Revolution Money Raises Another $42 Million For Alternative Payment Service Nobody Is Using
Steve Case’s startup Revolution Money announced a series C funding today of $42 million led by Goldman Sachs. Case and other existing investors (Citigroup, Morgan Stanley, former AOL vice chairman Ted Leonsis, former Charles Schwab CEO David Pottruck, and JP Morgan vie chairman David Golden). That is on top of $50 million the company raised is September, 2007. The company is using the Internet to lower the cost of credit card charges and payment transfers, charging merchants only a 0.5 percent transaction fee instead of credit card fees which can be four to eight times as high. Revolution Money has done a good job signing up banks and merchants to accept its credit card and online payment service, but it is not so clear how good a job it is doing actually signing up customers. In tandem to its regular credit card, it also operates Revolution MoneyExchange , an online payment processing service that is trying to compete with Paypal. MoneyExchange is basically a loss leader to get people to sign up for the credit card. The problem is that nobody is really using MoneyExhange. Only 33,000 people in the U.S. even visited the site in February, down from a marketing-fueled high of 742,000 a year before in March, 2008, according to comScore. Hopefully, it’s found another way to sign up customers, and I’m not talking about Washington Capitols hockey fans (Leonsis owns the hockey…
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