Can mobile wallets plug the holes of the all-in-one card model?

The all-in-one card market has been a tough go for fintechs, partly because the “all” is tough to achieve in plastic form but fairly easy to achieve as an app.

Curve has decided to take advantage of the work done by the major mobile wallet brands by adding support for Apple Pay about a week ago, and Samsung and Google Pay near the end of 2019. This addition is designed to make Curve, and the Pays, a workaround for banks that don’t support one or more of the three major mobile wallets.

Since Curve’s core model is to consolidate a group of bank cards, once a user adds the overarching Curve card to one of the Pay apps, that app is usable for any Mastercard or Visa card at any NFC-enabled point of sale. Curve’s tie to the Pays is a single commercial agreement that’s designed to overcome missing connections.

“If you think about certain markets, take Germany for example, there are thousands of local banks,” said Nathalie Oestmann, Curve’s chief operating officer. “That’s a lot of contracts and technical connections to make. In the U.K. there are about 20 large banks, but the problem is still the same. Since Curve is an ‘over the top’ platform there’s one commercial agreement.”

The flexibility is Curve’s play against a bevy of well-funded fintech rivals in Europe; and an attempt to thrive in a business model that’s claimed many other contestants. Coin, Swyp, Stratos and Plastc did not succeed in the market, with the remnants of Coin winding up underpinning FitBit’s transaction rail and Plastc becoming part of Edge Mobile Payments.

Bloomberg News

Curve is up against firms such as Monzo, Starling and Revolut, racing to become a central hub from which users can manage their funds from different sources without navigating between multiple accounts or apps.

This goal is the crux of open banking. Europe's PSD2 rules and other open banking initiatives are designed to ease the data management that allows fintechs to work with different banks, acting as a curator more than a direct provider. But it doesn’t guarantee success, nor does it pry consumers loose from familiar bank relationships.

Curve has added card-linked offers, a feature that allows users to change the underlying card after a transaction, and hopes to pair its mobile wallet support with an increasing range of money movement options.

Shortly after its initial mobile wallet integrations, Curve added P2P transfers for international payments. Around the same time, it began work on an installment payment and credit card debt reduction service, putting Curve in competition against firms such as Splitit and Klarna.

The company has added executives to drive its diversification. Paul Harrald joined Curve at the end of the year to support its install payment project. Harrald previously worked for CreditEase, a Chinese venture capital firm. Oestmann arrived in the fall from Samsung, where she headed Samsung Pay in Europe.

“At Samsung I noticed the problem of signing up banks and getting a base of banks that would be meaningful. Europe is not ubiquitous,” Oestmann said. “Not all of the banks are signed up for all of the Pays. Some may do Apple Pay but have their own Android app.”

Since mobile wallets allow a consumer to aggregate their payment offerings into the wallet and then decide which tender type that they should use for a specific purchase, there’s a fit with the all-in-one model, according to Thad Peterson, a senior analyst at Aite. “Adding an all-in-one offering to the wallet is another layer of choice, and it’s clear how the consumer would use an all-in-one card in a wallet that holds other cards.”

The real value to Curve is the rebate and, possibly more importantly, the ability to change tender types post transaction, Peterson said, though time will tell if the Curve model will boost mobile wallet usage.

“[Tender change] is a unique aspect that can create real value to digital wallets. Curve is an interesting offering for mobile wallets, but I’m not optimistic that all-in-one cards will move the needle on mobile wallet adoption,” Peterson said.