oliver2002

In the US and other countries the practice of selling miles is common. In Germany if you sell miles the miles become e-currency and have to follow those rules.

fransknorge

In Germany or as a FFP located in Germany ? I am a A3 FFP member and I reside in Germany: if I buy miles to A3 does A3 has to respect those rules ?

oliver2002

BaFin is responsible for Germany, so I suppose this is limited to companies registered in Germany operating loyalty programmes.

The LoC has published a nice survey on how countries are dealing with eCurrencies... the German section is pretty detailled: https://www.loc.gov/law/help/cryptoc...ey.php#germany

speed.skater

Do you have anything to back up that claim?

I wouldn't consider FF miles balances to be an e-currency. And I'd consider myself an expert in the field of money (perhaps being somewhat less of an expert on e-money).

oliver2002

From what we know M&M approached BaFin and asked them how to stay clear of being considered a provider of a virtual currency. The conclusion was that selling miles directly against cash without having to provide a service first would run afoul of the regulations. Hence they quietly stopped selling miles directly.

A year later this lawyer comes along and challenges the ruling in court.

speed.skater

^^^Thanks for the reply.

I think that is still very much up to debate if they were an e-currency should they sell miles directly. For example, if you look at the EU'S e-money directive, a crucial aspect of the definition is that balances are usuable broadly. To my knowledge, most goods and services available on M&M are available at one place only: the M&M website. Sure, there are several linked outlets such as the worldshop and LH.com where you can also use miles, but those are almost exclusively M&M or LH group entities. (And LH group owns 100% of M&M.)

So it's not like you could pay a barber, a restaurant, or a car wash with M&M miles without going through the M&M website or a store directly affiliated with M&M (such as an LH world shop at an airport). There is no API or other platform such non-affiliated shops could use.

That is quite distinct from, say, the Geldkarte. The Geldkarte you can use to pay for stamps, parking, or a lunch at a canteen. The variety of goods and services you can buy with the Geldkarte is quite limited. But the crucial distinction* to M&M is that you can make payments at hundreds of different vendors which are independent businesses not closely associated with one another.

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* crucial as to the definition of what constitutes e-money

fassy

Good point, looking at https://www.prepaidverband.de/e-geld-quick-check/, checking YES, YES, NO it says "Most likely NOT e-money". But that is exactly the point, most "likely not"is not "definitely not". That is the decision they need to work out in front of the court.

Quite difficult is also the fact that miles expire and through the regular devaluations the customer can't even be sure they get what they intended to pay for, i.E. that reward flight.

mashlakito

I don't want to jinx it, but why is this suspension of mileage transfer only related to hotel points? Why, for example, can one still transfer say Payback points into miles. Surely the same concept applies between Hotels and Payback, no?

goliath

Because you can outright buy hotel points (at least the "currencies" being blocked now) and transfer them to M&M. You can't outright buy Paypack points.

thbe

shipsmail

Just today surprisingly Shangri-La has credited miles to my LH M&M account, while Hilton is not possible.