Curve Card’s version of what happened with their American Express partnership

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Following on from our coverage of Curve and its split with American Express, the blog post below was published on the Curve website on Thursday morning.

As few of you will find it there by chance, I thought I would reproduce it here. I have not edited it or added any commentary.

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

“January 31, 2019
Bringing Amex Back to Curve
By Shachar Bialick

You are probably aware that American Express has decided to block our customers from adding their Amex cards to Curve and making top-ups to their e-wallets. Amex has given no good or fair reason for their decision and we believe it to be entirely disproportionate and discriminatory to Curve and our joint customers.

Although Amex cardmembers represent a small percentage of our customers, we believe the decision by Amex to be wrong. We believe consumers should be able to decide how they wish to access their money, and that progress should not be stifled by the whims of giants. So we decided to stand for what we believe in: that real innovation can prevail. Curve is an original and groundbreaking product that gives you, the consumer, greater control over your money and we are convinced that this is worth fighting for.

Before I ask for your support of Curve in its fight for innovation and a level-playing field, let me share how this situation with Amex has come about.

Amex First Comes to Curve

In 2016, when we launched Curve in Beta, we accepted Amex cards as one of our funding options, alongside Visa and Mastercard. We soon found out that Amex did not like this operating model, and were promptly told to remove Amex support from Curve. Back then we were a small startup with limited resources and, though disappointed, we were forced to acquiesce and continue to grow our business without them. This was a time before the game-changing PSD2 came into force and regulations did not forbid Amex from doing so.

Although Amex’s market share of total card payments is less than 10% in the UK, it is a leader in the rewards market. Curve cardholders who also have an Amex card represent a small segment of our customers, but for them, Curve can’t be ‘All Your Cards in One’, and they still need to carry two cards in their wallets. Moreover, the bigger problem these users have is that Amex acceptance in the UK and Europe is low, so they can’t use their Amex as much as they’d like to. All of the above explains why many of these customers asked Curve to bring back support for the Amex network.

PSD2 Introduces a Level-Playing Field

In January 2018, the EU’s PSD2 came into law in the UK under PSR 2017, and turned the payments industry on its head. It opened up the payments market to competition and innovation. In particular, it ensured that companies could access all payment networks (including Amex) on a level-playing field along with every other fee-paying and legitimate payment service provider.

As a consequence of this radical change, Curve applied for a new merchant account with Amex and signed a Merchant Services Agreement on the 23rd of March 2018. The Amex team knew the history with Curve but were very happy to start working with us again. In fact the leadership team at Amex Europe were supportive and engaging and we jointly came up with the traditional top-up (prepaid) model approach that Curve launched this week.

In particular, I personally spoke with Amex’s Head of Merchant Services in Europe, who gave his support and endorsement to our plan, understanding that the top-up model they requested differed markedly from how we operate with other card networks. He was happy to have this distinction.

Aside from having a standard merchant agreement with Amex – allowing Curve to accept Amex cards like any other merchant – Curve never had a formal ‘partnership’ with Amex, nor have we sought such an arrangement.

On the 19th of November, we re-launched Amex to a small group of Curve customers, as we do with any product (‘Closed Beta’). It is important to note that the Closed Beta wasn’t part of an agreed roll-out with Amex, nor was there ever a discussion on needing permission from Amex to roll it out to our customer base. Based on the agreement with Amex from March 2018 and the information we had, Curve could have rolled out Amex support to all its customer base in November – when the MVP was ready. The Closed Beta results were remarkable. Around 500 customers topped-up over £1 million in less than a month and their activity on the Curve platform increased by 25%.

Daily communication with Amex employees was nothing but positive and encouraging throughout our Beta launch. They did express a desire to be involved in our launch communication plans and requested a meeting to align communications prior to our wider launch. The meeting was postponed to early January and then moved again at their request to Monday 21st of January. We continued to push back our main Amex launch accordingly, in order to respect their wishes.

The Meeting on Monday 21st of January

The official reason given for this meeting was to discuss Curve’s PR strategy for the main Amex (‘Open Beta’) launch, knowing that we planned to launch shortly. Instead, to our surprise, the Amex team stated that they were unhappy with the Beta, acting as if it were a joint operation. Amex raised concerns over customer experience without giving more details. This flew in the face of the data we had collected and our direct customer feedback.

To be absolutely clear – this was the first time Amex ever mentioned any uneasiness with the integration, and it was never the case that we required Amex approval for the launch. Curve received written approval to launch Amex support in Curve the moment Amex signed the Merchant Service Agreement.

We reminded Amex that strictly speaking we did not have a partnership but rather a Merchant Service Agreement, and if they wished to terminate it, the contract required Amex to give Curve 180 days’ notice. Moreover, we shared our legal opinion that by doing so they might be in breach of payment regulations and could demonstrate clear anti-competitive behaviour if they prevented Curve from accessing the Amex network – as they allow exactly the same functionality to other merchants, such as Paypal, Upay and Yoyo Wallet.

The meeting finished without Amex giving us any formal notice and we agreed to continue the conversation at their offices at a later date.

Amex Launch vol 2

Our launch was planned for Monday 28th January. With this in mind, we decided to regroup to reflect: what would be best for our customers? Should we delay yet once again to an unspecified date, or launch? We decided to move forward with the launch for several reasons. Our Merchant Services Agreement was perfectly valid and our top-up mechanism was known and agreed-upon with Amex. Moreover, our legal advice told us we were protected by regulations, and Amex were unable to prevent Curve from accessing its network.

The first day of the Amex launch was remarkable. Curve customers, especially those who were already Amex cardholders, gave us positive feedback on social media, and spent more than £450,000 on Curve via Amex in one day.

Then, the bombshell. On Tuesday 29th January at 4.46pm UK time, Amex notified us that they were terminating their Merchant Services Agreement with Curve with immediate effect. With that move, and based on legal advice we received, Amex breached their contract with Curve, failed to give appropriate notice, breached PSR regulations, and demonstrated clear anti-competitive and anti-innovation behaviour. Most importantly, Amex seemed to show a total disregard for its own customers’ interests.

Next Steps and What You Can Do to Support Us

We know that without your help we wouldn’t have achieved the heights we have reached to date. With your interests in mind, and our mission to deliver a truly innovative product, we intend to challenge Amex’s decision. We believe financial freedom is the future and we are prepared to fight for yours. This is not really about Curve or Amex; this is about you. It is about putting the customer at the centre and fostering a level-playing field in the financial space.

To be clear, we are not asking you to slander Amex – we are still trying to understand the reasons behind their actions and hope to reach a commercial resolution. We have already sent a letter to them to reconsider their decision and have given them reasonable time to comply. Failure to do so will mean that we will be forced to exercise our rights in the courts and to submit complaints to the relevant regulators in the UK and Europe.

You can support our cause by tweeting to the PSR and FCA, and letting Amex know your thoughts. Explain the benefits you see in supporting Amex in Curve, how it increases competition and choice, and request to review their decision.

We’re sorry for any inconvenience caused to Amex cardmembers, and we hope to resume Amex support in Curve soon. We will update you as soon as we have any further information.”

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Curve Card

This article is closed to new posts. Discussion continues in the HfP Forums.

Jay says:

1 Feb1 February 14:38

Having watched the Fyre festival earlier this week, I know one way Curve can solve this disagreement with Amex. All they need is Andy King with his same energy for evian water. It will all work out fine 🙂
- guesswho2000 says:
  
  2 Feb2 February 00:29
  
  😂 excellent!
Magarathea says:

1 Feb1 February 15:05

I cancelled an Amex SPG card on the online chat facility today and when asked for any reason for this, said I had wanted to use the card in conjunction with my Curve card and was disappointed Amex had stopped supporting it. The customer services rep replied that this had been a “business and mutual” decision between Amex and Curve! The statement from Curve certainly does not make it sound mutual but who knows!
- JL says:
  
  1 Feb1 February 15:59
  
  I’ve seen similar comments on twitter, such people clearly have no interest in Amex or their products, just the opportunity to manufacture spend. This is why this situation is no loss for Amex.
  - Mark2 says:
    
    1 Feb1 February 16:33
    
    Yeah, I always cancel it so that I can re-apply in six months and get 33,000 points again, so I have got great interest.
  - Tom says:
    
    1 Feb1 February 16:41
    
    To be fair to Margaratea I found the comment very level-headed and reasonable, most of the ones on Twitter, as you say, are ridiculous emotional ramblings from blatant card churners tagging the FCA even though they have zero relationship with Curve.
    
    Can’t see AMEX backing down on Curve doing anything.
    
    Yes, regardless of financial status of the limited company, customers money with Curve might well be safe because Wirecard have a German Banking licence, but Wirecard would most likely have to carry some or most of this battle with AMEX as they are the financially regulated entity that facilitates Curve.
    
    Unfortunately for Curve, Wirecard are under investigation by the German regulator and Munich prosecutor for possible market manipulation, their shares have tanked this week, CEO Markus Braun has lost over 200m Euros from his net wealth over the last two days, I doubt he fancies a battle with AMEX that would no doubt shed light on every bit of evidence American Express may have on their operation.
    
    Not to mention, Wirecard have lots of other fintech companies using their services, they can’t go round starting fights at the best of times, too many stakeholders.
    - Magarathea says:
      
      1 Feb1 February 18:59
      
      I’m not sure what JL was trying to say but for the record I have been an Amex customer for 20 years and was simply looking forward to expanding where I could use their product using the Curve system. Like Mark2 I have adopted a similar approach and have a great interest in the Amex product offering. It has given me access to 12 first and club class 2-4-1’s over the last 10 years with 2 more planned for this year. The main purpose of my post was to note that the Amex take on this week, appears to be that it was a joint decision between Amex and Curve and NOT an Amex only decision.
Alex Sm says:

2 Feb2 February 00:46

The main unanswered question here is one for Rob: after all these comments (and possibly a fresh record of readership), whose version of events do you believe most: Amex or Curve? Or as usual, the truth is out there, somewhere in between?
- Callum says:
  
  2 Feb2 February 02:03
  
  How do the versions differ? They seem pretty much the same to me, Curve just goes into more detail and adds their own spin on top.
- Rob says:
  
  2 Feb2 February 09:04
  
  The stories are not incompatible.
Andrew S says:

2 Feb2 February 00:51

Forgive my ignorance, but how could Curve charge a credit card transaction fee to accept Amex, when I thought the EU banned such fees?
- Callum says:
  
  2 Feb2 February 02:30
  
  Good point. Maybe because it’s a prepaid card that has a 0.65% admin fee and just so happens can only be topped up by Amex? Does seem a bit tenuous now I think about it though.
- Anna says:
  
  2 Feb2 February 07:04
  
  Billhop do it.
  - Callum says:
    
    2 Feb2 February 17:18
    
    They have a service fee, I’d imagine that’s different to a credit card surcharge, otherwise all the prepaid cards etc couldn’t exist.
Munch says:

2 Feb2 February 07:48

Is there anyway to pay a UK direct debit from Revolut? If so is it classed as a purchase?
- Genghis says:
  
  2 Feb2 February 07:53
  
  No. Can set up a recurring payment to a bank account but that’s very different.
Alex Sm says:

2 Feb2 February 14:53

A new potentially serious development in this saga:
My AMEX transfer to Curve which was pending for 6 days has DISAPPEARED for good as if it was not there at all! But the monies were transferred to Curve and spent!
So, Curve will now need to fund all these transactions out of its own pocket! And this could be millions of £££ in losses for them… Bleak
- Mark2 says:
  
  2 Feb2 February 16:13
  
  Surely as an honourable person you will be reimbursing Curve since you have had the money?
  - Alex Sm says:
    
    2 Feb2 February 16:17
    
    Let’s pool our resources together!
    - Anna says:
      
      2 Feb2 February 16:49
      
      My pending £100 has also disappeared into the ether. Of course Curve is entitled to claw this back but there doesn’t seem to be any function on the app for the cardholder to actively reimburse it.
- Paul says:
  
  2 Feb2 February 16:55
  
  I think they have up to 6 months to claim the funds. Most banks will let transactions drop off after 4-5 days if it hasn’t claimed. Doesn’t mean curve can’t claim them
  - Anna says:
    
    2 Feb2 February 17:00
    
    Whatever the case, this will have delayed a few sign up bonuses and 2 4 1’s being triggered! Just credited £75 to Amazon to make up for this.
    - Anna says:
      
      2 Feb2 February 17:01
      
      Actually that could be really inconvenient. If anyone had several £k pending which has already gone to a recipient and no idea when Curve will call on it, it could really mess up one’s earning strategy!
  - Mark2 says:
    
    2 Feb2 February 17:06
    
    Where does this idea of ‘claiming’ come from?
    Surely the money is paid to the merchant automatically?
    - JPR says:
      
      2 Feb2 February 17:11
      
      Presumably not in the event of a termination event. For example, if there were concerns over illegality, money laundering or much else I imagine the fund would not be passed to the merchant. I am sure someone who has an Amex merchant account will be able to opine.
    - Charlieface says:
      
      2 Feb2 February 21:03
      
      Not at all. Most merchants do automatically claim it but many (hotels, car hire for example) take time til they settle the transaction, possibly even changing the amount in the interim. They have usually at least 30 days to settle.
    - J says:
      
      3 Feb3 February 11:17
      
      As with any merchant account an pre-authorisation on funds will expire if they are not ‘captured’ within the required period i.e. 7 days. It looks like the pre-authorisation has not been captured for some reason, however depending on the merchant acquirer the settlement terms to the merchant can be anything from 7 – 30 days. Although the pre-authorisation has now lapsed, this does not mean that the customer is not still liable for the goods / funds that have been obtained and benefitted from. My guess is that Curve will exercise their right to obtain from the funds from a funding method and if this is no longer in place could potentially look to take legal action against the individual under such laws as the Fraud Act 2006. Assuming Curve is not in breach of their Amex Merchant account, and assuming this is a standard merchant agreement with no additional caveats linking it into a beta, they will still should have access into the Amex system to go back and immediately ‘capture’ a payment. If they are in breach of the merchant agreement with Amex and the merchant account is frozen, with no recourse, then they could go to plan B which is claim from another card or demand payment with some form of legal action threat if the monies are not paid. I know there are a lot of if, could, should and assuming, however none of us are party to the full details and this is speculative based on the limited information we have.
    - Ian M says:
      
      3 Feb3 February 22:16
      
      I topped up my Amex Plat wallet on Curve to the tune of £1300. Like others here, the pending transaction has now dropped off my Amex card. I had a recent experience with eBay/PayPal for a large sum which dropped off, and then PayPal put it through 30 days after the purchase date, that was very annoying to say the least and pushed me over my credit limit. I spoke to Amex at the time and they said that although it’s unusual for a Merchant to put the payment through so late, they are within their rights to do so.
      
      I was planning on closing my Amex Plat this week so it’s all a bit annoying. I would like the 1300 points. I’m sure Curve will try and put the payment through again at some point. But seeing as the same seems to have happened to a lot of people, I’m guessing there’s something going on here.
- Dave says:
  
  3 Feb3 February 08:34
  
  Same. About £800 of pending payments on two Amex cards showed pending for days. This morning there is no trace of those payments on either card.
  
  The money has gone from my Curve account and I have receipts from HMRC for the payments.
  
  At this point I’ve paid a chunk of my tax bill for free but presumably Curve will be sending a bill of some kind. Does anyone know if they just bill your current account in this unusual circumstance?
Brighton Belle says:

3 Feb3 February 08:12

Curve sent a £300 hotel charge through to Amex before they pulled the shutters down. It sat in Amex Pending for a few days. I had an online chat with Amex and told the agent it was a legitimate charge and not to consider it fraudulent. He said it would hit my account soon.

The £300 pending charge has totally disappeared off my Amex transactions today. Presumably Amex have rejected it as a matter of policy leaving Curve to decide where to send the charge.
- Shoestring says:
  
  3 Feb3 February 08:17
  
  That has to be the presumption, as many here have reported something similar. I guess this will lead to an immediate & very serious cashflow/ credibility problem for Curve.
  
  Amex plays hardball!
  
  Rather a bad Curve management decision to unilaterally go for the ‘wider beta launch’ (sic) – despite Amex saying ‘hold fire, please’.
  - Charlie says:
    
    3 Feb3 February 12:48
    
    Surely you have a lump sum amount on your amex from Curve? That’s the amount curve have charged to your Amex, and then everything else comes out of that pot of money without hitting the amex directly?
    - Shoestring says:
      
      3 Feb3 February 16:30
      
      Difficult to square the circle. Somebody tell me where the money’s coming from etc?
    - Anna says:
      
      3 Feb3 February 16:36
      
      No – e.g. my Amex is showing no transactions and no balance whatsoever on the Curve app, however I topped it up with £400 in total and spent it. £300 of this has been charged to Amex but the other £100, which was still “pending” in my Amex account, now isn’t showing anywhere.
Nick_C says:

4 Feb4 February 01:39

The issue of top ups not being charged to Amex might just be a curve IT issue.

There was a similar problem a few months ago where the underlying credit card was not charged. The charges all went through on the same day after about three weeks.
- Go says:
  
  4 Feb4 February 10:08
  
  This is a bit of a pain. I have about £1500 in charges that curve haven’t collected. I have however already paid £500 to Amex in anticipation of the charge, so I’m sitting wiith an Amex credit. I’ll view the rest as an interest free loan until they decide to collect it. Agree that it must be IT or Amex relationship issue as Curve surely must need the cash. Can’t help feeling days might be numbered for curve which will be sad
- Kev says:
  
  6 Feb6 February 15:14
  
  This is an interesting one because if Curve no longer have an active Merchant Services Agreement with Amex can they recharge the cards at all?
  I topped up, and promptly used curve, to spend £1.8k which also first showed as pending and has now dropped off my Amex account. When I called Amex about it they said that Curve *should* have completed the transaction within 7 days otherwise they’d need a new authorisation from me. I’m now wondering what T&C’s Curve might try and fall back on to recoup that.
  - EwanG says:
    
    6 Feb6 February 16:36
    
    Very interesting, and grossing this up I wonder how many customers / how much £ affected.
    An administrative nightmare for Curve, doubt (m)any fintechs would have mature incident management experience or be able to shift resources to quickly handle a crisis like this!!