Chocolate Finance CEO says withdrawal issues stemmed from miles reward system being heavily utilised

Chocolate Finance CEO Walter de Oude on Mar. 10 explained the reasons for suspending his firm's instant withdrawal service.

In an interview with CNA a day after the instant withdrawal service was suspended, de Oude said Chocolate Finance customers who heavily utilised a miles rewards programme led to the suspension.

"Absolutely huge payments"

Even though it is not a bank, Chocolate Finance allows up to S$20,000 worth of instantaneous daily withdrawals by each customer as part of its "Chocolate Liquidity Programme".

The firm also offered a debit card partnered with the HeyMax miles platform, allowing users to gain miles on almost all their transactions.

This included bill payments made with the AXS bill payment platform, which does not usually allow users to accrue reward miles.

According to de Oude, after Chocolate Finance's debit card launched in February 2025, the service began to see users make what he called "absolutely huge payments" on AXS platforms.

When payments are made through other means, such as via credit card services like Mastercard or Visa, fees charged to vendors by the services are split with the payment card issuer, in this case, Chocolate Finance.

de Oude explained that the AXS platform did not have that benefit for his company, but Chocolate Finance had hoped that other transactions would help justify the cost, something that did not come to pass.

Gaming the system

He described this as customers "gaming" Chocolate Finance's system, even though it was offered as such to be different from others in the market.

Commenters on social media appear to believe that Chocolate Finance had simply miscalculated and that customers were using the card rationally as expected, given how it was set up.

They noted that Chocolate Finance's miles reward throttled rewards after the first S$1,000, going from 2 miles per dollar to 0.4, as reported by Milelion, a website that examines credit cards' perks.

de Oude said Chocolate Finance realised they "could not keep giving miles" on AXS transactions and decided to stop offering miles for payments on that platform.

But fearing that notifying users of the stoppage ahead of time would "exacerbate the utilisation so much more", Chocolate Finance decided not to inform customers first.

CNA reported that Chocolate Finance then updated its frequently asked questions page to reflect the change to its AXS payment policy, but had written it in a way that implied that the stoppage was due to AXS.

As this was not the case, it changed the wording "within hours".

de Oude said on LinkedIn that the change had been communicated poorly, and provided a detailed accounting of what happened.

Chocolate Finance is a financial services firm and, as a result, is not covered by the Singapore Deposit Insurance Corporation, which assures bank deposits up to S$100,000 in an effort to prevent bank runs.

Unhappiness and unease

CNA reported de Oude as saying that the change "wasn't properly communicated to customers", leading to "unhappiness" and unease, and many customers decided to utilise Chocolate Finance's instant withdrawal service to withdraw their money.

This, in turn, meant that Chocolate Finance experienced an "unusually high" number of instant withdrawal requests, depleting its liquidity pool for instant withdrawals and resulting in the service's suspension.

de Oude added that he expected the service to restart when "ordinary business resumes".

He described it as "an absolutely cool thing" to offer and that it had never been done before.

He said that "what's absolutely clear here is that all of our customers' monies is safe" and that the monies were all appropriately invested, and all withdrawal requests would be fulfilled in a matter of days, which is the industry standard for such requests.

Withdrawal requests had also reduced in number since it first occurred, and de Oude said he expected that once customers saw their money returned to them as promised, faith would be restored, and the instant withdrawal programme could return.

MAS response

The Monetary Authority of Singapore (MAS) said in response to the suspension of instant withdrawals:

Chocolate Finance is an online robo advisory service operated by Chocfin Pte Ltd (Chocfin).

Chocfin holds a Capital Markets Services (CMS) licence for fund management.

As a CMS licence holder in fund management, Chocfin is required to segregate customers’ monies from its own monies and place customers’ monies under independent custody.

It is also required to put in place a risk management framework and provide clear and transparent disclosures on the terms of its services, including circumstances where redemptions may not be instantly available.

MAS notes that ChocFin has provided clarifications on its redemption timelines and has instructed Chocfin to ensure that it meets all redemptions in an orderly manner and to keep customers informed of developments.

MAS is separately querying Chocfin about its representations of its instant withdrawals programme.

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Top image via Chocolate Finance