A couple of days ago Tiffany flagged how something strange is going on with Lufthansa Miles & More points transfers. Those trying to transfer points from Marriott Bonvoy to Lufthansa have found that the transactions haven’t actually gone through, and instead have stayed in limbo.
We weren’t sure what exactly was going on, and if this issue was specific to Marriott Bonvoy, or what. Well, we now have a better sense of what’s going on.
First of all, since publishing the first story, a Marriott representative issued the following statement to us:
“We have had to suspend Lufthansa Miles & More as a Marriott Bonvoy points to miles transfer partner at the request of Lufthansa Miles & More in connection with German regulations. This suspension is not specific to the Marriott Bonvoy program and other Lufthansa Miles & More hotel partners have taken the same action. Points to miles transfers from member accounts were made through May 20, 2019 and any transfers occurring after that date will be returned to the member’s account. We will share a timeline soon for when we expect the points to be returned. We are working to ensure all pages on our digital and mobile sites reflect this change in the status of Lufthansa Miles & More. We apologize for the inconvenience to members and look forward to providing updates about Lufthansa Miles & More once we have them.”
So as it turns out, points transfers to Lufthansa Miles & More from all programs are suspended right now. Lufthansa claims that this is due to German regulations, so what exactly is going on?
YHBU has a statement from Lufthansa Miles & More about what’s going on, translated from German into English with Google Translate:
“The background to this is that Miles & More must ensure that its services do not constitute an e-money transaction subject to authorization in the meaning of the German Payment Services Supervision Act (ZAG). We can not completely rule out that the ability to earn loyalty points from a partner company abroad directly and for a consideration could be considered as an e-money transaction. To make sure that this is impossible, all programs that open up this possibility are suspended. We can not yet estimate how long our assessment will take. This measure protects both the interests of our participants and those of our partner companies and, last but not least, ours. Payback is not affected, a conversion is still possible.”
Due to German laws that were instituted last year, further types of transactions are subjected to authorization requirements under the Payment Services Supervision Act.
This means that payment initiation services, which are services that trigger a payment transaction at the customer’s request, and where the account accessed in the process is held by a different institution, are subjected to new restrictions.
The question here seems to be whether a Miles & More mileage transfer is considered an “e-payment.” While you might only be exchanging points currencies, presumably some money is changing hands between companies, and therefore it may qualify.
Up until now it has been business as usual for Lufthansa, and they seemingly have continued to allow mileage transfers. However, with a lawsuit filed against Lufthansa within the past few weeks, it seems they’re reconsidering that.
So while Lufthansa Miles & More works on figuring out how exactly the regulations apply to miles, all points transfers to Miles & More are suspended…
I’ll post an update once this is resolved (or once we know it won’t be resolved).