This news came out about 10 days ago and we changed our Plastiq Credit Card Payments Complete Guide accordingly, but I just realized that I’d not yet written about it separately and wanted to make readers aware: Plastiq new account and referral bonuses have been decreased by 90% for both sides. Here is their blog post announcing the new referral bonus. This is an unfortunate change for both sides. Hopefully, we’ll see a positive change in these bonuses when the economy turns around or we’ll see some other promotions for fee-free dollars.
New account bonus decreased from to 50 fee-free dollars (was 500)
The new account bonus is apparently only 50 fee-free dollars after making $500 in payments. That is down 90% from the $500 in fee-free payments that new users used to earn through a referral link. What makes this a big bummer is that it was previously possible for someone signing up new to come out comfortably ahead on their first $1,000 in payments. The standard credit card processing fee is 2.5%. In the past, a new account would receive 500 fee-free dollars after making $500 in payments at the 2.5% fee, making for an average of 1.25% in fees on the first $1,000 in payments. That meant that even a 2% credit card came out a few bucks ahead, earning $20 in cash back.
Now, you would only come out ahead as a new user if you were using Plastiq towards minimum spending requirements.
Referral bonus (for the user making the referral) decreased to 100 fee-free dollars)
The person referring a new user is also receiving a significantly lower reward — just 100 fee-free dollars after the new user has sent $500 in payments (versus the previous bonus of 1,000 fee-free dollars). That represents the same 90% decrease in fee-free dollars.
Bottom line
This is a big bummer for those who have never used Plastiq and were hoping to sign up new. Hopefully we’ll see other fee-free promos launch for existing users, though it is more likely than not that this is a cost-savings measure amid a greatly changed economic environment.
H/T: Doctor of Credit
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[…] was greatly devalued on both sides earlier this year, but if you don’t currently have a Plastiq account, there’s a new […]
[…] had already reduced referral bonuses by 90% for both sides in May, so this is a second hit to their service in as many months. They closed a […]
I have had multiple issues with checks not received. Has anyone else?
They sent duplicate checks to my landlord, then just put a stop payment on the first. My landlord was very not happy when the rent check bounced. This was the first time for this but still really embarrassing for me.
I’m not sure how creating a big disincentive for people to suggest or use your service is supposed to be good business. For that matter I haven’t seen a spending bonus in forever.
Yeah, I have gotten zero Plastiq offers this calendar year (even before the March Covid mess). I read they received $75 million in venture capital funds earlier this year. Wonder if that had something to do with it (lots of offers the last couple years to drive up use, making it more appealing to investors).
I imagine that like most businesses right now, they’ve probably seen revenue tank in the past couple of months and are looking to cut costs where it is easy to do so for the time being. I think I saw it reported last week that Chase said that spending on their credit cards has been down 40%. That’s probably not isolated to Chase, and that likely means a significant drop in revenue for Plastiq.
Hopefully we’ll see some promos if and when the economy turns around, because I agree that the current referral system doesn’t seem to offer much incentive for either party. That said, if they offered some promos for regular customers instead, that would be a good way to encourage folks who are obviously already interested.