Revolution Money to Take on PayPal, the World
A large group of very heavy hitters, chaired by former AOL man Ted Leonsis, has launched a new financial services company called Revolution Money. The company will charge transaction fees it says are as low as 25% of the industry average and will allow those transfers to be carried out through existing Points of Sale, an anonymous PIN protected credit card and a variety of online methods, including social networking sites and AOL's AIM instant messenger. Here's the release on Leonsis's blog.
The team at Revolution Money is staggering. The Board includes Lawrence Summers, former U.S. Treasury Secretary; Russell Hogg, former President and CEO of MasterCard International, Inc.; Franklin Raines, former CEO of Fannie Mae and former director of the Office of Management and Budget; David Pottruck, former CEO of Charles Schwab and David Golden, CFO of Revolution LLC and former Vice Chairman of JPMorgan. The company recently announced a $50 million Series B round of funding from Citi, Morgan Stanley, Deutsche Bank and others.
Will you start seeing Revolution Money as a payment option online and off this fall? You probably will. This company could have the financial smarts to succeed where Google Checkout has failed and prove a viable challenger to PayPal, at the very least.
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They list on the site that they will also provide products for Money Exchange. That's huge - the process for sending smaller amounts internationally, especially when its not on a regular frequency is terrible today. Banks are extremely expensive and inconsistent (fixed fee in the US, and often, percentages abroad is one problem). If they get that right, the volume (and opportunity) is huge.
Thanks for pointing that out - that is huge. These guys are really swinging for the fences.
I wonder how their prices will compare to what Amazon charges with their FPS WebService. It's been suggested that you could make your own PayPal with their service.
http://www.amazon.com/b?ie=UTF8&node=342430011
Interesting take. I'd check out TrialPay too -- they're taking a much different approach but offering a different payment platform that could give the PayPals of the world a run for their money on consumer/online spending while providing a new channel for advertisers.
It would be good to have a strong alternative to Paypal, as it will also help keep the bank aligned payment services honest, who charge very high rates for doing very little. And hopefully they improve on some of the poor execution from Google Checkout. As a merchant, I took a look at that, but one of the basic, vital pieces of information I needed to know - when do I get the money into my account from Google - was well and truly buried on a hard to find page. It wasn't on their FAQ page, which made me immediately suspicious - surely when the merchant will receive the funds would be one of the most popular questions - and so I've never ventured further to try it, even though they have been offering a fee free period to get you started.
A big reason why this thing might stick has to do with interchange fees -- they're like ATM fees for merchants, the processing fee they're charged by the banks each time they swipe your card.
I work for a group called Merchants Payments Coalition on just this issue, and I assure you, restaurants and retailers are desperate for an alternative to Visa and MasterCard. Heck, and who better to undermine MasterCard than one of their fomer execs!
The Leonsis blog post even specifically mentions interchange, so it's clear they know they stand to gain among merchants. I'm impressed so far.