Lloyds Banking Group is reportedly in advanced talks to acquire digital wallet provider Curve for up to £120 million (US$162 million).

An announcement could be made by the end of September.

Curve, founded in 2016 by Shachar Bialick, offers an app and card that consolidates multiple accounts into one platform, competing with services like Apple Pay.

The potential deal aligns with Lloyds’ strategy to strengthen its payments infrastructure. It also comes as Apple faces regulatory pressure to open its payment services to competitors.

Curve raised £133 million (US$179.5 million) in series C funding in 2023 but has faced challenges, including staff cuts and the suspension of its US expansion.

Both companies have declined to comment.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Lloyds’ digital payments strategy follows broader banking sector trends

This Curve acquisition represents Lloyds’ most significant move yet in a multi-year digital payments strategy that began with smaller technology investments.

In 2017, Lloyds invested in Finastra’s Global PAYPlus platform to enhance its cross-border payment capabilities and support real-time payments as part of an “API-first” strategy 1.

The shift from partnership to outright acquisition mirrors how traditional banks are responding to fintech disruption, first by collaborating with fintechs and then by acquiring them outright to fully integrate their technology and talent.

The £120 million acquisition price (compared to Curve’s £133 million Series C funding) suggests Lloyds may be getting a favorable valuation, likely influenced by Curve’s recent employee reductions and paused US expansion.

This acquisition gives Lloyds control of a digital wallet positioned as an Apple Pay competitor at a time when regulators are pressuring Apple to open its payment services to competitors, potentially creating new market opportunities.

2️⃣ Digital wallet competition intensifies amid explosive market growth

The digital wallet market is experiencing tremendous growth, with transactions increasing from just 8% of card payments in 2019 to 29% in 2023, demonstrating rapid consumer adoption 2.