WASHINGTON—Former AOL chairman Steve Case and half a dozen other well known new media and financial business executives have formed a new Internet-based credit card company that has already raised a $50 million B round. The company, formerly Gratis Card Inc., includes among its founders: Ted Leonis; former U.S. Treasury Secretary Larry Summers; former Charles Schwab CEO David Pottruck; and former MasterCard international president Russell Hogg.
The company is backed by Cases’ investment company, Revolution LLC, Citi, Morgan Stanley, and Deutche Bank. Leonis will chair the new company and Jasoin Hogg is president and CEO. Hogg was previously a founder of MBNA Canada and chief business development officer at MBNA Canada. He was the COO of Medsite, Inc. and previously President of HorizonLive. Hogg is the son of Russell Hogg, the former president and CEO of MasterCard International Inc.
The company will be based in Tampa, Florida.
Revolution Money recently secured $50 million in Series B venture capital funding. The financing round was led by Citi, Morgan Stanley, Deutsche Bank and Ted Leonsis, and included its controlling investor, Revolution LLC. In addition to the equity financing, Revolution Money has secured debt financing from Citi to fund growth of Revolution Money’s prime consumer loan portfolio. The investments will be used to accelerate the company’s growth, enhance product development and expand marketing and sales efforts.
The company offers consumers what it says is “one of the most secure credit cards with significantly lower interchange fees for merchants and the first free online money transfer service.” Competitors include PayPal and Google, which also offer online payment transfers.
The company says its technology will enable account holders to do things that no single alternative has been able to do before—fuse the expected functions of a traditional offline credit card with a stored value card, and combine it with new online functionality.
Flagship products launch
Monday, Revolution Money introduced its first two flagship offerings – Revolution MoneyExchange, the first free money transfer service that powers online transactions, and RevolutionCard, the industry’s first anonymous, PIN- protected credit card. MoneyExchange launched in an invitation-only beta form Monday and will be gradually expanded before being made available to all consumers later this year.
MoneyExchange’s money transfer service is the first online payments platform for social and instant messaging networks, allowing consumers to safely transfer funds via the Internet to anyone, even merchants, for free. Consumers will be able to use Revolution MoneyExchange across a variety of Internet platforms and portals, including social networks and Instant Messaging portals
Revolution Money will charge merchants only .5 percent per purchase by consumers rather than the standard 1.5 percent paid to traditional credit card companies such as Visa or Mastercard.
Higher level of security
Also, the new company’s credit cards offer higher levels of security against identity theft and other types of credit card fraud. Revolution Money offers an anonymous credit card with PIN-based encrypted technology. With no name or account number on their card, consumers’ identities remain anonymous, drastically reducing the risk of identity theft, fraudulent charges and other consequences of cards being lost or stolen.
Revolution Money has launched pilot programs in a number of segments, including credit, online, gift and person- to-person. In a recent trial, the company successfully performed in multiple programs with the Philadelphia Flyers and the Philadelphia 76ers.
RevolutionCard is also launching card distribution programs and marketing programs in multiple segments, including airlines, cable, petroleum and convenience stores, energy products and services, apparel and footwear, online, healthcare, computers, electronics, and sports. Northwest Airlines is one of Revolution Money’s largest acceptance partners.
One of the first online partners to offer Revolution MoneyExchange will be AOL’s AIM service, the largest instant messaging community in the United States. Starting this fall, AIM users will be able to download the Revolution MoneyExchange
Revolution Money’s Board of Directors is comprised of Steve Case, Lawrence Summers, former U.S. Treasury Secretary; Russell Hogg, former President and CEO of MasterCard International, Inc.; Franklin Raines, former CEO of Fannie Mae and former director of the Office of Management and Budget; David Pottruck, former CEO of Charles Schwab; David Golden, CFO of Revolution LLC and former Vice Chairman of JPMorgan; Jason Hogg, Founder and CEO of Revolution Money; and Patrick Graf, Co-founder and CTO of Revolution Money. Marshall Group Chairman and CEO Dennis Mathisen is also a founding investor.
On the Web:
www.revolutionmoneyexchange.com;
www.revolution.com;
Southeast Venture Conference, February 29 – March 1, 2012 at the Ritz Carlton in Tysons Corner, VA – Where Smart Money Meets Smart People.
www.seventure.org
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