Although using credit cards has become much more prevalent throughout the years (they are accepted at more places and for more expenses than ever, just look at rent through Bilt,) there remains niche expenses that you cannot use cards, earn valuable points, or at least without incurring a fee. Expenses such as utilities, real estate taxes, tuition, HOA fees and more. Enter Paypal Bill pay. Let's take a look at Paypal Bill pay and perhaps it can be advantageous to you in your points earning game.
What is PayPal Bill pay
We all have heard of Paypal, the predecessor and perhaps waning in popularity version of Venmo. Paypal is a way to securely transfer funds to another person or entity. It has always operated under the premise that if you were transferring "cash" to friends and family (coming out of your bank account) there was no fee. But if paying for goods and services, and maybe using a credit card to pay, there was a fee involved. This fee typically ranges from 2%-4%.
More recently, Paypal has added Bill Pay, a feature they tout as "Your bills, paid your way."
How does it work
I have been turned onto this feature through various online forums, as users have been experimenting with Paypal Bill pay as an avenue to pay bills with a credit card (linked to their PayPal account) with no fee. These are instances where either the vendor doesn't traditionally accept credit cards or typically charges a fee when processing through their website.
When logging into your Paypal account (on a desktop browser) you will see "Pay Bills" toward the upper right.
When you click on that, you will see the bills you have already added or can "Add a new bill."
You can then search by name or category to see if your vendor is in the system.
Once you choose a vendor you add your account number.
Once your bill is added, you click "Pay"
Enter the amount and click "Next"
You can then choose among the credit cards you have saved to your PayPal profile.
Once you get a confirmation, you're all set. You can double check with your credit card to confirm the charge has posted.
Caveats
In experience scouring data points on this service, there are several caveats you should note before using PayPal Bill pay. This process is truly a "Your Mileage May Vary" (YMMV) situation, meaning what works for one person may not necessarily work for another.
A vendor search may come up empty, not all suppliers are part of the database.
You may have your company/vendor/supplier come up when searching the database, but be unable to add/verify your account number with that vendor and get an error message. I had this with my electric supplier, so I eventually gave up.
It is possible that even through Paypal, it may try to add a % processing fee, be aware.
Paypal may use your Paypal "balance" first when charging a transaction, so if you don't want that to happen, make sure you transfer/use up that balance beforehand.
There have been reports that Paypal may charge a bill to your checking account on file, even if you indicated to use a specific credit card for said transaction. This would obviously defeat the purpose of using Paypal at all to earn points/avoid fees. So you may want to remove your checking account from your profile before paying a bill to avoid this scenario.
If paying a large bill, you may want to send a small "trial" payment to the vendor to confirm the process works before submitting a larger payment.
You may get to the end of the whole transaction and PayPal says you can't use a credit card.
It is possible that Paypal will charge your credit card and the payment never shows up with your vendor, so be diligent on following up after submitting payment. It may take a while to process, I had some payments take 1-3 weeks.
Paypal's customer service is frustrating. I have read reports of not being able to get answers from Paypal regarding why a payment hasn't processed and ultimately ended up having to dispute the charge with their credit card company.
Conclusion
Paypal Bill pay is like any plan, when it works, it's great, when it doesn't, it can be a nuisance. Understanding the hurdles that may arise though, Paypal Bill pay can be an untapped, viable resource to pay previously unpayable bills with a credit card while avoiding the pesky credit card fees. I have had overall success with this feature and it has netted me valuable points that hadn't been possible before. If your interest is piqued, I encourage you to check out the feature and see if there are vendors you currently use that are on the Paypal Bill pay platform.
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