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Get ready for credit card 2.0

The name of the St. Petersburg company sums it up, say the founders of Revolution Money.

By KRIS HUNDLEY, Times Staff Writer
Published October 27, 2007

Jason Hogg, President and CEO of RevolutionMoney, pictured with his RevolutionMoney card kiosks at their headquarters in downtown St. Petersburg . RevolutionMoney is a new credit card based in St. Petersburg.
[Dirk Shadd | Times]

ST. PETERSBURG - When Revolution Money moved into its headquarters in the Bank of America building last year, the high-rise tower's wraparound windows meant there was no place to hang whiteboards.

So the staff, rushing to complete development of a high-tech, low-fee credit card, started writing in marker on the windows.

Today, the windows are covered with scribbles. And the company's two products, a PayPal competitor called Revolution MoneyExchange and a PIN-based credit card called Revolution Card, are ready to take on the MasterCards and Visas of the world.

"We're here to disrupt a complacent industry," said Jason Hogg, Revolution Money's president and chief executive. The company's co-founder and chief technology officer is Patrick Graf.

The two have developed a credit card that uses the Internet to reduce the fees charged to merchants as well as a free online money-transfer service. To deter identity theft, the card carries no account number or name and is activated by a personal identification number.

"We've linked online and offline," Hogg said. "And we've got a kiosk that can take your application and put the card in your hands right away."

Hogg, 36, may be uniquely positioned to take on the traditional $56-billion payments industry. He was a founder of MBNA Canada, one of that country's largest MasterCard issuers. He is also the son of Russell Hogg, former president and chief executive of MasterCard International Inc.

"Dad used to take me into his office and let me build houses out of credit cards," said Hogg, who has a picture in his office of himself and his dad, circa 1982, in front of MasterCard's first ATM.

Hogg also has lined up some impressive backers. Last year, Steve Case, founder of America Online, bought a majority stake in the company, making it part of Revolution LLC, which also has interests in the health and travel sectors. Revolution Money's board is headed by Ted Leonsis, vice chairman emeritus of AOL, and includes David Pottruck, former chief executive of Charles Schwab; Lawrence Summers, former U.S. Treasury Secretary; Franklin Raines, former chief executive of Fannie Mae, as well as Russell Hogg.

Leonsis, who recently participated in raising another $50-million for Revolution Money, said the company was attractive because it will charge merchants just 0.5 percent of sale price per transaction processed, undercutting traditional credit cards that charge close to 2 percent.

"Those fees are ultimately passed on to consumers," Leonsis said. "And if you can create a service that saves consumers money - while increasing their feelings of safety and security, and competing with entrenched competitors - this could be a huge winning investment."

Though Hogg has been kicking around the idea of a Web-based credit card since 2000, he and Graf have been working on it full time for only about three years. Graf, a 36-year-old IT consultant, had been living in the Tampa Bay area. When it came time to set up a company, initially called GratisCard, St. Petersburg seemed like a natural.

"We wanted to be able to see our kids, have a short commute and a good cost of living," said Hogg, who moved his wife and two young sons to the area in July. "The quality of life here is great and the resources from a human resources point of view are fantastic."

Revolution Money now has about 100 employees at its downtown headquarters and an unspecified number of workers at a call center in Largo. Hogg expects the local work force to double in size over the next year. The company also has offices in New York City and Washington, D.C.

Since Revolution Money's products were launched late last month, Hogg has been busy forging partnerships. The card is now accepted by about 100,000 merchants, including Barnes & Noble. Hogg said it will have 1-million merchants within 12 months. Other partnerships with gas stations and cable companies are also expected. Among the early incentives for members: a free jersey autographed by a member of the Philadelphia Flyers hockey team.

Calling the Revolution Card a simple idea that wasn't so simple to implement, Hogg remembered the first time he used the card, which is sculpted in the shape of a bone, rather than a rectangle. It was during a trial run of the product in Nyack, N.Y., about a year ago. The purchases were mundane: film and some batteries for his son. But after so much work and anticipation, the experience, Hogg said, "was surreal."

About the card
The Revolution Card is a PIN-based credit card that charges merchants less than traditional cards and ties cardholders' interest rates to their credit rating.

About Revolution Money
St. Petersburg
Corporate parent: Revolution LLC, Washington, D.C.
President/chief executive: Jason Hogg
Chief technology officer: Patrick Graf
Other products: The Revolution MoneyExchange, a free online money-transfer service, is being launched with AOL's instant-messaging service.

Kris Hundley can be reached at or (727) 892-2996.

[Last modified October 26, 2007, 23:18:36]

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