Well, you can’t say it hasn’t been a long time coming.
Back in February, I posed the question “What happens when there’s no more credit card rewards for GrabPay top-ups?“
It appears we’re about to find out, because Visa has changed GrabPay’s MCC to a quasi-cash merchant. This effectively closes the door for credit card rewards, and could be the death knell for the GrabPay Mastercard (at least among miles chasers).
What’s happened to GrabPay top-ups?
Up until last week, it was still possible to earn points for GrabPay top-ups with Visa cards. That’s because Visa processed these transactions under MCC 7399- Business Services Not Elsewhere Classified, unlike Mastercard which switched to MCC 6540- Stored Value Card Purchase/Load in December 2019.
Towards the end of the week (17 July is the best guess), people started reporting that GrabPay top-ups with the Citi Rewards Visa were no longer earning points. This isn’t the first time we’ve heard such reports, of course. GrabPay chat veterans will wearily recount numerous false positives, usually from overenthusiastic individuals who didn’t wait long enough for the points to show up.
But there was something different this time round. Not only were GrabPay top-ups not earning points with the Citi Rewards Visa, some transactions were being blocked outright. Upon contacting the bank, cardholders were told that the system was seeing these as quasi-cash transactions, and Citi’s risk assessment algorithm was blocking their card for such MCCs.
Wait…quasi-cash transaction? This was a first. A quick check with the DBS digibot confirmed that GrabPay top-ups on the DBS Altitude Visa were now coming through as quasi-cash transactions as well.
And there you have it- the MCC for GrabPay top-ups with Visa cards is now MCC 6051- Quasi Cash Merchant. This MCC is excluded from earning rewards on virtually every credit card out there, so it basically spells the end of rewards for GrabPay top-ups.
|🏳️ Lone Survivors (?)|
The AMEX True Cashback card is still confirmed to earn 1.5% cashback on GrabPay top-ups (unlike other AMEX cards, GrabPay top-ups aren’t on the exclusion list)
It remains to be seen whether individuals who saved their DBS Woman’s World Card in the Grab app will get bonus points come August (don’t bother with ad-hoc top-ups, these are already confirmed not to receive points).
There’s also an outside chance the Maybank Horizon Visa Signature may survive too, given that the T&Cs do not explicitly exclude quasi-cash transactions.
I’m not holding my breath on either, but we’ll get some data points next month.
What now for the GrabPay Mastercard?
The axing of credit card points for GrabPay top-ups spells trouble for the GrabPay Mastercard, because it’s now in direct competition with credit cards.
When credit card points were awarded for GrabPay top-ups, the GrabPay Mastercard was able to ride on the coattails of the banks. People would earn 1.2-4 mpd for topping up their GrabPay balance with a credit card, then spend on the GrabPay Mastercard to earn further GrabRewards points. The two solutions complemented each other, not competed.
Now that no points are awarded for top-ups, you have to choose between using GrabPay or your credit card. Unfortunately, the math just doesn’t favor GrabPay…
|Rewards per S$1||2-4 points||1-4 miles|
|Effective MPD||0.2-0.4 mpd||1-4 mpd|
|Effective Rebate @ 1.8 cpm||0.36-0.72%||1.8-7.2%|
This means that GrabPay is relegated to fringe cases, for instance at hawker stalls which have a GrabPay QR code but no other cashless payments. Or perhaps you need to make an education or government payment which won’t earn any rewards on your credit card. In this case, it’s better to take the paltry GrabRewards points than to leave empty handed.
|If you hold an AMEX True Cashback card, you may find it useful to top-up your GrabPay Card to make insurance payments, earning 1.5% cashback in the process. No GrabRewards points are issued for insurance.|
Beyond that, however, it’s pretty much game over. I wonder if this is why we’re seeing some promotions for the GrabPay Mastercard right now, like an easy 15,000 GrabRewards points for making S$1,000 in online transactions.
For what it’s worth, GrabPay did hike its merchant fees some time back, so perhaps it’s trying to generate the margins needed to support a more generous rewards ecosystem. They’ll certainly need it, now that the days of double dipping are over.
We all knew it was only a matter of time before credit card rewards disappeared for GrabPay top-ups. I hope everyone made as much hay as they could, and so we’ll pause for a moment, press “F” and move on with life.
The GrabPay wallet is basically a zero-interest credit line for Grab, and the challenge now is to convince users to continue loading funds, as opposed to just charging their card at the time of transaction. The MCC change means the banks won’t indirectly subsidize GrabRewards anymore, and as I said in February:
All this while, GrabPay has been a beneficiary of the banks’ willingness to extend rewards to top-ups. If I can double dip on credit card and GrabRewards points, why not?
But take away the double dip, and it’s not even a contest- from a rebates point of view, there’s no compelling reason to use GrabPay when credit cards are also accepted.
How interesting that in the end, it wasn’t the banks which nerfed GrabPay top-ups; it was Visa (technically the acquiring bank assigns the MCC, but they’re bound to follow Visa guidelines anyway). And just like that, another chapter has closed in the Singapore miles game.
I think it’s only apt I give the closing word to Rose: