Chocolate Finance Meltdown: Post Morterm and moving ahead
- MilesWise
- Mar 12
- 4 min read
At this point, the Chocolate Finance (CF) saga has been talked to death. You’re probably as tired of hearing about it as I am. However, given the recent changes to the Chocolate Visa Card, I figured it was worth providing (hopefully) a final update on where things stand.
Chocolate Visa Card Imposes S$250 Transaction Limit
CF has now placed a S$250 per transaction limit on its Visa Card. This move appears to be directly linked to their liquidity pool, which suffered a major hit following a mass withdrawal event over the weekend. The logic here is simple: by capping transaction amounts, CF can slow down the rate of outflows while waiting for their money market fund (MMF) and short-term bond redemptions to come through.
My personal take? This limit is likely to be temporary. Once the panic subsides and CF gets its cash flow back in order, I expect them to relax the restriction. However, S$250 is still a rather low limit, considering the primary use case for the card was non-discretionary spend—things like insurance premiums, bill payments, and even rental payments. That said, it should still be sufficient to cover smaller recurring expenses like utilities or ad-hoc overseas spend.
MCC 6540 Transactions Blocked
Another key change is the complete blocking of transactions under MCC 6540 (stored value/e-wallet top-ups). This was clearly a reaction to users exploiting a workaround over the weekend—topping up their GrabPay wallet and then cashing out the balance to their bank account. Given that this method was also dependent on CF’s liquidity pool, it was an unsustainable loophole that CF has now shut down.
That said, there was never really much incentive to use CF for MCC 6540 in the first place, since e-wallet top-ups never earned max miles. This restriction is more about damage control than a fundamental change to the rewards structure.
Final Thoughts
As many have already pointed out, CF’s handling of this crisis was nothing short of a masterclass in what not to do. From the ill-conceived decision to award miles on AXS payments, to the sudden and chaotic shutdown of the program (they later justified this by saying they needed to prevent a "last hooray" of abuse), to the misleading and poorly worded FAQ—it’s been a mess. The FAQ, in particular, made it sound like AXS itself had severed ties with CF, when in reality, it was CF that made the call.
Throughout this debacle, I’ve also noticed a fair amount of fear-mongering, with some voices almost gleefully spreading FUD about CF’s impending collapse. Look, there’s plenty of valid criticism to be made about CF’s crisis management, but taking joy in the situation doesn’t help anyone—especially the users caught in the crossfire. I also noticed a lot of personal attacks against Walter (CF's CEO who came out with a public statement), branding him as an unapologetic "angmoh," but honestly, that kind of rhetoric doesn’t add much to the discussion.
There was also significant criticism around CF’s "bank" vs. "not-a-bank" status. To me, it was clear from the start that CF functioned similarly to cash funds on robo-advisors, meaning SDIC insurance was never part of the equation. Yet, many users seemed to capitalize on this point, blaming and mocking CF as though this was some shocking revelation. Accusations of false advertising and oversimplified marketing were thrown around, but the reality is that instant withdrawals were meant to be a value-added feature, not a guarantee. Now, that same feature is being held against them when it "doesn’t work." While CF certainly deserves scrutiny for their missteps, some of the backlash has been excessive and, frankly, unjustified.
I also saw some criticism directed at "finfluencers" for supposedly causing a "bank run." It’s quite amusing that many of these influencers were actively promoting CF (likely due to the S$5 referral fee and the need for fresh content), but as soon as the situation turned sour, they scrambled to prove they had never truly recommended CF—digging up old videos and screenshots to distance themselves. Maybe some genuinely never found CF worth using and only shared it as "financial education." Or perhaps they’re just riding the wave, creating content that condemns CF because that’s what people want to hear right now.
So where does that leave us? If you were using the CF Visa Card for AXS payments, it’s time to move on—that ship has sailed. If you’re still holding onto the card for other payments, just be mindful of the new S$250 limit for now. Whether CF can recover from this PR disaster remains to be seen, but one thing is certain: regaining the trust they’ve lost won’t be easy.
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