So, last week was a pretty interesting one for Mileslife.
It all started on Tuesday, when a merchant in China posted the following:
The merchant claimed that they had not received payment from Mileslife since December 2018 and were owed more than 50,000 RMB. When they visited Mileslife’s office, they were told by a staff member that employees were being laid off and the company was closing down. These concerns were echoed in a WeChat group for merchants, where others reported that they couldn’t reach anyone at the company.
This story was picked up on Reddit and the whole thing quickly developed into a classic run on the bank as users rushed to cash out their Mileslife credit. It didn’t help that Avios transfers were suspended and Mileslife’s check-in feature stopped working on exactly the same day (the latter has since been restored).
Mileslife flatly denied the rumours it was closing down and assured merchants and customers it was still business-as-usual. Here’s the statement they issued in China:
Translation (courtesy of Jerry W in the Telegram Group):
“Dear respected customers and business partners:
Regarding the post on social media that Mileslife is delaying payment and the company has stopped operation, we would like to clarify that the rumour is false. We are still business as usual and all operations within Mileslife are going according to plan.
Mileslife (China) is our HQ and it’s very important to us. Although we sustain profit in 2018 in China, we are still operating at a loss due to our operations overseas (outside China). This caused a tremendous stress on our operations. We are working on various plans to make Mileslife profitable.
We are also aware that a Mileslife (China) employee has shared that the company is shrinking operations in China, and cutting down manpower. We apologise for the panic. We are sorry for not conveying this information in a more professional and matured way.
We promise not to give up on every Mileslife (China) customers, and won’t delay payment to our business partners.
1. We will communicate with the business partners for timely repayment.
2. We will rectify and ensure that the Mileslife app is working normally.
PLEASE BE ASSURED THAT MILESLIFE WILL CONTINUE LIVING. WE STILL GOT A LONG WAY TO GO.”
Mileslife also released this statement in Singapore:
Two caveats before I weigh in on the matter. First, I worked for four months at Mileslife last year before going full-time with The Milelion. I don’t retain any financial interest or stake in the company, but I obviously want to see them do well because I think they’ve got a great product. Second, I’ve not had the chance to speak more than a few words with Troy (the CEO) since this all started, so when it comes to the future of the company, your guess is as good as mine.
That said, I generally buy into the “no smoke without fire” argument. Mileslife seems to have acknowledged that merchants in China were indeed not getting paid- whether that was a process snafu or something more ominous is the question.
Moreover, apart from the statement on Facebook there hasn’t been a lot in the way of communication since last Wednesday. If I were Mileslife, I’d be going out of my way to over-communicate with customers and merchants to reassure them that everything’s ok, and as far as I can see from the customer side that hasn’t happened. It doesn’t help that Mileslife is a privately-held company, so it’s not like there’s a lot of information out there we can dig into.
Therefore, instead of speculating further, let’s perhaps lay out what we do know so far.
(1) Are miles from Mileslife still posting?
My last transaction with Mileslife was on 16 April at The Daily Cut, and those miles posted to my KrisFlyer account one day later.
A quick straw poll on the Telegram Group suggests that the last posting activity for Mileslife to KrisFlyer happened on 17 April, and those with transactions subsequent to that date have yet to receive their miles.
I wouldn’t panic just yet, because transfer delays can happen for perfectly innocuous reasons. However, it’s worth noting that historically, Mileslife transfers to KrisFlyer generally posted within one business day of the transaction.
For what it’s worth, there was a report of a successful Mileslife transfer to Qantas Frequent Flyer on 20 April.
(2) Are merchants still accepting Mileslife?
Crystal Jade has disappeared from Mileslife, and visitors to their outlets are being told that the app is no longer accepted. Similarly, the entire shopping section (which used to feature RWS merchants) has also vanished, along with hotels, cruises and trains.
The spa and travel insurance sections remain populated (although you can’t actually buy travel insurance now as the purchase button is greyed out), as do a few travel services options. It’s important to note that even where merchants do appear on Mileslife, some customers have reported being rejected when they tried to use the app to pay.
At this point, it’s hard to pinpoint exactly who is and isn’t accepting Mileslife, and you might want to give the restaurant or merchant in question a call before heading down. I reckon merchants are just as spooked as customers, and are waiting to see what happens. I did visit Daily Cut at Raffles Place on Saturday and was told that Mileslife was still accepted, so at least some merchants are still taking it.
(3) Should you buy Mileslife credits?
Frequent users will know that Mileslife offers a chance to triple-dip on miles earning through Mileslife credits. When you buy credits, you earn miles from Mileslife (1) and your credit card (2), and when you spend credits, you earn miles from Mileslife (3) again.
Mileslife’s most recent top-up campaign (in March) gave up to 2.5 mpd on credit purchases (plus up to 4 mpd on your card), which when used at a 3 mpd dining merchant yielded a total of up to 9.5 mpd.
In light of what’s happened, I doubt people will be rushing out to top up their balances even if there’s a top-up campaign this month. In any case, my stance is that you should only buy prepaid balances if you have confidence in the future of the company. This same rule applies whether you’re buying NTUC Vouchers, IKEA Gift Cards, Kopitiam top-ups or any other form of stored value.
It’s worth noting that Mileslife credits are not classified as a widely-accepted Stored Value Facility (WA SVF) by the MAS. This is relevant because approved WASVFs must appoint a bank to guarantee the total outstanding stored value, so there’s no such protection here.
(4) How does this affect other ongoing Mileslife joint promotions?
OCBC VOYAGE has an ongoing promotion offering 5 mpd on all Mileslife transactions, and Mileslife is giving an additional 3,000 miles when you sign up for a VOYAGE card through the app. My contact at OCBC tells me that they’ve not received any adverse news from Mileslife about ceasing this promotion so it’s still business-as-usual, and your Mileslife transactions continue to earn 5 mpd. Should there be any issues, the bank will follow through with Mileslife to ensure members who have participated in the offer will get their 5 mpd + 3,000 miles as promised.
I’m also aware that you can get some bonus Mileslife credits when you sign up for a Club Wyndham vacation package. To my knowledge that offer hasn’t changed either, at least from the Club Wyndham side.
I think the bigger question is whether Mileslife will be able to fulfill their end of the offer. So if that’s what’s drawing you into these promotions, you might want to consider reaching out to the company or waiting until there’s further clarity.
When Mileslife first launched in Singapore, I was really excited at the prospect of an app for miles geeks, by miles geeks. Mileslife introduced new ways of earning hard-to-get mileage currencies like Lufthansa Miles & More and United Mileageplus in Singapore. They ran some amazing 5X miles promotions, which let you earn a whopping 15 mpd on dining just from the app alone. They did fun things like offering free miles for just checking into the app or syncing your step tracker, a really useful way to keep alive balances in activity-based FFPs. But more than that- it really felt like they understood exactly what miles chasers wanted, and how to deliver it.
So while I really hope that all this turns out to be a big load of nothing, you can’t say there aren’t already some red flags. I’m also hoping the company will take a more proactive approach towards communication because if they don’t, well, rumors and speculation love a void.
The next couple of weeks are going to be very, very interesting.
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