RevolutionCard Aims to Shake Up Credit Card Industry
RevolutionCard, a new credit card that aims to cut credit card fees and increase card security, launched today. Backed by a gaggle of financial and technology heavyweights, including America Online founder Steve Case at the helm of its parent company, the RevolutionCard comes with no name or account number listed on the outside of the card, instead using a PIN code system to verify a cardholder’s identity. It also offers merchants a much lower interchange fee—the fee merchants pay to banks and credit card processors for accepting credit cards—which might be the key to its success in the marketplace.
The RevolutionCard is one of the products from Revolution, LLC, the company formed by Steve Case. In addition to Case, investors include former AOLer Ted Leonsis, former United States Treasury Secretary Larry Summers, former Charles Schwab CEO David Pottruck, and former MasterCard International President and CEO Russell Hogg. It is also partnering with traditional credit card issuers including Citi and CompuCredit to issue its cards.
According to an article in USA Today, the card can already be accepted at 100,000 merchants, and will ramp up to levels equal to MasterCard and Visa over the next three years.
While the RevolutionCard’s security features may entice some, its ultimate success may be predicated on how hard it is pushed by merchants—and it may be promoted very highly.� Revolution claims that traditional credit card purchases cost merchants 1.9% of a purchase, while RevolutionCard transactions will cost just 0.5%. With many merchants either grumbling or outright suing credit card companies over the size of these fees, it’s likely that many will embrace the RevolutionCard. Despite Revolution’s claims that merchants will pass these savings on to consumers, that of course remains to be seen.
More information on RevolutionCard and an online application can be found at revolutioncard.com.
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