Many online sellers were intrigued when they learned that AOL co-founder Steve Case's new company, Revolution, had launched an online payment service that sprang from Jason Hogg and Patrick Graf's GratisCard LLC. When the service launched last year, ReadWrite.com wrote that Revolution Money could prove a viable challenger to PayPal.
David Cautin, Senior VP and General Manager of Payment Solutions for Revolution Money, spoke to AuctionBytes about the payment service to put things in perspective.
Cautin said Revolution Money has two offerings. RevolutionCard is an interchange-free credit card (see Wikipedia's entry on interchange fees). And Revolution MoneyExchange is an online service enabling merchants and consumers to send money instantly, securely and free. "I think it's fair to say Revolution MoneyExchange competes with PayPal," he said.
Cautin said the RevolutionCard is very appealing to merchants because it's an interchange-free card, saving merchants 2 - 4 percent of revenue over Visa and MasterCard or American Express. "Two to four percent for an online retailer or general retailers is a significant chunk of margin."
Merchants are motivated to promote the card to shoppers, since they incur lower fees when buyers use RevolutionCard. Larger brick-and-mortar merchants can work with Revolution Money to offer shoppers a co-branded Revolution Money card. And for online merchants, Cautin said Revolution MoneyExchange is a good option, as it enables them to receive payments with zero fees.
According to Cautin, there are 4,100 listings on Etsy from sellers who accept Revolution MoneyExchange, and there are 2,800 sellers on eBay accepting Revolution MoneyExchange as a method of payment. Cautin could not comment on eBay's accepted payments policy that specifies which payment methods sellers may accept (Revolution Money is not on the list). But he said Revolution Money has provided a type of tool that makes it very easy for small online sellers to accept payments securely, instantly, for free. "Yes, sellers have inquired about us getting listed on eBay's list of accepted payments, and we are considering this," he said.
Cautin addressed the value proposition of Revolution MoneyExchange. "First, there's the element of pricing - our product is free. There's an element of security - our product is PIN-based and affords a level of protection other solutions do not." As a new entrant to the market, Revolution Money was able to design the systems from the ground up and was able to "bake in" that security at the ground level.
Revolution MoneyExchange recently launched a plug-in for AIM, AOL's Instant Messaging service. Users can send money through the instant messaging service to people on their "Buddy list" using a screen that Revolution Money manages.
Revolution Money's revenue model is based on the fees and interest from consumers that revolve on the credit card. The business model saves merchants money by eliminating interchange fees, Cautin said, and provides consumers with unmatched security and practical rewards, and MoneyExchange is an online, person-to-person service offering a secure and reliable way to instantly send money between accountholders for free. "Our product is poised to satisfy a lot of the concerns with respect to pricing of payment products and online security."
