Steve Case and Ted Leonsis are back in a big way. According to Ted’s blog, Revolution LLC (the parent company of Revolution Health), is launching Revolution Money. Revolution money allows secure payment transfers for free online! This is going to be a major blow to Paypal and Google Checkout, especially to Google given that they failed to revolutionize the credit industry when they had the opportunity.
So how does the new company make money? Through a new payment technology system, Revolution Money has cut the costs of credit card fees to merchants down to 0.5% from an average of 1.9% per sale. Currently, these fees, called interchange fees, total a whopping $56 billion each year. This company plans on putting a serious dent in it and chances are they will succeed.
I’m surely going to start using the system when it launches to receive payments online and if I owned a store I would surely integrate this into my point of sale system. One company after the next seems to be launching in D.C. so this is great times! If you want to become an active member of the D.C. technology scene then go sign up for the DC Technology Network on Ning. Big thanks to Justin Thorp for putting it together.
September 24th, 2007
2 Responses to “Thanks Leonsis & Case! D.C. Is Back in a Big Way”
September 25th, 2007 at 12:38 am
I’m not sure Mr. Leonsis’ product is all that revolutionary. If I read his press release correctly, he’s offering a completely new platform–one that competes with Visa, Mastercard, Amex, etc. In other words, if you want to use Revolution’s payment system, you can *transfer* money for free. If you want to pay with his Revolution Cards then you can use them as your credit card provider.
As a merchant, one still needs a traditional gateway to accept all the major cards. And one will still have to pay the 1.9%-2.9% + transaction fee to accept these methods of payment. You could also accept their Revolution card or exchange system, but it’s just one more option and not a replacement.
As a consumer, I have no monetary reason to switch to Revolution because, if there’s not a fee collected, then there’s no room for me to get rewards. That money that comes out of the merchant comes back to my pocket.
The only advantage I can see as a consumer is that I can have a card that’s somewhat less susceptible to identity theft (read the press release for information). And as a merchant this is no good until there’s critical mass. But they’ve got an uphill battle…
September 25th, 2007 at 12:42 am
All that being said, it’s great that this is all taking place in DC
. And if we can take advantage of all this–so much the better.
I’m sure there’s more to Ted/Steve’s ideas than I’ve picked up on, so I’ll be curious to hear what the blogs have to say…
Thanks for so quickly reporting on the community, Nick!