Yesterday a reader tweeted me about a new mileage-earning opportunity. My initial reaction, that I still hold, is to be cautious. At the same time I’m also optimistic.
The Wall Street Journal this week covered Square Cash, a new service that lets you send money to someone for free charged to your debit card.
Here’s how Square Cash works. Say you want to send $47.12 to your sister. You just compose an email with her email address in the “To” field and, in the “CC” field, you enter “cash@square.com.” In the subject field, you enter the amount you’re sending—in this case, “$47.12.” You can leave the message body blank, or add a note explaining you’re sending the money and why. Then, you just press Send.
If this is your first time using the service, Square will email you a link to its service, where you’ll be asked to enter your debit-card information. This is required one time only.
…Your sister will receive two emails: the one from you and a second from Square saying you’re sending her the money. If she accepts the payment and it’s her first time using the service, she will be asked to click a link to Square and enter her debit-card information.
Once that’s verified, the transfer is made, and the money will show up in her bank account in one to two days. She will also be empowered to send money herself.
Square is known as the company that lets you charge credit cards with an iPhone or similar device. However Square Cash doesn’t require a traditional Square account. It’s a simple transfer of money via e-mail.
You charge a payment to your mileage-earning debit, send it to someone else who links their bank account and the payment should get deposited to their bank. They allow you to transfer $2500 per week this way. And payments show up instantly or within a day or so.
Earn Miles For Transferring Money
This service is for debit cards, and reports are that this doesn’t work with most gift cards and prepaid cards although the countermeasures they have in place to prevent using gift cards do not work universally against all such cards.
Mostly, though, the opportunities to earn miles are with mileage-earning debit cards such as:
- Suntrust Delta
- UFB Direct American
- Bank of America Alaska Airlines
Only the Suntrust Delta debit card earns 1 mile per dollar for its
Delta Skymiles World Check Card.
There’s a 5000 mile signup bonus and a $75 per year annual fee. You need to keep a $3000 average balance in the account to avoid monthly fees.
Suntrust will let anyone open an account online, but they seem to shut accounts down for many people who do not live in their business areas of Alabama, Arkansas, Florida, Georgia, Missouri, Mississippi, North Carolina, South Carlona, Tennessee, West Virginia, Virginia, and Washington DC. Suntrust is strong in the South and Mid-Atlantic.
Frequent Miler, who doesn’t live in a Suntrust state, had his account closed after initiating a $7000 funds transfer. I’ve seen that large funds transfers initiated from a Suntrust account that’s just been opened seem to raise flags. I live in Virginia and have successfully used my account for quite awhile, essentially doing nothing but transferring funds in and using those funds to pay taxes. Your mileage may vary.
Potential Risks
Trying to exceed the $2500 per week limit could cause problems, as could attempting to transfer money to yourself using unique email addresses. They track email address and debit card numbers of course, but also over a small threshold of sending money they require the last four digits of your social security number and your date of birth or instead you can link your Facebook profile)
Historically Square credit card reader was quick to shut down accounts of folks liquidating gift cards or charging their own credit cards (and in the case of the credit card reader, held onto funds for a couple of months).
Paypal debit cards (which you can load via credit card spend by purchasing paypal reload cards at stores like CVS) seem to work. Paypal also historically has an itchy trigger finger in shutting down accounts.
The combination of the Square and Paypal makes me initially nervous, until there are data points suggesting that it shouldn’t.
And while I’ve had much success using my Suntrust debit card primarily for tax payments,, Suntrust is known to have an itchy trigger finger shutting down accounts.
The important thing to remember is that at this point there are not a lot of data points on how well this will work out, or how long this will work. And while it may be anything that gets rejected just returns money to the original source account, I would not test this with funds you cannot afford to have held.
For the intellectual curiosity of it all, I’m going to have some fun playing with this. Will you?
Update: Scott at HackMyTrip has useful coverage of this here and here as well.
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so if your email get hacked they could send money this way? hmmmm…. I’ll skip this one.
Hahaha, may end up like HopeImprovementGiftcard.
It won’t end up like Home Improvement Gift Card because you won’t get stuck with gift cards of limited use.
Two ways this could go bad (1) they hold onto your money for 60-90 days, (2) they reject/return transactions.
Appears to be working for now, no way to know yet whether it continues to work for a short time or long time. That’s why I outline risks.
could i use my B of A alaska airline debit card and send money to myself?
Oh, boy, I see a train wreck coming.
But it should work for a few weeks.
I think your examples were much more professionally described than Scott’s, who seemed like a kid in a candy store yelling a screaming about how much abuse can be administered. You told it like it is, in a much calmer, professional manner. Good Post. I think I’ll stick with my Blue Bird for the time being.
Thanks !!!
@Gary
“It won’t end up like Home Improvement Gift Card because you won’t get stuck with gift cards of limited use.
Two ways this could go bad (1) they hold onto your money for 60-90 days, (2) they reject/return transactions.”
60-90 days of being money held is the same as having limited use GCs to me…but I guess different for you.
I know if they want to, they can shutdown by the name at least since on their account system for the 1st time login, they already had my name. They might go by the debit card #…multiple accounts…frequent changing of debit…etc., etc.
Well, I’m getting in on this one since I already have the ST debit. I’ve been using it for quit a while for MO purchases, without any trouble. I am, however, in a state ST services. My hope is that the limited opportunities for exploiting this will prevent it from quickly blowing up. We’ll see.
Is Bank of America still offering Alaska Airlines debit card? I can’t find it anywhere.
How are they going to prevent me sending an email out of the name of somebody else who uses this service? Faking the “sender” field of an email is ridiculously simple..
It’s unfortunate that a service designed to simplify things like sending your buddy $15 for the pizzas he ordered is viewed by so many people as a wonderful new way to rack up miles and game the system.
Ultimately, this kind of behavior forces the provider to tighten controls, make the service less useful, or just shut it down. Not so great for the target market that has no interest in mileage arbitrage but seeks an easy way to send cash.
I like Square and have used it to help a 401 c3 setup a charitable sales event. I hope this Square service thrives and they are able to quash the mileage-only activity activity ASAP.
I was hoping that visabuxx cards would work with this but unfortunately they don’t. So it is just like Venmo.
@Gary Frequent Miler made a huge mistake when he opened up his Suntrust account, he used a GC (the web site states that you need to use a debit card from a checking account) when that didn’t work, he then transferred 7K from his ING account. This is what caused all the problems… Greg almost admitted his mistake this past weekend in Chicago at the FT event… So please do not use him as example, he tried to go around what suntrust wanted from him.
I have had my suntrust account not for 8 months, I live in Phoenix, AZ and I opened it on-line, I followed the rules I used my checking accounts debit card to fund my account, and I have 3/4 of my pay check directly deposited into the account, I move movies around to be able to double dip on paying my CCs. I have collected over 100K skymiles in this short amount of time. while doing the MS on other CC. I doubt I’ll be taking advantage of this promo….
as soon as I read fees….i stopped 🙂
@Tony – how do you double-dip paying of your credit cards? Any other tips for racking up 100K DL in 8 months?
Gary, will using UFB debit card work for this deal? UFB only awards miles for POS sales right? this will not qualify correct?
Good post about debit card and miles earning. I live in California. BofA is terminating Alaska debit card to earn miles next year. I am left with UFB Direct American debit card. maybe by the time I apply, it will be terminated to earn miles also. Look forward for more findings about debit cards