Plastiq and PayPal Might Code as Small Business for Amex Card…Good Earning Potential?

A couple of people are reporting that Plastiq payments made with an American Express card might be coding as a small business purchase. This is significant, because American Express is offering double points on Small Business purchases until the end of the year. This could potentially mean that you can earn 2x points on just about any goods and services you can cut a check to. (I suppose this is the good news counterpart to the recent bad news, that Visa payments are starting to code as cash advance with Plastiq.)

Plastiq will process your credit card payment and send a check on your behalf

Plastiq will process your credit card payment and send a check on your behalf

Plastiq allows you to make payments to payees that don’t normally accept credit cards. You simply pay Plastiq, and they will write the payee a check on your behalf. They do charge a fee (2% with MasterCard, 2.5% with Amex or Visa), so you will have to do the math to see if it’s worth it. I included a sample calculation later in the post.

From now until the end of October 2016, Plastiq is also offering a promotion, with lower fees for rent and mortgage payments. You will have to schedule 6 payments in advance, but they can be as far out as possible. Under this promotion, they will charge a 2.25% fee for payments made with an American Express card, instead of the usual fee, which maxes out at 2.5%.

There are a few possibilities here. Plastiq might just be serving as a payment aggregator, so whether something codes as Small Business depends on who you pay. On the other hand, it might also be that all Plastiq payments count as small business, which would be fantastic, but might also mean that Amex could close this door quickly. I did a few experiments myself, and will hopefully be able to report back soon!

Earn double base points with your American Express card at small businesses plastiq small business

Earn double base points with your American Express card at small businesses

Depending on the card you have, there are some good earning potentials here. For example, if you have the American Express Business Platinum card, you will earn 1.5x points on single purchases greater than $5,000. You can also basically redeem them for travels (subject to rules) at 2 cents per point. This means that if you make a single purchase of $5,000 through Plastiq, you can:

  • Essentially “buy” MR points for 1 cent a piece
    • Earn 5,000 * 1.5 = 7,500 Membership Rewards points for the >$5000 purchase
    • Earn 5,000 bonus points under the Small Business promotion
    • Pay up to $125 in Plastiq fees (2.5%)
  • Use MR points at 2 cents/point on airfares

Keep in mind, the Small Business promotion works on a variety of cards, so you could earn, say, 2 SPG points per dollar spent with Plastiq instead, and I value SPG points at more more than 1.25 cents (Plastiq fee) apiece. This means that with the right card, you could very well come out ahead. But again, scenarios could be limited, and Amex could always change the way they code purchase.

There have also been a report of PayPal payments also coding as “Small Business” with American Express. But keep in mind PayPal has a different fee schedule, and they are not too keen on folks “taking advantage of” their system. Plastiq, on the other hand, at one point even advertised their service as a way to “rack up reward points.” Regardless, you can do the math to see if it’s worth jumping in.

If you are looking to check out Plastiq, you can sign up using my link and get $200 fee-free dollars after your first payment.

(HT Everyone on Reddit)

The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

Comments

  1. So to note I tried Plastig and have asked that my account be closed and wiped from their servers. I do not recommend them at all. They are expensive to begin with, unless for the “trial ” period using MC or AMEX after that your looking at over 5%. It seems an unnecessary service just to get points and your exposing yourself and the security of your credit cards. There is no guarantee on their part if the check does not get there in time.

    Just saying.

    • You’re doing something seriously wrong if you’re getting a fee over 5%…even without the promo the highest they go is 2.5%. Either that or you can’t do math.

Leave a Reply

Your email address will not be published. Required fields are marked *