Capital on Tap Bill Pay: fees, points and when it is worth using

What Bill Pay is

In Capital on Tap’s words: “Bill Pay is a feature that allows you to pay suppliers and bills via bank transfer directly from your Capital on Tap account, even if the recipient doesn't accept card payments.” You upload an invoice or type in the payee’s details, confirm the amount, choose a date (one-off or recurring) and pick a fee option. The money leaves as a bank transfer, and the amount lands on your Capital on Tap balance alongside your card spend, to be repaid on the same statement.

That makes Bill Pay a way to put invoices that cannot go on a card onto your credit line: rent, many trade suppliers, contractors, utilities, and tax bills. It is governed by a separate Bill Pay Agreement that sits on top of the main credit agreement. When we checked, Capital on Tap’s Bill Pay page described the service as a beta with a waitlist, so it may not be switched on for every account yet; check your portal before planning around it.

Bill Pay transactions sync to your accounting software in the same feed as card spend (Sage, Xero, QuickBooks, FreeAgent and more), so a supplier invoice paid this way reconciles like any other card line. The accounting sync guide covers how that feed works.

The two fee options

Every Bill Pay payment carries a fee, and you choose which before you confirm:

• Option 1: a 2% fee, earning 1% back in points (net 1%). The rewards terms give 1 point per £1 on Bill Pay (on the 2% fee option), and points are worth 1 point = 1p (1,000 points = £10).
• Option 2: a 1% fee with no points (net 1%). The Bill Pay Agreement says this lower fee is available “where the option is available to you in your Online Portal”, so not every account may see it.

On the free card the two options cost exactly the same: 2% minus 1% back in points is 1%, the same as the 1% flat fee. The only reason to prefer the points option is if you value points above a penny each, for example by converting them to Avios, or if you are close to a redemption threshold. If you take the points as cash or a statement credit, the two are identical, and the 1% option is simpler to reconcile because there is nothing to redeem later. The rewards page covers redemption options, and the fees page lists every other charge on the account.

Whichever you choose, be clear about what the fee is. A net 1% to move a payment onto credit is a cost of borrowing. It happens to be the same size as the cashback the card pays on ordinary purchases, which makes it easy to think of Bill Pay as “free with the points”. It is not: on the free card you pay 2%, get 1% back, and are left 1% down on every pound.

Bill Pay on Pro

Pro members earn a boosted rate of 1.25% on preloaded spend (and Daily Repay via Smart Repay). On Bill Pay with the 2% fee, Capital on Tap says that brings the cost to net 0.75% for Pro on preloaded spend or Daily Repay. Notice the condition: the boosted rate applies to preloaded spend (your own money topped up onto the card) or to Daily Repay, where the balance is cleared every day. In both cases you are not really borrowing for a month, so the float that justifies Bill Pay mostly disappears. What you are buying at 0.75% is points on a payment you could have made by bank transfer for nothing.

That can still make sense if you convert points to Avios at Pro’s better rate (10 points = 10 Avios on Pro) and value an Avios well above a penny. For most businesses it does not, and Pro costs £299 a year before any of this starts. The Pro page has the break-even maths.

Worked example: a £5,000 supplier invoice

A supplier sends a £5,000 invoice due now, they take bank transfers only, and a client payment large enough to cover it is due in three weeks. Illustrative numbers, using Capital on Tap’s published rates:

So the free-card price of paying this supplier three weeks late, from your side, is £50. Whether that is good value depends on the alternative. If the alternative is going overdrawn at an arranged overdraft rate for three weeks, or missing a supplier discount, or paying a late fee, £50 may be cheap. If the alternative is simply paying from the current account, where the money is sitting, it is £50 for nothing. The card vs loan vs overdraft guide compares the options for bridging a gap like this.

One more cost to keep in view: the £5,000 only stays cheap if you clear it when the statement arrives. Left on the account, even at Capital on Tap’s lowest advertised rate, the interest is roughly £58 a month, and many accounts pay more than the floor rate. One month of that and the Bill Pay fee is the smaller problem.

Paying HMRC with Bill Pay

A VAT or Corporation Tax bill is the most common reason people look at Bill Pay. HMRC publishes bank details for transfers, so mechanically Bill Pay can send a VAT payment from your credit line, with Capital on Tap’s fee in place of HMRC’s own charge for corporate cards. HMRC also accepts corporate credit cards directly through gov.uk, for a fee that gov.uk does not print as a percentage. Which is cheaper depends on the fee HMRC’s checkout shows you on the day against Bill Pay’s net 1%.

We have written this up in full, with the payment deadlines, the payment-date rules and a worked Corporation Tax example, in the guide to paying HMRC and suppliers by card. The short version: get the reference exactly right, because an authorised Bill Pay payment cannot be recalled, and never let a tax bill become the balance you carry.

What the fee buys: float until the statement is due

The honest case for Bill Pay is timing. Capital on Tap puts it this way on the Bill Pay page: pay suppliers now and use your interest-free credit period to manage the gap between when bills fall due and when your customers pay you. A payment made early in a statement period sits on the account until that statement’s due date; one made just before the statement closes is due much sooner. The number of days you gain therefore depends on where in your billing cycle you pay, and it is worth checking your statement date in the portal before scheduling a large invoice.

Put another way, you are paying a known fee to borrow the invoice amount for a few weeks without interest, provided you then pay in full. Expressed as an annual rate, a net 1% for a few weeks of credit is not cheap borrowing; it just feels cheap because it is small and fixed. It works best as an occasional bridge for a specific gap, such as a large supplier bill landing a fortnight before a client pays, and badly as a routine way to pay every invoice.

When a plain bank transfer is cheaper

Almost always. A transfer from your business current account normally costs nothing, and Bill Pay costs a net 1% on the free card. If the cash is in the account and you do not need it for anything else before your statement date, Bill Pay is simply a fee. The points on the 2% option do not change that, because they refund only part of the fee you paid to get them.

Use a plain transfer when:

• you have the cash and no better use for it in the next few weeks;
• the supplier offers an early-payment discount (paying from cash captures it without a fee);
• the amount is large relative to your credit limit, so Bill Pay would crowd out card spending;
• you are paying someone new who does not take cards: a transfer carries the same lack of dispute rights as Bill Pay and costs nothing.

Card payment or Bill Pay?

If the supplier takes card payments, paying on the card is usually better than Bill Pay. As the payer you normally pay no fee for an ordinary card payment, you earn 1 point per £1 on it, and you keep Visa chargeback rights if something goes wrong. Some payees pass on a card surcharge, and HMRC charges a fee for corporate cards; when a payee does, compare that surcharge with Bill Pay’s net 1% and pick the cheaper.

Bill Pay is for payees who do not take cards at all. Where both routes are open and the card carries no surcharge, the card wins on cost and on protection. Note that Section 75 does not apply to Capital on Tap cards, so “protection” on a card purchase means the Visa chargeback scheme, not the consumer credit rules.

No chargeback rights

Because Bill Pay transactions are bank transfers, not card payments, they do not have chargeback rights. If a supplier you paid through Bill Pay does not deliver, you deal with the supplier directly; Capital on Tap can show that the payment was made, and that is all. The Bill Pay Agreement also says that once you authorise a payment for immediate processing it cannot be cancelled, although a payment scheduled for a later date can be changed before it goes.

Interest if you do not pay in full

The Bill Pay Agreement says Bill Pay payments are charged interest at the same rate as card purchases, and that no interest is charged on them if the statement’s closing balance is paid in full by the due date. That mirrors the card: no interest on purchases if you pay the statement balance in full by the due date. Miss the full payment and interest runs on the Bill Pay amount as it would on any purchase.

Capital on Tap advertises rates as low as 13.86% APR (variable). Capital on Tap does not publish a representative APR on its website, and your actual rate depends on your personal and business credit history and the Bank of England base rate. The minimum payment is the greater of 10% of the balance or £100, which on a large invoice leaves most of it accruing interest. If you use Bill Pay for a big bill, set the repayment to full balance and make sure the cash will be there on the due date. The guide to avoiding interest walks through the settings.

Bill Pay and your credit limit

Bill Pay draws on the same credit line as the card. The Bill Pay Agreement lets you pay invoices “up to your credit limit and the amount (if any) you have preloaded”, and each payment sits on the account balance with your card spend. A £5,000 supplier invoice on a modest limit can leave little room for the card until you repay, and there is no over-limit fee (the card is declined instead) once the limit is reached.

Capital on Tap advertises limits up to £250,000, but starting limits are often far smaller; mine came in lower than I expected and has not moved since. If a bill is larger than your available credit, Capital on Tap’s own answer is that preloading lets you spend beyond your limit with your own money, though that means using your own money and removes the float. The credit limit page explains how limits are set and what helps an increase.

Is Bill Pay worth it?

Bill Pay is a useful tool with a clear price. It is worth using when a payee will not take a card, you need a few weeks before the cash arrives, and the net 1% is cheaper than the alternatives for bridging that gap. It is not worth using as a routine way to pay bills you could pay from the bank today, and it is a poor idea for any payee you do not fully trust, because there is no chargeback.

If you do not have a Capital on Tap account yet, Bill Pay is one reason among several to consider it; it is not the main one. The main case is the card itself: £0 annual fee, 1% cashback on card spend, and 0% non-sterling transaction fee. Our referral code page explains the welcome bonus and how to apply.