Bringing Amex Back to Curve

amex

#28

Per my understanding, There’s a reason Amex Wallet is a separate procedure and a product - apart from conditions imposed by Amex (if any) , there’s a business reason by curve.
If it’s processed just like Visa / MC - they cannot charge .65% fee on Amex alone as it will be a violation of surcharge regulations in PSD2 (same regulation curve raises against Amex in this fight)

They will be forced to make Amex free or start charging every provider equally (which will upset customer base)


#29

It would only be a violation in the UK, which included Amex, PayPal etc. in the regulations when the rest of the EU didn’t. They can charge for Amex elsewhere in the EU under PSD2 without any worries!

The “wallet top-up fee” allows them to charge for Amex in the UK as its a separate product that only takes Amex… There is no wallet top-up fee for Visa/Mastercard because you don’t top-up a wallet. Someone could challenge the fee, but unlikely.

If they handled it like any other card (direct charge per transaction), they wouldn’t be able to charge in the UK without adding fees for Visa/Mastercards too!


#30

IMHO, It’s a tough battle.

Hope and wish both parties come to an understanding outside the legal Mumbo jumbo & get this sorted.

Best wishes :slight_smile:


#31

I wonder if there has been an internal restructure or reoorg within Amex? The Curve people at Amex not coordinating with other teams?

My own speculation is that Amex insisted on the top-up wallet model as they thought it would be less attractive for current Amex users - why store money with “Curve” when they could have the freedom to use Amex (in a growing number of retailers?). Or that the crossover base was not a large chunk.

The top-up wallet model being surprisingly successful, maybe the Amex team in charge of signing up new merchants freaked out (maybe rightly so) and panickingly forced upper management to pull the plug.

When core business revenues are being threatened, hasty decisions can be made in order to protect the bottom line.


#32

Let’s all look forward now, hopefully with a little bit more clarity and communication. I add my support to the team and hope the storm can be well and truly ridden.


#33

No, you wouldn’t be allowed to charge 0.65% as additional transaction fees since that is prohibited by PSD2 for “common payment methods”
The only loophole is by saying the official retail price has the 0.65% included already and a merchant giving a discount of 0.65%. Actually it would be a discount of 0.61032864%

Meaning if you buy something online or 100€, Curve would say, the actual cost is 106.50€ but Curve offers a discount of 0.61032864% (106.50*6.1032864%), when paying by Visa / MasterCard - so the end user is paying 100€ by Visa / MC (discounted price) but 106.50€ when paying by AmEx.
By PSD2 its allowed to offer discounts for cheaper payments but its not allowed to add surcharges.

But can you imagine this? That would freak the hell out of every customer to understand that system :smiley:

By adding a wallet Curve allows to add a top up fee (very important, this is a top up fee, not a payment fee), since payment fees would not be allowed.


#34

I don’t exactly buy this - if it was just a business decision they would had pulled the plug after giving notice or in a more neutral terms.

For agreements to be terminated with immediate effect - there’s either a breach of terms or significant risk exposure to underlying business.

Legal team within Amex is not that stupid to terminate a contract of this significant PR exposure. Firther, as per curves blog post, they announced dissatisfaction on 21st - so they had enough time to get multiple legal opinion to cover their base.

Again, we don’t know what was on the MSA & the binding terms so let’s leave it to both parties to sort it out.

Wishing Curve all the best :slight_smile:


#35

The UK went further than the rest of the EU when implementing PSD2 into local law…

In the UK discounts for using other cards are also illegal as they are seen, effectively, as payment surcharges for other methods.

The wallet top-up fee works, if they were to switch to using it as a regular card (each transaction posts individually), they wouldn’t be able (in the UK) to charge any fees, unless all payment methods were charged equally.


#36

If the problem is that Amex doesn’t see actual spending transcations and patterns, couldn’t you just share anonymised Amex transaction data with them?


#37

@Curve_Marie, I do sympathize with what Curve is going through. and do hope situations going forward will favour curve.

However, would the admin team decide on a date where they could announce to the public on what they will decide to do with the current subscriptions? THe subscription clock is ticking. and i’m sure many would ask the question again. Maybe a pinned post or email, mentioning a specific date which curve will definitely come to a conclusion on what to do with subscriptions? At least we have a date to look forward to while the clock is ticking.


#38

Writing up the email to customers now while preparing the public communication.


#39

Exactly what I’m thinking. I mean, look at the numbers, £1 million top up within a closed beta? Yes, thats a huge revenue for AmEx, but they probably thought that this is not a win but an actual loss. When you think about how big corp. companies plan, they probably thought: £1 million via Curve gives them a 0.65% fee (if thats what Curve is paying AmEx) = £6.5k
vs
£1 million * 3% fee (avg. cost for a merchant to accept AmEx) = £30k

So total loss for AmEx:
£30k - £6.5k = £24k just for the closed beta group.
They think they can probably somehow generate that win themselves by offering a similar product and rather pulled the plug to Curve, even if its illegal (if thats the case), because that is a big PR desaster for Curve and the legal cost for AmEx are lower than the 2.35% fee(3%-0.65%) they would lose on every £ Curve processes in AmEx wallet £


#40

What’s being missed is the risk exposure that Amex attained within that 1 month.

500 people spending 1M in a month - was that their usual spenting pattern ? Need to understand in the UK AMEX is the sole lender, there are no banks issuing partnered Amex cards. That’s a significant exposure.

Further Curves ewallet is not FSCS protected - so from a risk perspective , if something happens and if customers start raising chargebacks - Amex is on the hook for 1M for 500 ppl (who might not show that amount as a usual spending pattern)

The reward (interchange fee at 0.30%) may not be worth the risk exposure. Just my thoughts


#41

Here is some evidence to prove that AmEx does really do those things and breaking their own t&c:


2971 comments from real users, hundreds of them describing AmEx terminating their contract with immediate effect which is against their own t&c which states a 2months notice
Its in German, but you can use google translate. Especially the last 50 pages or so you’ll find enough evidence of people saying their card got terminated because they were generating too much purchases on the card or AmEx did not issue the promised 75k MR and many people even had to file law suits against AmEx.
And here another 1k+ comments:

So yes, AmEx really does not care about their own t&c and agreements and say, if you disagree with them, then you have to sue.
Luckily its much cheaper in Germany to sue than in other countries so many people took AmEx to court and won.
So thats just my 5 cents about AmEx and why I believe every word other companies say when it comes to unproportional actions from AmEx.


#42

Okay. I don’t work or never worked for Amex so I can’t comment good or bad about them.

I had worked for large banking corps and based on my experience - usually agreements are terminated with immediate effect only if there’s a significant damage (compliance , risk or operational stability)

But again, that just based on my experience in banking industry - Amex may act differently


#43

But wouldn’t AmEx not have any risk whatsoever since they receive the money from the merchant (=Curve) at the exact moment a payment is captured?
Doesn’t matter than if Curve ewallt is FSCS approved or not, since every other merchant that accepts AmEx also is not FSCS approved.
When you go to the local store around the corner and they accept AmEx and go bankcrupt the next day it would be the same exact scenario since they also have no deposit insurance whatsoever. Same as airlines, they don’t have to have any deposit or insolvency insurance


#44

Chargebacks as it’s a wallet load.

Why does curve restrict prepaid cards from being added ? Because it’s a risk from operational standpoint.

Wallet loads are not usual purchases as it’s storing money for later use - risk threshold is higher


#45

There are some questions regarding the fees. Does Curve have a direct merchant agreement with amex? Do they go through an acquirer bank? Do they have any discount on the fees over a similarly sized business? If not, then what would be amex’s loss?


#46

the 500 users spending 1 mil in a month - i admit that is ODD
what sort of people were in this beta and how were they speding these monies ???

i feel like maybe a lot of them were bad apples moving money from Amex to pay bills which they normally could not pay with amex or even with a normal card?!

I mean that is odd and not in a good way
Curve could be more select in who they allow in these betas


#48

Oh cool! So the UK was much smarter than the EU and I totally agree with it. Offering a cash discount is pretty much the same as chargeing a payment fee for alternative payments.

The reason why this payment fee was banned by the EU had many reason, especially for the travel sector. When you go on kayak (not U.S. or UK) the price you see is not what you have to pay. It always have a funny discount included, such as paying by Sofort-Überweisung by Klarna or by Diners Card or by another electronic card nobody has. Websites like fluege.de go even 1 step further and say, you only receive the discount when paying with the fluege.de mastercard, all other payments are 25-75€ on top.
So they trick you with a lower price to go on their website via kayak, you enter all your personal information and in the very last step, they present you with those payment fees (or better to say, discount for 1 payment method)

Example, this is what flugladen (travix, HUGE online travel agency is doing)
You see the -15€ discount for paying by Sofort-Überweisung and all other payments are “free”

All this of course is very off topic but very interesting part, maybe we should move this to a new thread?