[Update] Paypal Bill Pay – Conveniently Pay Bills With Your Saved Cards

Update 2/15/24: Tons of payees that people were using got removed yesterday from the Paypal Bill Pay system.

Update 2/9/23: Multiple Reddit reports (1, 2) talk about an issue whereby Paypal changes the payment method after the fact to your bank. YMMV

Update 1/16/23: a lot of people are experiencing very delayed payments, myself included, so use this option with caution.

Original Post:

Sometimes there are things staring us in the face that we just don’t notice. I learned this week about Paypal Bill Pay. (Maybe everyone already knows about this?)

Paypal Bill Pay allows paying utilities, insurance, phone bills and more directly from your Paypal account with all of the regular payment methods allowed by Paypal. Vendors found in the Paypal Bill Pay system will be paid via ACH bank payment.

Most insurance companies and utilities likely allow direct credit card payments, so this bill pay system might not be useful for most people since you can pay with a credit card, regardless.

For years I’ve been paying a large monthly insurance bill with bank ACH payment since they don’t allow card payments. This week, I added the bill to Paypal Bill Pay and sent a $1 payment with my saved credit card as the payment method. Two days later the payment is being reflected on my insurance company balance.

You can also pay credit card and mortgage bills with Paypal Bill Pay, but for those you can only use bank or Paypal balance as the payment method.

Potential uses of Paypal Bill Pay:

• Bills such as insurances or utilities occasionally won’t accept credit card payments. Or they may charge a fee for card payment or they won’t accept AmEx cards or Visa gift cards. These might be payable with Paypal Bill Pay.
• Paypal is sometimes a bonus category on various cards, and Paypal Bill Pay is a nice way to use them.

A few notes:

1. Paypal does not appear to allow splitting bills across multiple cards when using their Bill Pay service.
2. There is a message on the payment screen that your Paypal balance is always used first. Be sure to transfer out any Paypal balance before making a payment if you want the payment to charge your card.
3. Random interesting tidbit FWIW: I see that the category of the bill carries through to the card issuer when using Paypal Bill Pay. My insurance bill payment is showing “Merchant type – Insurance sales, underwriting and premiums.”
4. Be sure to double check your payment method – there are many reports of Paypal switching the payment method afterward, see this Reddit thread.

Hat tip thefrugaltourist