announced that it plans to acquire Revolution Money for $300 million. The deal is still subject to regulatory approval. Revolution Money, which was founded by AOL's co-founder Steve Case, launched in 2007. The company offers a number of services, including a payment and ATM card that offers discounts at participating retailers and the Revolution Money Exchange, which enables online person-to-person money transactions. It seems reasonable to assume that American Express made this acquisition to get a foothold in the online e-payment market and to challenge eBay's PayPal.American Express just
According to today's press release, Amex hopes that this acquisition will give Revolution Money - and Amex - room to grow as it goes "head-to-head with other online and person-to-person payment providers." Amex will put its own brand and marketing reach behind Revolution Money's services.
Chances are that Amex is mostly interested in the P2P payment system that Revolution Money has developed. It will be interesting to see what the company will do with the Revolution Money card, which, even though widely accepted, hasn't exactly become a household name yet. Amex also plans to expand Revolution Money's reach beyond the US.
Lots of Participating Merchants - But How Many Customers?
The Revolution Money card is currently accepted at about 650,000 stores in the US, including Barnes & Noble and Whole Foods. Merchants have been drawn to Revolution Money because the company charges lower fees than credit card companies. The company didn't announce how many actual users it currently has, though just like GigaOm's Om Malik, we still haven't met anybody who owns a Revolution Money card.