Is Curve unique in the market?


#1

As a principle everyone acknowledges that the basic premise behind Curve is innovative (and a bit magic in places - I mean - GBIT - surely that’s just sorcery? :grin:)

Unless I’m very much mistaken, there is no direct alternative to my Curve card. Is this because the model is untested or is it something else?


#2

There have been quite a number of companies that have tried to do something similar, but with emulation on a hardware level instead of software - ie. you get a card that physically emulates your other cards. Coin and Plastc, for example, both failed, whilst Fuze is still going. The problem here is that it’s only really possible to emulate mag stripe cards. EMV chips are designed to be impossible to clone, so to emulate one, you’d need cooperation from the issuing banks, which is unlikely to happen.

Curve’s model of re-charging purchases to another card as an online purchase doesn’t require any cooperation from banks, but I believe the reason nobody else has tried it is probably because there’s no obvious way to make money out of it. Curve only get the interchange fee on each transaction (max 0.2%), but have to pay more than that to charge your underlying card. So they actually lose more money the more you use your card. Whilst other fintechs start off losing money, they at least have costs that scale sub-linearly with the number of users - if they get enough customers, the per-customer cost becomes negligible. Curve’s costs will go up with every user they gain, no matter how big they get. I’m not surprised nobody else thinks it’s a good business idea.

This is probably why Curve are trying to make money from selling insurance. The more popular they become, the more they lose. They therefore need to upsell people onto profitable products to be viable.


#3

I suspected as much. A clever friend suggested as much some months back, when I was extolling the virtues of the Curve card. Almost too good to be true?

I hope not.


#4

Yeah this is definitely the reason. I was surprised that they were only charging a one time fee for the original Curve Black so it no surprise that they moved on to a subscription model. I suspect that is why they have disabled Curve rewards for the time being as they don’t have the budget for it at this time. I suspect that they we’re going to run the subscription model for a while to get some of cash back then reactivate Curve Rewards but, with Amex pulling the plug, which makes Curve metal much less appealing it’s been kind of a mess for them. Although, all that being said I have upgraded to Curve metal not because of the so called benefits but because I do want to support Curve and hope they get this situation sorted out quickly. I don’t mind paying a little extra now in hopes of better benefits in the future however, it is a gamble they might just not improve it at all and i might be out of pocket.


#5

Well, it depends on the card set-up. If the curve as well as the underlying cards are personal (debit) cards, than it’s correct, however, I wouldn’t got along then with loosing money, I would say not earning any money is more to the point. Only if the underlying card is a commercial one, they would be loosing money. The ideal set-up for them is a commercial curve (debit) card and the underlying card is a personal one, then they are earning money. That’s why this was the original idea/set-up of curve. Issuing private cards in the long-term is only feasible with a subscription package IMHO.


#6

Not true. If the underlying card is personal credit, interchange is 0.3%, so 50% higher than they’re receiving. Plus interchange is only a small part of what a merchant pays to accept a card - fees also go to the merchant’s bank and to the network. Maybe Curve have a very good deal, but even so they’d be paying at least 1%, whilst only getting 0.2% (on personal cards).

Agreed


#7

I think there is lots of ways to make money (once they reach a reasonable user base);
-Huge amounts of data- curve can then target / team up to offer brands &companies who could then pay to provide special offers to groups of curve users for example

  • instant loans - curve would know if your spending a little more than usual and could offer say an instant short term loans for specific transaction / a loan wallet with a clear cost- e.g. borrow £50- pay back £50.50 in a week for example
  • subscription model- I presume they will profit from this once they reach a certain amount of users

#8

True, forgot about that one. I do stand corrected.


#9

There’s definitely ways they can make money, but it involves upselling users on other products. Their core “all your cards in one” product will always remain a loss leader.


#10

This is interesting stuff. Thanks folks.


#11

True.
I think the subscription models need some more work to represent good value and therefore attract lots more users
We are probably more easy to sign up than people who are new to the idea. Hopefully we will get clarity/more detail on the features this week so we can experience the card to its fullest before the 28day cool off time is up.


#12

Yep, so a great opportunity to really get the product range and, just as importantly, the messaging right.

I hope they don’t rush into this. I’d rather slow but sure, against another hurried roll-out.


#13

Interestingly the curve black card I was issued at the beginning of January has been flagged as a business credit card by a couple of retailers:

  • Amazon, who offered to create an Amazon Business account
  • Trainline, who charged me a credit card fee

The card has debit on the back, but also commercial. Maybe something has changed to actually make money from transactions rather than lose?

I’ve raised this an issue with support, as it’s a bit annoying to be charged more (in the Trainline case) then I would have been using the underlying card - understandably they’re a bit busy so am waiting for a reply.


#14

What follows is only MY opinion… I feel that our relations with Curve look like relations inside the real life, with friends… When you have much money, all is going well for you ,your life is a pretty huge success, all people is around you and best friends.
If something goes wrong just one time, and you loose money or reputation, even if it’s not your entire fault…many “friends” are going one the other side of the road…isn’t it ?
Only the real ones stay at your side.
With Curve we aren’t friends, we are customers and our relationship is a contract, but i think it’s too easy to leave the boat today just after Amex issue or discussed subscription models… Curve is a great product, the model needs to be optimized to make profit, but i support entirely the team and the product. I’m still awaiting the Metal card for us in France, and in the meantime i use my Curve for all Visa and MC , and my Amex directly when i can ( difficult in France). I’m Amex user since 1988, Curve wasn’t on the market …:-). Patrick.


#15

Agreed, Patrick, agreed. :grin:


#16

@Jonty I am not sure how they can do this under GDPR unless Curve’s users expressly opt into having their data shared and receive marketing. As regards loans, Curve would need the requisite licenses (it has none) and the funding (it seems to have little).


#17

A good deal is not paying 1%, that’s pretty standard and available to any merchant. Probably Curve is paying about 0.5 to 0.6% total, based on acquirer bank rates by transaction volume


#18

Not wishing to regurgitate the recent Amex happening, is it likely that a solid agreement between them could in itself be the basis for a sustainable business for Curve?

I’m wondering how important Amex are to the future of Curve.


#19

The “commercial” statement is the key to identify it according to the EU regulation as a business card. Debit (vs. the former credit) “only” had an impact on how the transaction was processed respectively the underlying fees (debit is better from a curve’s perspective).


#20

Ah yes, one interesting thing to note/comment: the largest card issuer in Austria (cardcomplete) advised all its users last autumn that they would block all transactions coming in via curve; so no MC or Visa cards issued by cardcomplete can be used with Curve since then. Transactions always get declined.

Rumour has it that they didn’t like the loss of FX-fee.