UOB One GrabPay nerfs coming – back to square one

First, Grab silently removed the option of paying your AXS non-credit card bills using GrabPay, which had allowed users to pay for insurance and telco bills, among other bills, with their GrabPay credits.

Thereafter, a series of nerfs started. Top-ups to other e-wallets (e.g. Revolut, Transferwise, YouTrip) was no longer possible. American Express revised their terms and conditions on some of their Amex cards that they will no longer give rewards for GrabPay top ups from 1 March 2020.

Grab then announced another huge devaluation in terms of both the earning rate and rewards redemption rate. According to Grab, there’ll be a reduction in how many points you earn per transaction from 2 March 2020.

Revised GrabPay rewards structure

Previously, GrabPay transactions would have earned up to 10 points per transaction for Platinum Grab users, so the earnings rate has decreased by up to 60% for every dollar spent. This is probably due to the launch of the physical GrabPay MasterCard, which allows users to spend at even more places – anywhere that accepts MasterCard – both offline and online.

Furthermore, they also devalued the value of each reward point, making it more expensive to redeem the equivalent value of reward. It is estimated that rewards will now cost between 10% to 39% more points to redeem across the board, and all levels of Grab membership will now redeem at the same cost regardless of which tier you belong to.

The UOB One x Grab nerf

Late last week, another bombshell came in a seemingly quiet move – UOB has updated its T&Cs for its popular UOB One Card to exclude GrabPay topups from the additional 5% rebate effective 16 March 2020.

This announcement was broadcasted to select cardholders via SMS and apparently, many people still don’t know about these changes.

The reason why this is considered a bombshell is the initial use case of signing up for the UOB One card was to earn that 10% rebate from the UOB and Grab partnership. When Grabpay had allowed for this double dipping over the past several months – using UOB One Card to top up the Grabpay wallet before spending the virtual currency – consumers could earn both the additional cashback from UOB and Grab reward points.

From UOB’s perspective, this didn’t make sense, given consumers would only charge their UOB One card onto the Grab platform and not use it for other spending patterns. It also had to give up huge rebates for consumers.

For me, there are now even fewer reasons to use the UOB One card – given its tiered spending requirement ($500, $1000, $2000) to earn 3.33% or 5% cashback and far fewer use cases with the new Grab exclusions.

With QR code payments starting to gain market share and widespread adoption, coupled with Grab announcing its bid for the digital bank license, you can imagine that UOB is feeling the heat to regain lost market share in the payments space before potentially losing out further in the banking space.

As Grab and other fintech companies prepare for eventual profitability or an IPO, there will be fewer and fewer ways to take advantage of such opportunities until another new player comes in. While I still wonder how long can Fave sustain their 10% cashback (probably the next in line to be nerfed), we will be heading back to square one in the era of fewer discounts and sustainable growth.

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