Posted by William Charles on April 26, 2017
Manufactured Spending

Published on April 26th, 2017 | by William Charles

33

Radpad Sends Out E-mail Warning Of Higher Fees & Reason Why CSR No Longer Earns 3x

We recently posted that RadPad is no longer earning 3x points on the Chase Sapphire Reserve. RadPad users that have used the CSR and other premium cards (e.g Chase Sapphire Preferred) have received an e-mail stating:

Thanks for paying your rent with RadPad! We hope you had a great experience. We noticed that you are using a card with a very high interchange rate. Unfortunately our standard 2.99% rate is based off standard card rates. Please click below to update your payment preferences to a Debit or Standard interchange rate credit card. Please note that per our Terms of Use we reserve the right to charge a higher fee for these types of cards so please update as soon as possible. Thanks again for using Pay With RadPad!

If you read the RadPad terms under section 7, sub section b they can charge a fee of up to 3.99% on high interchange fees (e.g VISA Signature, VISA Infinite, VISA Preferred and other cards not listed with interchange fees higher than 2.2%). This is obviously bad news for RadPad users, but it likely does mean that RadPad purposefully changed their merchant category code so that the Chase Sapphire Reserve would no longer earn 3x points to discourage use of that and other cards that come with high fees for RadPad. Fingers crossed Plastiq is profitable enough to handle these fees and it continues to earn 3x.

Hat tip to aoechamp via @telewatcr



33
Leave a Reply

avatar
 

  Subscribe  
newest oldest most voted
Notify of
AB
AB

The post title is off – should say RadPad. Had a minor heart attack seeing Plastiq going to higher fees before I read the article.

Chuck

Fixed, sorry about that

oozze
oozze

title said plastiq, but message meant for radpad?

joE
joE

Will hasn’t had his morning coffee yet, so go easy on him 🙂

Reg
Reg

In this case precision is important. Who sent out this email? RadPad or Plastiq?

Frank
Frank

It’s radpad that sent it out but nonetheless the title needs and will be fixed I’m sure

Andrew
Andrew

Agreed. The title makes this incredibly confusing. I paid my mortgage last week using CSR and was given 3x travel bonus. Obviously I will stop doing this if Plastiq takes action as described in the article.

Chuck

Fixed, thanks

Mike
Mike

Explains why card company offer multiple point offers interchange fee of 4% explains why

Kevin
Kevin

How does this not violate their merchant agreement? I thought merchants were forbidden to discriminate based on card “level”…

joE
joE

great point, I’d like more discussion around this though I’m not a SME.

Frank
Frank

Comments I’ve read elsewhere (Reddit) say that the class action lawsuit that just happened specifically allows for this type variation. Further, I saw another comment referencing that RadPad T&C permit up to a 3.99% fee. So in theory, you’ll still come out slightly ahead if they ultimately do up the fee (4.5% CSR travel vs. 3.99% fee)

Ender
Ender

If this is true then it would be huge. It’s my understanding that the facts issuers earn higher fees on premium cards allow them to give out better rewards (eg. CSR 3x on travel). If merchants can just pass these higher fees to us and neg out the rewards then there would no point having such premium cards.

Nun
Nun

Title should be:

Plastiq Sends Out E-mail Warning Of Higher Fees & Reason Why CSR No Longer Earns 3x w/Radpad

Rob
Rob

Actually, the email reads like it came from Radpad, not Plastiq, so I think your title isn’t right either.

Jimbo
Jimbo

No, it shouldn’t. Radpad sent the email.

wiivile
wiivile

Is it true that travel-coded purchases have higher interchange rates? Could this be why they purposefully changed it? Or do you think it was just to discourage people from using cards like the CSR?

Jimbo
Jimbo

Visa Infinite has higher interchange rates than Signature and others. Vendors cannot disallow use of Infinite cards.

wiivile
wiivile

Yes, but do certain purchases of a certain category have higher rates? For example, do travel-coded purchases have higher interchange rates than grocery-coded purchases?

Peter
Peter
wiivile
wiivile

So if the MCC for travel charges a higher interchange rate than the MCC for real estate (or whatever they changed it to now), then that’s probably why they changed it. But they are going to lose all of our business in the meantime. I just hope Plastiq doesn’t do the same.

Jake from MSP
Jake from MSP

Actually, for the time being, Signature and Infinite are in the same subgroup as applied to the different MCCs, so there’s no difference.

Ashok
Ashok

Hi – Can i still get the travel credit if i pay small part of my rent 300$ with CSR even though it dosent earn the 3x points ?

Frank
Frank

If your purchase doesn’t code as travel (3x) then it’s not considered travel and won’t count towards your travel credit

bY
bY

Plastiq should still code at 3x – the title of the article should say “Rad Pad”. I paid my rent last month and it earn 3x on CSR.

jnrfalcon
jnrfalcon

Att+Android Pay just posted as real estate as oppose to lodging last year… That’s probably the end of it.

Howard
Howard

I received the same email, but I use a PayPal Business Debit MasterCard via RadPad, which has been processing as a debit card and, thus, incurring only the $4.95 flat RadPad fee for debit cards. Have others using PPBDMC also received this email? I sent a reply email to RadPad asking if this was a mistake since the FAQ on the RadPad site specifically says that PayPal debit cards may be used and should only be charged the debit fee.

Hong
Hong

I received the same email for using PPBDMC.

Howard
Howard

Received this reply from RadPad:

Andy
Andy (RadPad)
Apr 26, 10:47 MST

Hi Howard,

Thanks for reaching out, I’m sorry for the confusion! This email does not apply to debit cards, your $4.95 debit fee has not increased!

Let me know if you have any other questions.

Best,
Andy

…………………………………………
Experience Team Manager

TG
TG

I’m worried Plastiq can’t sustain it either since they have an even lower fee.

Jake from MSP
Jake from MSP

A lot will depend on their merchant processing fee structure.

If they use a flat rate processor, then people that use debt, and non rewards earning cards make the whole basket of business profitable for the processor even though they may lose money on certain transactions.

Basically, the non-points savvy users end up subsidizing all of us.

Tyler
Tyler

I got curious, so I decided to go and find the Visa interchange fees. Find them here from April 2016: https://usa.visa.com/dam/VCOM/download/merchants/visa-usa-interchange-reimbursement-fees-2016-april.pdf

Talk about confusing. There are definitely differences between the different card types (Visa Infinite, Signature, etc) and also the categories. Travel doesn’t seem to have higher interchange fees than most other categories though (certain high-volume categories like supermarkets seem to have lower fees).

As some one else mentioned, charging a higher rate and keeping it in the travel category would be much better for most people here than changing the category.

Back to Top ↑