Products like this are particularly susceptible to fraud, especially given that they're charging your bank account directly. Without any KYC, if I as a fraudster get access to your bank login, I can basically drain your account. That opens up a ton of liability to Privacy. Also, the card networks tends to be pretty risk-averse with allowing issuing products access to their networks if there's a lot of fraud going through their services.

So, it's much easier to put KYC in place in order to avoid the headache of dealing with fraud/AML/etc