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April 06, 2009

Revolution money

This looks interesting, there's a new upstart payment processing firm called Revolution Money. And they've managed to get a fund raising away, even in the middle of this financial recession.

At a time when both consumers and merchants are looking for ways to cut costs, several major financial firms and individual investors have pumped $42 million into Revolution Money, the payment-processing company backed by AOL co-founder Steve Case.

By harnessing the Internet for its payment platform, the company slashes costs for accepting credit cards by up to 75% for merchants, who in turn pass part of those savings on to consumers to drive loyalty. With the new funding, the company will continue developing its technology as it looks to steal market share from traditional credit card companies like Visa and MasterCard, as well as popular payment service PayPal, a unit of eBay.

Ah, that's what they're doing! Using the net as a platform and thus thinking that they can cut the processing fees....and thus gain market share.

Chase Paymentech Solutions LLC has begun accepting RevolutionCard transactions for online and retail merchants. The deal is expected to boost the number of merchants who accept the card, a product of Revolution Money Inc., a St. Petersburg payments firm.

Terms of the agreement between Revolution Money and Chase were not disclosed in a release announcing the deal.

Chase Paymentech, a business unit of JPMorgan Chase (NYSE: JPM), processes about half of all Internet transactions, the company said in a release. By working with Chase Paymentech, Revolution Money’s market position and broad acceptance is solidified with both retail and online merchants, the release said.

If they've managed to get into the real payment system like this then they've got an opportunity to compete.

A recession may be in full force, but it didn’t prevent payment-processing start-up Revolution Money from raising $42 million in a new round of funding announced this morning. Revolution Money, which was founded by AOL co-founder Steve Case, managed to stay away from traditional venture capital firms, instead turning to financial giants Citigroup, Goldman Sachs and Morgan Stanley as well as a number of well-known individual investors. The attraction is an Internet payment platform that slashes costs for accepting credit cards by up to 75% for merchants, who in turn pass part of those savings on to consumers to drive loyalty. Read the story from VentureWire, which interviews Chairman Ted Leonsis, who is also an owner of the National Hockey League’s Washington Capitols.

All sounds interesting, eh?


April 6, 2009 in Finance | Permalink

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