Comments on: Interview with Jason Hogg, CEO of Revolution Money

By: Anand Goel

Anand Goel — Tue, 20 Oct 2009 15:41:46 +0000

Our experience reflects Ken Boekhaus’ sentiment. We have few large merchant clients who accept Revolution Card but the percentage of sales through these cards is less than 0.001% of all credit/debit card sales.

The value proposition for many consumers isn’t as strong as traditional credit cards.

By: David L. Tepoorten

David L. Tepoorten — Sat, 03 Oct 2009 17:39:31 +0000

Same subject / different subject – why is it that so few see, or are willing to acknowledge, what’s beyond dispute? The total value proposition associated with bankcards – for cardholders, issuers, acquirers and merchants – is a compelling one. So compelling, in fact, that our bankcard payment system continues to dominate the payments landscape and is among the greatest of all American product innovations. The only “alternative payment” options that have gained any traction have been those that have ridden the rails of the bankcard system. As to whether the pricing is “fair” – the free market (or what’s left of it!) has spoken. Interchange does exactly what it should do …. i.e. – it provides an efficient method by which to balance the interests and transfer the costs between the financial institutions associated with any given payment transaction.

By: Allen Weinberg

Allen Weinberg — Fri, 02 Oct 2009 15:34:30 +0000

I did touch on those points with the CEO, specifically opining that relying on merchants to sign up cardholders en masse was not going to get them to mass market/”4th network” status. His response was along the lines of “stay tuned”, there are big announcements to come. Soooo, I guess we’ll all have to wait and see.

I really appreciate your comment re: POS signage. It’s funny, these days those Visa/MC/Amex/Discover decals on the doors and at POS are getting harder and harder to find. As consumers, we almost assume that merchants will take cards unless they tell you otherwise (usually with a hand lettered cardboard sign near the door). On one hand, the card brands can declare victory in a way, in other respects I have to wonder about brand value….

By: David L. Tepoorten

David L. Tepoorten — Fri, 02 Oct 2009 15:21:00 +0000

Where their “marketing falls down” is at the point-of-sale – where both of the following must be present to have any opportunity of achieving the scale required to become the “4th network”.
1. A message (logo signage) to alert existing cardholders that Revolution Card is an available payment option.
2. A message to alert prospective cardholders to the benefits of applying for a Revolution Card.
The “chicken or egg” debate in the payments business was settled long ago. Evidence of widespread merchant acceptance is the critical generator for card demand and issuance.

By: Allen Weinberg

Allen Weinberg — Thu, 01 Oct 2009 18:26:51 +0000

My sense is that some merchants are issuing their own cobranded Revolution cards that offer instant rewards/savings at POS. That’s still a pretty small number now, so while the card can be physically used at hundreds of thousands of locations, only a narrow subset offer incentive for cardholders to use it. Ergo, to your point, at most merchants, consumers would need to use other cards to get rewards.

By: Ken Boekhaus

Ken Boekhaus — Thu, 01 Oct 2009 18:14:01 +0000

I think Revolution Money has 3/4 of a great concept. VISA, MasterCard and American Express have exposed themselves to competion at the lower interchange end by continually increasing credit and debit card interchange. Revolution Money’s product should be appealing to the merchants who are tired of paying inflated interchange and funding the loyalty programs of the issuers. Yet they can’t force consumers to use it because they must still take the Big 3’s cards to remain competitive.

Where their marketing falls down is that there is no motivation for the consumer to apply for a Revolution Money card. I would rather use my Amex card and get my annual rebate than use a card that gives me nothing but saves the merchant money. (WIIFM!) They are so close to the solution that is right in front of them, yet they don’t see it. It’s a shame!

By: Steve Klebe

Steve Klebe — Wed, 30 Sep 2009 23:39:15 +0000

It would be highly unlikely they could tolerate the dispute and customer service costs around micropayments with their current pricing scheme. p.s. I was original Revolution Money customer, tried it once, paid off the bill and just got my Dear John letter cancelling my account. Not that I was ever going to use it again, anyway….so who cares. This is likely to go way of PayByTouch.

By: Greg Smith

Greg Smith — Wed, 30 Sep 2009 23:34:44 +0000

I applied for a Revolution Card and received it a few months ago. I had not used it yet and last week I received a notice in the mail that they shut down my account! I was shocked considering that I am a heavy card user not to mention a payments analyst. Seemed odd to me and somewhat insulting since they already went through the process to verify my credit history. Why not market to me in order to get me to use the card?

By: Allen Weinberg

Allen Weinberg — Wed, 30 Sep 2009 17:12:07 +0000

The merchant discount would be negligible (assuming they keep their 50BP pricing) so from that perspective, why not?! The issuers probably won’t care that much assuming they don’t get killed with customer service inquiries…

By: Bruce Shirey

Bruce Shirey — Wed, 30 Sep 2009 14:23:20 +0000

Would Revolution be in a prime position to take on and inspire the (under $3) micropayments market?