Full disclosure: Plastiq offers referral credits to this blog. I’m attempting to negotiate a better deal for readers, but the current deal via Milenomics’ referral link is $500 in fee free payments for readers after your first $500 paid payment and $1,000 in fee free payments for the blog. If I can get a better deal negotiated I’ll update this post, and our Referral page.
Sign up for Plastiq here (Referral Link).
Quick Recap: Plastiq
Plastiq is a bill payment service that accepts credit cards. The fee structure of Plastiq (2.5%) means that it is best used:
- To reach a Minimum Spending Requirement you otherwise would not be able to reach
- For a short term bridge loan.
- As part of a strategy like the one I oulined in this post.
- For the $0 fee Masterpass promo
With Your second $500 in bill payments fee free and a 2.5% fee on the remainder you could spend $1,000 towards a minimum spend requirement for $12.50. ($500 x 2.5% + $500 x 0%). When you consider that $1k in spending on Plastiq can be done from your home I think that first $1,000 in spending compares favorably to some of the best methods around right now, at least in this very limited capacity.
Unfortunately there are restrictions on what can and can’t be paid based on the card type you use. (more on that later) In addition I would not use Plastiq for a bill that is due soon–delays and long processing times could mean getting hit with late fees.
Q&A with Plastiq
In an attempt to get some new information out about Plastiq, I asked to do a Q&A session with somone from Plastiq. Landon Howell agreed, and I’ve asked him to write a little about himself here, and then we’ll get right into the questions. (Italicized text is Landon’s)
Landon Howell oversees Industry Relations at Plastiq, a service that makes it possible for cardholders to use a credit card for any expense, even ones like rent that normally require a check. Plastiq makes it easier to earn credit card rewards, tap early-payment discounts, and use your cash in the ways that make the most sense for your life or your business.
Q: I appreciate that Plastiq accepts Visa/MC Gift Cards for payments. But the fees Plastiq charges for payments from these debit cards are the same as credit cards: 2.5%. Would it be possible to lower the fees charged for payments from Visa/MC Gift Cards?
A: We always want to offer a rate that adequately takes into account our own costs, so the Plastiq fee on any card payment is always a reflection of those business decisions. That being said, gift cards have never been a favorite method of payment on Plastiq, even when steep discounts or promotions were considered. Credit cards continue to be the preferred choice, used in more than 90% of all payments.
Q: Why are there so many restrictions on which types of bills can be paid in general? If we look at other similar services like Evolve Money and TIO.com they didn’t have such restrictions.
A: Any restrictions experienced when using Plastiq are merely the result of our agreements with the card brands. They have their own individual rules, permitted payments, restricted payments and such. Plastiq then implements a member experience in-line with the requests of the different card brands.
Plastiq wants to create a service that provides value to our members and a profit that helps our company grow so that we can continue to expand on and improve our services. TIO Networks just announced on March 22 that they were suspending operations, and Evolve Money ceased operations in late 2017. It is worth noting that when Evolve Money decided to shutter, ADP and their ALINE card shifted their cardholders to Plastiq.
Plastiq aims to provide financial flexibility and convenience, and when our members don’t feel that flexibility and convenience, we work to alleviate and improve as best we can within the requests by which we’re asked to operate. It’s no accident that six years later Plastiq continues to grow while so many other payment services cannot say the same.
Q: You can’t pay mortgages with AmEx/Visa but you can with Mastercard. Why are these restrictions in place depending on the card we’re paying with?
A: Great question, and one that I get almost every day. As I mentioned previously, each card brand has the option to permit or restrict certain payment types. Rent and mortgage continue to be two of the most popular payments on Plastiq, even if Visa and American Express are not an option.
Visa and American Express each made individual decisions independent of Plastiq not to allow mortgage payments on credit cards. If and when Visa or American Express decides to permit mortgage payments, we will work to make that a reality for Plastiq members.
Q: The existing payee database with Plastiq has always seemed a little sparse vs other online bill pay services like Bluebird for example. Is that improving over time as more people pay bills? Or should we always expect to have to enter a payees address?
A: The key differentiator of Plastiq is the ability to pay almost business for almost any bill, so it is not unexpected for many recipients not to appear as an existing recipient because the actual list of companies to be paid is practically endless and ever expanding. We’re working on ways to make the Recipient Addition faster, and even more importantly Plastiq is also rolling out a feature with will permit companies to submit ACH information to Plastiq. A few thousand members currently have access to this feature, and the response has been overwhelmingly positive.
This feature will enable members and businesses to accelerate the speed of payment. Plastiq has successfully paid hundreds of thousands of companies to date, and we expect our network to expand by double-digit percentage growth each month in 2018.
Q: It would be great if we could pay 529 plans. Any progress on that front?
A: This too is a payment where the card brands have made a decision not to allow a specific payment type, and Plastiq is merely adhering to their rules and requests.
Q: What’s a feature you would like to see Plastiq eventually support?
A: Oh, my. How much time do you have?
I love our service. I pay my rent every month using Plastiq. I just paid my federal and state taxes using Plastiq. Last year I had my first child, and I paid all of our medical bills using Plastiq. Plastiq is a part of my financial life, so I’m frequently reminded of ways we can continue to improve.
There are so many features we could add, but we must first focus on the features that will have the most impact. Any new features we create should enable greater flexibility, convenience, be more beneficial to our members, and ensure the service is more dependable for our members.
Some examples of features that were only ideas just a year ago but are now a Plastiq feature:
- International & Domestic Wire: A Plastiq member can now pay almost any bill to almost any recipient in 157 countries. Just last year members could only make payments to two countries. This speed and convenience of Wire payments have been incredibly beneficial to business owners in particular. A cardholder can pay her supplier in London $50,000 for goods, and the money arrives next-day. That cardholder is now able to spend her cash in a way that works best for her and her business.
- ACH Funding: A Plastiq member request to add ACH information for businesses they wish to pay. Standard process on Plastiq is for a check to be sent to any recipient. Checks then arrive within eight businesses days. With ACH, payments arrive within three days, and there is greater visibility into the payment for both parties.
As far as a feature that I would love for all Plastiq members to have? Payroll on Plastiq, because payroll is the most significant monthly expense for any business owner, and we are constantly asked by businesses big and small if they can put payroll on their credit card. If we could have integration with workforce management and timesheet programs like Deputy too that would be even better. It is something we’re working on, and I’ll be sure to update you on our progress. Business owners might want to check out the payroll software solutions to use themselves like those on cloudpay.net which can streamline how they do the employee payroll.
Q: Why did you pay your federal taxes with Plastiq @ 2.5% when other processors charge as little as 1.87%?
A: Good question. First, Plastiq is easier for me. Since I can pay all of my bills on Plastiq, it serves as my bill pay hub. In 3 steps I’ve paid all taxes and I know (via the Plastiq Guarantee) that it will arrive on time. Second, I trust Plastiq for[sic] than other payment services.
Q: Readers have expressed concerns over a data breach at another payment service. Is there anything our readers should know about your data collection and security measures?
A: At Plastiq privacy and security are paramount. We pride ourselves on our bank-grade security, PCI Level 1 Compliance which is the highest level attainable. Plastiq has processed billions of dollars in payments by hundreds of thousands of members who trust us with their largest, most essential payments. We value that trust and work daily to ensure their information is properly protected.
Q: What is the average size of a payment sent via the service? (mean/median?)
A: I’m not at liberty to discuss the specifics around the average payment size, though can speak to the fact that the three most common bills paid through Plastiq are rent, mortgage, and business expenses, all of which are sizeable monthly payments.
Due to the small businesses who continue to adopt Plastiq, whose monthly spend and average bill size are much higher than typical consumer spend, our average payment size continues to increase.
Q: What are some of the more interesting payments made on Plastiq?
A: There is something new and exciting every week, but three things spring to mind:
- A few weeks back someone purchased two of the Tesla Model S, each valued at around $86,000.
- A member used fee-free dollars earned through Plastiq to pay off a home mortgage.
- Another member bought a private plane worth a few million dollars.
There you have it–Thanks to Landon for agreeing to the Q&A. I hope that some of the above gives a little more insight into Plastiq. I can see the cash flow angle, especially for a business, being worth the 2.5% ‘squeeze.’ I also appreciate the transparency that Plastiq has attempted to maintain with their users as well.
If you’ve got questions, feedback or experience with Plastiq you’d like to share feel free to do so in the comments below.
Good follow up question on the taxes. His answer is hilarious. Assuming his taxes were sizable he just paid an extra fee for nothing. Typical corporate answers
Hi Justin. I hate corporate answers as well, so I’m happy to dive deeper if need be. Feel free to reply below with any follow-up questions, or shoot me an email: firstname.lastname@example.org
I’m assuming that he probably has plenty of ‘fee free dollars’ as a perk for working at Plastiq.
For future Tesla owners, let me say something short for you: NEVER USE PLASTIQ!!!
My payment was never delivered. My Tesla sale representative sent me the transaction history record every day to confirm with me. I had to file multiple complaints on BBB and Consumer Financial Protection Bureau. I was almost hiring a lawyer to file a claim against their business. If you go to BBB, there are plenty of people who stepped on the same trap with me through the paid article from Business Insider: https://www.businessinsider.com/tesla-travel-rewards-credit-card-plastiq-2018-6
Attachments below are my complaints with them. They still have not resolved my issue. Is it worth for you to go through this whole process like me? Don’t, don’t ever use PLASTIQ!!!
Quan: I appreciate you detailed comment, and raising this warning flag. Just for clarity–did plastiq refund you? Or did Tesla eventually receive the payment? Or (worst case) the money was charged and never sent and now plastiq refuses to refund? Please update readers!