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August 11, 2016August 11, 2016

‘The unbundling revolution isn’t for the user’: New solutions pop up along the path to digital payments

The biggest obstacle to mobile wallets may not be technology or integrations but changing consumer habits.

Credit cards currently have a stranglehold over mobile payments, and asking consumers to break their habits isn’t an easy task. According to a 2015 Accenture survey, 52% of people are extremely aware of mobile payments, but only 18% of North American shoppers make mobile payments regularly. A more telling statistic is the preference consumers have to credit cards over mobile payments. “67% of consumers continue to prefer traditional card providers for mobile payments over all other providers,” concludes the report.

Consumers have concerns over security and others aren’t comfortable enough with the technology yet to use a mobile wallet. Using a credit card is just easy. Nothing is simpler than swiping a credit card while checking out at a retail location.

As there’s significantly more road ahead along the move from to digital payments, different solutions have been developed to address this interim stage we’re at. One such answer comes from Curve, a London based startup founded in 2015 by Shachar Bialick, Tom Foster-Carter, and Ann Mostyn-Williams.

Bialick, who serves as CEO, sees mobile wallets as the future, but currently limited by low maximum payment sizes and outdated hardware at retailers. “There is a huge gap in infrastructure and it prevents mobile wallets from functioning perfectly, plus users need an incentive to change because the plastic works,” said Bialick.

Curve takes a simple approach to bridging the behavioral gap, combining a mobile wallet with a physical credit card. After signing up for Curve, customers get sent a special MasterCard/Curve card issued by Wirecard in the mail. Although it looks like a run-of-the-mill credit card, the Curve card is actually a smart card connected to a mobile app.

After users input all their credit and debit cards into the mobile app, they choose one card to be active, which is placed virtually on top of the Curve card. Every time a user swipes, the merchant receives active card information instead of the Curve card. Any time a user wants to change a method of payment, he just logs into the app to change the active card. Customers also get a history of all their payments through the app, allowing users to keep track of budgeting and spending habits.

According to Bialick, Curve is planning on releasing a SDK in September that allows users to grant access to their information to third parties, like personal finance apps. “Budgeting and personal finance apps have the requirement of manual entry, and if the user forgets even one, they loose track of their budget,” he remarked. “We’ll allow users to push data into personal finance and expense management apps, helping companies provide a better service and users to have a better experience.”

The thought of a central platform bringing in third party apps is an intriguing proposition for consumers. Mobile wallets from companies like Apple, Google, and Samsung have already consolidated payment options, and the next step would be to incorporate other financial services. By rebundling financial services in a more personalized manner, consumers will be able to keep track of all their financials in one place and have a better handle on their financial health.

“The unbundling revolution isn’t for the user,” Bialick said. “It’s something that was created as an intermediate stage where everything was at the bank before. We don’t see a better bank coming back, but rather something different, a platform that will connect all financial services. We envision one platform that connects you to everything money.”

As the proposition of a personal finance hub becomes more popular, mobile wallets, banking apps, and technology platforms will compete for market share. Companies like Apple, Google, and incumbent financial institutions are likely to be the most popular platforms, while young technology companies like Curve may be able to live on by forming early loyalties with customers.

Regardless of how many platforms end up rising to the top, customers ultimately win with better options to consolidate, compare, and monitor their financial services.

Photo credit: JeepersMedia via Visual Hunt / CC BY

February 29, 2016

5 trends we’re watching this week

[alert type=yellow ]Every week at Tradestreaming, we’re tracking and analyzing the top trends impacting the finance industry. The following is a list of important things going on we think are worth paying attention to. For more in depth trendfollowing, subscribe to Tradestreaming’s newsletters .[/alert]

Oscar Health raises $400m, said to be valued at $2.7b in Fidelity-led round (Bloomberg)
Health insurance startup, Oscar Health was valued at $2.7 billion in the startup’s latest round of funding, according to a person familiar with the matter. That’s about $1 billion more than when the health insurer raised funds in September. In the latest round, the company said it took in $400 million from backers led by Fidelity Investments.
Oops, Vanguard sent 71 account emails to wrong investor (TheStreet)
The tweet by a Vanguard Group customer went out on the morning of Feb. 11.
“Just got 77 e-mails from @Vanguard_Group detailing how much money people withdrew from their accounts along with names,” he wrote. “Yay security.”
With the rising sophistication in hackers targeting global financial systems, it’s kind of disappointing to see such an established player like Vanguard making such rookie mistakes.
Should roboadvisors be regulated like investment companies? (Michael Kitces)
Ultimately, then, the question of whether robo-advisors are in violation of Rule 3a-4 really highlights a broader question of whether any investment adviser that heavily leverages technology to standardize their investment process is coming too dangerously close to mimicking an investment company.
How Curve is changing the nature of physical credit cards (Tradestreaming)
The way we use credit cards is changing and many of the solutions, like UK-based Curve, are hardware/software hybrids. But much of the technology-enabled change doesn’t require major changes from a user’s point of view.
Jon Steinberg launches ‘CNBC for Millennials’, Cheddar (Business Insider)
Jon Steinberg, former president of BuzzFeed and CEO of Daily Mail US, is launching a startup called Cheddar. Steinberg is focused on attracting a smaller, savvier audience — business-minded millennials. Cheddar will stream one to two hours of live content every day, primarily from the NYSE trading floor, and distribute them across the web on platforms like YouTube.

February 23, 2016March 16, 2017

How Curve is changing the nature of physical credit cards

The days of thumbing through your wallet, trying to figure out which credit card you want to use are nearing an end. That time is coming quickly if Curve takes off. It’s a new super credit card that’s a lifesaver for people who use many credit cards.

Curve uses its smartphone app to essentially lift the information stored on various credit cards. It then transfers this information to its own single Curve card. The result is a software/hardware hybrid that gives Curve users the choice of which card they’d like to use at the point of purchase without the need to carry multiple cards. Holders of the Curve card just choose which underlying credit card they’d like to use via the app and present their Curve card.

If you carry a card that isn’t accepted as broadly as some other cards, like Amex, Curve improves your acceptance rate. The Curve card is a prepaid MasterCard and consequently, even if your underlying card is Amex, it’s accepted anywhere MasterCard is accepted. The app is designed to help Curve holders track their various purchases and loyalty points across multiple cards.

Curve also boasts that it doesn’t charge any currency conversion fees — card holders only pay the MasterCard wholesale rate + 1%, a relatively low rate according to the LA Times Currency Exchange study.

Curve joins a group of credit and banking offerings that sit on top of existing financial technology infrastructure. It provides a new interface for users to use to connect to their accounts and cards. And with its app tie-in, it provides a user experience that captures much of the traditional interaction between consumers and their financial institutions. Solutions like Curve and all-in-one credit card competitors Coin and Stratos aren’t competing as substitutes to existing financial products — they’re complements that aim to make the existing banking and credit ecosystems easier and more enjoyable to work for today’s demanding consumers who are want their financial apps to be as easy-to-use as the ones they use to travel, order a cab, and go shopping.

“We’re not another new bank or extra service to deal with, we transform your existing fragmented financial world into somewhere crystal clear, designed for the user,” Curve founder, Shachar Bialick told VentureBeat. “Mobile payments have the potential to bring similar benefits, but cards work everywhere and people are used to them. So we’ve created the best of both worlds — all the benefits of mobile payments via a groundbreaking card.”

Bialick believes users will be more likely to adopt his solution versus other options on the market. And it’s precisely because of its old school/new school aspect that users may find it appealing — Curve’s sole product at this point is a physical card. It looks, smells, and feels like the other cards in your wallet. But while competitive offerings look like credit cards, Coin and Stratos are both battery-powered bluetooth devices that tether to mobile phones; Curve is a standalone credit card and can be used without its accompanying app.

London-based Curve first made waves when, in stealth mode, it closed an investment round that included Taavet Hinrikus, co-founder of money transfer startup TransferWise, Ricky Knox of challenger bank Tandem, Ed Wray of Betfair, and former members of the Google Wallet team.

Photo credit: orphanjones via Visual Hunt / CC BY

February 22, 2016

The Startups: Who’s shaking things up (Week ending February 21, 2016)

[alert type=yellow ]Every week, Tradestreaming highlights startups in the news, making things happen. The following is just part of this week’s news roundup. You can get these updates delivered direct to your inbox by signing up for the Tradestreaming newsletters.[/alert]

Startups raising/Investors investing

East Coast credit fund puts $250m to work on Patch of Land platform (Finovate)
An East Coast credit fund will invest $250 million across the Patch of Land platform.

Dallas-based StoneEagle raises $76m for payments system (Xconomy)
StoneEagle Services sells virtual “credit cards” for business-to-business payments to the healthcare and automotive industries, among others, digitizing traditional B2B payment processes.

Financial wellness firm, PayActiv raises $9m (Finovate)
Financial wellness specialist, PayActiv raised $9.2 million (lead by SoftBank). Read more.

Modo Payments closes on $2m in funding (Finovate)
Modo is a “shipping container for intermodal payments”. Read more.

Victory Park Capital taps Goldman exec for CIO role (FINalternatives)
Behind many of the $100m+ investment rounds sits Victory Park Capital (VPC), a provider of lending facilities for many of today’s top online lending startups. Former Goldman Sachs managing director Upacala Mapatuna has joined Victory Park as chief investment officer.

Visa reveals major stake in Square (Finextra)
Shares in Jack Dorsey’s Square received a much needed boost on Friday on news that Visa has a 9.99% stake of shares in the payments firm.

The Startups: Who’s shaking things up

$1 Billion Served: Venmo circa 2016 (Venmo)
Big milestone: In the month of January, over $1 billion in mobile payments were made via Venmo (2.5x year over year). Paypal’s P2P mobile/social payment provider has its sights set on B2C payments, too.

Citibank: Google should buy AIG and turn it into a fintech lab (BusinessInsider)
So why exactly does Citi think Google should buy this basket case? Could be really interesting, actually.

New app will help you manage all your credit cards (and plans to manage more of your financial life) (TechCrunch)
Curve, which has some notable investors, combines all your credit cards onto one physical card (similar to Coin). Curve’s been designed to plug into any payments system under the hood (today this is cards, but could be bank accounts or an online payment provider like PayPal) and has big plans for the future.

B of A’s Head of Tech Strategy joins tech startup (AmericanBanker)
Thomas had been B of A’s head of architecture and technology strategy and last week apparently joined Apprenda.

Insurance Disrupted: An insider guide to who’s doing the disrupting and how (Insurance Thought Leadership)
An inside look at the visions, culture and disruptive innovation accelerating the digital tipping point for insurance and the opportunities that creates for companies bold enough to become part of it.