12 minute read
Super-charged for the US
As Curve prepares for a full launch in the States, Founder & CEO Shachar Bialick sets out why it will succeed in its super-app mission – and why others might fail
What do US grocery chain Walmart, French healthcare insurtech Alan, UK challenger bank Revolut and Mexican buy now, pay later (BNPL) platform Kueski have in common?
Answer: they are among dozens of companies worldwide to have declared their ambition to build a financial services super-app – a project that the CEO and president of payments giant PayPal admits is one of the most difficult that it, too, has undertaken. PayPal is going for global scale – its president Dan Schulman is quoted as saying that around one billion users would be ‘ideal’ and it’s been busy acquiring companies to populate a super-app ecosystem that can deliver it. Those acquisitions include operators across buy now, pay later (BNPL), crypto, logistics and internet search capabilities.
Without the capital resources of a PayPal and with a slightly less ambitious geographic horizon – indeed, its founder is quoted as saying that ‘it would be highly improbable that a single super-app takes over the world’ – Curve is steadily building a similar proposition in Europe and the US, but by stealth.
Seven years ago, just as challengers reached a feeding frenzy, tearing chunks out of the traditional consolidated banking model to offer up discrete services, Curve launched its ‘over-the-top’ card aggregation technology in the UK – correctly predicting that the inevitable consequence of things breaking apart was that, before too long, there would be a great ‘rebundling’ – and it would be ready for it.
The logical conclusion of the re-bundling process is for a number of powerful providers to emerge with propositions that, ultimately, take care of all of a user’s financial needs, plus some. In other words, in Curve’s genesis was its destiny: to become a super-app.
Indeed, in its new report, The Race To The Super App, fintech-focussed advisor FT Partners observes that Curve ticks all the necessary boxes to succeed. The report identifies a super-app’s defining characteristics as being able to deliver greater value, in terms of a user’s time, money and customer experience, than the user would receive by going to individual apps for each product; and it must have a large and engaged base of customers who are willing to expand their interactions with the app – because the super-app business model is dependent on cross-selling: “Every incremental product sold to an existing customer comes with essentially zero consumer acquisition cost (CAC), making these cross-selling opportunities highly profitable,” the report said
It also noted that, in the past 12 months, Curve has changed its place in the super-app food chain: having started out as a pure, ‘over the top’ aggregator model, it’s now taking a hybrid approach, no longer just connecting customers to third-party accounts, but offering in-house products as well. Having worked with regulators to allow its proprietary tech to bring ground-breaking new tools to market, such as its ‘go-back-in-time’ feature (savvy users can flip transactions between their cards after payments have been processed – thus beating fees and interest and easing cash flow), Curve launched its own flavour of BNPL in 2021, a tool called Flex, under the slogan ‘F*** it… not what you think!’.
It’s all going nicely to plan, according to the man who wrote the pitch-deck for what was known as ‘Plastic’ back in 2015 – Curve founder and CEO, Shachar Bialick.
“I think you can measure the strength of a vision by looking at what that vision was in the early days of the company and what that vision is today,” he says.
“Instead of us changing the vision, the market evolved as we predicted it would – which put us in a unique position as the ultimate aggregator in that market. Now, we only need to keep growing the geography and product activity.”
It’s worth noting that Bialick’s pitch-deck also included a BNPL prototype.
“There’s a slide on the deck that tells you we will introduce the ability to pay with instalments anywhere in the world,” he says. “I’m from Israel and you can go into any merchant there and ask to ‘pay in three’. That’s existed since I was one year old. So, I knew it was a great product, but I also knew we could make it much better.
“About two-and-a-half years ago, we started to put investment towards Curve Flex, hired a team led by Paul Harrald (a former credit and risk advisor at Google) as head of Curve Credit globally, and started to apply for licences in the UK and the European Economic Area (EEA). The BNPL market then became super-hot and we are there with everyone else, but offering a unique experience that no one else can.”
That unique experience is tied to the app’s go-back-in-time feature, which also allows users to revisit payments made up to a year before, split them into three, six, nine or 12 monthly instalments and be refunded the original amount by Curve.
“We saw BNPL five years ahead of time and acted on it two years ahead. That’s why it’s important to have a clear direction and vision of where things could go,” says Bialick. “And, while sometimes that means you’re, in effect, taking bets,
Super-charg ed for the US
good founders and good teams are rigorous on the inputs to realise a predictable output.”
FINTECH’S MR FIXIT
Early Curve adopters were hooked by its ‘one-card-for-all’ payments and withdrawals utility, allowing them to combine all their credit, debit and loyalty cards in one. They raved about the user experience (UX) and, as more features and rewards were added, the fandom has grown – especially among affluent, well-educated users who know a good thing when they see one. Its two million-plus customers spend between £1,000 and £3,000 a month over the platform and have been largely responsible for its organic growth by enthusiastically referring others.
The fintech has made a virtue of becoming the ‘Mr Fixit’ of financial services, coming up with workarounds such as allowing Amazon’s UK customers to continue to put spending on their Visa credit cards after the marketplace stopped accepting those payments; and striking a partnership with Huawei to allow its European mobile phone users to enjoy near-field communication (NFC) payment functionality, courtesy of Curve Pay, when
To come to the US with a product whose entire proposition is user experience – as N26 and Monzo did – I believe will fail… Why would Curve succeed? Because the wedge we’re trying to bring to customers doesn’t yet exist in the US
they were prevented from downloading Google Pay as a result of US sanctions against the Chinese technology company.
Within weeks of it announcing, in January 2022, that it would enter the US market this year, there were 8,000 people on the waiting list. They clearly weren’t bothered by who Curve chooses to share its technology with, but other European challengers haven’t exactly received a hero’s welcome, State-side. German neo N26 pulled out of the US in January after acquiring a disappointing half-a-million customers in two years; the UK’s Monzo appears to have given up trying to get a full US banking licence after 18 months in Beta, fully launching, instead, on the back of Ohio-headquartered Sutton Bank early in 2022. So, why is Bialick so confident that Curve will make a smooth journey across the Pond?
He says it’s all too easy for European fintechs to treat America as a nice-but-dim cousin, and underestimate how sophisticated the US banking market’s customer experience has become. They also fail to realise how important it is to have boots on the ground in order to fully grasp how different from Europe it really is. “Banks in the US – Chase, Bank of America, Citi, Capital One – are providing remarkable customer experience,” says Bialick. “Take the Chase app. When I saw it two years ago, it was beautiful – already equal to Monzo. There is nothing that Monzo is offering that Chase doesn’t offer, and Chase is one of the strongest brands in the world. So, to come to the US with a product whose entire proposition is user experience – as N26 and Monzo did – I believe will fail.”
Super-charg ed for the US
He’s not convinced that European neo Revolut (which launched there in 2019 and has also declared its super-app ambitions) will fare much better.
“Revolut is about consumer foreign exchange (FX) and travel. But the problem is that most banks in the US do not charge you FX to begin with, so there is no wedge there. And, secondly, the majority of Americans don’t even have a passport, so they don’t have the currency problem that exists in Europe.”
Curve, he insists, isn’t going to make the same kind of assumptions – or mistakes. “Why would Curve succeed? Because the wedge we’re trying to bring to customers doesn’t yet exist in the US,” says Bialick, citing figures that suggest Americans are juggling twice the number of cards in their wallets as the Brits and Europeans, making Curve ‘a better fit’.
And, he says, it’s learned from the failures of others when it comes to team-building in the US. It installed American military special forces veteran Amanda Orson as general manager and gave her freedom to decide what would work there and what wouldn’t.
“She’s built a Curve proposition with similar positioning to a super-app, but the product experience in the US will be different to that in the UK and European markets because there are different needs, different problems to solve, different regulations to operate under. We’ve been quietly launching in alpha over the past few months and, as soon as we’re happy with where the product is, we’ll scale it up,” says Bialick.
He continues to insist that Curve ‘is not here to disintermediate or displace the banks’, and yet it’s hard to see how it won’t, given that the first commandment of super-apps is ‘thou must own the customer relationship’.
“We believe banks are doing a great job,” says Bialick. “But what do you define the job of the bank to be? We define the job of the bank to be the long arm of the regulator and to multiply money for the economy; from a customer’s perspective, it’s to keep money safe and banks do that better than any fintech in the world.”
Notwithstanding his admiration for US banking apps’ above-average UX, he says that, on the whole, existing providers don’t offer the sort of experience customers expect.
“It’s not in their DNA,” says Bialick, “and this is exactly where Curve comes into play and says ‘keep your money where it is and we’ll super-charge the experience you expect from a bank’.
“The result of that is that we must transfer as much information as possible to that underlaying bank. So, for example, prepaid products that require you to load money in advance of using them would not be sending any information to the bank – it would see £500 leave the account to go, for example, to Revolut, but it would have no idea what the customer was doing with it. When customers use the Curve card, we send information in real time to the bank – so, if I use my Santander card with Curve to buy a Starbucks, for example, Santander knows about it.
“And that principle has been very important to our success because the banks realised we weren’t here to compete with them, but to help them understand their customers better.”
Clearly, not everyone agrees: the third-biggest credit card network Amex has consistently held out against its members integrating their cards with Curve, despite a long campaign by the fintech to bring it onside – a battle that demonstrates just how critical being ‘top of wallet’ with each and every customer is for a would-be super-app.
“Nothing can stand between Curve and the customer,” says Bialick. “You must be the only instrument they’re using, in the same way that Amazon is top of e-commerce and Netflix is top of screen. Because, if you’re closest to the customer, you have maximum access to data. And not just any access, but read and write access, because your job is to advise the customer what to do, ask the customer what they want and do it for them.”
FINANCIAL LIFE HUBS
Bialick’s own two definitions of a super-app are that they are ‘a self-contained and curated marketplace where customers know they can reliably find high-quality financial products and suppliers’ and that they are ‘the central component in a person’s financial life. They are closest to the customer, and the focal point of access to everything money – their go-to source of truth for spending, sending, seeing and saving their money’.
There’s no lack of ambition in the Curve camp to be that ‘source of truth’ – and all of it, so far, has been propelled by a comparatively conservative $200million of fundraising. The US has proved it can be an expensive graveyard for European fintechs, but Bialick is confident that its triple-bottom-line revenue model – made up of the income Curve receives every time a customer spends money with the Curve card; the monthly subscription fee a significant cohort of customers pay to be able to access premium capabilities; and platform revenue lines, such as those from Curve Credit lending products and insurance – makes it sufficiently resilient.
While all eyes are on how it fares in America, 2022 will be a significant year for the fintech in other ways, too.
There are plans to launch a new Curve app in Europe and to extend Curve Credit products beyond ‘go back in time and pay later’, to refinancing card balances.
“We see all your cards and we can perhaps see you’re paying a lot of money on one of the cards that we might be able to re-finance,” explains Bialick. “Instead of paying 25 per cent APR you might be able to pay 12 or 13 per cent. We can be fairer to the customer because we understand the data and the risk model better. With one tap you will stop owing anything to a credit card company and have an instalment loan to repay that debt with us.”
It’s also recently added limited cryptocurrency functionality – something, Bialick admits, it didn’t see coming seven years ago. In October 2021, Curve cardholders were given the freedom to buy cryptocurrency at certain merchants including Banxa, Bitpanda, Coinbase, Crypto.com, Kraken, MoonPay and Uphold. Ultimately, says Bialick, decentralised finance will present just another opportunity to curate and advise because, as the financial space accelerates with choice it ‘merely acts as a tailwind in Curve’s sails’.
“There are very few companies that can achieve the stardom of Spotify, Amazon, Netflix and the like,” says Bialick. “They rebundled music, commerce and movies. We’re rebundling finance, which is probably bigger than all three of them. And the impact we can deliver is pretty significant.”
