your own research and consider getting independent tax, financial and legal advice before making any important decision.

With some apps, people can create a payment request and share it with friends and family in seconds. They can then link their bank account, an online financial account, or credit or debit card, and make payments directly without needing cash or cheques.

Online payment platforms may provide a convenient way to track who has paid and who hasn't, potentially eliminating the need for guesswork and follow-ups. Collecting money online can also make it simple to plan a group gift, organise a party, or simply split expenses with friends.

However, anyone sending or receiving money will need to set up an account on the same app before they can complete a payment request.

Challenges of requesting money

While collecting money from friends and relatives may be necessary, it may come with challenges.

Here are a few examples:

• In-person collections can be hard to organise, especially if people are in different cities or countries or don’t visit one another frequently.
• Fewer people carry cash nowadays, which can make it difficult to collect funds on the spot.
• Cheques may cause delays, as they may take time to reach the desired recipient. They then need to be cashed at a local bank branch.
• People may lose track of who owes what, leading people to forget about the money they are owed or owe someone else.

On the other hand, digital platforms may help people more easily collect money from a group — eliminating the need for meetups or cash exchanges.

How to collect money online

There are different platforms and tools available to help make the process as smooth as possible. While each platform may have different nuances, the process might look something like this:

• Choose an online, peer-to-peer (P2P) payment platform: For example, PayPal’s digital wallet app offers features to request money from friends and family with ease.
• Set up an account: Follow the instructions to set up an account with one’s personal information. Link a bank account or credit/debit card to start sending and accepting money. Review terms to learn of any applicable fees for sending or receiving payments.
• Create a payment request: Many apps make it simple to create a payment request. Enter the amount to collect and a brief description of the reason. Choose the person or group to collect money from. This can be done by selecting their account (if they have one with the provider) or sending the request as a text message or email.
• Receive payments: The recipients will then get the payment request. They can then follow the instructions to securely make the payment using their account. The requester will receive a notification when each payment is made, and the money will be deposited into their account.
• Keep track of payments: Some platforms may allow people to send reminders to those who haven't paid or responded to a payment request.

Why someone may need to collect money

There are many instances where people may want to collect money from others. Here are some examples:

• Group gifts for birthdays, holidays, or special occasions
• Charity fundraising or donations for a cause
• Wedding gift fund
• Group travel expenses such as flights, hotels, and transportation
• Money from roommates for rent, bills, and utilities
• Splitting expenses for shared services
• Group dinner or activity

In all these scenarios, modern digital methods can help make splitting payments and collecting funds stress-free and more efficient.