Amex Vendor Pay. The ultimate path to free credit card rewards? (hint: no)

If you have an Amex business card, you’ve probably received an email from Amex with the headline: “Introducing a new Card benefit to make paying bills easier.”

And, if you’re into points and miles, you may have taken particular note that they’re advertising the ability to use your Amex card to pay suppliers with no fee.  And, they explicitly state that you earn rewards when you do so.

Have we just found the ultimate no-fee perpetual point machine?  Can we pay a vendor (read: friend or relative) with our Amex business card and earn rewards for free?

Unfortunately, no.

I did some digging, and found:

  1. Yes, the service is fee free when you pay vendors with your Amex card.
  2. Yes, you do earn rewards on this spend.

So, what’s not to like?  It’s the way it works.

The Catch

The process Amex Vendor Pay uses to let you pay people by credit card is that it creates a single use credit card number for each payment, and emails that number to the person or company you want to pay.  The vendor, therefore needs to be able to accept credit card payments for this to work.  To do so, they have to pay the credit card transaction fee.

Ultimately, the process isn’t really fee-free.  It’s just that the person or company receiving the payment must pay the credit card processing fee.

Conclusion

Amex Vendor Pay might be a useful service for real business needs.  I don’t know — I didn’t evaluate it for that purpose.  But I do know that this is not the great manufactured spending technique that I had hoped.

This has been a public service announcement designed to prevent manufactured spenders from wasting time with this new service.  You’re welcome.

Regarding comments: Comments posted at the bottom of Frequent Miler pages and posts 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.

About Greg The Frequent Miler

Greg is the owner, founder, and primary author of the Frequent Miler. He earns millions of points and miles each year, mostly without flying, and dedicates this blog to teaching others how to do the same.

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Lrdx
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Lrdx

So.. you can access your credit card credit limit.. with a credit card? How revolutionary.

Seriously, this just sounds like the temporary card number service from BofA or Citi.

JustSaying
Guest
JustSaying

Ever since the death of Bluebird the Fascists have been in control of auxiliary cards at AMEX……………let the buyer beware!

king
Guest
king

apart from the transaction fee , what abt the tax the friend needs to pay. This is a joke topic

KPhere
Guest
KPhere

There is no tax liability if the friend processes a $10k transaction and then writes you a refund check for the full amount.

king
Guest
king

but doesnt he needs to report it?

CaveDweller
Guest
CaveDweller

Another way for the Banks to make money while trying to Help the People..
CHEERs

Colin
Guest
Colin

So what about paying rent or something similar? How would that work

Avalon
Guest
Avalon

Your landlord etc wouldn’t want to pay the fee so will probably ask you to pay the difference. And if they’re already accepting credit cards, this makes no difference as you can just straight up pay. Its a non-perk “fake news”

CaveDweller
Guest
CaveDweller

Lots of rental places take CC’s , me and my girl friend did this to get many 1/2 price cruises and 30% cash off my GM truck .I saw the sign on the wall 5 years later did it . No FEEs to bad we didn’t do it FIVE years before Huge Lost for us not them..
CHEERs

JayP
Guest
JayP

Nothing to do with this post, but the new BoardingArea flag at the bottom of the screen on a mobile device is annoying. Can you ask them to change that?

Pam
Guest
Pam

I’m totally confused by the comments thus far. What the heck is anyone talking about!?

Thebebfit in question is not worth the mention

CaveDweller
Guest
CaveDweller

Go find out and tell us it’s Monsoon time on Waikiki beach and the satellite disk is out .
CHEERs

Tugboat
Guest
Tugboat

Anyone know what the fees are to accept this type of payment? When you log into vendor pay names of indivuals come up when searching vendors. If I had an advertising business someone could pay with an Amex Business Gold at 4x… may be great for things like min spend in a pinch? Even if fees are around 2.5%

Mike
Guest
Mike

If I sign up for Vendor Pay using bill.com their basic plan allows for checks to be sent to the vendor for two dollars processing fee. It does not suggest that this check requires the vendor to except a 2 1/2% expenses such as a credit card? For high ticket items such as rent and large vendor payments, it seems like this would make sense. Do you have any thoughts on this? Am I missing something?

Shawn
Guest
Shawn

In regards to the transaction fee Gregg, wouldn’t this be the same for all credit cards used…VISA, AMEX, Citi etc? If the statement,

Another important question. If I can’t use AMEX to pay my supplier because they don’t accept AMEX, will Vendor Pay be the work around?