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Revolution Joined by Industry Legends and Major Banks To Launch Revolutionary Payment System
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Steve Case, Ted Leonsis, Larry Summers, David Pottruck, Russell Hogg and
others form and invest in company to transform payment industry
New company to be called Revolution Money; Internet pioneer Leonsis named
Chairman
New Internet-based payment system with innovative credit card drastically
alters economics of the industry, generating significant consumer benefits
and higher level of security; saves merchants and online store owners on
rising interchange fees
Company first to combine the power of free online money transfer with
credit and pre-paid in one integrated offering
WASHINGTON, Sept. 24 /PRNewswire/ -- Revolution LLC, the investment
company created by Steve Case, today launched a new subsidiary, Revolution
Money, an innovative new payment platform created to transform the payment
industry by drastically altering the economics through Internet-based
technology, generating significant consumer and merchant benefits.
Revolution Money offers consumers one of the most secure credit cards with
significantly lower interchange fees for merchants and the first free
online money transfer service, Revolution Money, formerly GratisCard Inc.,
has been formed by Case, Revolution Money Chairman Ted Leonsis, former
United States Treasury Secretary Larry Summers, former Charles Schwab CEO
David Pottruck, and former MasterCard International President and CEO
Russell Hogg, among others, and is backed by Citi, Morgan Stanley and
Deutsche Bank.
(Logo: http://www.newscom.com/cgi-bin/prnh/20070924/NYM048LOGO )
"Traditional, and even online, incumbents have been charging what adds
up to billions of dollars of fees every year that ultimately comes out of
consumers' pockets," said Steve Case, chairman and CEO of Revolution LLC.
"So we have built an innovative Web 2.0 company based on the latest
technology to disrupt the decades-old system with the goal of offering the
industry's most accessible, easy-to-use and secure payment system that puts
money back where it belongs, in consumers' pockets."
Revolution Money has created the first Web 2.0 payment platform
designed for a mainstream consumer audience, especially those who enjoy the
convenience of handling their financial affairs and purchasing online. Its
technology will enable account holders to do things that no single
alternative has been able to do before - fuse all of the expected functions
of a traditional offline credit card with a stored value card, and combine
it with new online functionality.
Today Revolution Money introduced its first two flagship offerings -
Revolution MoneyExchange, the first free money transfer service that powers
online transactions, and RevolutionCard, the industry's first anonymous,
PIN- protected credit card.
Revolution MoneyExchange
Revolution MoneyExchange's money transfer service is the first online
payments platform for social and instant messaging networks, allowing
consumers to safely transfer funds via the Internet to anyone, even
merchants, for free. Consumers can set up a free Revolution MoneyExchange
account in just minutes by registering at http://www.revolutionmoneyexchange.com,
and start transferring money to friends, family, or merchants. In the
future, Revolution MoneyExchange plans to provide its users the option of
linking their accounts to a RevolutionCard, offering the convenience of
combining their online and offline payment needs into a unified stored
value and credit experience.
Consumers will be able to use Revolution MoneyExchange across a variety
of Internet platforms and portals, including social networks and Instant
Messaging portals
Revolution MoneyExchange launched in invitation-only beta form today
and will be gradually expanded before being made available to all consumers
later this year.
RevolutionCard
When a consumer uses a credit card at any store today the merchant is
required by traditional credit card companies to pay them an average of 1.9
percent of the total sale. For example, when a consumer buys a $500
television using their credit card the store has to pay the credit card
company an average of $9.50. With billions of credit card transactions
annually these fees - called 'interchange fees' - totaled an estimated $56
billion paid in the United States to credit card companies in 2006 alone.
Revolution Money's sophisticated new payment system, based on secure
Internet technology, slashes these fees to 0.5 percent, creating
significant savings for merchants and enabling them, in turn, to offer
their customers new and immediate rewards, such as cost savings and loyalty
programs.
"Today, merchants, and ultimately consumers, pay an enormous sum just
to have the convenience of using a credit card," said Jason Hogg, Founder
and CEO of Revolution Money. "Revolution Money's proprietary operating
system uses the Internet to circumvent the traditional interchange system,
providing a drastically reduced fee structure that could create billions of
dollars of merchant and consumer savings - essentially flipping the
industry on its head."
In addition to the significant savings generated by Revolution Money,
the company has also created one of the most secure forms of payment.
Revolution Money is the first to offer an anonymous credit card with
PIN-based encrypted technology. With no name or account number on their
card, consumers' identities remain anonymous, drastically reducing the risk
of identity theft, fraudulent charges and other consequences of cards being
lost or stolen.
"Payment security and identity theft are big concerns for virtually
everyone today," said Hogg. "That is why we have created a network based on
the latest technology that provides consumers the highest security
available. Whether a consumer wants the benefits of a traditional credit
card, pays bills online or transfers money, Revolution Money is the most
cost-effective and secure offering available."
Accepting RevolutionCard is easy for merchants. It can be accepted
through existing payment processors or directly through Revolution Money.
It can seamlessly integrate into existing Point-of-Sale (POS) software and
implementation can be completed remotely. Revolution Money has effectively
created the first win-win credit service for merchants by offering a
drastically reduced-interchange service that increases their profitability.
"Customer convenience is a number one priority for our company," said
Comcast-Spectacor President Peter Luukko. "RevolutionCard allows us to
provide our customers with a new and innovative payment platform which
ultimately saves the consumer money. We rewarded our customers who
registered during our trial period with credit toward food, beverage or
merchandise purchases at the Wachovia Center. Additionally, we offered our
season ticket holders an autographed jersey as incentive for using
RevolutionCard as their payment form. RevolutionCard is a necessity for any
organization looking to truly reward their customers and simultaneously
reduce credit card fees."
To apply for RevolutionCard, consumers only need to fill out one
application form, found at participating merchants or online at
http://www.revolutioncard.com. RevolutionCard offers instant customer approvals
and merchants are able to issue co-branded PIN-protected RevolutionCards
on-the- spot in their stores and through their websites.
Launch Partners
To demonstrate its versatility, Revolution Money has launched pilot
programs in a number of segments, including credit, online, gift and
person- to-person. In a recent trial, the company successfully performed in
multiple programs with the Philadelphia Flyers and the Philadelphia 76ers.
RevolutionCard is also launching card distribution programs and marketing
programs in multiple segments, including airlines, cable, petroleum and
convenience stores, energy products and services, apparel and footwear,
online, healthcare, computers, electronics, and sports. Northwest Airlines
is one of Revolution Money's largest acceptance partners.
One of the first online partners to offer Revolution MoneyExchange will
be AOL's AIM(R) service, the largest instant messaging community in the
United States. Starting this fall, AIM(R) users will be able to download
the Revolution MoneyExchange AIM(R) plugin at http://gallery.aim.com to
launch Revolution MoneyExchange and make payments via instant message
directly from their AIM(R) Buddy List(R) feature for free.
To gain ubiquitous acceptance by merchants, Revolution Money has
established key strategic partnerships with leading merchant acquirers and
processors, such as Fifth Third Processing Solutions, to enable millions of
merchants across the United States to immediately and seamlessly begin
accepting RevolutionCard. Processing more than 21 billion transactions
annually, Fifth Third provides best-in-class processing solutions to
diverse financial institutions, merchants and networks worldwide.
Bank Partners
Unlike most bank credit card issuers who are limited to a narrow scope
of credit approval guidelines specific to their bank, RevolutionCard
seamlessly utilizes multiple partners to achieve unparalleled consumer
approval rates. The platform is able to achieve these high approval rates
by giving consumers access to multiple banks, which approve credit across a
much broader range of credit scores than traditional credit card companies
do, while still only having to fill out one application. RevolutionCard's
centralized application system dramatically increases immediate consumer
credit approval rates, on terms appropriate for each consumer.
Revolution Money has initially partnered with four institutions: First
Bank and Trust (Brookings, SD) issues the accounts, Citi (New York, NY)
acts as a prime partner, CompuCredit (Atlanta, GA) acts as sub-prime
partner and Union State Bank (Orangeburg, NY) acts as a merchant settlement
bank.
Financing
Revolution Money recently secured an additional $50 million in Series B
venture capital funding. The financing round was led by Citi, Morgan
Stanley, Deutsche Bank and Ted Leonsis, and included its controlling
investor, Revolution LLC. In addition to the equity financing, Revolution
Money has secured debt financing from Citi to fund growth of Revolution
Money's prime consumer loan portfolio. The investments will be used to
accelerate the company's growth, enhance product development and expand
marketing and sales efforts.
"The launch of Revolution Money is another example of how Web 2.0
technologies and business processes can transform an industry for the
benefit of consumers and merchants alike, while providing great growth and
value creation opportunities for stakeholders," said Ted Leonsis, Chairman
of Revolution Money.
Management Team
Ted Leonsis, Vice Chairman emeritus of AOL and majority owner of the
Washington Capitals and Washington Mystics, and minority owner of the
Washington Wizards, is Revolution Money Chairman. In addition to Leonsis,
Revolution Money's Board of Directors is comprised of Steve Case, 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; David Golden, CFO of
Revolution LLC and former Vice Chairman of JPMorgan; Jason Hogg, Founder
and CEO of Revolution Money; and Patrick Graf, Co-founder and CTO of
Revolution Money. Marshall Group Chairman and CEO Dennis Mathisen is also a
founding investor.
Revolution Money was founded by CEO Jason Hogg and co-founded by CTO
Patrick Graf. Hogg was previously a founder of MBNA Canada and chief
business development officer at MBNA Canada. He was the COO of Medsite,
Inc. and previously President of HorizonLive. Hogg is the son of Russell
Hogg, the former President and CEO of MasterCard International Inc., who is
credited with launching BankNet, MasterCard's global packet-switching
network. Graf was previously SVP for Q1 Solutions. Hogg and Graf are joined
by COO Dax Cummings and CFO Darren Thompson. Cummings is a seasoned veteran
who previously ran MBNA's US Endorsed Card business and served as member of
their Management Committee. Thompson was formerly the head of Credit
Finance at Fannie Mae and a Managing Director at Goldman Sachs.
About Revolution LLC
Revolution LLC, the Washington, DC-based company launched by Steve Case
in 2005, seeks to drive transformative change by shifting power to
consumers and building significant, category-defining companies in the
process. Revolution's mission is to build companies based on disruptive
business models that give people more choice, control and convenience in
the important aspects of their lives. Revolution is currently focusing on
four market sectors poised for disruptive change - Health, Financial,
Resorts and Balanced Living. For more information go to http://www.revolution.com.
MEDIA CONTACT:
Brad Burns
202-776-1400
brad.burns@revolution.com
