PayRewards Turns $10,000 Business Bills into 40,000 Transferable Points

PayRewards is a bill payment service that allows businesses to earn transferable points and credit card rewards on their expenses, even if the vendor doesn't accept credit cards. The company's U.S. arm, which launched in August with $28 million in funding, offers two separate charges when using a credit card: the cost of processing the card payment and an optional charge to earn PayRewards points.

The service uses eligible American Express, Visa or Mastercard, or bank account funding to pay vendors by bank transfer, wire, or check. PayRewards currently has two live transfer partners: Singapore Airlines KrisFlyer and Cathay Pacific Asia Miles. Each partner point can be transferred at a 1:1 ratio.

The company's core and plus options offer varying fees for processing card payments, ranging from 2.9% to 6.15%. The optional PayRewards points cost between 1.75 cents and 1.625 cents per point, depending on the option chosen. For example, using a card that earns 2 points per dollar and the highest earning option would result in $615 total fees for 40,000 combined points.

Paying business processing expenses can lower the effective cost further, as they may be deductible as ordinary and necessary expenses. However, it's essential to note that personal payment to acquire points does not qualify for deduction. This service is particularly valuable for businesses with substantial expenses and those looking to accumulate miles for premium cabin travel.