[Update 4/6] You can now earn an extra 2x Membership Rewards when using AMEX Check out at eligible merchants. Purchases must be completed by May 17, and each card can earn up to 5000 bonus points at most (it appears authorized user cards may also qualify separately). Walmart and Staples are both good options, and buying gift cards should also trigger this 2x bonus. That means AMEX EveryDay Preferred can earn 3.5x, and the Blue Business Card can earn 4x MR!

[Update 3/26] You can now get $50 back on a single purchase of $250+ at Costco.com when you pay with Visa Check Out. The key terms are as follows:

  • Promotion dates: 3/26 – 3/28/2018. You must use a Visa card + Visa Check Out, and the purchase must be at least $250 in a single transaction.
  • The $50 will be deposited into your Visa Check Out account within 6-8 weeks. Each Costco account can receive the $50 only once.
  • The terms do not exclude Costco Cash Card (which can be used directly for payment, similar to a gift card), so buying 2*125 or 200+50 should also trigger this offer.
  • Official promo link and details

[Update 12/18] After Visa Check out partnered with Samsung Pay, it has now also teamed up with Android pay. In other words, merchants that accept Visa checkout online can now be paid through the Android pay link on your phone (added under “add other payment” in the app). What does that mean? Credit cards that offer bonus rewards on mobile payment become even more useful, since many online merchants support Visa check out. Examples include:

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What Is Third-Party Payment?

Third-party payment is basically a payment intermediary, similar to Alipay in China, acting as a bridge between merchants and payment institutions.

In the US, the major third-party payment options include:

  • PayPal
  • Amazon Payments
  • Google Wallet
  • Visa Checkout
  • MasterPass by Mastercard
  • AMEX Express Checkout
  • Apple Pay
  • Android Pay
  • Samsung Pay
  • Walmart Pay
  • Chase/Citi Pay

Here, chanye groups these third-party payment brands into three categories:

  • Pure intermediary services: PayPal, Amazon Payments. In general, you add your credit card to these accounts using the card number. At checkout, you log into the account and choose one of the stored credit cards to pay, without needing to enter the card number or CVV.
  • Credit-card-network affiliated services: Visa Checkout, MasterPass by Mastercard, AMEX Express Checkout, Chase/Citi Pay. Usually you log directly into your online credit card account and then choose payment, without entering the card number. Visa Check out does require setting up a separate account.
  • NFC/QR-code mobile payment services: Apple Pay, Android Pay, Samsung Pay (which also supports non-NFC payments through MST and magnetic-stripe readers), and Walmart pay. In general, you add your credit card to these accounts using the card number. At checkout, you log into the account and choose one of the stored credit cards to pay, without needing to enter the card number or CVV.

Benefits of Third-Party Payment

Convenience

  • Online shopping: Generally speaking, these third-party payment methods offer the convenience of “add once, use many times.” They help you avoid repeatedly entering your credit card information while shopping.
  • In-store: Apple/Android/Samsung/Walmart Pay can also be used in physical stores. You do not need to pull out your credit card or carry too many cards, which is very convenient. Also: when using an AMEX offer at an in-store merchant that supports these various “pay” methods, you may want to check out with one of them. That can help avoid the cashier asking for ID and causing unnecessary hassle.
  • Walmart pay in particular feels a bit like Alipay/WeChat Pay in China, since it uses QR code scanning. But it only works at Walmart itself, so its use case is limited. However, you can add your Walmart giftcard to your Walmart account, and at checkout you can choose to deduct from the Walmart gift card balance first. That way you do not need to carry those cards around.

Security

  • Online shopping: generally speaking, bank-level encryption is much stronger than merchant-level encryption, so the risk of information leakage or theft is relatively lower.
  • In-store: if your card is not a chip card, using various pay methods is also an effective way to prevent fraud, since it is well known that magnetic-stripe cards are easy to clone.

Deals pop up from time to time

Visa Checkout has had a lot of deals recently, and MasterPass by Mastercard also occasionally has similar deals. Not to mention the huge 10% Apple Pay deal that Discover offered late last year. Of course, chanye is not big on deal-hunting and was a bit lazy at year-end, so didn’t really pursue that one.

A side note here, in memory of the long-dead MS method Amazon PAYMENTS (AP)... AP used to allow person-to-person payments funded by credit cards, with a monthly limit of 1k and no fee. Back then, if Amazon decided your payment activity was fake (i.e. MS), your account could get shut down. And two people sending 1k back and forth was widely considered very high risk. So clever MSers spontaneously formed multi-person payment loops (A>B>C>D>E>F>.......>Z>A)... Of course, sometimes Amazon still figured out those loops. And now that Amazon payments has shut down this method, that MS technique has faded into history.

Another side note: during the years AP was still alive, Discover’s Q4 category was usually online shopping. Then MSers discovered that Discover also counted AP as online shopping... So in Q4, with 1k each quarter, the Q4 cap on two Discover cards could be maxed out perfectly.

Can It Trigger AMEX Offers and Bonus Rewards Categories?

In short, PayPal does not work, Amazon payments does not work, and Google Wallet does not work. The others do.

The reason is that the payment process for PayPal/AP/GW actually happens in two steps. In the first step, the payment network (likely via VISA/MC/AMEX/DISCOVER) processes the payment to PP/AP/GW; only in the second step does PP/AP/GW pay the merchant. AMEX offers are triggered based on merchant identification codes. In the first step, the identification code returned to AMEX is that of PP/AP/GW, so the AMEX offer cannot be triggered.

By contrast, the various pay methods (possibly except Walmart pay) connect directly with the bank on the backend and only serve as a channel, so the merchant identification code in the transaction is not changed. Naturally, they can trigger AMEX offers.

As for bonus rewards categories, PP and AP may or may not trigger them, but that would be YMMV. The various pay methods definitely can. For example, when chanye recently went to Walmart, using Walmart pay linked to an SM card did earn 5x in real-world testing.