Payment Processor Revolution Money Pumped With $42M
At a time when both consumers and merchants are looking for ways to cut costs, several major financial firms and individual investors have pumped $42 million into Revolution Money, the payment-processing company backed by AOL co-founder Steve Case.
Context & Ripple Effects
Revolution Money had already been positioned as a lower-fee alternative to PayPal and MasterCard. The $42 million round gives that cost-focused payments proposition backing from major financial firms and individual investors, including support tied to Steve Case.
First-order effects
- Revolution Money gains $42 million to support its payment-processing business, while its financial-firm investors acquire a direct stake in a challenger to established payment networks.
Second-order effects
- PayPal and MasterCard face a better-capitalized rival competing on fees, making merchant cost savings a more prominent point of differentiation.
Third-order effects
- If financial incumbents continue funding lower-fee payment challengers, competition in processing is likely to focus more sharply on transaction economics rather than network scale alone.
The trend: Payments infrastructure is attracting capital for models that challenge established networks by promising lower processing costs.