Lufthansa provided a statement to You Have Been Upgraded in German explaining why they shut down the ability to transfer points from other programs into their Miles & More frequent flyer program.
This is why they abruptly terminated the functionality with Marriott, Hyatt, Hilton and others (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.
Since January 2018 “Two further transaction types are now subject to the authorisation requirement for institutions subject to the Payment Services Supervision Act.”
Payment initiation services are services that trigger a payment transaction at the customer’s request; the account accessed in this process is not held at the payment initiation service provider, but at another institution.
…Another new addition to the catalogue of payment services is the account information service. This is an online service that provides consolidated information on one or more accounts held by a payment service user with other institutions. Where a supervision requirement under the Payment Services Supervision Act previously only applied if access to customer funds was involved, the mere access to data relating to payment accounts has now been placed under supervision for the first time.
The second sounds like it could include services similar to AwardWallet and Mint.com which are subject to German law. The first, though, is what Lufthansa appears to be concerned with — whether the customer is requesting a ‘payment transaction’ spending points held at another provider (in this case, Marriott, Hilton, etc) to purchase Miles & More miles.
If Germany’s Payment Services Supervision Act applies to ‘buying’ Lufthansa’s miles using points in another program, then they aren’t currently in compliance with the Act, in part because ‘e-payments’ are now regulated as traditional payment services. That means registration, government supervision, and “strong customer authentication” among other requirements.
Do miles earned via the miles and more Barclaycard fall under this situation too? Or only credit card points transferred into miles and more?
I have the exact same question as @Entrada-can we even use the Barclays card to earn points??
@Entrada – Lufthansa likely considers their arrangement with Barclays to be a “closed loop”. They know exactly who their customers are and would have had to go through this certification process to launch the product.
Well, we may not like it, but at least it sounds like Lufthansa has legitimate reasons for these steps…unlike the usual BS we get from airlines for transfers or seats not being available, programs being devalued, etc.
I smell some enhanced partner availability down the road. With a derth of LH miles they might have to stoop so low as opening up space to partners.
European regulations (ok, in this case German) are onerous to the max and unaccountable condescending bureaucrats have wide latitude in their interpretation. Some bureaucrat probably decided that there was something fishy about points transfer.
To Americans that want to follow the European model, be careful what you wish for. The grass always look greener on the other side of the mountain, but usually it is a mirage.
@Other Just Saying says: It wasn’t some bureaucrat that decided something was fishy. Lufthansa is getting sued on the issue of whether or not M&M are ecash or not. There was an article about this posted, in German, recently.
Did Lufthansa cut off the getting of points from purchasing reading material?
That seemed like the biggest points earner for some accounts I checked.
Bureaucrats had nothing to do with this sudden LH change.
Most of the war on money is a result of decisions made by politicians, not bureaucrats, trying to appeal to the public and generate and exploit hysteria. And the war on money is as bad as it is around the world because of the US Government first and foremost.
Das ist unmoglich!!!