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Curve Card launches legal action against American Express

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According to an article in The Daily Telegraph yesterday, Curve Card is going through with its threat to sue American Express for withdrawing its support in January with no notice.

The report says that Curve is seeking damages for the ‘millions of pounds’ spent on fees and development work for the project to integrate American Express into the Curve platform.

Curve has also said that it is filing a complaint with the Payment Systems Regulator.  To quote:

“We have a very large set of investors and we have a lot of money in our war chest”, [Curve CEO] Mr Bialick said. “When someone is actively trying to kill you, that means you are disrupting the model.”

Amex supplied the Telegraph with the same quote they gave to me back in January:

“American Express participated in a limited Curve beta test where we enabled a small number of Card Members to load funds onto an e-wallet using their Amex Card in the Curve app.  We informed Curve that we would not participate in the further roll out of the Curve e-wallet, prior to them launching the product.  We do not have regulatory obligations to work with a particular partner, and we can confirm that we have terminated our agreement with Curve.”

This is a tricky one to call.  For most businesses, the ability to accept payment cards is a pre-requisite to their survival so card companies should arguably not be allowed to discriminate over who they work with.  On the other hand, you can understand that Amex, Mastercard and Visa would want the ability to stop their logos being associated with stores or websites selling certain products.

Credit card companies also share legal liability for products purchased using their cards so they must be allowed to have the flexibility to only work with merchants whose finances and products are seen as reliable.  This was not an issue with Curve transactions, however, as the legal liability sat with Curve / Mastercard and not American Express or whichever other card your Curve was linked to.

Curve is still pushing forward

Curve is not going anywhere in a hurry, it seems, despite the huge setback with Amex.  Over the last couple of weeks it has announced plans to open offices in Italy, Germany, France, Spain, Portugal and Poland (country managers are currently being hired if you’re interested).  As Amex has a lower penetration in these markets, the lack of Amex functionality is likely to be less of an issue.

It has also launched ‘Faster Purchase Protection’ for transactions of up to £100,000.  This ensures that all claims for refunds against purchases made on Curve are dealth with within one day of receipt of the requested documentation.   You are covered when the goods or services were not received, defective or not as described. It also covers eligible purchases in the event that the goods prove to be counterfeit or when a promised refund is not completed.

It is worth noting that this covers debit and credit card purchases, which makes it more generous than Section 75 coverage in the UK which only covers credit card purchases.  There is also no minimum purchase threshold, whereas Section 75 protection only kicks in if you spend over £100.

Does Curve still have value to HfP readers without Amex as a partner?

Yes it does, basically.  Arguably the free card should be in your wallet, linked to another points earning Visa or Mastercard:

you can spend £500 per month abroad Monday to Friday without incurring any FX fees (0.5% fee at weekends) and have the transaction recharged your points-earning Visa or Mastercard in Sterling

you can withdraw £200 per month via an ATM and have it charged to your underlying points-earning Visa or Mastercard as a purchase (EXCEPT for Tesco Bank and NatWest / RBS cards)

If you pay HMRC, you should also know that payments to HMRC via Curve are still accepted. It is treated as a debit card but goes through as a purchase on your underlying Visa or Mastercard.

If you’ve never tried Curve, simply go to this page of their website to download the app.

Curve will pay you £10 for trying it out if you use our link.

Can Curve beat Amex?

I’m not sure if the Curve lawsuit against American Express will get very far.  I’d like to think it would, but the situations under which you can legally force a company to do business with another company are few and far between, although they do exist.

That said, strip away all of the noise caused in the last three months by the sudden collapse of the Curve / Amex relationship and you are still left with a product which has some use in the arsenal of the average miles and points collector.

Be clear, though.  There is a shake-up coming, with little hope that Curve, Monese, Revolut, Starling, Monzo, N26 and Atom will all survive as independent fintech businesses.  I’m not sure if Curve is less at risk – because it is at least offering something different whilst Revolut etc are just offering plain vanilla banking with pretty-coloured plastic cards – or more so.


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Comments (230)

  • Mud Island Mlungu says:

    What is the shakeup you refer to Rob?

    • Billy says:

      +1

    • Andrew says:

      I think e shake up is simply that a lot of the fintechs will be bought out by the established players if they ever get big enough to be seen as a real competitor.

    • Rob says:

      Shake-ups always come in new markets. Customers decided which of the competing newcomers are worthy of surviving. The other merge or close. The ones that survive are then bought by established players. It is a very standard model.

      • R says:

        Describing Revolut as plain vanilla banking with pretty cards is a bit disingenuous. The whole point of Revolut(and some of the others) is that they are disrupting the major banks by offering plain vanilla banking products with significant lower cost to the customer. e.g. transfer 10,000 GBP to USD using a high street bank and expect to pay £300-£400 in fees and commission. Use Transferwise and you still pay at least £50. Use Revolut and you pay £0.

        The models behind Revolut and others may be, arguably, unsustainable but continue to grow significantly and right now they offer much more over the high street bank than a pretty card.

        • Rob says:

          This is a teeny tiny market though. How many people actually do such foreign transfers?

        • John says:

          You certainly don’t pay £0 with revolut, less than transferwise yes, but not zero. It still has a spread, albeit small. About £1 for £10k. You also need to pay a fee, or be a premium member for transfers of that amount.

        • R says:

          There is definitely no spread on Revolut transfers, at least on weekdays. On weekends I believe there is a small spread. You are correct that only £5000 per month can be transferred fee free on the free account, any amounts exceeding that have a .5% fee, or you can pay £7.50 a month for Revolut Premium and then there is no limit to how much you transfer.

          I am speaking from first hand experience(I have transferred significant amounts through Revolut and saved thousands – even vs Transferwise) but you can check the link below if you don’t believe me. I agree that this might be a niche benefit but I think Revolut offers a lot of other banking services that are significantly cheaper than the high street bank e.g. foreign ATM withdrawals.

          Source: https://www.revolut.com/help/transaction-issues/transfers/why-was-i-charged-a-fee-for-my-transfer

        • Oh Matron! says:

          Oh Rob….. You and your provincial thinking again… You speak to anyone who lives in london is from outside of the UK (with the exceptions of germany, france, etc) and I think you’ll find there is a massive market for FX transfers. And you’ll be surprised at how much banks are charging…

        • Pf says:

          They don’t have a spread during the week. Certainly not anything near 1£ per 10,000. I sit at a bbg terminal monitoring when I exchange and if there is a spread it is more like 5p per 10k. I typically execute at the level I see in bbg. On G4 at least.

          The market is in people who go on Holiday and use their bank cards and get absolutely ripped off, and are sick of this rip off so jump at an alternative that is simple and offers close to fee free fx. This is not a small market.

          My concern for revolut is more on the sustainability front. I am
          Certain they lose money on their free customers. The question is will the get enough premium paying customers to finance this. I suspect they will need to gradually add more fees (to get closer to transferwise fees) once they have a sufficient base of customers, and they no longer want to burn through their cash.

      • TimTam says:

        By shake up do you mean Curve will actually find a business model that is profitable?

        • Crafty says:

          No, that it will cease to exist. Monzo is the natural winner.

          • Rob says:

            Could be. But the CEO admits only 20% of active users pay their salary onto it.

            There is a chance they are all losers.

    • Alan says:

      The BBC had an article a coupleof days ago about “The Vultures circling Metro”. The author seems to think its days are numbered
      https://www.bbc.co.uk/news/business-47609539

      • Alan says:

        Got my organisms wrong its “financial sharks” doing the circling not “vultures”

        • Lady London says:

          My guess is it’s sharks trying to put M ‘into play’ at a vulnérable moment.

          It will be a dark day if they succeed. I stick with Metro even paying their FX fes when they charge them. I’m fully aware i could avoid these by using methods discussed on here. But i pay them because i figure that sustains things luke their weekend opening and longer hours that I like.

  • HAM76 says:

    Revolut is actually a great match for many Germans: Maestro card, instant notification, ability to disable and enable cards instantly, SEPA transfers, and online registration without having to go to the post office puts them miles ahead of the competition here. Whenever I showed someone my Revolut card, these were the interesting features.

    A credit card that charges another credit card is less of interest in a country where most people only have bank issued debit cards that are part of a national payment scheme to withdraw cash from an ATM.

    I know the situation is different in the UK. With their current valuation these companies need to be present and successful in many countries.

    • Bob says:

      Revolut works well for me it only comes out for foreign travel in my case holidays it’s on an auto exchange at rate I haven’t seen for a few weeks but it’s loaded with €500 euro most of the time that was exchanged at 1.175 last month at exactly the same rate as in the XE currency app Use Curve all the time as well both better rates than I have got with Lloyds and immediate rather than waiting 3 days for it to appear in Lloyds App

    • Alan says:

      Yep, I’ve now had multiple situations abroad when paying with Revolut where the checkout assistant has said they have it too, or once wanted to show their friends because they’d been telling them about it!

  • callum says:

    Amex didn’t withdraw with “no notice” – as you’ve said later on in the article, they explicitly told Curve that they wouldn’t be involved any more which they ignored and launched anyway.

    The weekend FX fee is also 1.5% in almost every country around the world, it’s only 0.5% in EUR and USD.

    • Matt says:

      Also Rob you can withdraw 10 x £200 withdrawals per month with no fee. The article says only £200 per month.

      • Sergey says:

        It is 200 GBP per month on Blue and 400 GBP per month on Black.

        • Tilly says:

          Is the £200 per month based on calendar month or rolling month? So can I say withdraw £200 on 31st March and another £200 on 1st April? I rarely withdraw from Curve, normally 3 months apart.

        • Yorkieflyer says:

          This is the limit for overseas fee free withdrawals I believe

        • Craig says:

          @Tilly – I believe it is based on a rolling 30 day window. See the curve limits section of the app

      • Matt says:

        Sergey those limits you are quoting are for foreign ATM withdrawals? I thought UK limit was 10 x £200 withdrawals per month? I hope it’s nit the former as I’ll be being charged lots of interest :s

    • Rob says:

      No, that’s not what happened. What actually happened is that Amex agreed to do a Beta and then Curve de facto did a public launch which they called ‘a public Beta’. Amex decided that this was not a Beta at all.

      • callum says:

        That’s not what Curve said… They specifically stated that they were informed by Amex that they weren’t happy with the beta and so wouldn’t be taking it further before the public launch. Just as described in the quote from Amex you’ve included.

        • Rob says:

          That’s not what they said TO YOU.

        • Chrisasaurus says:

          Chrisasaurus on 26 March 2019 at 08:21
          Those two aren’t mutually exclusive.

          Amex agreed to a closed beta, told curve they wouldn’t be taking it further, Curve tried to release anyway by calling GA a ‘public beta’ and Amex (arguably quite rightly) pulled the plug as they’d already said they would at the end of the closed beta

        • GiddyLizzie says:

          @Rob Do you hold any sort of position at Curve/Curve 1 LTD; or carried out any work for them, perhaps on a freelance basis for them?

        • Callum says:

          I have no idea what “TO YOU” being in capitals is meant to represent?

          Their blog post on this subject describes it pretty much how I did – with the usual Curve spin and waffle. It certainly confirms that they were aware of what Amex thought before they launched and that they didn’t want to continue on this basis – they just felt their merchant agreement means it doesn’t matter.

        • Callum says:

          Rob – Oh I see! I did consider that, but then dismissed it as I couldn’t make sense of a decision to give a more negative spin on what happened in public than in private.

          Something to do with the legal case?

        • Stuart says:

          “I know something you dont know…”

    • The Streets says:

      I thought the interchange fees didn’t apply to pure AMEX cards such as Platinum? and only applied to the likes of the BA branded AMEX cards? is there as higher interchange on the “pure” AMEX cards or is this if they are issued abroad? Surely any Apple Cards would follow suit..

  • Jon says:

    Hi Rob,

    Have you seen that Apple have announced a card, 2 percent cash back. I think it’s gojng to be an industry disrupted.

    https://www.apple.com/apple-card/how-it-works/

    Jon

    • Alex W says:

      Mentioned several times already. Unlikely to be viable in UK at 2%.

    • TGLoyalty says:

      Aren’t you better off doing the analysis at £15k spend where you get the 10k MR bonus?

      On foreign spend the 3% fee eats into your CB or points calcs. 3% to get 2% back would be madness when you can use clarity or curve or Revolut or sterling etc

      • Russ says:

        Ok at 3% fee on GBP£15,000 overseas spend on Amex Gold CC that’s GBP£450 and you’d pick up 40,000 avios. Currently GBP£655 to buy 40,000 avios via BA. Now saving is GBP£205.

        Unless you have a clear plan what you are going to do with the cash back I don’t think it makes sense over collecting points.

      • Shoestring says:

        and you’re going to get a few Amex statement credit offers/ Shop Small £5s over the year you hold Gold.

      • The Savage Squirrel says:

        Russ that’s exactly backwards – it makes no sense.

        Your comparison is silly because if you had £450 in cash you’re almost always better off just spending it directly on flights rather than using it to buy Avios to redeem on flights 😀

        With points you’d better have a clear plan or reason for wanting them. With cash you don’t need any plan – it’s accepted everywhere for everything and never expires.

      • Russ says:

        Savage, not for those who haven’t mastered the dark art of booking QR premium seats for £450 instead of 37,500 avios 😉

    • Alan says:

      Ermm see comments above yours? Mediocre product in USA, not going to come here on anything like these terms.

  • RH says:

    Aside from Revolut.. where can I top up these new style bank accounts with a debit or credit card?

  • ilou says:

    There are actually much better card (free) that the apple card in the US
    If successful, it will only be down to the apple brand, not the features

    • Big Dave says:

      their success is also down to the app on the phone – its great for lazy people or maybe those with mild dementia who still can live on their own and look after themselves

      They traditionally have to remember to take their credit card with them, remember their PIN, remember to check their mailboxes for their monthly statements, remember to pay them off in time etc..Only helped slightly by the likes of online banking etc.

      The app just lets you use your finger print as access, tap and go – reminders on the fly etc..

  • Julian says:

    I presume that Hard or Soft BREXIT will affect whether or not the prior non 0.3% capped credit card interchange fees will be able to make a comeback in the UK.

    0.2% interchange fee on debit card makes some sense but only 0.3% on credit cards with all the attendant risks of bad debts does seem aggressively and anti competitively low in nature.

    • Anna says:

      I’m sure it’s been said a few times on HFP that it was the UK which initiated the capping?!!

    • Andrew (@andrewseftel) says:

      Nope – notwithstanding any requirement for regulatory alignment post-Brexit, British MEPs were significant supporters of the interchange caps in PSD.

    • Alex W says:

      More people looking for pink unicorns to emerge from Brexit. Reality check: there aren’t any, you were sold lies.

      • Rob says:

        As has been pointed out many times, this was a UK initiative in the first place which we effectively forced on the EU.

    • will says:

      Although as a point collector the interchange cap isn’t good news, for the efficiency of markets its certainly a good thing.

      Card processing has been sewn up by a few major players in my living memory and it’s been a licence for them to print money usually at the expense of small business.

      It’s one industry where I’d love to see the incumbents pushed out of business.

      I thought worldpay was a very brave acquisition last week.

    • Chrisasaurus says:

      Those two aren’t mutually exclusive.

      Amex agreed to a closed beta, told curve they wouldn’t be taking it further, Curve tried to release anyway by calling GA a ‘public beta’ and Amex (arguably quite rightly) pulled the plug as they’d already said they would at the end of the closed beta

    • Chrisasaurus says:

      Julian
      The bad debt risk is what interest is for…

    • Alan says:

      Why would Brexit have an impact on interchange when it was the UK the pushed for the cap in the first place?

  • FCP says:

    If Amex just had no FX fees for UK customers, (US customers pay 0%!) then I expect that would increase their usage. But its probably a huge cash cow for them.

    • RIccatti says:

      Bingo! 2.76-2.99% FX fee is huge earner for UK card issuers.

      There was a lot of resistance from publishing that fee separately on the statement, and some card issuers still not do so.

      Most time it comes down to complacency and “convenience” of people keep using the same card — and they feel they are getting something in return (e.g., Avios points). But when fees going high — even spenders re-evaluate, and it’s enough to break the pattern and add 1-2 different cards to their regular use. Lloyds Avios was that kind of product, and Virgin could be more aggressive (but went for ancient approach to underwriting).

    • Billy says:

      Yeah I remember when I first took out my Amex card 10 years and was shocked when Fx fees would apply for using the card in ‘America’

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