Category: Fintech

My 2019 financial reshuffle 2/2: Virgin Atlantic credit card, Curve and Founders Card

Curve and Virgin Reward+ (again)

Just after I posted the first part of my financial reshuffle, Curve launched Amex support, I applied for one of their metal cards, that came with unlimited free Amex spend (and a much higher maximum £1.4m annual spend limit), and Amex terminated Curve’s MSA, pulling Amex support from Curve.

It all happened very quickly but, having missed a few good opportunities, I decided to jump in quickly on this one, and now I’m stuck with Curve metal card that looks and feels really nice but isn’t much use to me.

New Curve metal card

I have 28 days to claim a refund so my plan is to try to get to get a much spend on it as possible within that time, to reassure myself that I won’t get stuck at an annual spend limit. Assuming that happens, I’ll keep it.

The funny thing is, metal cards are quite common among high-fee, high-income reward cards in the US, but in the UK, the only metal cards I’m aware of are the Amex Centurion, N26, Revolut and Curve. In other words, 3 out of the 4 metal cards in the UK are basically pre-paid debit cards open to anyone. How’s that for prestige?!

It’s not that easy, though. no sooner had I cancelled my Virgin Atlantic Reward+ Credit Card that Curve brought out this new product that is literally game-changing for anyone with large tax bills. Because of that, I actually re-applied for the Virgin Atlantic Reward+ Credit Card. Reading the fine-print carefully, I should be eligible for the current 25k miles signup bonus again. The product’s been out less than a year so I guess the possibility for churn hasn’t registered yet… I also got a higher limit second time around.

Founders Card

Speaking of pointless metal cards, I took out a  Founderscard some time ago (I don’t know why they given out cards).

Founders Card

Given how many of the best offers were restricted to the US, I wasn’t sure if I’d keep it, but I’ve recently had a lot of good value out of it:

  • Total Rewards (Caesars) Diamond Elite status was immensely valuable in Vegas and as far as I know, this is the only way to get it in the UK. I also managed to get a status match from Caesars in the UK – the benefits are relatively modest but still nice to have.
  • Stripe became a Founders Card benefit in the US and, shortly after, in the UK as well. The £15,000 in free processing from Stripe combined with the £30,000 in free processing I have in a legacy Braintree account have opened up the possibility of ditching Worldpay for a more modern solution and saving money at the same time.
  • It was time to replace my 2017 Macbook Pro and after perusing the offers on Founders Card, I realised that I could get a very good Lenovo laptop for very good price as long as I could arrange for it to be shipped to the USA and forwarded on from there. It was a bit of a debacle but I saved several hundred pounds, even after all of the extra costs involved in forwarding it.
  • I’ve had a couple of free business lounge visits, discounts at Namecheap, Moo and others. These aren’t worth a lot but still nice to have.

All in all, I have saved a lot compared to the annual fee, both in business and personal expenses. I am also really looking forward to the London event as a place to meet likeminded business owners in a relaxed setting.

My 2019 financial reshuffle 1/2: Virgin Atlantic credit card, Curve and Natwest

Over the past 18 months or so, I’ve very successfully collected a lot of airline miles, without changing my spending habits. In fact, In principle, anyone can do this, and I’m surprised that so many people I know don’t use a miles or cashback earning card.

However, the landscape has changed in the same period. Most people now have more choice but, big spenders, including small business owners such as myself that expense a lot, may have to accept that very generous rewards were great while they lasted.

Curve

The first victim of my reshuffle is Curve. Curve is a bit like Apple Pay or Google Pay, but with a physical card. You link your cards to it within the Curve app and select the one you want to use, then use the Curve card to pay. Alongside convenience, advantages included:

  • Cash withdrawals would be treated as purchases on credit cards, thus earning you airline miles,
  • Foreign currency spend would be converted by Curve at the Mastercard rate + 1%, saving you about 2% on most cashback or miles earning cards,
  • Curve is technically a debit card, so you could use it without incurring a fee at HMRC, car dealerships and so on, whilst earning miles on your cashback or miles earning credit card.

The first point has changed: without getting into the technicalities, you’re likely to be charged a cash advance fee if you withdraw cash on your Curve card.

The second point has also changed: instead of a flat 1% markup, there is a 0% markup up to a low limit, then 2% thereafter. My back of fag packet calculation suggests that most people will be worse off, with business users such as myself, hardest hit.

The final point hasn’t changed. However, Curve’s “enhanced” annual limits have stayed at £50,000 and they are making it harder to get the enhanced limit, so big spenders will be limited by how much they can use their card.

My maxed out Curve card
My maxed out Curve card!

Virgin Atlantic Reward+ Card

Virgin Atlantic is my long-haul airline of choice and coincidentally, about 9 months ago, they released the most generous miles earning credit card on the market. In fact, it was hard to see how they could possibly make any money from it.

I signed up almost as soon as it was released and I’ve been using it alongside by Amex since then. On paper, it remains an incredible deal but I’ll be cancelling it in about a month because:

  • The customer service is crap. If you send them a message via online banking, you get an ill-considered copy-paste response. Their call centre seems to be located overseas and apart from the agents’ English, their customer service skills also seem to be lacking. I wholeheartedly believe the best way to respond to poor customer service is to walk away.
  • They gave me a relatively low limit and refused to increase it despite a perfect payment history. The limit it below the amount that I charge to it each month, so I have to keep making interim payments to earn the miles, which is a PITA.
  • Because I keep making interim payments, it can be hard to keep track of how much I spend in a statement period and how much I pay off in the same period. Because of this, I’ve been charged interest a couple of times. The amount I was charged was much, much higher than I had expected, and I eventually figured out that even if you only “carry” a balance of £0.01, you’re charged interest on the whole average balance in the statement period.
  • There is no mobile app, Apple Pay or Google Pay.

NatWest

I was waiting for Starling for released their business product for non-micro businesses, but eventually decided that since web-based banking isn’t on their agenda, I’d find an alternative. I chose NatWest, and also took advantage of the £125 bribe they were offering for switching a personal account to them. Generally, I find NatWest’s customer service to be better than Santander’s, and there is a working mobile app for business accounts (yay!). There are a few snags but I’ve decided to put up with them:

  • The card reader. You need to carry around one of these things to make most types of payment:
    NatWest card reader
    NatWest card reader

    It is more secure, but it’s also rather annoying.

  • NatWest limit the amount you can charge to one their debit cards, when paying financial institutions, to £2k. I’m used to paying my Amex off by debit card, with the benefit being that your balance is updated immediately. I now have to pay them by bank transfer.
  • NatWest limit the amount that you can pay by BACS/FPS in a given day to £20k for personal accounts. This is rarely a problem for me, as I’m sure it would be for most people, but I hit a snafu a couple of weeks ago where I had hit the limit and needed to make another payment that day. I called them and it turns out that the same limit applies to payments made by telephone banking and there’s nothing that they can do to increase the limit. Luckily, business accounts have a higher limit and I was able to make the payment I needed from there.
  • NatWest show you very limited information about payments received until the day after they arrive. Say you receive £100 on Monday. You’ll see £100 and you’ll see the reference, but you won’t see the sender’s name until Tuesday. WTF?!

 

Transferwise add business debit cards!

I’ve often complained about the high cost (i.e. FX fees) involved with doing business internationally – most banks in the UK just don’t understand that modern businesses are increasingly international and that “traditional” 3% FX charges on card spend and expensive/lengthy SWIFT transfers (and the SWIFT system in general) make them really uncompetitive.

I’ve tried to find solutions. The best I’ve found are:

  1. Revolut’s business product, although as a limited company, you have to do a lot of volume to make it worthwhile, which is hard as the USD facilities are very limited.
  2. Starling Bank’s business account, that I’ve decided we won’t adopt even when they accept multi-PSC businesses, because of the complete lack of a web interface.
  3. Curve – a sort of proxy that charges the Visa/Mastercard of your choice with the Mastercard rate + 1% when you spend on it in a foreign currency (the 1% is eliminated when you use a cashback credit card).

Until today when this arrived in my inbox!


Transferwise business debit cards are here

Whilst I wouldn’t normally recommend using an e-money product as a bank account, Transferwise are backed by the Royal Bank of Scotland and were one of the first entrants to the fintech space. We’ve been using them on and off for years and the only thing stopping us using their borderless business account was the lack of a debit card.

Their (market-leading) offer is now:

  • FREE real bank accounts in the UK, USA and EU (and elsewhere),
  • FREE debit card
  • Web AND mobile banking
  • Faster Payments, SEPA, ACH AND Wire (with a fee)
  • Approximately 0.5% FX fee,
  • Proper company and decent service
  • Xero integration coming soon(tm)

Interested? Sign up here.

Starling launches its “challenger” business account

Starling Bank

I was lucky enough to attend Starling Bank‘s business account launch party. It was a nice opportunity to walk around the new office development in Finsbury Square, to meet forward thinking business owners and to understand a bit more about Starling’s roadmap.

I am a happy Starling personal customer and, in my view, if you are interested in fintech, Starling is the company to watch. They were the first of the challenger banks to obtain a banking licence and, of the few challenger banks offering current account, they have the best offer on paper. This review is quite critical but that is because I am holding them to a standard that is well above the norm.

  1. There was heavy criticism from the audience around spend tracking. Spend tracking as it stands at the moment is extremely simplistic – there are a small number of fixed categories and spend is assigned to one of the categories based on the merchant’s MCC. The result is that your spend will be put into one of a few vague buckets such as “travel” or “bills”. For personal customers with relatively simple budgeting needs, this may suffice but for businesses, this feature is completely useless. Starling have heard this feedback but it seems low on their list of priorities.
  2. I was the only one to raise the lack of web-based banking. On Starling’s forum, the lack of web-based banking attracted similarly passionate critique to the simplicity of spend tracking. The audience, myself excluded, didn’t seem to mind. Starling confirmed that they are still committed to being mobile only but, when they release their Xero and FreeAgent integrations, that will provide a web interface, sort of. They also suggested that their apps will be made usable on tablets “soon”, which will at least make it easier to see what’s happening without frantically scrolling up and down.
  3. Xero and FreeAgent integration isn’t here yet but it sounded like that is their top priority right now and will be available in a matter of weeks. CSV export is available now. It sounds like integration with other accounting systems, including Sage and Quickbooks, as well as Yodlee, are a very long way off.
  4. They have initially chosen to target limited companies, with one significant person of control, with a turnover below £1.7m, who don’t need cash or cheque facilities. They will be able to start using it immediately and will pay nothing. Companies with a turnover over £1.7m that meet the other criteria will be able to sign up but will be liable for yet unannounced fees at a yet unannounced point in the future. Seems like quite a narrow market segment to me. Sole traders, LLPs, companies with more than one controlling party etc., are all coming “soon”.
  5. Pricing was announced, sort of. For limited companies who either have a turnover below £1.7m or who have fewer than 10 employees, there will not be any charges at all. Not even for foreign currency. Businesses larger than that will enjoy free banking until Starling’s business user base grows (how much?!) and will then have to start paying (how much?!)
  6. Cash deposits are still coming “soon”. Starling talked a lot about costs but, for most SMEs, the key cost of their banking is cash handling, which Starling don’t offer at all. Take that away and you’re saving something like £5-7.50 per month, after a free 12-24 months, for a high street bank’s electronic tariff.

So, overall, the thing that really stood out to me was the extensive use of the word “soon” and no mention of when “soon” means weeks and when it means probably never. The general vibe in the room was that is ok because Starling is moving fairly quickly. In my view, though, Starling ought to take a page out of Monzo’s book on this one and create something like a publicly accessible Trello board to help customers understand what “soon” means.

In summary, Starling do now have a business current account but it’s very MVP. Personally, I will be revisiting this topic when the requirement for businesses to only one significant person of control is dropped.

Curve – the solution to business FX woes?

About a year ago, I decided that enough was enough, and I had to find an alternative to Paypal to cut costs. At the time, we were paying PayPal around £300 per month, which was at their 2.9% rate, generally plus a 1% cross border fee (i.e. we were paying them almost 4%). Although Elavon gave me the runaround, Worldpay offered a surprisingly good solution for a fraction of the price. Moving from Paypal to Worldpay was one of the best decision I’ve made.

FX Fees

However, I’d yet to find an equally good solution to the smaller but still substantial FX fees we pay for various software and hosting products in USD and EUR. I’d looked into currency accounts where the cost and headache of getting one and reconciling it would have outweighed the benefit and “travel” credit cards that, instead of paying cashback, simply don’t charge FX fees.

I didn’t want to have to reconcile two credit card accounts, nor did I want to give up the Membership Rewards that I get from running business expenses through my American Express. However, I was deeply unhappy that American Express charge a 3% FX fee on top of the £450pa card fee.

To make matters worse, although I have been a happy occasional customer of Transferwise, and was eagerly anticipating their stress-free currency account service, when it was launched, I realised that it doesn’t come with a card. Most of these software and hosting services rely on card payments.

Imagine Curve

I read about Curve on a travel site. Essentially, it’s a prepaid card, similar to Revolut. However, whereas Revolut prohibits business use, Curve is specifically for business use. Well, allegedly. The offers for Topshop, Goldsmiths and Dorothy Perkins might suggest that it’s a commercial card purely because commercial cards attract a higher acquisition fee but that’s not my problem.

The other key difference, which is a big help from a business point of view, is that rather than having to keep the card topped up or getting another statement to reconcile, each transaction is converted to GBP immediately and billed in GBP to the card of your choice. In this case, my business debit card. Therefore, I can rely on my business bank statement and I have a receipt from Curve and from the merchant with a complete paper trail.

It gets better

Not only is this a very easy way of cutting FX fees from 3% (Santander / American Express) to 1% (Curve), you can also attach several Visa and Mastercard credit and debit cards to it and pick the right card for each purchase. You can even reassign the card a purchase is funded from after the purchase. Again, this is probably more useful for personal users, of whom I’m sure there are many, because a the FX fee could be offset by using a cashback Visa/Mastercard credit card.

Also, you’ll get £5 free on the card the moment it arrives (code: TENPY) and the whole order, verification and activation process is really smooth. The limits are also, in my view, reasonable for most small businesses.

To make it perfect

I understand that Curve have to sustain grow their business and to do that, they have to charge their customers. However, I would like to see an option to pay a fixed monthly/yearly fee in place of 1% of my FX spend. This would persuade me to use the card more without having to think of the fee at each purchase, especially with larger purchases.