PayRewards Launches in America with $28M and a 1.75% Fee to Earn Points
PayRewards, the US arm of Pay.com.au, has launched with $28M in funding and a novel approach to earn points on bank transfers that currently yield nothing. The Australian parent company boasts processing over $7 billion for 30,000+ customers within a year since its 2019 inception, growing at a staggering 100% annually.
Blake Hutchison, CEO of PayRewards, frames it as a fairness issue: "Large companies negotiate their way into rewards, small businesses get an invoice and a due date."
Their pricing structure is straightforward with no monthly platform fees. For bank transfers, businesses pay 1.75% to earn one point per dollar, or 3.25% for two points. PayRewards claims these points are typically worth one to two cents each.
Calculating the margin, however, reveals a slim profit margin. At the lower tier, it costs 1.75 cents to earn one point valued at one to two cents by PayRewards, making the entire proposition hinge on redeeming points at the higher end of that range. The card payment route is significantly costlier, involving a 2.9% processing fee plus the points layer, resulting in total fees between 4.65% and 6.15%.
Benefits for businesses include "float" on card payments, their own card rewards, and the ability to Double Dip by redeeming PayRewards points on top.
While Europe’s similar sector focuses on software rather than points (e.g., Moss, a unicorn specializing in spend management), regulatory differences play a role. EU rules cap consumer card interchange fees at 0.2% for debit and 0.3% for credit, while the Payment Services Directive prohibits surcharging on these cards, leaving less room for rewards arbitrage.
Ultimately, the decision for business owners comes down to pure arithmetic: keeping the 1.75% fee or absorbing the cost for potential long-term benefits.