Chocolate Finance has processed over S$500 million in withdrawals in just one week, following a surge in customer dissatisfaction over changes to its bill payment rewards programme.
The Singapore-based fintech had previously offered 2 miles per dollar spent on bill payments, including through platforms such as AXS.
However, Chocolate Finance observed that users were leveraging the rewards programme in a way that was not sustainable, and they took steps to address it.
The changes led to frustration among users and a surge in withdrawal requests, which prompted the company to suspend its instant withdrawal feature on 10 March.
Withdrawals were temporarily shifted to a standard processing time of three to ten working days.
While the instant option has not been reinstated since, the company confirmed that all withdrawal requests made between 10 and 18 March were fully processed.
Founder and CEO Walter de Oude acknowledged that the company may have overextended itself in trying to meet customer expectations, and paid the price when the promotion was rolled back.
However, he emphasised that Chocolate Finance remains in good shape, with its systems and processes having stood up to the pressure of the withdrawal surge.
While Chocolate Finance is not covered by the Singapore Deposit Insurance Corporation (SDIC), de Oude noted that customer funds were never at risk, as they are held in segregated accounts with custodians HSBC and State Street, and backed by short-term investments.
Funds remain ringfenced, providing protection for customers if the company faces operational difficulties.
The situation has sparked mixed reactions online. While some users on Reddit praised the company for handling the withdrawal volume efficiently, others voiced concerns over the lack of clear communication and the abruptness of the changes.
One user said they withdrew their funds but might consider returning if the platform demonstrates greater stability moving forward.
Despite the setback, Chocolate Finance is working to stabilise its operations and rebuild trust with customers.
The company is now refocusing on its core offerings, which include enhanced cash management solutions and foreign exchange services, while aiming for a more sustainable rewards structure.
