Announcement made last night through the Mileslife app, although not unexpected.

Mileslife last night put out a sudden announcement that it was suspending operations in Singapore:

‘Suspended temporarily’

While Mileslife did say it’s a ‘temporary’ suspension and said they are hoping to return by July, it remains to be seen if they can even successfully return to the market.

If you have been following their development closely, you will have come across many signs of issues brewing with Mileslife since several months ago.

It started with this case of a merchant in China complaining about the non-payment of dues owed, and following that, a spate of ‘temporary suspension’ of partnerships by several airlines including Singapore Airlines and British Airways.

There were also reports of Mileslife merchants who had verbally told customers that they were not accepting Mileslife payments anymore, including Crystal Jade group of restaurants.

It’s worthwhile to note that while Mileslife has suspended operations in Singapore, from online reports it seems like they are still working well in Hong Kong and China, although the partner airline offering has reduced significantly.

What happens if you still have Mileslife credits?

Tough luck. When the turbulence started hitting a few weeks ago, some forum users did go down the refund route. Mileslife offers a refund less 15% administrative fee, which is probably the best way to cut losses.

If you still have some credits, it might be worthwhile writing in to their customer care at customercare.sg@mileslife.com.

Will Mileslife ever come back?

Much as Mileslife hope to come back in July after a ‘operational restructure’.

Given the recent dive in public confidence from merchants, airline partners and users, it will be immensely difficult for them to bounce back and regain the former glory, short of a new brand. Even then, I believe that users will be a lot more cautious in parting with their money through this app.

Final thoughts

Mileslife definitely changed the landscape for earning frequent flyer miles. Traditionally, one could only earn miles from actually flying, and then subsequently credit cards came on board to award miles for spend.

Mileslife took the concept a step further, by partnering with merchants and awarding miles through everyday spend. And the earn rates were crazy: under some promotions, users could get as much as 12 mpd on select merchants.

Apart from earning miles through dining and lifestyle spend, you could also earn miles by simply checking in on the app everyday, and also walk your way to more miles by clocking steps every day (this functionality was only available in Singapore).

As with all start ups, cashflow is often a problem. Conversations with merchants revealed that while customers were paying full price through the app, merchants were actually paid a discounted price, with Mileslife pocketing the difference. My guess is that this is the default revenue model for Mileslife, while most of the expenses also go to funding miles awarded to users. Airlines are known to charge non-airline partners for the miles they disburse, which will cost anything from 0.8 cents to the market rate of 4 cents per mile.

As with many things, nothing comes free and in this case, Mileslife users probably had the last laugh all the way to their first class seat.