Curve Credit Buffer


#1

Let me explain what is a credit buffer and why do we want it.

A credit buffer is something like a current account overdraft facility or a credit card, a Curve card user could spend from the buffer under certain conditions and repay it latter. But it’s different than overdraft and credit card.

The difference between the buffer and an overdraft
The buffer is smaller and it has a interest free period. The buffer doesn’t offer thousands of pounds to user. The buffer also doesn’t charge for interest on the first a few days or weeks if used, but it can and will charge for interest if the borrowed money is not repaid within a reasonable amount of time.

The different between the buffer and a credit card
The buffer is (again) smaller, and it has shorter interest free period. But more importantly, Curve users cannot actively choose to spend from the buffer. The buffer can, and will only be used automatically if certain conditions are met. I will explain the conditions latter.

In addition to above, Curve users also cannot use the buffer for activities such as repaying a credit card, withdrawing cash, gambling, etc.

A comparison table that highlights the similarity and the differences
Screenshot_20190212_225656
(*) User cannot choose to spend from the overdraft facility if the transaction does not bring the account to a negative balance
(**) Normally needs to be repaid before the end of the day to avoid fees and/or interest

Okay, now we know what the Curve credit buffer is, but why do we need it?

Well, as we all know that the Curve card is actually a proxy card, all transactions made on the Curve card will eventually end up on one of the backend cards behind the Curve card. The problem is the backend cards do not always work, the card issuer could have IT issues with their system, they might temporarily decline suspicious transactions until they could reach the user and confirm them. In reality, anything could happen between Curve and the backend card issuer, and result in either delays or declines.

When this happens to me, it is inconvenient and sometimes stressful and causes frustration. As a Curve user I would have to take my phone out, and then switch to a different backend card before retry the transaction. This is not a big deal if I was sitting on front of my screen and using my Curve card for online shopping. But it can be stressful if I was in a supermarket or shopping mall with tons of people waiting in the queue behind me.

I have had this kind of experiences a few times in the past years (I’m a Curve Beta user), and whenever it happens to me, I just wanted my Curve card could accept the transaction and then latter take the money from either the same card or ask me to choose a different card.

I fully understood that this is in fact a lending product and different regulations would have to apply to the product, but it is definitely doable. As an alternative, if the regulation is a road blocker, Curve could allow user to choose a failback card in case of declines, but I’m afraid that this won’t work in the event of first card issuer timed out, by that time it will be too late for Curve to start the fallback.

Financially, a small buffer of a few hundred pounds and only being used in rare cases (and controlled by Curve) is certainly affordable for Curve. In fact, if the user fails to repay in time, Curve can also charge for interest and/or fees for the use of credit buffer, which results in additional profit for Curve. This will be a win-win product for both Curve and it’s users.


#2

That won’t work as Curve is a replacement for your cards not a separate account with a buffer. Why add confusion to a simple product?

Your credit buffer idea is not a good idea, as your asking a company that has (cash?) issues to dig themselves into more debt and or cause more confusion to their customers. I don’t see them embracing that idea anytime soon.


#3

I can’t see myself using this. The idea of an auto-switch to another card if failed transaction might have more legs, but I’m not sure this will.


#4

I’m also against a credit buffer.
AFAIK Curve also doesn’t have the needed license for this and I’m sure they are heavily against offering any sort of credit without putting an auth/charge on the underlying card.
That would mean much more intense credit checks what is difficult when you have so many unsers from different countries as Curve does.


#5

This is the best solution. Having the ability to set an “auto fail card” is both better for the company economically, as they don’t have to
give users buffers of cash or spend time and money checking and validating a customers ability to pay back the buffer but also, less complicated for the end user. What the buffer does is add another line of credit that the user would have to pay back that only serves to complicate. Keep in mind Curve as a company helps simplify you wallet; many of the users will have multiple credit cards that they have to pay back and by adding a buffer adds another area that they have to monitor which goes against what the company is trying to do.


#6

I’d like to hear from the Curve expert on this. We’ll know where we stand then. :thinking:


#7

Your description marches with a kind of automatic microcredit to allow customers to exceed his/her current balance.

IMHO that idea makes sense for underlying cards with their own credit line and according financial scoring for each customer.

Curve current business model lacks the required banking licensing to enable credit operations as it’s just a “proxy” to forward your transactions to the real card.

However, the idea to add intelligence to choose your underlying card automatically based on whatever criteria you have, including your credit balances in each one, yeah, that might be a point, but that’s a different proposal, without involving credits run directly by Curve.


#8

That won’t work as Curve is a replacement for your cards not a separate account with a buffer.

The credit buffer is not a separated account, it’s a part of the Curve card. Comparing this to current account, the overdraft facility is not a separated account, it’s a part of your current account.

Why add confusion to a simple product?

This doesn’t have to be confusing, it could be a feature hides inside a menu on the app, the user who opens it on their app will be able to read the description of it and decide whether to enable it.

It also doesn’t need to be complicated, user who applies for the credit buffer could be asked to choose one or more registered cards for the repayment to be taken from. If the buffer is being used, the repayment will be automatically taken from the chosen cards, without the user moving a finger. Think direct debit for credit card, setup once and you will not need to touch it again.

Your small buffer idea is as dead as a dodo, as your asking a company that has (cash?) issues to dig themselves into more debt and or cause more confusion to their customers?

Presumably you don’t act on behalf of Curve, therefore you wouldn’t know whether they have cash issue and whether they would make this happen. If so, please stop saying the idea is dead, because you don’t know it for sure.

That would mean much more intense credit checks what is difficult when you have so many unsers from different countries as Curve does.

The credit buffer doesn’t have to be compulsorily bundled with Curve card. No credit check is needed if the user doesn’t apply for it. Furthermore, Curve could still offer the Curve card without the credit buffer if the user applied for it and subsequently failed the credit check.

Keep in mind Curve as a company helps simplify you wallet; many of the users will have multiple credit cards that they have to pay back and by adding a buffer adds another area that they have to monitor which goes against what the company is trying to do.

Simplify the physical wallet doesn’t mean it can’t have more features in the digital wallet (the app). I have multiple credit cards too, but I setup direct debits for them. I don’t need to check those credit cards unless the DD fails, which almost never happen. The pre-authorized credit and fully automated repayments simplify the borrowing and repaying process, user doesn’t need to get involved.

However, the idea to add intelligence to choose your underlying card automatically based on whatever criteria you have, including your credit balances in each one …

The problem is Curve doesn’t always have a way to know the credit balance on the real cards, at least not until open banking is adapted by all financial institutions. Even then, Curve is hardly be able to know the balance in real time when a transaction is happening. This is because open banking isn’t built to be used at transaction time, it may be slow or serves slightly outdated data.
Given that knowing balance in advance is not a viable option, Curve would have to make decisions based on the information it has.
The limitation of information availability is also the reason why fallback card isn’t always going to work. The card payment processing is a real time protocol, the point-of-sale terminal (POS) will request the authorization of payment from the card network (Visa, MasterCard, etc.), which in turn requests the authorization from the card issuer (Curve, banks, etc.), and then the card issuer would have to make fast decisions whether approve or decline the transaction. The fast is in matter of seconds, and if the card issuer doesn’t reply fast enough, the auth request will be treated as declined by the card network. In the case of Curve card, Curve would then have to act as a merchant and request a different authorization of the same amount from the underlying card’s card network (which could be a different one from Curve’s MasterCard), and that request will finally reach the real card issuer. For example, if you buy a sandwich from Pret use your TSB Visa card via your Curve card, the process is like below:

Pret's POS - MasterCard - Curve - Visa - TSB

This works most of the time because TSB rarely have IT issues (do they?), and they will response the approval to Visa and then back to Curve fast enough, so Curve will be able to to approve the purchase of a sandwich from Pret.

But what if TSB is slow and doesn’t respond in time? It will timeout on Visa network, and then Visa will tell Curve that the payment has failed. But this is too late, because MasterCard is either going to timeout or has already done so, and it will tell the POS at Pret that the transaction has failed. Curve will know TSB has failed, but not before it had a chance to retry the transaction on a different card.

Why a credit buffer can solve the problem? Because Curve can pre-approve the payment authorization request, and then wait for TSB’s bad IT system. If TSB works, the buffer will be used for less than a few seconds. If TSB fails, Curve can then take the money from a different card with plenty of time and retry on different cards if it has to.

Of course, due to the nature of the transaction (e.g.: it could be a prohibited merchant type for some cards), Curve may require the user to have at least one debt card that is linked to a current account to use this feature, or only allow the use of the credit buffer for widely accepted merchant types (such as groceries, foods, bills, etc.)


#9

Why should Curve volunteer to take on additional credit risk ‘free-of-charge’?


#10

Because he said they should. :thinking:


#11

It’s not always free, it all depends on how Curve writes the T&C. For example, Curve could charge for late repayment fees and/or interest if user didn’t setup backup cards (or backup cards didn’t work) and didn’t repay in time.


#12

Neither do you and as you can see I put the word cash in brackets and a question mark.


#13

This is Feedback and Ideas forum, the posts are suppose to be constructive and help both Curve and the community.

I personally don’t think your comments are being constructive. Turning people and ideas down is not going to do any good for the community. Saying Curve is potentially having issues is not going to help Curve either.

Curve and the community need everyone’s support, not criticize. Please be constructive and help Curve and the community get better.


#14

Curve is not an account, current or otherwise, so obviously, instead of a curve card we would need to have a curve account too, where that buffer would work.

I think no one yet understands why you think anyone needs this. Just because once in a blue moon some bank’s payment system may fail?


#15

I am a realist of course they are having issues, to say otherwise is frankly madness.


#16

Curve is not an account, current or otherwise, so obviously, instead of a curve card we would need to have a curve account too, where that buffer would work.

OK, maybe my current account example isn’t good enough, let me try it this way. Curve is not an account, but it’s a card, right? Pre-paid cards are not accounts either, but they can have a balance on them. So Curve card can have a (negative) balance too?

I think no one yet understands why you think anyone needs this. Just because once in a blue moon some bank’s payment system may fail?

Is it only happening to me? I fell Curve card has higher decline rate compare to directly use a credit or debt card. It’s not necessarily the underlying card issuer’s fault. The reason for failed payments really could be anything.

The credit buffer is just one thing to improve the user experience with Curve, reduced decline chance leads to better product, and better product leads to happier customer. To me this is a win-win for Curve and their customers.

BTW, if this matters - I don’t use TSB cards, and I don’t have TSB cards in Curve.


#17

No, Pre-paid cards have an e-money account associated with them. Curve doesn’t have ANY account associated or in any way related with the card. Curve doesn’t let you have ANY balance either positive or negative.

As for declines, I’ve never had a single decline with Curve, and I believe its also not a problem for anyone else. So should Curve create this solution just for you? Doesn’t seem reasonable. Could it be that your bank is being incredibly slow in authorising the transaction and that’s why you get the declines? If so, you should probably try to talk to the bank about that as the problem isn’t with Curve


#18

No, Pre-paid cards have an e-money account associated with them. Curve doesn’t have ANY account associated or in any way related with the card. Curve doesn’t let you have ANY balance either positive or negative.
OK, that’s something I don’t know. But if pre-paid cards have an e-money account associated with them, surely Curve can have one too.

As for declines, I’ve never had a single decline with Curve, and I believe its also not a problem for anyone else. So should Curve create this solution just for you? Doesn’t seem reasonable. Could it be that your bank is being incredibly slow in authorising the transaction and that’s why you get the declines? If so, you should probably try to talk to the bank about that as the problem isn’t with Curve
As of the declines, I searched here and found this thread: Do you only carry Curve? In that thread, Woodworm has also experienced higher than normal decline rates, so it’s not specific to me.

Furthermore, I don’t have problem if I pay directly from the underlying card, the higher than usual decline rate only happens if I use Curve.


#19

Two people in a forum hardly means there is a problem. If there was a problem with declines you’d have dozens of people complaining. Maybe you two use the same bank? :wink:


#20

Two people in a forum hardly means there is a problem. If there was a problem with declines you’d have dozens of people complaining. Maybe you two use the same bank? :wink:

OK, fair enough. I admit that I use a card issued by a foreign bank outside the Europe. But that card works all the time, I have not had problem with it.