Time Is Short, But Revolution Money Sticks to Million-Merchant Goal

Revolution Money Inc., the upstart that bills itself as merchants' low-cost alternative to the established card brands, this week announced that Murphy Oil USA Inc. is now accepting its RevolutionCard. It's a notable win for Revolution Money as Murphy has nearly 1,000 gas stations in 20 states, most located in the parking lots of Wal-Mart Stores Inc.'s high-traffic Supercenters. But it's possible that Revolution Money may pull a really big rabbit out of its hat and more than triple its current base of nearly 300,000 physical and online merchants by Dec. 31. “They told me in the spring they would have a million merchants rolled out by the end of the year,” Red Gillen, an analyst with Boston-based Celent LLC, tells Digital Transactions News. “They've got two and a half months to get to that goal.” A Revolution Money executive likewise told Digital Transactions News this spring that the company planned to have 1 million merchants on board, along with 1 million cardholders, by the end of 2008 (Digital Transactions News, June 20). Gillen notes that adding 700,000 merchants in the fourth quarter is an especially tough proposition because many retailers balk at making significant changes in their back-office systems, such as adding a new card brand for payments, for fear of disrupting normal operations during the holiday shopping season. But St. Petersburg, Fla.-based Revolution Money says its goal hasn't changed. “Yes, Revolution Money is on track for acceptance at 1,000,000 merchants by the end of this year,” a spokesperson told Digital Transactions News by e-mail on Thursday. The spokesperson didn't elaborate, but in an interview on Wednesday, Duncan Evans, senior vice president and general manager of the RevolutionCard Network, noted that additional merchant acquirers selling acceptance of the card would be disclosed soon. “We have a number of other acquirer/processor relationships that have been signed, with announcements coming out later,” he says. “We continue to make great strides in the acceptance side of our business.” Revolution Money's publicly disclosed merchant-processor relationships are with Cincinnati-based Fifth Third Bancorp's Fifth Third Processing Solutions and alternative-payments portal and authentication provider CardinalCommerce Corp. At Murphy Oil's Murphy USA and Murphy Express locations, approved RevolutionCard applicants will receive up to $50 in savings through $10 off on their first five purchases of $25 or more. They'll also get ongoing discounts of 3 cents per gallon. Evans would not confirm who funds the discounts, but Gillen says Revolution Money's merchants typically pass on part of the savings from what otherwise would be more expensive purchases on the major card brands. Revolution Money's standard merchant pricing is a straight 0.5%. “We save money each time a customer uses a card on the RevolutionCard network, and we pass those savings on to the customer with our 3-cent-per-gallon discount,” Bill Deichler, Murphy's manager of business development, said in a news release. A spokesperson for Murphy USA's parent company, El Dorado, Ark.-based Murphy Oil Co., did not respond to Digital Transactions News requests for further comment. While Revolution Money is making a strong pitch to merchants on how they can save on their card-acceptance costs?up to 80%, according to the company?consumers care little about that issue, Gillen says. He adds that few consumers seem willing to drop their major-brand cards, especially if they have a rewards package they like or an acceptable interest rate. “It's a long hard slog, it really is,” he says. “If people were screaming for another card, it would be easier.” Revolution Money hasn't revealed its cardholder count. Despite those challenges, Revolution Money is forging on. The September deal with Mentor, Ohio-based CardinalCommerce opens new transaction potential from online merchants on the Cardinal Centinel platform. CardinalCommerce links 30,000 merchants and merchant service providers to such payment alternatives as PayPal, Bill Me Later, Google Checkout, Amazon Payments, NACHA's new Secure Vault Payments, myECheck, eLayaway, and others. Meanwhile, leading payment processor First Data Corp., which services more than 5.4 million merchant locations, this week announced its own agreement with CardinalCommerce that will link alternative-payment networks to 100,000-plus e-commerce merchants. Evans wouldn't comment on the First Data deal, but says “we are very pleased to partner with CardinalCommerce.” Also in September, Revolution Money introduced its MoneyExchange RevolutionCard, a reloadable card that enables free online person-to-person payments to other account holders, works for point-of-sale purchases, and gives access to ATMs in Fifth Third's Jeanie EFT network and the Armed Forces Financial Network.