Have you ever experienced issues with payment? Perhaps, you find yourself unable to make payment for the things you need. Also, there are cases where a vendor doesn’t have a payment option that suits you. If that describes you then you understand the need to have a bailout. Hence, we have Plastiq, a company that specializes in the bailout.
Plastiq is a bill payment app. It helps users pay vendors that do not accept credit or debit cards for goods and services.
Similarly, using Plastiq, you can virtually pay for rents, bills, taxes and other kinds of expenses. It allows you to pay through the available traditional methods the vendor accepts such as checks, wire-transfer or ACH (Automated Clearing House).
Free bank transfers
Credit card acceptance is at no cost
QuickBooks Online integration
Payment and billing all in one place
How does Plastiq work?
Plastiq for now does not have an app. For every signup and transaction, you have to do that through their website.
Paying with Plastiq involves four steps:
Linking your cards
Add recipients info
How to sign up for Plastiq?
Log unto their website to create an account
Click at the top right of the website for free sign in
Enter your email address
Provide your name, business name and other information as required
Indicate your reason for opening the account. If it is for business and/or personal purposes
Add a unique password
When you are through, it will automatically bring you to the Plastiq home dashboard.
This brings us to:
How to link your cards with Plastiq
At the top left of the dashboard, click on “add your first card”. The information needed will include your card information and billing address.
You can add as many cards as possible. However, you need to make one your default card.
With the correct information added, Plastiq synchronizes the card for two reasons.
How does Plastiq process card purchases?
Remember that the job of Plastiq is to help you make payments through means that are not convenient for you.
If the vendor, supplier or property owner accepts cash, credit/debit cards payments; you can easily do that yourself.
Also, for the services Plastiq renders, which is paying your recipients through wire transfer, ACH or check, you can as well do them yourself.
However, in the case, where the mode of payment is not convenient for you or you do not have time to start processing them yourself, Plastiq does the nice work for you for a fee.
Therefore, there is the need to let Plastiq know whom you want to pay. At the home dashboard:
Click on “Add the Recipient”
The recipient could be anyone whom you wish to pay via Plastiq.
Add enough information about the recipient including the name, country, bank routing number, bank account and contact information as indicated.
You can get from the recipient the necessary information just to be correct. Before your first payment, Plastiq will reach out to the recipients to confirm some necessary information.
Also, note that Plastiq saves each recipient’s information you add automatically. This is in case of reoccurring or future payments.
You do not need to stress yourself adding their information every time you need to pay them.
How Plastiq pays the recipient?
When you request payment, Plastiq would like to know the payment mode of the recipients. That will make them know if it is in alignment with theirs, especially if it is a new recipient.
For the existing ones, you can change the mode of payment according to the recipient’s desires.
With their information ready, you enter the amount you need to pay and set the schedule.
Plastiq will pay them in their preferred mode of payment, which includes check, wire transfer, or ACH bank transfer.
The recipient does not need to sign up for a Plastiq account. You just order, they deliver and you pay them for the convenience.
Plastiq also ensures to secure your information and that of the recipients. All of your payment schedule histories are on the dashboard for easy access.
Plastiq does not lengthen the period it takes any of the modes of payment to reflect.
For check payment, it takes about 8 days to arrive and the recipient must be able to receive snail mail.
For ACH bank transfer, it normally takes 3 working days.
Wire transfers can happen within minutes, a day or in three days. It depends on the financial institution, kind of bank transfer or via non-bank money transfer.
To avoid late payments, you should start processing them on time. Perhaps, Plastiq defaults and the payment arrives late, they assure you they will cover the late fee.
For each payment transaction Plastiq helps you with, they will charge your card.
How much does Plastiq charge?
Before we begin, the charges to debit and credit cardholders differ.
Debit card charges
Plastiq charges 1% per transaction for debit cards. That fee is the same for any amount you want to pay. For example, Plastiq charge for $100 is $1 and charge for $1,000 is $10.
Also, note that additional charges can occur for cards issued outside U.S. Expedited payment too can incur charges too for the delivery fee, bank fee, handling fee and so on.
Credit card charges
For credit card users, the charge is quite high at 2.85% per transaction.
Just like in the debit card transaction, the charge remains the same regardless of how much you are paying, reasons for the payment or who you are paying.
For example, charge for $100 is $2.85 and charge for $1,000 is $28.50.
For some, the charges are nothing, especially if you are transacting a smaller amount. Nevertheless, for small earners or those transacting higher amounts of money, the fee is huge.
That is because you do not even have the money in the first place. More so, it may even be less than the interest you pay on some loans or quick cash.
Therefore, for Plastiq coming to your rescue, you pay a higher price than debit cardholders do.
Note also that Plastiq gives credit card owners a period to pay what they owe. If you are not able to do that within the time limit, it will attract interest.
On a general note, the only way to avoid these charges is by doing the transaction yourself.
Another escape route is if Plastiq waives the fee up. Sometimes, Plastiq does give up some fees to certain dollar amounts or offer promotions.
What card brands are acceptable for Plastiq?
Plastiq accepts virtually all card types. It works with major card brands like Visa, MasterCard, American Express, Discover and Diners Club.
It is good to know too that the cards do not support all payment types. Therefore, to get the best out of your credit card to increase your credit card rewards and cash backs, you should use credit cards that best suit your spending style.
You can read more about credit card restrictions with Plastiq. With that, you know which card is suitable for your crucial needs.
Benefits of Plastiq
For credit card users, you need to worry less about late payments. You can pay your employees on time. Settle bills when due. Pay it back within the extra billing cycle of 30 days.
Plastiq covers up for you when you do not have much cash in your account. It helps you manage your small business cash reserve.
With that, you can concentrate more on other important tasks.
Make payments easier
Truth be told. Not everyone will have the time to go to banks for every wire transaction, ACH or check.
Your supplier may not accept any kind of payment, which could have been comfortable for you. Alternatively, your business clients may prefer any of the above-mentioned modes of payment.
Therefore, in this case, you have an option to either create time to do it yourself or have someone else do it for you.
Plastiq makes this kind of task easier for you when you cannot.
With your favourite credit card, you can earn rewards. The more you spend or make a transaction such as wire or bank transfers, etc., the more you can earn.
That is why you should set up your frequently used credit cards as your default. Use it to pay rents, mortgage and other reoccurring bills. Earn more reward points when you quickly hit your credit card promotional thresholds.
You can redeem your points to cover up for travel expenses, new purchases for your business or even re-invest it back.
Better still, you can use it to offset the transaction charges to your credit card.
Better than short-term loans
Short-term loans or a quick loan is the next alternative for someone in short of money. Coupled with the fact, they need to pay bills or settle expenses they would have paid regardless.
Nevertheless, the stress and cost of short-term loans, whether it is for business or personal use is much.
With Plastiq, you just do not only make the transaction faster and easier but also pay less than what most loan interest will amount.
Other advantages may include early payment discounts and partial tax deductions.
Downsides of Plastiq
Increase in credit card debt
Debit cardholders only have to pay for the 1% charge for processing. Plastiq merely helps you do what you cannot do with your money.
The case is not the same for credit cardholders. First, you do not even have the money Plastiq is helping you pay.
Secondly, the transaction fee charged is higher because literally, Plastiq borrows you the money.
Thirdly, if the repayment passes the stipulated billing cycle (1 month), it can generate interest of about 14% or even more.
Therefore, you can incur more debt and worsen your situation. If you are having a hard time clearing your bills. Plastiq would not be a nice option for you.
Although you may earn when you use Plastiq to make frequent purchases and payments, you may not be earning much to cover up for your expenses.
For example, the credit card big-spend bonuses or even the sign-up bonuses may not be enough to cover up for the 2.85% charge on each transaction you make.
Most of the times, the processing fees outweigh the benefits or bonuses you get. To avoid this shortfall, you can move out of your comfort zone.
You do so by engaging in the “Rewards & Referrals” program offered by Plastiq to meet up with the expenses.
Anything other than that may amount to nothing much.
More on Plastiq Rewards & Referrals
There is more than just one way to earn with Plastiq. It goes beyond earning points only when you make frequent purchases with your credit card.
How it works
Every credit cardholder in Plastiq has a unique referral code/link. You can find this code when you:
Go to your profile
Click on the icon
Select on “Rewards and Referrals”
Click “Refer Friends, Pay Less Fees”
You will find your unique referral code below the option
Copy your code and save
This way, you can share it with families and friends through any means possible. Such means may include social media, emails, text messages etc.
How to earn with Plastiq Rewards and Referrals
With your unique code/link, you can share Plastiq with your network.
This makes it easier for your referrals to sign up with it.
Those you refereed must click on your code/link to sign up. If done otherwise, the code will not apply.
Again, your referrals have to make a payment of $2500 in total within 30 days of sign-up.
With that, you (the referrer) earn a bonus of 2,500 FFDs and the referral earns 1,000 FFDs.
All participants get their bonuses credited within 2weeks of successful completion of the task.
Make sure to click the “Apply Fee-Free Dollars” link when choosing your payment method to apply the FFDs bonus.
What are FFDs?
FFDs mean Fee-Free Dollars. The credit you earn to help reduce your Plastiq fees when you apply it towards payment.
1 Fee Free Dollar = 1 dollar sent without the Plastiq Fee.
Fee-Free Dollar dollars can expire. It expires after 90 days of earning them. However, earning a new Fee-Free Dollar will automatically reset the expiry date.
That means the only way to lengthen the expiration date is by earning more new Fee-Free Dollars.
On the other hand, Fee-Free Dollars already applied to your payment will not expire. This is so despite the fact, the payment process has passed the estimated period.
To view our FFDs balance:
Go to your account
Click on the setting section
Click Rewards to find out about your FFDs available balance
Who can use Plastiq?
Plastiq is literally for everyone. Individuals and small businesses can benefit from using Plastiq.
More so, you can use it to pay for:
Rent or mortgage loans
Utility bills like water and gas
Country club membership or guest fees
Mobile phone plans
Taxes on property, income etc., and other popular payment types
Again, for business owners, you can also use it for some of your popular expenses with Plastiq. That includes:
Do the recipients pay any charges?
No. All the recipient need is to accept the request at no cost. The charges are for the customer to pay.
What information does Plastiq collect?
Plastiq collects your registration, financial, transaction and device information. They also collect information on how you use their services.
In addition to that, they will also collect information about you from third parties like banks. It is helpful for credit investigation, fraud detection process, account verification process and more.
However, Plastiq does not collect personal data or related information of children under the age of 13 intentionally.
They use the collected information to improve their services and user experience.
How secure is Plastiq?
Plastiq secures the information collected from any credit or debit cards. They strive to protect personal data from misuse, loss or unauthorized access.
They also rely on top-level security for their website connections, servers, encrypted vault storage and many more.
Plastiq is a lifesaver when you are short of cash in an emergency. It is an ideal way to earn more card rewards and control your cash flow.
Again, it is likely to be your next available option when your vendor/supplier etc., will not accept debit or credit cards. You can use it to pay virtually almost all kinds of bills. That is a plus.
However, you have to take extra precautions. Know that the more bills you pay with it. The more charges it incurs overtime.
These charges can create a hole in your pocket, especially for someone who is struggling to pay even the principal amount.
Therefore, if you do not earn enough credit card rewards to offset some of the charges and expenses, using Plastiq will be unsuitable for you.
Thanks for reading, please let me know your thoughts and comments below.
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Sagar Sridhar is a personal finance blogger from Canada. His genuine passion for personal finance coupled with his unique style of writing is what stands out. Professionally, he is a computer engineer, agile certified and has a master’s degree in Project Management. His writing has been featured or quoted in the leading Canadian publications such as Credit Canada and many other personal finance publications. While he is juggling between his day job and blogging, he is the main author on this blog and has miles to go before making the final pit stop.