Pay bills online with debit and prepaid cards

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A new online bill pay service called Evolve Money launched in September of last year and evolved into something useful in November (see their launch blog post here and their November post here).  This service has a few unique features that make it particularly interesting to mile and point collectors: free bill pay; pay with debit card or prepaid card; or pay with reload cards such as RELoadit Packs or EVOLVE Pay Bucks.

Evolve_PayBills

I’ve tested this service for a few weeks now and found that it works well if you can find the company you’re trying to pay.  They do not yet publish a full biller directory, so you’re at the mercy of their barely adequate bill search function.  Of the bills I pay regularly that do not allow credit card payments, I was only able to find one available through Evolve Money, but it was a good one: my mortgage (via Wells Fargo).  If you’re lucky, you may be able to use this service to make car payments, loan payments, Education Savings Plan payments (529 plans), utility payments, local tax payments, and more.

Making Payments

Assuming you can find the biller you want to pay, the process of making a payment is dead simple.  Select the biller, enter the amount you want to pay, then enter your debit card / prepaid card information.  I’ve successfully made numerous payments with a prepaid reloadable card and with Visa and MasterCard gift cards.  One great thing about being able to pay with gift cards is that you do not have to register the card first (the card does need to be activated first, though, of course).  Within Evolve Money, I simply enter in my name and address along with the Visa or Mastercard gift card number and the payment has gone through fine (most of the time – see Problems, below).

Evolve_CashorDebit

Limits

UPDATED 6/11/2014:

  • For each unique account that you pay via Evolve (such as a car loan, for example), you can make no more than 4 separate payments per calendar month.  I’ve confirmed that it is calendar month.  So, it should be possible to make 4 payments near the end of one month and then 4 more payments at the beginning of the next month.
  • Even if you and your spouse have separate Evolve accounts, no more than 4 payments per month can be made to the same biller account (e.g. to the same car loan).
  • If you have multiple accounts with one biller, you may make up to 4 payments per account.  For example, if you own two homes and have mortgages on each with the same bank, you can make a total of 8 payments per month to that bank: 4 to each mortgage account.
  • Each individual payment can be no more than $999.
  • Each biller account can be paid no more than $1000 per day.
  • Payments made with “cash” (via EVOLVE Pay Bucks™ or RELoadit™ Pack) are not subject to the 4 payment per month limit.

Problems

I’ve encountered a few small issues so far:

Billers can’t be found: I mentioned this earlier, but it bears repeating.  I would like to use this service to pay all bills that can’t otherwise be paid by credit card, but most of my billers are not yet available through this service (or I haven’t found them through their search function).

Failed payment: One of my attempts at using a gift card to make a payment failed without explanation.  For several days, the gift card showed zero funds available, but eventually the hold on the money went away.  I tried again with the exact same gift card and the payment went through without a hitch.

Mortgage applied to principal: My Evolve Money mortgage payments initially show up in my Wells Fargo account as “unapplied funds”.  Then, after a few days, the funds get automatically applied to my mortgage’s principal.  This would be fine if my goal was to pay off my mortgage early, but it won’t help to cover my monthly required payments.  I believe that I can call and ask to have the unapplied funds assigned to my monthly payments instead.  That’s what I intend to do going forward.

Use for real spend, not manufactured spend

Some enterprising individuals found that it was possible to manufacture debit card spend (for the rewards) by using Evolve Money to fund an education savings account and then immediately withdraw the funds.  Rinse and repeat.  Not surprisingly, the powers that be are actively working to stop this practice.  On Saturday, The Free-quent Flyer posted his amazing interview with a Vice President at Evolve Money.  My takeaway from this interview is this: Evolve Money is happy for us to use debit cards or even gift cards to pay legitimate bills, but they will most likely shut down those who try to use the service to manufacture spend.

Other quick takeaways from the interview include:

  • Free Bill Pay is a loss-leader for the company.  They plan to make money with same-day payments (for which there is a fee), and by directing customers to opportunities to save money (and Evolve Money will earn an affiliate commission when the customer switches services based on their recommendation).
  • Paypal’s debit card (the one that earns cash back for signature transactions) does not pay cash back for Evolve Money payments even though the transactions are listed as signature transactions.
  • There are no plans to allow customers to add their own billers
  • The ability to pay credit card bills is coming eventually, but they will limit how they can be paid (e.g. possibly no gift cards) and will charge a fee of some sort.  Note: some “retail store cards” are already available for payment including: Amazon, Disney, Sears, and more.

Wrap up

Evolve Money is a terrific new service that can be used to earn rewards for paying real life bills that are not usually amenable to credit card payments.  The simplest approach is to use one of the few remaining rewards debit cards to make your payments.  Alternatively, you can use one of the many reloadable prepaid debit cards in which it is possible to directly or indirectly reload the card with a credit card.  Or, if you find a place to buy RELoadit Packs or Evolve Pay Bucks with a credit card, you can use those.  Finally, you can use your credit card to buy MasterCard or Visa gift cards and pay your bills with those.

UPDATE 6/11/2014: For updated information about Evolve Money, please read: Evolve Money talks

Hat tip: Free-quent Flyer and FlyerTalk

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