Monday, October 01, 2007

Revolutionising online payments

BetaNews reports: [edited]

After attempting to shake up the healthcare industry, AOL co-founder Steve Case is now looking to do the same to online payments.

The new venture is called Revolution Money and allows users to transfer money at no charge, as well offers a credit card for business that has lower fees for the money they get charged to accept it.

Businesses are only required to pay 0.5 percent of the total sale made on the RevolutionCard to the company, rather than the industry average of 1.9 percent. In addition, consumers gain the added security of a PIN number on their cards.

If the customer desires, the card could even include no name or account number on it, making transactions anonymous and the card useless to thieves who would need the PIN number in order to use it.

"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," Case said in a statement earlier this week.

The concept is enough to get Wall Street excited: Revolution Money has already raised $50 million in venture capital funding from companies that included Citibank and Morgan Stanley.

Not surprisingly, its first partner is AOL, who will allow payments through the AIM service.

The online payment system could be seen as a threat to PayPal and Google Checkout, while its credit card concept could significantly shake up the long-entrenched personal credit industry, which has three large players - American Express, MasterCard and Visa - and a host of others with limited reach.

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