London fintech Curve completed a £133 million series-C funding round last year. How is it using the money to grow?
The firm operates a digital wallet app that connects lots of different cards into a single debit card. According to one series-C investor, the fintech is “revolutionising how we perceive and access our money” and can “supercharge the customer experience” by “eliminating nasty hidden fees”.
But last week Curve changed tack. Customers were sent an update to its terms of service: “You will now be able to use your Curve card to pay merchants that may otherwise be blocked by your underlying payment source provider due to them being seen as “high-risk”.”
Sounds exciting. The changes took place immediately and there was no opt-out. If you don’t like them, shut your account, read the message.
What were these new high-risk payments? Porn, gambling and dating sites were the main ones, according to the Ts and Cs, as well as crypto trading and buying “precious stones.”
Many banks and credit card companies block these payments because of high fraud rates. But Curve said it could now allow them by introducing a new (nasty hidden?) processing fee.
Spy remembers another fintech company called Wirecard that adopted a similar strategy to boost margins. The FT reported that Wirecard had an “unusually lucrative relationship with a collection of almost 4,000 porn, dating and related customer service websites registered to 175 companies in the UK and Cyprus.” Porn and dating sites ended up being the firm’s sixth-largest set of customers, the FT said. There is no suggestion, by the way, that Curve is doing anything criminal here, like Wirecard did.
A Curve spokesperson said: “As with any financial decisions, the ultimate choice of how to spend, send or manage money should be with the individual consumer, and Curve empowers this freedom through the unique way our customers can control their transactions.” It added that the move was “responding to customer demand.”
Spy presumed this “high risk” payments move was a strategic shift led by the CFO, Paul Harrald. But on the same day Curve announced the change, the firm quietly notified Companies House that Harrald had resigned, with no immediate replacement.
“Paul has decided now is the right time to move on and we thank him for his immense contribution to Curve and wish him well,” a spokesperson said.
Curve is “in the process” of finding a new CFO, the firm added. Spy wishes them luck.
