The company, established by AOL Co-founder Steve Case and his DC-based Revolution LLC in 2007, provides secure payments through an internet based platform. The company offers PIN-based credit cards, which do not include names or account numbers, that charge merchants a fraction of the industry’s typical acceptance cost.
“While Revolution Money is a young and relatively small company, we believe it has big potential,” American Express CEO Kenneth Chenault said in a statement. “This is a smart, nimble business.”
Revolution Money also offers a prepaid card linked to online accounts that can be used for offline payments or to withdraw cash from ATMs throughout the United States.
Last April, Revolution raised $42 million from Goldman Sachs (GS), Morgan Stanley (MS) and Citigroup (C) (investors have poured at least $112 million into Revolution). At the time, Chairman Ted Leonsis said the company had no plans for a sale or IPO before fiscal 2011. Apparently, things have changed a lot faster than Leonsis expected.
The acquisition, which is subject to regulatory review, is expected to close in the first quarter of 2010. Upon closing, Revolution Money will operate as a subsidiary of American Express and will become part of its new Enterprise Growth unit. Majority shareholder and Chairman Ted Leonsis will serve as a special adviser to AmEx, helping with the digital and online payments strategy.
Jason Hogg, founder and chief executive officer of Revolution Money, will continue as president and CEO of the company.