How is Curve financed?

I’ve been a customer for over 2 years now and have often wondered how Curve actually makes money.

I got a private customer card back then. Even then, the Business MasterCards, with which Curve earned money in any case, no longer existed.

The fact is that Curve only receives 0.2% per payment (since it is a debit card), but has to pay 0.3% if a credit card is on file. On top of that, there may be acquirer fees.

How does Curve earn any significant money? There won’t be that many Metal customers and few customers will pay interchange fees either.

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Good question.
In the beginning one could only sign up as business owner / … and Curve gave out commercial cards. I believe the idea was to be able to charge a higher interchange fee (because of the commercial card) and charge a lower card fee (0.2% (debit) / 0.3% (credit)) to the underlying consumer cards.

That changed when Curve started issueing consumer cards. Even worse then, having a Curve consumer card and the underlying card being a commercial card, Curve would actually lose around 1% for each transaction. Financial-wise Curve could add a underlying commercial card fee since they really do lose a lot of money there.

Now we don’t know what Curve has to pay for charging an underlying card, but just to give you an idea. Stripe charges 1.4% for all cards and only offer a disagio price, same as Worldline / SixPayment, Mollie,…
Other accquireres, like Adyen (really expensive), Wirecard (RIP), Concardis, First Data, … have an interchange++ payment model.

Meaning:
Interchange fee (what the accquirer has to pay to the card issuer) - variable

  • all consumer EU cards are 0.2% for debit and 0.3% for credit (because of the GOOD EU law)
  • commercial cards much higher

Acquiring fee

  • the profit the accquirer makes, wide range from 0.20% to 1%

Card scheme fees
The card scheme fee is very tricky and not well known.
Visa usually charges 0.04% and Mastercard 0.42%, so yes, thats a BIG difference of 0.38% as a merchant whether your customer pays with Visa or MC.
So the card scheme fee with MC is actually higher than the capped interchange fee, I have no idea why this was not adressed in the EU legislation.

Conclusion:
Unless Curve can become an accquirer itself, they will always lose money with every transcation since they can only charge the interchange fee but have to pay the interchange fee + card scheme fee + accquirer fee. Even if they were an accquirer, they’d still have to pay the card interchange+scheme fees but only receive the interchange fee.

Don’t ask me how this can be financially sustainable, but I don’t think any fintech actually makes money. I remember reading N26 has lost ‘only’ 200 mio € last year.

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very good summary, thanks for that!

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The short answer is that they don’t. They’re financed by venture capital. As their last accounts showed, they are making significant losses. Their long-term plan for profitability seems to be a combination of:

  • Subscription fees
  • Interest from lending (Curve Credit)
  • Advertising to users through targeted offers

They talked the last of these up during the crowdfunding round a couple of years ago, but we haven’t seen any real movement on it since. My guess would be that the free £10 on Amazon offer before Christmas was them testing how much traffic they could send to a retailer through offers like that.

For now though, it seems that Curve is still very much in growth mode, and focusing on new customers and new markets, rather than profitability.

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The missing margin explains the long response times of the support. Actually, that’s a shame, because Curve is so useful and yet not profitable.

I don’t think you can get a lot of users into a Metal customer. That’s 15 € a month for a very small amount of added value - tbh.

Permanent funding is important. Perhaps Curve could just issue two cards in one:

a MasterCard Business on the front as a number, in the magnetic strip, in the chip and as NFC. And a private card number on the back and on the chip on the back.

Then you tell the customer, please only use the business card for business transactions. The hope in the background: the people are too comfortable.
You often pay with NFC anyway and therefore automatically with the business card. To pay with the private card you would have to insert it (the wrong way round).

Then you can’t blame Curve and there is solid financing.

Are there any fees?

Depending on which Curve tier you’re on, you’ll have a different fee-free limit for your foreign spend and ATM withdrawals:

  • Curve Blue (free)
    • 0% fee on spend in over 150+ foreign currencies, up to £500 per rolling month, with a 2% foreign exchange fee after that.
    • ATM withdrawals are free up to £200 per rolling month, after which there’ll be a charge per withdrawal of £2 or 2%, whichever is higher.

If you’re a frequent traveller, our Curve Black or Metal products might be better suited to you:

  • Curve Black (£ or € 9.99 p/m)

    • 0% fee on spend in over 150+ foreign currencies worldwide (subject to fair use policies above £15000 per rolling year).
    • ATM withdrawals are free up to £400 per rolling month, after which there will be a charge per withdrawal of £2 or 2%, whichever is higher.
  • Curve Metal (£ or € 14.99 p/m, 150 p/a)

    • 0% fee on spend in over 150+ foreign currencies worldwide (subject to fair use policies above £60000 per rolling year).
    • ATM withdrawals are free up to £600 per rolling month, after which there will be a charge per withdrawal of £2 or 2%, whichever is higher.

Spending abroad during the weekend?

If you make a withdrawal or purchase over the weekend and Curve performs a currency conversion, we’ll use the rate from Friday and apply a surcharge as the Forex markets are closed. The weekend counts as Friday 23:59 GMT - Sunday 23:59 GMT.

For transactions where both the transaction and the underlying payment cards are in GBP, USD or EUR, the foreign exchange fee will be 0.5%. For all other currencies, the foreign exchange fee will be 1.5%.