[Update] Melio Business Bill Payment Service with Credit Cards for 2.9% Fee (Plastiq Alternative)

Update 5/2/22: Melio sent out an email that debit cards will cost the same 2.9% beginning June 1 15, 2022 (ht raekwon)

Update 5/20/20: Melio will stop accepting Visa consumer cards on May 22, 2020. Mastercard, Amex, Discover are still accepted, as is Visa Commercial cards (I think that would be any standard Visa business credit card). It’s possible that Visa consumer debit cards will continue to work. (Hat tip to Agile–Travel)

Update 12/10/19: Melio has increased the fee to 2.9%. Existing members get the 2.5% fee grandfathered.

Original Post:

Two readers reached out about a new Plastiq alternative Melio who also allows bill payments with credit cards at the same 2.5% fee.

Melio is a business bill payment service for a business to pay their bills (e.g. their vendors). Most interesting for credit card enthusiasts: they allow paying your bills with a credit card for a fee of 2.5%. That makes them in many ways similar to Plastiq, but there are a few important differences:

• Melio accentuates businesses only, no mention of being able to pay things like mortgage, rent, or taxes. They state that way in the terms as well. Plastiq, on the other hand, offers both business and personal bill payment service. (From what I’ve heard from a reader, some personal payments may be possible on Melio, and they may be expanding to personal payments in the future as well.)
• Melio charges no fee at all for debit card payments while Plastiq charges a 1% fee. (Prepaid/gift cards don’t seem to work for this, as per reader reports in the comments.) Melio also offers a fee-free option of paying with your bank account.

Both Melio and Plastiq accept Visa, Mastercard, Discover, and American Express. (Initially, Melio did not accept Amex, but they do now.)

Melio is a new company, it’ll be interesting to see if they gain traction. For the most part, there doesn’t seem to be any price advantage to Melio over Plastiq when paying with a credit card as both have the same 2.5% fee; regardless, it’s nice to have all options on the table. Also worth noting that with Plastiq some Visa consumer cards have a cash advance issue (more details on which cards are affected can be found here). It’s possible that this issue does not occur with Melio so that would make them a good option for racking up Visa spend.

Hat tip to readers David and Andrew