Cardup and iPayMy are two Singapore startups that give you the opportunity to use your credit card to pay for things that you normally can’t use your credit card for, like rental, income tax, condo fees, school fees etc., in exchange for a 2.6% processing fee.
[It may be best practice to point out that The Milelion has previously worked with iPayMy to produce two webinar series on miles earning and miles using, for which all remuneration went to World Vision]
Although both platforms will point to convenience, the ability to schedule payments and their own proprietary rewards program as reasons to use their services, I’ve said from the start that the only thing that justifies paying a 2.6% fee is the ability to earn 10X/ 4 mpd.
I’ve done the working before, but it bears repeating. If you can get 10X points, you pay-
2.6 cents= 4 miles or 0.65 cents per mile
If you’re earning regular spending rates of 1.4 mpd (e.g with the UOB PRVI), your equation becomes-
2.6 cents=1.4 miles or 1.86 cents per mile
1.86 cpm isn’t a terrible price to buy miles at, insofar as it’s below the magical 2 cpm threshold, but remember that you could potentially be buying miles for less through annual fees.
This then leads us to the magic question- do iPayMy and Cardup earn 10x?
If you want some amusement, scroll through the comments section of this article, where it seems every other post is someone asking “does (CARD NAME) earn 10x?”
I mean, it’s perfectly understandable why people would ask this. 10X cards are high risk, high reward. If the bank doesn’t consider the merchant to be a 10x-able category, you earn 0.4 mpd. And if you earn 0.4 mpd you’re the loser because of the 2.6% transaction fee.
The answer is: I don’t know for sure. When I used my DBS Woman’s World card and Cardup to pay my NUSS membership fees back in December last year, I did indeed get 10X points. But each month the game can change without notice, and just because something worked last month doesn’t mean it will work this month.
Whatever the case, it now seems confirmed that it won’t work for the DBS Woman’s card, as (someone pointed this out on the comments on 5th May, and I only got around to seeing it now), DBS’s T&C for the Woman’s card have been updated to explicitly exclude payments made to Cardup and iPayMy
Bummer. Why would the banks take this away?
To understand the answer to that question, we need to understand why banks give 10X.
Why do banks give 10X?
Two words: discretionary spend.
Let’s think about all the 10X opportunities that exist right now.
- Citibank Rewards (online and offline shopping)
- HSBC Advance (online and dining)
- UOB Pref Plat Visa (online and Paywave)
- DBS Woman’s World (online)
- UOB Visa Signature (overseas)
Notice anything in common?
Well, all the categories that get 10X are those where banks are trying to drive discretionary consumer spending.
You don’t have to eat out, but the banks hope that by offering you 10X you feel less guilty about swiping your card. You don’t have to indulge in online shopping, but banks give you 10X to encourage you to splurge on Amazon. If you bother to change your money at The Arcade before heading overseas, you don’t have to swipe your credit card overseas, but the banks hope that 10X will change your mind.
(Paywave seems to be less of a discretionary spend category given that you’ll find it at supermarkets, pharmacies and lots of other “utilitarian” places, but I’m guessing that the 10X program was conceptualized when Paywave was relatively new in Singapore and UOB wanted to drive adoption of the technology. Since Paywave transactions are capped at $100 and the overall 10X on the PPV is capped at $12,000 spend per year In any case, UOB doesn’t give UNI$ at merchants that are members of its SMART$ program, which, surprise surprise, is most of the supermarkets + pharmacies)
Banks don’t need to incentivize your non-discretionary spending because they know you’d do it anyway. Groceries need to be bought. Medical bills need to be paid. But they want to encourage you to spend above your baseline, and that’s why 10X opportunities exist.
Now think about what iPayMy and Cardup are offering. They are letting you turn routine, necessary payments into 10X opportunities. That’s great for you, but not so much for the bank, which suddenly realises that it’s having to pay out additional DBS points/UNI $ on payments that were going to happen anyway.
Therefore, from the bank’s point of view, it doesn’t make sense for them to reward this. And I fear that we’re now going to see more and more banks set this out explicitly. I know that HSBC Advance already doesn’t give 10X on iPayMy/Cardup, and to my knowledge only the UOB PPV currently earns 10X.
And that’s a big deal for iPayMy/Cardup, because, looping back to my opening argument, the only way I’ll pay 2.6% is if I get 10X. I’m sure the same goes for a lot of people in the miles community.
(I suspect the platforms themselves aren’t too confident about advertising 10X earning opportunities, because the working on Cardup’s own website illustrates a 1.4 mpd opportunity, not 10X)
The solution? Both iPayMy and Cardup have to go to the banks, sit down with them and say- this is what we offer, this is what people want. How can we make this work?
And whether the answer involves some sort of cost sharing, or joint promotion, or explicit cap on 10X for iPayMy/Cardup, I don’t know. But something needs to happen, because the longer the ambiguity about 10X exists, the fewer miles chasers will use either platform.