Computerworld - The recently launched RevolutionCard is the first credit card in the country that stores no cardholder name, account number or similar data. It's also the first credit card in the U.S. to require authentication based on personal identification numbers (PIN) for all credit transactions. The card was launched by Revolution Money Inc., a company backed by AOL LLC co-founder Steve Case and with several marquee board members, including former Treasury Secretary Lawrence Summers, former Charles Schwab & Co. CEO David Pottruck and former Fannie Mae CEO Franklin Raines.
In an interview with Computerworld, company CEO Jason Hogg talks about the decision to launch the new card, its consumer security features and why charging lower transaction fees than other payment brands is already making the RevolutionCard popular within the merchant community.
Why did you decide to launch the RevolutionCard? There's a payment vehicle fragmentation in the marketplace. Consumer transaction behavior -- the way they transact financially -- has changed, and it has done so dramatically over the past 10 years in particular.
I looked at the fact that there were some specific pressure points in the payment industry such as the ID theft issue, interchange [fees] and those things. What I realized is that associations like MasterCard, Visa, Discover, PayPal -- what they have essentially done is built little mini-Internets or private networks and controlled things.
What I wanted to do was create a payment platform that leveraged modern technology and the Internet essentially so that we could give the power of how to transact back into the consumer's hands and back into the merchant's hands. The opportunity to start clean with a whole new operating system and technology with 2007 solutions and architectures built in, it's just an advantage.
What does that mean, practically speaking? When you have stuff like the ability to eliminate interchange fees, you can work with your merchants to redeploy a good portion of those savings toward immediate consumer benefits.
For example, if you use your RevolutionCard to buy tickets, you can get a free autographed jersey from the [Philadelphia] Flyers. You can take that same card and get 10 cents off a gallon of gasoline; we are going to be announcing a partnership on that shortly. Or you could take that card and you could get free pay-per-view or free premium services from your cable provider if you use your RevolutionCard. So there's immediate gratification.
At the same time, you have greater security. I think there are opportunities for a better model, and an Internet-based payment platform affords us that opportunity.
How exactly has consumer transaction behavior changed? They do transactions online and they do transactions offline. They use anything from a credit card, to a debit card, to a gift card, to a stored value card, to a PayPal account in order to try and do their transactions. One of the things that we are looking to do is say 'Hey, we've got the ability to have a solution through one platform for all the different kinds of transaction types.'
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