(or: The making of A Curve Transaction)
I’m Rona, Head of Operations at Curve. I’m responsible for making sure that our customers get their Curve cards quickly, have a smooth activation process and a seamless experience transacting and using our card and app. That includes our Customer Experience team, Compliance and Fraud processes to ensure security and privacy and building robust processes to support our customers and product as we scale.
At Curve, we are constantly working to create a seamless and delightful experience for our customers when using their Curve cards. Card transactions are not simple to process and Curve is even a bit more complicated than your usual bank card. This post is the first in a series in which we’ll explain how it works, what happens when it doesn’t work and what we’re working on to improve your experience as a Curve customer.
Let’s start with what happens when you’re standing at Cafe Nero at 9:16am using your Curve card to pay for that cup of coffee you really want right now:
Paying at a Merchant — Your Curve card is a Mastercard and you can use it at any merchant that accepts Mastercard (including ATMs and Online).
Processing the transaction — phase 1
The merchant sends a transaction authorisation request to the Merchant’s acquirer and from there to Mastercard. Mastercard sends the transaction to Curve’s processor and then onto Curve, the issuer of the card, for approval.
The transaction has two stages. The first is called Authorisation — the merchant asks the card issuer (in this case — Curve) if it’s ok to charge the card. The issuer performs a few checks before making a decision, including whether the card is real, not expired, if the billing address matches, if the transaction seems risky for this customer and if there are sufficient funds in the account.
Once the issuer approves the authorisation (as well as everyone else along the chain) the transaction amount is blocked from the card’s balance, but not taken yet. The authorisation approval is sent all the way back to the merchant. This is the moment the terminal at the coffee shop says “card approved”.
The merchant can now Capture — second stage of the transaction. At this point the card is charged. Sometimes merchants capture the funds a few days after the transaction took place (usually up to 7 days, but there are exceptions like hotels and car rentals).
For most card transactions the Issuer is the furthest part of the chain, in Curve, we have another layer!
Processing the transaction — phase 2
Let’s go back to the point in which Curve, as the issuer, receives the authorisation request from the merchant. We now need to charge the payment card that you have added to Curve and have chosen in the app for this transaction.
Once we receive the authorisation request from Mastercard we send it to our Acquirer. Our acquirer sends it to Visa\Mastercard (depending on the payment card you have chosen in the Curve app) and they send it to the payment card issuer — your bank.
This time Curve is taking the role of a merchant, sending an authorisation request to your bank. Once your bank approves, we capture.
This is also the point at which we send you a push notification to your phone. In the notification you can see the merchant, amount and the payment card that was charged.
While phase 2 is happening we also send the transaction details to our fraud engine to make sure we feel comfortable with the merchant, the transaction and that your card has not been compromised and only being used by you.
All this in 1 second??
Yes! This is quite a complicated process, but while it seems like a long one, it all happens within 1 second, as you’re standing at the till waiting for your coffee at Cafe Nero (and collecting reward points for your spend!).
=> In the next few post we will dive deeper into offline transactions, declines and a few other interesting cases.
What does it mean when we say:
Authorisation — when a customer makes a purchase the merchant sends an authorisation request to check with the customer’s bank if the card is legitimate and has sufficient funds for the product or service. At this point the transaction amount is deducted from your available balance but the funds are not taken from the customer’s account.
Capture — once a transaction has been approved by the issuer and other parties in the process the merchant can decide to go through with the transaction and claim the funds. At this point the funds are taken from the customer’s account.
Merchant Acquirer — a financial institution, with direct integration to Visa and Mastercard, that maintains the merchant’s bank account. The contract with the acquirer enables merchants to process credit and debit card transactions.
Issuer — a company that issues cards to customers on behalf of the card networks (Visa, MasterCard). Curve operates as both an issuer and an acquirer.