Thu. Dec 12th, 2019

$200 million finance startup Curve faces complaints from customers who say they were handed corporate cards without knowing and ended up with extra charges

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$200 million finance startup Curve faces complaints from customers who say they were handed corporate cards without knowing and ended up with extra charges

  • $200 million finance startup Curve is facing complaints from customers who were handed business cards rather than standard personal cards.
  • Curve issues a smart card that groups all your debit and credit accounts into one, meaning you can spend from multiple accounts using a single card.
  • Customers complained that they were issued corporate cards without being clearly informed and, in some cases, were charged additional fees while making payments.
  • Curve did not respond to a request for comment.
  • Click here for more BI Prime stories.

Hot UK finance startup Curve is facing complaints from customers who were unexpectedly issued business cards rather than standard consumer cards. It’s a move that nets Curve more money but, in some cases, has resulted in unexpected extra fees for customers, who are now complaining about the startup’s lack of clarity on the issue.

Curve is the $200 million British fintech that lets people group all the cards and accounts onto a single physical Curve card. It isn’t a bank — rather the sell is that users don’t have to scrabble in their wallets for various physical debit and credit cards, and instead rely on one neat payment solution on their phone. The concept is similar to Apple Pay, and Curve is one of a host of emerging players in the UK’s competitive fintech scene that aims to reshape how people manage their finances.

Curve customers can be issued with a business or standard consumer account, depending on whether the card is for personal or business expenses. But the startup’s online community message board is awash with customers who say they were sent a business card without realising what they had signed up for. 

Ivan Cameron, an entrepreneur based in Amsterdam, said he signed up to Curve expecting to receive a regular consumer card. He claims that when he contacted the company to ask that it to be changed, they effectively told him the two account types were the same. 

“I got in touch with them when I received a commercial card [and] they tried to convince me there was no difference between the two,” he said on the message board. “When I disagreed, they sent me a replacement card… Curve shouldn’t be sending commercial cards to people who don’t expressly request one.” 

One user, writing under the name “Wittgendworkin”, said they faced extra charges when buying train tickets to work due to additional corporate card fees.

They wrote: “I had no idea what a corporate card was or that I would face extra fees… In my view, Curve needs to be WAY more upfront about this, and ensure that self-employed people are not bounced into corporate cards if they don’t want them.” 

Curve earns more money per transaction on business accounts

Commercial (or “business”) debit cards are more profitable than ordinary personal cards, earning the companies issuing them up to 1.1% in commission on every payment made – five times the approximately 0.2% made off personal accounts. 

This money is paid by the “merchant bank”, as in: the bank serving the store where you just bought something. These charges help keep global operations running smoothly. 

Under UK competition guidelines, those applying for business accounts usually have to submit some evidence of their work, such as their Companies House registration documents. For example, as part of the onboarding process for Starling Bank, another fintech challenger, applicants for business accounts need to submit information including proof of ID, a self-recorded video, a company website address, Linkedin profiles and a letter from their accountant or lawyer. 

However, as Curve is not actually a bank but an “over-the-top” platform used to access other accounts, these regulations don’t apply. Given how much time and effort it usually takes to open a business account, they are very rarely given to the wrong people. But no such checks appear to exist for Curve customers. 

Curve customers might not even realise they even have a business card until they are hit by additional corporate fees on their transactions.

What’s potentially troubling is that every time a Curve business card has been unknowingly spent in, for example, a grocery store, that store’s bank will have paid Curve a higher interchange fee entirely unnecessarily. 

Curve isn’t especially transparent about what type of account customers will be getting

When Business Insider ordered a Curve card, we selected the “self-employed” option and were given no further information about the type of card we had ordered. Curve sent us a card with “commercial” written on the back. 

When signing up for a Curve “Blue” card, the company’s only fee-free option, users are presented with six choices, including “entrepreneur and business owner”, “self-employed”, “employee” and “other”.

Curve sign_up

Regardless of which one you choose, it is never made clear in Curve’s sign-up process whether you will receive a consumer or commercial card. 

Curve were quick to respond when we requested our card be exchanged for a personal one. But when asked which option one should tick to avoid opening a business account, they told us they were “unable to provide more information due to regulations”. 

When asked whether documentation should be a requirement for those opening a business account, the UK’s Financial Conduct Authority declined to comment. 

However, Business Insider understands the watchdog is “actively considering the future of regulation” around emerging financial technologies. There are regulations and principles that apply to firms like Curve, requiring them to be transparent about their products, who they are for, and what fees and charges are levied. 

Curve did not respond to requests for comment. 

SEE ALSO: Leaked numbers show $200 million fintech startup Curve has far fewer active users than the number of ‘customers’ it has claimed

AND NEXT: $200 million finance startup Curve quietly removed its own crowdfunding video after questions about its user numbers

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