Steve Case, Ted Leonsis, Larry Summers, David Pottruck, Russell Hogg and others form and invest in company to transform payment industry

New company to be called Revolution Money; Internet pioneer Leonsis named Chairman

New Internet-based payment system with innovative credit card drastically alters economics of the industry, generating significant consumer benefits and higher level of security; saves merchants and online store owners on rising interchange fees

Company first to combine the power of free online money transfer with credit and pre-paid in one integrated offering

WASHINGTON, September 24, 2007 – Revolution LLC, the investment company created by Steve Case, today launched a new subsidiary, Revolution Money, an innovative new payment platform created to transform the payment industry by drastically altering the economics through Internet-based technology, generating significant consumer and merchant benefits. Revolution Money offers consumers one of the most secure credit cards with significantly lower interchange fees for merchants and the first free online money transfer service, Revolution Money, formerly GratisCard Inc., has been formed by Case, Revolution Money Chairman Ted Leonsis, former United States Treasury Secretary Larry Summers, former Charles Schwab CEO David Pottruck, and former MasterCard International President and CEO Russell Hogg, among others, and is backed by Citi, Morgan Stanley and Deutsche Bank.

"Traditional, and even online, incumbents have been charging what adds up to billions of dollars of fees every year that ultimately comes out of consumers' pockets," said Steve Case, chairman and CEO of Revolution LLC. "So we have built an innovative Web 2.0 company based on the latest technology to disrupt the decades-old system with the goal of offering the industry's most accessible, easy-to-use and secure payment system that puts money back where it belongs, in consumers' pockets."

Revolution Money has created the first Web 2.0 payment platform designed for a mainstream consumer audience, especially those who enjoy the convenience of handling their financial affairs and purchasing online. Its technology will enable account holders to do things that no single alternative has been able to do before – fuse all of the expected functions of a traditional offline credit card with a stored value card, and combine it with new online functionality.

Today Revolution Money introduced its first two flagship offerings – Revolution MoneyExchange, the first free money transfer service that powers online transactions, and RevolutionCard, the industry's first anonymous, PIN-protected credit card.

Revolution MoneyExchange
Revolution MoneyExchange's money transfer service is the first online payments platform for social and instant messaging networks, allowing consumers to safely transfer funds via the Internet to anyone, even merchants, for free. Consumers can set up a free Revolution MoneyExchange account in just minutes by registering at www.revolutionmoneyexchange.com, and start transferring money to friends, family, or merchants. In the future, Revolution MoneyExchange plans to provide its users the option of linking their accounts to a RevolutionCard, offering the convenience of combining their online and offline payment needs into a unified stored value and credit experience.

Consumers will be able to use Revolution MoneyExchange across a variety of Internet platforms and portals, including social networks and Instant Messaging portals

Revolution MoneyExchange launched in invitation-only beta form today and will be gradually expanded before being made available to all consumers later this year.

RevolutionCard
When a consumer uses a credit card at any store today the merchant is required by traditional credit card companies to pay them an average of 1.9 percent of the total sale. For example, when a consumer buys a $500 television using their credit card the store has to pay the credit card company an average of $9.50. With billions of credit card transactions annually these fees – called —interchange fees' – totaled an estimated $56 billion paid in the United States to credit card companies in 2006 alone. Revolution Money's sophisticated new payment system, based on secure Internet technology, slashes these fees to 0.5 percent, creating significant savings for merchants and enabling them, in turn, to offer their customers new and immediate rewards, such as cost savings and loyalty programs.

"Today, merchants, and ultimately consumers, pay an enormous sum just to have the convenience of using a credit card," said Jason Hogg, Founder and CEO of Revolution Money. "Revolution Money's proprietary operating system uses the Internet to circumvent the traditional interchange system, providing a drastically reduced fee structure that could create billions of dollars of merchant and consumer savings – essentially flipping the industry on its head."

In addition to the significant savings generated by Revolution Money, the company has also created one of the most secure forms of payment. Revolution Money is the first to offer an anonymous credit card with PIN-based encrypted technology. With no name or account number on their card, consumers' identities remain anonymous, drastically reducing the risk of identity theft, fraudulent charges and other consequences of cards being lost or stolen.

"Payment security and identity theft are big concerns for virtually everyone today," said Hogg. "That is why we have created a network based on the latest technology that provides consumers the highest security available. Whether a consumer wants the benefits of a traditional credit card, pays bills online or transfers money, Revolution Money is the most cost-effective and secure offering available."

Accepting RevolutionCard is easy for merchants. It can be accepted through existing payment processors or directly through Revolution Money. It can seamlessly integrate into existing Point-of-Sale (POS) software and implementation can be completed remotely. Revolution Money has effectively created the first win-win credit service for merchants by offering a drastically reduced-interchange service that increases their profitability.

"Customer convenience is a number one priority for our company," said Comcast-Spectacor President Peter Luukko. "RevolutionCard allows us to provide our customers with a new and innovative payment platform which ultimately saves the consumer money. We rewarded our customers who registered during our trial period with credit toward food, beverage or merchandise purchases at the Wachovia Center. Additionally, we offered our season ticket holders an autographed jersey as incentive for using RevolutionCard as their payment form. RevolutionCard is a necessity for any organization looking to truly reward their customers and simultaneously reduce credit card fees."

To apply for RevolutionCard, consumers only need to fill out one application form, found at participating merchants or online at www.revolutioncard.com. RevolutionCard offers instant customer approvals and merchants are able to issue co-branded PIN-protected RevolutionCards on-the-spot in their stores and through their websites.

Launch Partners
To demonstrate its versatility, Revolution Money has launched pilot programs in a number of segments, including credit, online, gift and person-to-person. In a recent trial, the company successfully performed in multiple programs with the Philadelphia Flyers and the Philadelphia 76ers. RevolutionCard is also launching card distribution programs and marketing programs in multiple segments, including airlines, cable, petroleum and convenience stores, energy products and services, apparel and footwear, online, healthcare, computers, electronics, and sports. Northwest Airlines is one of Revolution Money's largest acceptance partners.
The first major partner to offer Revolution MoneyExchange will be AOL's AIM® service, the largest instant messaging community in the United States. Starting this fall, AIM® users will be able to download the Revolution MoneyExchange AIM® plugin at http://gallery.aim.com to launch Revolution MoneyExchange and make payments via instant message directly from their AIM® Buddy List® feature for free.

To gain ubiquitous acceptance by merchants, Revolution Money has established key strategic partnerships with leading merchant acquirers and processors, such as Fifth Third Processing Solutions, to enable millions of merchants across the United States to immediately and seamlessly begin accepting RevolutionCard. Processing more than 21 billion transactions annually, Fifth Third provides best-in-class processing solutions to diverse financial institutions, merchants and
networks worldwide.

Bank Partners
Unlike most bank credit card issuers who are limited to a narrow scope of credit approval guidelines specific to their bank, RevolutionCard seamlessly utilizes multiple partners to achieve unparalleled consumer approval rates. The platform is able to achieve these high approval rates by giving consumers access to multiple banks, which approve credit across a much broader range of credit scores than traditional credit card companies do, while still only having to fill out one application. RevolutionCard's centralized application system dramatically increases immediate consumer credit approval rates, on terms appropriate for each consumer.

Revolution Money has initially partnered with four institutions: First Bank and Trust (Brookings, SD) issues the accounts, Citi (New York, NY) acts as a prime partner, CompuCredit (Atlanta, GA) acts as sub-prime partner and Union State Bank (Orangeburg, NY) acts as a merchant settlement bank.

Financing
Revolution Money recently secured an additional $50 million in Series B venture capital funding. The financing round was led by Citi, Morgan Stanley, Deutsche Bank and Ted Leonsis, and included its controlling investor, Revolution LLC. In addition to the equity financing, Revolution Money has secured debt financing from Citi to fund growth of Revolution Money's prime consumer loan portfolio. The investments will be used to accelerate the company's growth, enhance product development and expand marketing and sales efforts.

"The launch of Revolution Money is another example of how Web 2.0 technologies and business processes can transform an industry for the benefit of consumers and merchants alike, while providing great growth and value creation opportunities for stakeholders," said Ted Leonsis, Chairman of Revolution Money.

Management Team
Ted Leonsis, Vice Chairman emeritus of AOL and majority owner of the Washington Capitals and Washington Mystics, and minority owner of the Washington Wizards, is Revolution Money Chairman. In addition to Leonsis, Revolution Money's Board of Directors is comprised of Steve Case, Lawrence Summers, former U.S. Treasury Secretary; Russell Hogg, former President and CEO of MasterCard International, Inc.; Franklin Raines, former CEO of Fannie Mae and former director of the Office of Management and Budget; David Pottruck, former CEO of Charles Schwab; David Golden, CFO of Revolution LLC and former Vice Chairman of JPMorgan; Jason Hogg, Founder and CEO of Revolution Money; and Patrick Graf, Co-founder and CTO of Revolution Money. Marshall Group Chairman and CEO Dennis Mathisen is also a founding investor.

Revolution Money was founded by CEO Jason Hogg and co-founded by CTO Patrick Graf. Hogg was previously a founder of MBNA Canada and chief business development officer at MBNA Canada. He was the COO of Medsite, Inc. and previously President of HorizonLive. Hogg is the son of Russell Hogg, the former President and CEO of MasterCard International Inc., who is credited with launching BankNet, MasterCard's global packet-switching network. Graf was previously SVP for Q1 Solutions. Hogg and Graf are joined by COO Dax Cummings and CFO Darren Thompson. Cummings is a seasoned veteran who previously ran MBNA's US Endorsed Card business and served as member of their Management Committee. Thompson was formerly the head of Credit Finance at Fannie Mae and a Managing Director at Goldman Sachs.

About Revolution LLC
Revolution LLC, the Washington, DC-based company launched by Steve Case in 2005, seeks to drive transformative change by shifting power to consumers and building significant, category-defining companies in the process. Revolution's mission is to build companies based on disruptive business models that give people more choice, control and convenience in the important aspects of their lives. Revolution is currently focusing on four market sectors poised for disruptive change – Health, Financial, Resorts and Balanced Living. For more information go to www.revolution.com.

Brad Burns
202-776-1400
brad.burns@revolution.com

Labels: e-currency

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