Curve’s system is meant to detect the country of origin and the default currency of every payment card added. I’m from the UK, so this has always been £ for me. The currency would only be different if I manually changed it.
When I added my Klarna card, for some reason Curve’s system automatically detected SEK as the default currency, which belongs to Sweden. After I’d done a few regular UK transactions, I became aware that Klarna was processing them in SEK, converting them back to £ and charging me hefty exchange fees.
I got in touch with Klarna first, thinking it had nothing to with Curve. Klarna assured me that their card was UK based and that £ was my currency. I had always thought this. What’s more, there have been no issues with any Klarna card transactions that didn’t go through Curve. They all appeared in £.
In the Curve app, I have since manually changed the Klarna card’s currency to £. There have been no further problems.
Being unexpectedly charged in SEK for UK transactions was obviously a mistake, but whose responsibility was it? I never had to manually change the currency to £ with any other card added. There were no warnings that I might need to, so I wasn’t on the alert.
Klarna insist that their card is UK based and £ is the currency. Curve insist that my Klarna card has a Swedish BIN, and that’s why Curve’s system rightly detected SEK. Meanwhile neither company are currently prepared to refund the exchange fees.
I’m curious if anyone else had this issue when they added a Klarna card to Curve.
Yes, I’ve since checked this. Curve drew my attention to the fact that my Klarna card does indeed have a Swedish BIN. Curve have explained that was the reason why the app chose SEK as the default currency.
Klarna have acknowledged I applied for their card on a UK site as a UK customer, with the certainty that the card would process transactions in £ as the default currency. If there had been warnings from Curve that something like this might happen, I would have been on the lookout. Manually setting the currency to £ in the Curve app is no problem, if I know of a potential issue in advance.
Outside the Curve app, all my Klarna card transactions automatically went through in £. I had no reason to treat the card as anything but UK based. The BIN didn’t affect my Klarna card’s default currency anywhere else. It was only Curve who used it to assign the card a different currency.
I’ll leave it as an open question whether, in principle, the resulting exchange fees should be refunded. If so, by which company?
Well I’ll only add that Klarna treated £ as the currency of my account, not SEK. Because Curve detected SEK from the card’s BIN, normal UK transactions were converted twice on the Klarna side – first from £ to SEK, then from SEK to £. Since these transactions happened to be large, the exchange fees were as well.
It makes sense that if Klarna had issued me a card with a UK BIN, Curve would have selected £. However, I’ve used my Klarna card in Google Pay without any currency change from the store. If there are other digital wallets that use the card’s BIN to select the currency, Klarna might have been expected to know. If not, this is something unique to Curve that no-one would know unless told.
In either case, it is not the customer’s fault. Information to avoid this wasn’t shared until after it had happened.
Here is how Curve works:
Once you added your card to Curve, Curve will determine the currency by card country.
Once you do a transaction in another currency (not card currency) Curve will use its in-house FX exchange and charge you in the card currency.
If charge currency and card currency are the same no conversation is done.
This way you bypass high currency exchange fees from banks.
Simply contact Klarna and ask them to refund you the FX fee for your transaction due to an issue with the default card currency. (Card currency is determined by the card-issued country.) This is what I would do in your case.
You can ask Curve if they can be nice and refund you their charged FX fee from GBP to SEK. email@example.com
I see where you’re coming from and I appreciate the Curve system when it comes to FX conversion. I’ve always known that if I’m spending in a currency other than £, I have a choice between my payment card’s exchange fees where I change the card to the local currency, or Curve’s exchanges fees where I don’t change anything. For the first £500 on my account, it’s preferable to use Curve’s and it make’s no difference which payment card I’m using. Above £500, I’m specific about which card I use and make sure I change it’s currency in the Curve app.
I now know that this system relies on Curve initially determining the customer’s home currency via the payment card’s BIN. So long as all card providers issue a BIN belonging to the customer’s country, there’s no problem and the customer won’t have to check anything when adding a card. As you know, this wasn’t the case with Klarna.
I’m guessing there is a minority of international providers who issue cards with BINs that don’t happen to match the customers’ countries. From what I can tell, their customers won’t have to be concerned unless adding the card to a wallet that uses a system like Curve’s.
So the question hangs on whether Klarna had a responsibility to issue a card with a BIN to match my home country. So far they haven’t conceded this.
Even though most card providers issue the customer’s country BIN, it would do no harm for Curve to anticipate the few who don’t. Perhaps every time a customer adds a card, a simple message could state “Your default currency detected is ‘X’. If this is your home currency, press continue. If not, or you wish for another currency, please select here.” That way, everything is covered and I would definitely have avoided the erroneous exchange fees.