Bitter chocolate: The fallout of a poorly planned promo on Chocolate Finance's reputation

Singapore-based Chocolate Finance, which launched in 2024 with ambitions to disrupt business as usual banking with Gen Z-friendly financial products, is now facing acute customer backlash.

On March 10, the fintech froze instant withdrawals, later reinstating them—but with delays. It then capped debit card spending at S$250 (US$187) and blocked wallet top-ups, sparking a surge of customer frustration and online criticism.

According to Carma Asia, which analysed sentiment on X (formerly Twitter) and Reddit, 42.3% of conversations about Chocolate Finance have been negative since the withdrawal freeze, with just 6.1% positive (graph below).

The turmoil stems from a partnership between Chocolate Finance and rewards platform HeyMax. In February, the fintech introduced a promotion offering two air miles per dollar spent on its debit card (capped at S$1,000 per month), followed by 0.4 miles per dollar for purchases beyond that limit. The scheme included AXS, a payment platform commonly used for bills and fines—categories typically excluded from such promotions.

According to a report in The Business Times, miles could be redeemed with leading travel and airline brands, including British Airways, Qatar Airways, and the IHG Group.

However, on March 5, Chocolate Finance abruptly halted payments via AXS. Explaining the decision in a  LinkedIn post, founder Walter de Oude admitted that while the scheme was effective for customer acquisition, bill payments, mainly through AXS, “surged far beyond expectations, making the programme unsustainable.”

The sudden halt, poor communication, and uncertainty over funds triggered a wave of withdrawals and drew significant criticism on social media.

Speaking to The Straits Times, Aaron Wong criticised the S$250 spending cap, calling it a major inconvenience for overseas users, as Chocolate’s Visa cards were popular for zero foreign transaction fees. He also pointed out that customers using the card for recurring payments, such as insurance premiums, could face declined transactions if their payments exceeded the limit.

On Reddit, sentiment remains overwhelmingly negative. Users reject claims they “gamed the system”, arguing they used the card exactly as advertised—and now feel penalised for it.

A spokesperson from Carma tells Campaign, “Users have questioned the long-term viability of Chocolate Finance's model, citing the mismatch between promised returns and underlying investments. Some are bringing up the importance of understanding the risks associated with Chocolate Finance, emphasising that it is not a bank and lacks SDIC protection. Netizens expressed frustration and anxiety about the delays. Some are unsure whether they will return to the platform once the issue is resolved.”

‘A textbook example of how not to handle a crisis’

PR experts have sharply criticised Chocolate Finance’s handling of the crisis, pointing to a lack of preparedness and poor crisis communication.

Christel Goh, CEO of Grow Public Relations, pointed out ways in which a company could bounce back from such a crisis in a LinkedIn post: Have a crisis communication plan at the ready; respond quickly and give consumers time to adapt; put in place goodwill gestures to retain customer trust and have a real spokesperson instead of a faceless corporate response.

She noted: “Too many startups chase aggressive growth without thinking about the fallout.”   

Illka Gobius, CEO at Pinpoint PR said, “Loyalty programs aren’t revenue generators—they’re cost centres. Yet, time and again, companies get caught out by the fundamental truth: these programs need a budget—not just a number on a spreadsheet, but a budget that factors in scale, behaviour, and cost impact on the business. Marketing teams need to understand that loyalty isn’t free—it’s an investment with risk. Without proper modelling, oversight, and contingency plans, a well-intended program can quickly become a financial sinkhole. This isn’t just a Chocolate Finance problem. It’s a marketing blind spot many companies suffer from. Loyalty isn’t just about acquiring customers—it’s about sustaining them profitably.”

Wu yin Ying, regional head of content and communications at NinjaVan described the incident as a textbook example of how not to handle a crisis.

A vote of confidence from investors

Chocolate Finance is in damage control mode, and founder Walter de Oude is speaking to the media and posting updates on LinkedIn. But trust is fragile, and customers are already questioning whether they will return.

However, despite the turmoil, some investors have publicly backed the startup. Qin En Looi, partner at Saison Capital, reaffirmed confidence in the company, stating: “I have (personal) money in Chocolate. No, I’m not withdrawing. I don’t usually share this, but it is important to walk the talk—in a moment where [fear uncertainty and doubt] FUD and rumours are rampant, and people are fear-mongering.”

Meanwhile, Christopher Quek, managing partner at Trive Ventures, criticised finance influencers for exacerbating the crisis, arguing that some blurred the line between objective analysis and personal grievances. “Mixing personal complaints with financial advice undermines credibility. That’s unprofessional. I hope [the Monetary Authority of Singapore] MAS introduces clearer guidelines for finance influencers to ensure responsible communication, preventing unnecessary panic.”