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Alternative-payment network Revolution Money Inc. is hoping a 10-year deal with JPMorgan Chase & Co.'s merchant-processing unit will bring it closer to fulfilling its acceptance promise, especially with online merchants. Chase Paymentech Solutions LLC has begun offering acceptance of Revolution's PIN-based credit cards to its merchants, the companies said today. Revolution, which charges merchants a relatively low per-transaction fee, says Chase Paymentech's large concentration of online merchants would benefit from its security features. And both companies say Revolution's merchant-friendly pricing would appeal to all types of merchants as they try to minimize costs. "This is a validation of the fact that despite the tough economy, merchants are looking for solutions that are cost effective," says Jason Hogg, Revolution president and CEO. "Chase is the largest acquirer, so working with them obviously gives us a fantastic acceptance scale," and the processor "is really positioned as a great partner because of their online presence." Both online and brick-and-mortar merchants are enthusiastic about the product, contends Diane Donoghue, Chase Paymentech executive vice president and general manager of retail network services. "The card-not-present merchants seem to really want to capture that opportunity as quickly as possible. … It's a lower transaction cost for the merchants, and in the economic times of today, every merchant's looking for that." But observers have questioned whether Revolution can succeed at the critical next step: actually getting consumers to use its cards. "At peak times, we've had over 5,000 consumers a day that have been joining Revolution," Hogg says, declining to disclose the number of cardholders it has or the transaction volumes his network processes. Revolution will be working with Chase to increase consumer awareness through point-of-sale signage and merchant training, he says. Hogg also contends the recession has increased consumers' appetite for Revolution's security features and merchant-based incentives. "If you think about the fact that in this economy we're providing a solution where consumers are getting a more-secure solution … and some form of immediate benefit when they use their card, our consumers appreciate that," he says.
