Lloyds and Curve: betting on the future of digital wallets

Chris Jones, Managing Director at PSE Consulting, shares his insights on Curve’s acquisition by Lloyds, and its overall impact over digital wallets as a banking service.

Lloyds Banking Group’s confirmed GBP 120 million acquisition of Curve is far more than another strategic foray into digital wallets. It is a statement of intent: a recognition that the battle for consumer payments will no longer be fought between cards and current accounts, but between the wallet layers that sit above them. The banks that win will be those that re-think the bank account itself, and Lloyds has just bought one of the few platforms capable of enabling that shift.

Why the deal matters now

By any historical benchmark, Curve’s sale price looks modest. A company that has historically raised more than GBP 250 million exiting for less than half that. But this tells us more about the changed fintech investment landscape than Curve’s strategic value. High-burn, growth-stage fintechs can no longer command today’s valuations. For large banks, however, this recalibration creates a rare opportunity to acquire advanced capabilities at a fraction of their build-or-buy cost.

Lloyds has taken that opportunity decisively. And it has not bought a ‘digital wallet company.’ It has bought the technology stack that could redefine how a bank account works.

The real asset: funding orchestration, not NFC

Much early commentary has focused on Curve Pay and the possibility of Lloyds creating a challenger to Apple Pay. While regulatory pressure is gradually forcing Apple to open NFC access more widely, this is unlikely to drive mass user behaviour change. Consumers embedded in Apple’s ecosystem do not shift wallets because of Tap-to-Pay plumbing.

Fortunately for Lloyds, this is hopefully not where the value lies.

Curve’s unique capability is real-time funding selection: a single card or token that can route to debit, credit, instalments, partner credit lines or Open Banking sources based on consumer choice or smart rules. This is more than wallet functionality; it is a payment orchestration engine inserted directly into consumers’ everyday payment experience.

Few banks, even globally, have this capability, and those that do have built it only in fragments across different products.

A new generation of bank account

Lloyds now has the foundations to build something the UK market has never truly seen before: a universal, adaptive bank account where the funding method is no longer fixed at the moment of transaction. Instead of pushing consumers toward separate debit, credit, BNPL, or partner credit products, the account itself can decide or help the customer decide which funding source is best in real time.

This opens up several powerful strategic opportunities for the bank. The most significant is the ability to embed Lloyds’ own instalment and BNPL options seamlessly across every merchant and every transaction. Rather than relying on checkout integrations or individual credit products, instalments can be enabled at the account layer, allowing Lloyds to capture credit volumes that currently flow to fintech competitors.

It also shifts the centre of gravity in the customer relationship. If funding decisions move into the Lloyds app, the bank becomes the user’s primary payment control centre, not merely one card among many inside Apple Pay or Google Pay. Consumers would manage their payment preferences from within Lloyds’ own ecosystem, not someone else's.

The economics improve too. With intelligent routing, Lloyds can direct transactions internally onto debit, credit, A2A, or internal rails where appropriate. And because the system can automatically choose the most suitable funding source for each purchase, the bank can offer a level of convenience, flexibility, and personalisation that traditional current accounts simply cannot match.

In many ways, this evolution reflects the reality of modern payments, where the distinctions between debit, credit, e-money, and BNPL have already blurred in the minds of consumers. Lloyds now has the technology to build an account that mirrors this reality – an account that adapts to customers rather than forcing customers to adapt to products.

Execution will determine the outcome

The strategic logic of the deal is sound. The challenge now is integration. Curve’s architecture, user experience, and risk models must be aligned with Lloyds’ operational, regulatory, and service frameworks without diluting the very flexibility that makes the platform valuable.

If executed well, Lloyds could deliver a new category of digital account – one that flexes to the consumer, not the other way around.

If not, Curve risks becoming another promising fintech constrained by legacy infrastructure.

A market-shaping moment for UK payments

The UK payments market has often complained that domestic banks innovate too slowly. Lloyds’ acquisition should be viewed as a strong counter-signal. It is a decisive, forward-looking bet on a world where consumers expect to choose how they pay, not just with what they pay.

This deal is not just about digital wallets, it is about the future architecture of the bank account.

And that could reshape the UK market more profoundly than any wallet war.

About the author

Chris manages PSE Consulting’s business and is known across the UK and EU for his insights on payments innovation. With 20+ years’ experience at PSE and Accenture, he specialises in market entry, proposition development and value creation, advising C-level clients on emerging trends, regulatory impacts, and new opportunities across the payments ecosystem.

 

 

About the company

PSE Consulting is a leading global provider of payment advisory services to players across the payments landscape. PSE’s expertise has enabled it to deliver actionable market insights and operational optimisation to senior payments leaders for over 30 years. To learn more, visit: https://pseconsulting.com.