Tag Archives: dbs

Credit Cards

DBS Woman’s card updates T&C to exclude Cardup & iPayMy

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Cardup and iPayMy are two Singapore startups that give you the opportunity to use your credit card to pay for things that you normally can’t use your credit card for, like rental, income tax, condo fees, school fees etc., in exchange for a 2.6% processing fee.

[It may be best practice to point out that The Milelion has previously worked with iPayMy to produce two webinar series on miles earning and miles using, for which all remuneration went to World Vision]

Although both platforms will point to convenience, the ability to schedule payments and their own proprietary rewards program as reasons to use their services, I’ve said from the start that the only thing that justifies paying a 2.6% fee is the ability to earn 10X/ 4 mpd.

I’ve done the working before, but it bears repeating. If you can get 10X points, you pay-

2.6 cents= 4 miles or 0.65 cents per mile

If you’re earning regular spending rates of 1.4 mpd (e.g with the UOB PRVI), your equation becomes-

2.6 cents=1.4 miles or 1.86 cents per mile

1.86 cpm isn’t a terrible price to buy miles at, insofar as it’s below the magical 2 cpm threshold, but remember that you could potentially be buying miles for less through annual fees.

This then leads us to the magic question- do iPayMy and Cardup earn 10x?

If you want some amusement, scroll through the comments section of this article, where it seems every other post is someone asking “does (CARD NAME) earn 10x?”

I mean, it’s perfectly understandable why people would ask this. 10X cards are high risk, high reward. If the bank doesn’t consider the merchant to be a 10x-able category, you earn 0.4 mpd. And if you earn 0.4 mpd you’re the loser because of the 2.6% transaction fee.

The answer is: I don’t know for sure. When I used my DBS Woman’s World card and Cardup to pay my NUSS membership fees back in December last year, I did indeed get 10X points. But each month the game can change without notice, and just because something worked last month doesn’t mean it will work this month.

Whatever the case, it now seems confirmed that it won’t work for the DBS Woman’s card, as (someone pointed this out on the comments on 5th May, and I only got around to seeing it now),  DBS’s T&C for the Woman’s card have been updated to explicitly exclude payments made to Cardup and iPayMy

Bummer. Why would the banks take this away?

To understand the answer to that question, we need to understand why banks give 10X.

Why do banks give 10X?

Two words: discretionary spend.

Let’s think about all the 10X opportunities that exist right now.

  • Citibank Rewards (online and offline shopping)
  • HSBC Advance (online and dining)
  • UOB Pref Plat Visa (online and Paywave)
  • DBS Woman’s World (online)
  • UOB Visa Signature (overseas)

Notice anything in common?

Well, all the categories that get 10X are those where banks are trying to drive discretionary consumer spending.

You don’t have to eat out, but the banks hope that by offering you 10X you feel less guilty about swiping your card. You don’t have to indulge in online shopping, but banks give you 10X to encourage you to splurge on Amazon. If you bother to change your money at The Arcade before heading overseas, you don’t have to swipe your credit card overseas, but the banks hope that 10X will change your mind.

(Paywave seems to be less of a discretionary spend category given that you’ll find it at supermarkets, pharmacies and lots of other “utilitarian” places, but I’m guessing that the 10X program was conceptualized when Paywave was relatively new in Singapore and UOB wanted to drive adoption of the technology. Since Paywave transactions are capped at $100 and the overall 10X on the PPV is capped at $12,000 spend per year In any case, UOB doesn’t give UNI$ at merchants that are members of its SMART$ program, which, surprise surprise, is most of the supermarkets + pharmacies)

Banks don’t need to incentivize your non-discretionary spending because they know you’d do it anyway. Groceries need to be bought. Medical bills need to be paid. But they want to encourage you to spend above your baseline, and that’s why 10X opportunities exist.

Now think about what iPayMy and Cardup are offering. They are letting you turn routine, necessary payments into 10X opportunities. That’s great for you, but not so much for the bank, which suddenly realises that it’s having to pay out additional DBS points/UNI $ on payments that were going to happen anyway.

Therefore, from the bank’s point of view, it doesn’t make sense for them to reward this. And I fear that we’re now going to see more and more banks set this out explicitly. I know that HSBC Advance already doesn’t give 10X on iPayMy/Cardup, and to my knowledge only the UOB PPV currently earns 10X.

And that’s a big deal for iPayMy/Cardup, because, looping back to my opening argument, the only way I’ll pay 2.6% is if I get 10X. I’m sure the same goes for a lot of people in the miles community.

(I suspect the platforms themselves aren’t too confident about advertising 10X earning opportunities, because the working on Cardup’s own website illustrates a 1.4 mpd opportunity, not 10X)

The solution? Both iPayMy and Cardup have to go to the banks, sit down with them and say- this is what we offer, this is what people want. How can we make this work?

And whether the answer involves some sort of cost sharing, or joint promotion, or explicit cap on 10X for iPayMy/Cardup, I don’t know. But something needs to happen, because the longer the ambiguity about 10X exists, the fewer miles chasers will use either platform.

Credit Cards

ANZ points to be converted to DBS points

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It was announced in October 2016 that ANZ would be ceasing its consumer banking operations in Singapore and transferring its assets to DBS.

At the time, I mentioned that you might consider cashing out your ANZ Travel $, given that we didn’t know what would happen with the bank’s credit card program post the merger. I myself cashed out 10K of my ~13K ANZ Travel $, assuming that ANZ would eventually ask all cardmembers to convert their points by a certain date or lose them. I took the remainder 3K as a write off.

Well, perhaps I didn’t have to do anything, because the following notice has popped up on ANZ’s website.

In case you can’t read that, it says

Important Notice
Your unused Rewards Points will be transferred to DBS for future usage if you choose not to redeem via the ANZ Rewards Programme before the latest dates specified below:

  • 19 June 2017: For Redemption of KrisFlyer Miles or Cash Credits
  • 06 June 2017: For Redemption of all other Rewards including Travel Cash

You will receive more information prior to the transfer to DBS, or if you require immediate assistance, please call 1800 269 2269 or +65 6269 2269 (overseas).

No further information is given about the mechanics of the transfer (what does it mean for customers who don’t have DBS cards?) or the ratio (1 DBS point to 2 Travel $ would be the “fair” amount).

The lack of a ratio does worry me slightly, Because think about it from a business point of view- Travel $ are a liability on the balance sheet of ANZ. ANZ got the benefit of merchant fees etc when customers used their ANZ cards to pay for things. ANZ then incurred a liability in the form of the Travel $, which represent a commitment to deliver miles to the customer at some future point in time (and to incur an expense buying the miles from SQ/CX).

DBS is now taking over ANZ, and assuming those liabilities on their balance sheet by converting Travel $ to DBS points. But DBS didn’t get the benefit of those ANZ customers spending money on their cards (well, ok in some abstract way they did, because when they paid for ANZ I imagine that got priced in). So will they be willing to assume the liability at the full rate? Or will this be an opportunity for a devaluation in the transfer process?

For the record, I don’t think DBS will pull a dick move or anything (because that would be a super dick move), but I’d rather they come out and clarify this sooner rather than later. Whatever the case, I certainly hope they announce more details before 19 June, because this will let people decide whether they want to cash out their Travel$ or let them be converted to DBS points.

(HT: The Shutterwhale)

Credit Cards

If you’re on the old DBS frequent flyer transfer scheme, beware…

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Back in November 2016, DBS changed the way it charged for miles conversions from an annual fee of $42.80 with unlimited conversions to a per conversion fee of $26.75.

Cardmembers who had already paid the annual fee would be on the “old” scheme until their membership year was up. That is to say, if you paid your $42.80 on October 10 2016, you would have unlimited transactions until October 9 2017, after which you’d pay per conversion.

Download (PDF, 198KB)

In the FAQ that was provided with the program change, DBS clearly states under point 6) that-

I had not received anything from DBS, so I proceeded to do a transaction in early April to move some miles to Krisflyer.

On examining my ibanking statement, however, I saw that I had been hit with a $26.75 conversion fee. So I called DBS customer service to ask about it.

They told me that my annual membership expired end March and therefore I was on the new scheme. I reminded her about their FAQs which stated that customers would get a heads up via eDM or SMS.

Her response was that although she could see in their SMS outbox that I had not been sent anything, it was not practice for them to send out alerts about the impending expiry of your annual transfer fee.

They were not able to locate this FAQ on their side, so I’ve since sent this PDF to their customer service team for escalation, in expectation that they will refund me the fee. I will update you when this is resolved.

But in the meantime, if you are part of the old annual scheme you might want to take note that alerts are not going out. So be vigilant, check your account and let DBS know if you are charged without notice.