Talkin' 'bout a Revolution in transferring money online
SAN FRANCISCO -- Ted Leonsis wants you to pay bills and transfer money online in a new way, with no fees.
The entrepreneur and vice chairman emeritus of AOL has teamed with AOL founder Steve Case in a venture called Revolution Money, a kind of combination credit/debit card and online payment system. It's a unit of Case's Revolution, which has launched several other companies.
The RevolutionCard launched in September. Today, Revolution MoneyExchange launches, aiming to take on online payment leader PayPal by offering free money transfers online at revolutionmoney.com.
But there's a twist: Revolution is tied to a next-generation credit and debit card that promises to be more secure and less expensive than current cards.
Revolution's target market is the millions of young people who spend hours online at social networks.
"We want to be to social networking what PayPal is to eBay," says Leonsis, chairman of Revolution Money.
Later this month, Revolution will launch on AOL's AIM instant-messaging service. AIM "buddies" will be able to transfer money to each other or to participating merchants via an instant-message window. From there, Revolution hopes to be on Facebook, MySpace and anywhere else young people gather online.
To use the service, like PayPal, you sign up and type in your bank account information. Revolution transfers the money from your bank to the vendors, at no cost to merchants.
However, if consumers want to pay with a credit card, their only option is the RevolutionCard. Merchants will pay 0.5% of the sale, with no monthly fees.
When consumers buy goods via PayPal, they can use a variety of credit cards, and merchants pay fees of typically 2% to 3%. Google Checkout — which also accepts credit cards — is free to merchants through the end of the year. Google hasn't said what its plans are for 2008.
Greg Sterling, an analyst at Sterling Market Intelligence, says Revolution will find it very slow to wean customers from PayPal.
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