Next month, St George Bank will be the last major Australian bank to stop awarding frequent flyer points when paying tax to the ATO by credit card. But it’s still possible to earn points for paying tax – or any other bills, for that matter – even if your biller doesn’t normally accept credit card payments at all.
The trick is to use a bill payment service such as B2Bpay, RewardPay, Yak Pay, Easy Bill Pay or Bluechain. These services allow you to pay almost any biller using your credit card. If you have a points-earning credit card, you’ll then earn points for the transaction at the full earning rate – even if your card provider doesn’t normally award points (such as for government payments).
In addition to the points earned through your credit card, you can earn 1 Qantas point per $100 paid through B2Bpay if you’re a Qantas Business Rewards member (this increases to 3 Qantas points per $1.50 with “bonus billers”). And you can earn 1 Velocity point per $10 paid with Yak Pay.
These services are not free. There is a small fee for each payment made using these platforms. But if you’re earning points for the transaction, and would not have otherwise been able to do so, it could be worthwhile. If you’re paying a business-related expense, you may even be able to claim the payment fee as a tax deduction (although you should seek independent advice on this).
There are a few other catches. For example, you generally need an ABN to use these services as they are designed to faciliate business-to-business payments. And in some cases, you’ll only be able to pay billers that accept BPAY payments. But if you’re a small business owner and paying tax or rates bills, for example, you’ll almost certainly be able to use these payment platforms if you want to.
How do the various bill payment services compare?
There are many business-to-business payment services in Australia – and the number continues to grow as banks crack down on earning points for tax payments. We’ve compared the fees charged by six Australian providers.
Here are the fees applicable to Visa, Mastercard and American Express payments:
|B2Bpay||1.2-1.55% (depending on card type) + GST||1.2-1.55% (depending on card type) + GST||2.2% + GST|
|RewardPay||1.65-2.15% + GST (depending on amount) for Amex only|
|Easy Bill Pay||1% + monthly fees||1% + monthly fees||1.7% + monthly fees|
|Yak Pay||1.0% + GST||1.2% + GST||2.15% + GST|
|Credit Rewards||1.81% + $1/transaction||1.81% + $1/transaction||1.81% + $1/transaction|
|Blue Chain||1.4% + 50c/transaction + GST||1.4% + 50c/transaction + GST||1.95% + GST|
As you can see, each of the services has a slightly different fee structure. And B2Bpay, RewardPay, Yak Pay and Blue Chain exclude GST (which adds 10% to the cost) in the quoted fee amount.
On the surface, it would appear that Easy Bill Pay has the lowest fees. But this doesn’t account for their $24.95 monthly account fee, or their 0.75% “High Value Processing Fee” surcharge on payments over $20,000 in a calendar month. This reduces the value proposition of Easy Bill Pay significantly.
With that taken into account, it would appear that Yak Pay is the best value for Visa payments. Yak Pay & B2Bpay are both good for Mastercard payments, and Credit Rewards is the best value option for American Express payments.
Is it worth it?
If you’re paying a biller that doesn’t otherwise accept credit card payments, or your bank won’t award points for the transaction, this is a way to earn points for payments you have to make anyway. But you do have to pay a surcharge, so the points aren’t entirely free.
If you’re earning a high rate of points from your credit card, it could be worth paying your bills this way. For example, if you have a Qantas Premier Titanium Mastercard, you could earn 1.25 Qantas points per $1 paid to the ATO by using a service like Yak Pay. You would pay a 1.32% surcharge (including GST) for the payment, but the benefit of the points earned could well outweigh the cost if you’re redeeming your Qantas points for reward flights or upgrades. If you’re able to claim a tax deduction on the payment fee, the value proposition is even better.
If you’re running a business, these services can also help you to manage your cash flow and some provide itemised invoices & payment summaries. So apart from the ability to earn points, they do offer some additional value as well.
But if you’re paying a supplier that doesn’t charge a credit card surcharge, and you could earn points for the transaction without using a service like this, it clearly makes little sense. The main benefit is the possibility to earn points at the full rate for tax payments, which would otherwise no longer be possible with most Australian credit cards.
Earn up to 30,000 bonus Qantas points with B2Bpay
It’s worth mentioning that B2Bpay is currently running a promotion for new customers. If you’re not currently a B2Bpay customer, you can earn up to 30,000 bonus Qantas points if you join by 8 November 2020.
If you join by 8 November and make at least $10,000 worth of payments with B2Bpay by 30 November 2020, you’ll receive 10,000 bonus Qantas points. And you could earn an additional 20,000 Qantas points if you’re a business and receive at least $20,000 worth of total payments by the end of this month.
Join the discussion on the Australian Frequent Flyer forum: RewardPay Alternatives