KrisPay: just another wallet from … an airline?

It seems like every company these days wants to set up their own payment platform. Users in Singapore are probably used to a variety of payment option stickers on shop fronts:

Amex is the most practical among this cohort

The latest addition came from Singapore Airlines. KrisPay has been appearing on many points of sale:

KrisPay is a miles-based digital wallet allowing KrisFlyer members (SIA’s loyalty programme) to convert their KrisFlyer miles into KrisPay miles instantly for everyday spending at 18 partner merchants across the island of Singapore.

Starting from 15 miles, KrisFlyer members can transfer KrisFlyer miles to KrisPay miles at a 1-to-1 ratio. 

• 1 KrisPay mile = 1 KrisFlyer mile
• 150 KrisPay mile = S$1
• 15 000 KrisPay mile = S$100

SIA probably wanted members to think of the airline every time they use the app to pay. But should you bother with KrisPay?

KrisPay’s logic flaw

While KrisPay allows members the flexibility of spending miles outside of the Singapore Airlines family, they are still limited to 18 partner merchants like M1, Esso, The Challenger, and Gongcha.

The various mileage collaborations with the SIA frequent flyer programme suggest that members actually want to earn miles.

Will members then use their hard-earned miles to drink Gongcha? Think about it. Will members buy SIA tickets, to earn miles and only to make small purchases which can be bought using other e-wallets like Grabpay, Apple Pay or Samsung Pay?

There is a reason why airline miles are (NOT one of) the most successful loyalty programme. People think of flying (or going to a holiday) as prestigious; accumulating miles to hit (literally) the milestone of a ticket is a great sense of achievement; and credit card companies buy miles at bulk to reward their members.

And here we see the reverse being implemented – which does not make sense.

KrisPay’s terrible conversion ratio

Not only is it illogical, the low valuation given to the miles (0.67 cents per KrisPay mile) means that members should save their KrisFlyer miles for better redemption options (read: actual flying).

To put things into perspective, it takes around 4.4 one-way trips from Singapore to London on SIA’s Economic Lite fare type to earn 15,000 KrisFlyer miles. This 15,000 KrisFlyer miles can then be exchanged for a return flight to Bali, Jakarta, and Surabaya.

Would You rather spend that 15,000 miles on S$100 worth of petrol at Esso or a trip to Bali? We hope you did not choose the former.

That said, the general consensus is that KrisPay is useful for cashing out small miles balances that are expiring. In that situation, KrisPay is a godsend.

But is that the kind of behaviour SIA wants to encourage? Heck, we do not even see how KrisPay will encourage members to buy SIA tickets when there are cheaper alternatives available. 

If that is not convincing enough, not only is the transfer is irreversible, KrisFlyer miles converted are only valid for 6 months and there is no way you can extend the expiry contrary to KrisFlyer miles where you are able to extend it with a fee. 

Moral of the story? Unless you have miles that are expiring soon that are too little to fly with, do not bother with KrisPay. 

Daily touchpoints or last touchpoint?

While more frequent flyers are unlikely to get much value out of the app, less frequent flyers will have nothing to do with SIA after spending their few remaining miles with partner merchants. Cashing out is a one-time activity, and with no earn function on KrisPay, how does KrisFlyer expect to re-engage them? 

In this manner, KrisPay, which we imagine, was meant to create daily touchpoints with KrisFlyer members, ironically becomes the last touchpoint that some members will have with their customer loyalty programme. 

Some lessons here for product managers in the region.