Card aggregator Curve targets U.S. expansion

Wouldn’t it be nice to consolidate a wallet full of credit cards into a single card that does everything?

That’s what Curve, a hot European startup, is already doing across the pond. It plans to launch in the U.S. soon and already has thousands of Americans on its waitlist. It’s a great idea, but Curve will need to successfully navigate a treacherous course that has claimed many previous victims.

Curve’s ambitious mission statement is that it is to banking what Netflix is to TV and Spotify is to music. It allows users to spend from up to 100 different cards with a single piece of plastic (or metal, more on that in a bit).

Last fall, the company raised $7.7 million via crowdfunding and was valued at $200 million, according to Business Insider. It reportedly has 500,000 customers in Europe, but sources suggest just 72,000 of them use their card at least once per month.

See related: My credit cards are starting to overlap with one another

How the Curve card works

Technically, Curve is a debit card that can be used wherever Mastercard is accepted. Unlike traditional debit cards, you don’t keep funds directly on your Curve card. Instead, Curve draws from your linked credit, debit or prepaid cards. Only cards that process on the Mastercard or Visa networks are supported.

One of Curve’s more unique features is called “Go Back in Time.” If a transaction is less than 14 days old and under £1000, you can switch the underlying source of funds. This would be useful, for example, if you accidentally used your corporate card for a personal expense (or vice versa).

In theory, it would be a tremendous way to fix mistakes like using the wrong rewards card, although I’m not convinced it will actually work that way.

See related: 10 cash back credit card mistakes you need to avoid

Will you still earn rewards when using Curve?

The UK-based rewards blog Head for Points wrote, “Any transaction you make is automatically recharged to the relevant Visa or Mastercard by Curve. Your card statement will show as ‘CRV*XXXXXX’ with XXXXXX being the name of the original merchant.” This suggests to me that Curve may not code appropriately for category-specific rewards.

In the U.S., we’re accustomed to credit cards giving preferential rewards for various categories including travel, groceries, gas and more. In Europe, credit card rewards are less common and less lucrative. When they exist, they tend to offer a flat rate on all purchases.

We don’t know for sure because Curve hasn’t announced its U.S. plans yet, but I’m concerned that Curve transactions in the U.S. will all route to the base rewards level.

Let’s say a card offers 3 points per dollar on travel and dining and 1 point per dollar on everything else. My suspicion is that a Curve transaction showing up as “CRV*XXXXXX” would earn 1 point per dollar, even if it was travel or dining. That’s what happens with PayPal and Binji. This would be a deal-breaker for rewards chasers. The lack of support for American Express and Discover cards is already a big red flag.

I reached out to Curve, and a spokesperson replied, “We are still shaping our U.S proposition so aren’t yet in a position to provide any detail on how it may work from a rewards perspective – but please do watch this space for more updates as we have them and the launch gets nearer.”

See related: How to get the most from credit card rewards points

Curve subscription levels

In Europe, there are three different Curve cards: Curve Metal (which costs 14.99€ per month), Curve Black (9.99€ per month) and Curve Blue (no monthly fee). The main differences are:

• Curve Metal cardholders earn 1% cash back (Curve Cash) at six selected retailers, whereas Curve Black cardholders can only pick three retailers and Curve Blue cardholders are limited to three retailers for only 90 days. Those rewards are on top of whatever the underlying card offers.
• Curve Metal and Black cardholders get worldwide travel insurance. They also qualify for unlimited access to interbank foreign exchange rates (although the company notes that additional fees may apply). Curve Blue does not provide travel insurance, and its unlimited access to interbank foreign exchange rates is capped at 500€ per month.
• Curve Metal also comes with mobile phone insurance, worldwide airport LoungeKey access and rental car collision waiver insurance.
• Curve Metal allows up to 600€ per month in free ATM withdrawals (weekend charges apply, as do potential surcharges imposed by ATM operators). Curve Black permits up to 400€ in free monthly withdrawals, and Curve Blue has a 200€ limit.

All Curve cards allow free peer-to-peer payments (both parties must be Curve customers). And they’re eligible for Apple Pay, Google Pay and Samsung Pay.

What’s next for Curve? 

TechCrunch reports that Curve has begun quietly testing a point-of-sale lending component that competes with the likes of Affirm, Afterpay and Klarna. These installment loans represent a hot concept that is challenging the traditional role of credit cards.

The pitch is that installment financing is more predictable than carrying an open-ended credit card balance, and it generally requires less underwriting scrutiny. It’s especially appealing to people who haven’t established a strong credit history.

This kind of feature isn’t intended for rewards chasers, who mostly pride themselves on paying their credit card bills in full while amassing points and miles from introductory bonuses and ongoing spending.

In fact, point-of-sale lending, peer-to-peer payments, low foreign transaction fees and inexpensive ATM withdrawals all point to a broader audience that likely skews younger and less affluent.

Bottom line

Typically, when we think of card aggregators, we think of a way for rewards aficionados to carry one card that incorporates five, 10 or 20 cards into one neat, tidy package that offers the best return without the bulging wallet.

That’s the problem no one has been able to solve yet, and while Curve seems to be trying, it’s also doing more than that. Over time, I suspect Curve will lean more into challenger banking than rewards aggregation. In other words, it’s more of an N26 or a Revolut than another member of the graveyard of all-in-one prototypes.

Have a question about credit cards? E-mail me at ted.rossman@creditcards.com and I’d be happy to help.