American Express suspends its relationship with Curve Card, just 36 hours after launch

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• Kiran says:

  30 Jan30 January 06:34

  I guess the trouble with Curve (and likely all fintech startups) is that there are 2 groups of customers:
  1 – those in the mainstream who will use the card as intended so they only have to carry one card and get fx-free withdrawal abroad who may be interested in the insurance / lounge offering for a decent price
  2 – those in the miles/points (or equivalent) crowd who will devote their lives to finding loopholes and opportunities for maximising their points/miles/cash back etc. Once a loophole is found they will hammer it.

  It seems that in the early VC-funded days Curve was happy to actively court the second group (hence their funding of this site) as it quickly built a “loyal” user base to impress their backers. Now Curve has to start to stand on its own legs, financially speaking, it has to transfer from the second group (who will quickly bankrupt the company) to the first group. The problem with this is that the new Curve offerings are far too complex for the mainstream (and too complex for a large section of the second group). I’m sure that Curve could cut all the loopholes we’ve exploiting (it wouldn’t be hard) but until now they’ve needed the customers who use/abuse them and closing down the loopholes would likely lead to a rapid fall-off in early adaptors. This is also why people like us will mercilessly hammer loopholes – because we know they will be gone sooner rather than later.

  I think the TravelEx Supercard was a much better/simpler offering for the mainstream – it had a bigger company behind it so they could go straight for the mainstream without the risk of the enthusiast group. Still sad trust one’s gone as it got me through a year in the US using a UK bank account without issue.

  • shd says:

    30 Jan30 January 06:51

    >> as it quickly built a “loyal” user base to impress their backers

    Curve: “Investors! we turned over yuuuge volume last month! a big chunk of which of which was people paying off one credit card with another a) with another without paying any fees to anyone not even us, b) while earning points and rewards, and c) while breaking card scheme & issuer rules left right and centre.”

    • Kiran says:

      30 Jan30 January 07:14

      I think they probably would not have mentioned anything after the first sentence 🙂 seems to be that to impress VC backers you need to grow the users/customers very quickly. Profitability is not a concern. There Is a “common sense” approach to fund fewer startups more selectively so this kind of thing is much rarer, but that would probably need people at the VC/advisers who really understand the product.

    • Shoestring says:

      30 Jan30 January 07:52

      @shd now that made me laugh 🙂

  • Vistaro says:

    30 Jan30 January 07:05

    A great summary, as a launch Black Card customer I like and use the card a lot – but must be said the support leaves a lot to be desired

  • Alex W says:

    30 Jan30 January 08:20

    @Kiran I think Curve also relied to an extant on word of mouth referrals… which probably
    turned out to be largely Group 2 teaching Group 1 how to absolutely rinse the system!

    • Kiran says:

      30 Jan30 January 09:19

      Not sure word of mouth referrals would have helped with the complex system. I find it hard to enthuse anyone about miles collecting even with my stories of first class travel and free hotel stays. Something like the SuperCard model (recharge Visa/MC spend to a single card offering free FX and no charge for foreign ATM withdrawal) probably would have been a good sell even to our crowd due to the 2.99% FX saving combined with points earning in the underlying card. Then word of mouth would have still worked due to the ease of explanation/simple benefits and the prospect of the free £5 referral fee (to both the referrer and referree). What I don’t know is if such a product from a start-up would generate enough early users to keep VC backers happy.

      • Mr Dee says:

        30 Jan30 January 09:55

        Can’t see anymore VC money coming through after this!

• Andrew says:

  30 Jan30 January 06:37

  I’ve found the Curve card to be really useful in consolidating all of my cards. And for what it’s worth, I’ve actually found their customer service good too.

  This is a real shame as Amex was my only real annoyance with Curve. You can’t blame them for this if Amex are the ones who have pulled out

  • Graeme says:

    30 Jan30 January 06:45

    But you can. Amex was obviously hammered by a good number of people, which if they didn’t foresee then they may as well give up now. And if they did foresee it, then how did it get to this?

    I didn’t quite see this happening but I did wonder yesterday just how many more points (of various currencies) came into being yesterday than last week, Anna’s how that would look over the course of the year – my ignorant guess was that it couldn’t possibly be sustainable.

    • Alan says:

      30 Jan30 January 06:59

      I don’t understand why Amex wouldn’t have set their level at a point that meant they were making rather than losing money on these transactions. It’s been running in beta for months so I don’t know how it all came as such a surprise to them.

      • Polly says:

        30 Jan30 January 07:47

        Think they gomtwitchy by end of yesterday when larger sums of payments started going out to eg HMRC etc…and large top ups to curve. In Beta, folks were probably only doing much smaller amounts of money, payments etc. And not pushing it, so amex might have been reassured by that..falsely it might seem. They must not really know their client base that well, if so.

        • Alan says:

          30 Jan30 January 07:49

          Yes, I suppose Metal may have changed behaviours – during the Beta it was only £1k free so I’d imagine most of us stuck to that.

      • tartan says:

        30 Jan30 January 07:54

        There is a quote from Curve on another site saying that the 500 people on the beta spent £1M collectively on Amex – an average of £2k per participant.

      • Nigel says:

        30 Jan30 January 08:32

        @Polly – Amex won’t see the HMRC payments, as that comes from the Curve wallet as a separate transaction. All Amex will be seeing is very large wallet topups.

• Roger says:

  30 Jan30 January 06:41

  OT –
  Do we know if individual Visa / MC card issuers may start blocking Curve all together similar to Amex?

• Ja says:

  30 Jan30 January 06:54

  Mmmm…. how many people signed up using the HFP referral code pocketing them £5 and HFP £5 ?? Any negative comment from HFP could see their sizeable balance under threat

• Richard Branson says:

  30 Jan30 January 06:55

  Hope Rob got his HMRC payment in!

• Jon says:

  30 Jan30 January 06:55

  Opps, that’s a bit of a fine mess.

  Rob – when you get a chance would you mind trying to find out what happens to those old beta Black card holders (like me) who upgraded yesterday and now find this negative change. Can we revert back to the old card and get our upgrade money back.

  Thanks

  Jon

  • Ken Middleton says:

    30 Jan30 January 07:22

    I am in exactly the same boat. I am happy to go back to my black card but a metal card is of no real advantage without Amex. Please can you find out for us, Rob.

  • John Wilkie says:

    30 Jan30 January 09:07

    Or even the old Black beta customers who have now been silently downgraded to Curve Blue… And had our Curve rewards suspended since Monday!

    • Alan says:

      30 Jan30 January 09:35

      Eh? Why have you been downgraded to Blue? You should remain on Black for 6/12 (if you were part of the beta) then have the option of Legacy Black.

• Shoestring says:

  30 Jan30 January 06:56

  Perhaps the simple explanation is that Amex wants to keep its licence.

  Everybody knows you must not pay off a credit/ charge card with another credit card. All credit card companies AFAIK have this very strictly enforced rule.

  It’s ultimately to protect the consumer from himself – but also protects the financial institutions.

  Amex could easily see Curve people are flouting this rule.

  Simple equation here: we must protect our licence —>Curve is putting our licence at risk —>ergo stop accepting Curve

  • Alan says:

    30 Jan30 January 07:02

    But they’d only see a topup to Curve, not what it was spent on? Or are you meaning they went by the comments on here? (that folks sharing info always say mean nothing :D)

  • Yuff says:

    30 Jan30 January 07:11

    I haven’t used curve much just when promotions are on etc and atm withdrawals, however when I did anything remotely dodgy they were on to it fairly quickly.
    I upgraded purely for the ability to pay HMRC and avios is more beneficial, to me, than hotel points 😉

  • Anna says:

    30 Jan30 January 07:13

    But the top up wallet wasn’t part of that, you couldn’t use that to pay another credit card. Meanwhile, the other options for the goose seem unaffected so far.

    I may be naive but I would have thought these big financial complaints would make these agreements legally binding before actual money can be moved around?!

  • EwanG says:

    30 Jan30 January 07:38

    Surely to stop this it would have been Amex who would have needed to make changes to stop Curve BINs from being used for online Amex bill payments, as Barclaycard has done?
    Amex withdrawing support for Curve does not prevent this abuse, and updating Terms of Service (as Curve did yesterday) is pretty week too, and stronger action was necessary, presumably this is what Amex will force through, if Curve survives such a disaster!

    • Alex W says:

      30 Jan30 January 08:38

      So I take it from this that Curve did not actually block the ability to use the Amex wallet for paying financial institutions. This was either a massive error by Curve or it they couldn’t find a technical solution to do it. If the latter is the case then the game is very much still on for Visa/MC spend (for now, until Curve goes bust).

  • Mr Dee says:

    30 Jan30 January 09:57

    Amex will question you if you start putting a load of Paypal through your card if they believe you are cashing out to get the points and then pay the Amex off, if you do that they will just block your card, similar situation here but they just cut the merchant off to solve the issue.

• JOHN says:

  30 Jan30 January 07:00

  I set up the metal account just last night… it got stopped at a verification stage with Amex so I was about to give it another go now when I saw this… what a fiasco for Curve. I really feel sorry for them.

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