American Express acquires Revolution Money
American Express today announced that it is acquiring Revolution Money from Revolution LLC, a company founded by AOL founder Steve Case. Revolution Money processes payments over the Internet without transmitting names or account numbers, and cardholders use a personal identification number to authorize transactions online. Revolution Money was trying to reinvent the world of credit cards by drastically reducing transaction fees (in some cases a few percentage points) paid by the retailers. Revolution Money struggled early on to find both cardholders and merchants willing to accept their cards. But a recent search within 15 miles of my zip code found almost 100 merchants. Not bad considering where they started. The WSJ came out with an article quickly and seems to think the deal will be beneficial for both side. I’m sure this will provide some much needed money to help the business grow but I worry about Amex’s intentions with the company. They typically have some of the highest interchange fees and many merchants won’t take Amex cards because of those fees. How will developing a system that reduces interchange fees be good for Amex and its industry brethren? Only time will tell. From a consumer standpoint, the Revolution Card, which is the plastic consumers carry, had some Loyalty program options associated with the card. It will be interesting to see if card holders can now earn Membership Rewards or some other currency in the future. Stay tuned…this could get interesting.