Revolution Money: Paypal/credit card competitor

[grobe]

"AOL co-founder Steve Case's investment company launched an Internet-based payment system which would slash merchants' costs for accepting credit cards by some 75%.

Revolution LLC unveiled Revolution Money, the first two products of which will be an online money-transfer service and a credit card with "significantly lower interchange fees" for companies that accept it, Revolution said."

[online.wsj.com...]

Anyone think anything will come of this--or will it disappear like virtually all the other Paypal competitors?

[LifeinAsia]

There was some discussion several months ago about this. At the time, it was too early to tell, since there were very, very few merchants involved.

I'm always welcome to competiton. (Unless, of course, it's competiton to MY company! ;) ) I doubt it's going to even come close to putting either PayPal or the CCs out of business, but should (hopefully) do a lot to force them to lower their fees and/or improve customer service.

[Bjorn Iceland]

Steve Case knows the mass market, but what will be the killer incentive to use Revolution Money's MoneyExchange? Also isn't the name a bit long? come on guys...

It's interesting that Citigroup is a financial backer. Will we see C2it.com redirecting there soon?

The card was originally called GratisCard and has just been rebranded.

It's going to be an uphill battle to get the RevolutionCard adopted by consumers, although having AOL AIM customers as an initial target group gives them some strength.

(After all, Discover started with Sears in 1985 and now has 50 million card holders, despite the attempts of Visa and MasterCard to squeeze out such competition with exclusive contracts for card issuing which only ended after the Supreme Court ruling in the US a couple of years ago.)

However, how many merchants does AOL serve? Consumers want to buy something with their plastic, and it's unclear how they are going to reach merchants. Perhaps they will buy some company like 2Checkout.com and offer their service and card to all their merchants. Time will tell.

Amazon.com and Google with their new payment services have more of a chance to compete with PayPal, although having a card in a customer's wallet is certainly a good move.

From: Digital Transactions Mar 07 article

GratisCard is "well-funded, and they see an opportunity to lead the interchange path downward," says consultant and former MasterCard executive Steve Mott, principal of Stamford, Conn.-based BetterBuyDesign. Mott, who doesn't have inside knowledge of the company, says GratisCard won't gain much share until merchants and banks determine its operational systems, including risk management and chargeback resolution, work well. But the low acceptance costs will get merchant attention, he predicts. "Fifty basis points will certainly get some movement if all other things are basically equal," he says.

[edited by: Bjorn_Iceland at 6:42 pm (utc) on Oct. 2, 2007]

[edited by: lorax at 1:43 pm (utc) on Oct. 4, 2007]
[edit reason] remove URLs and edited for Minor Fair Use [/edit]