Case Launches Online Credit Card Company
Revolution Money Modeled After PayPal
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Tuesday, September 25, 2007
AOL co-founder Steve Case is starting an online credit card company called Revolution Money that combines a PayPal-like money transfer service with a credit card that can also be linked to a bank account.
Ted Leonsis, owner of the Washington Capitals and vice chairman emeritus of AOL, will be chairman of Revolution Money, which is an outgrowth of GratisCard, a credit card company Case started last year.
Jason Hogg, chief executive of the new company, said Revolution plans to charge merchants 0.5 percent for each transaction instead of the 1.9 percent industry standard.
Hogg has signed up several big names for his board of directors, including Case, former Treasury Secretary Lawrence H. Summers, former Charles Schwab chief executive David S. Pottruck and former Fannie Mae chief executive Franklin D. Raines. Russell Hogg, former president of MasterCard and Jason Hogg's father, is also on the board.
"We are going and disrupting an industry that has been complacent. And we are taking the power away from the networks and associations a la MasterCards, Visas and PayPals, and turning it back toward the consumers and merchants," said Jason Hogg.
Revolution Money hopes to circulate 100,000 RevolutionCards in the next few months and hit 1 million in a year, according to spokesman Brad Burns.
Revolution Money is financed by Revolution LLC, a District investment company that Case founded in 2005 with $500 million of his own money after leaving AOL.
Revolution subsidiaries include Revolution Health, a consumer-oriented health-care company; Revolution Places, a spa and resort company; and Revolution Living, a lifestyle business whose holdings include the Flexcar car-sharing service.
