Amex throws Curve a curveball
Shachar Bialick, co-founder and CEO of Curve, is not happy and has issued a 1,500 word (FFS) explanation today (31 January): “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.”
He says Amex cardmembers represent a small (undisclosed) percentage of its customers, yet he is ready to rumble. Bialick is calling for support in its “fight for innovation and a level-playing field”.
If you’re wondering how this came about, he delves into history to explain.
In 2016, when it launched Curve in beta, it accepted Amex cards as one of its funding options, alongside Visa and Mastercard.
Bialick says: “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 start-up 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.”
In January 2018, the EU’s PSD2 came into law in the UK so the market opened up to competition. This meant companies could access all payment networks (including Amex).
Due to this change, Curve applied for a new merchant account with Amex and signed a merchant services agreement in March 2018.
In November 2018, it re-launched Amex to a small group of Curve customers, i.e. a closed beta. This 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”.
In a meeting in January, Bialick says 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.
Cue more chatter and meetings. Then on 28 January, Curve launched this Amex option. Its legal advice told the firm it was protected by regulations, and Amex were unable to prevent Curve from accessing its network.
The next day (29 January), Amex notified Curve it was terminating the merchant services agreement with Curve with immediate effect.
Bialick comments: “With that move, and based on legal advice we received, Amex breached their contract with Curve, failed to give appropriate notice, breached PSR [UK’s Payment Systems Regulator] regulations, and demonstrated clear anti-competitive and anti-innovation behaviour.”
Curve is still looking for a commercial resolution. But Bialick does warn that he may take the matter to the courts and submit complaints to the relevant regulators in the UK and Europe.
FinTech Futures contacted Amex and it says: “American Express participated in a limited Curve beta test where we enabled a small number of card members to load funds onto an e-wallet using their Amex Card in the Curve app. Following this beta test we informed Curve that we would not participate in the further roll-out of the Curve e-wallet.”