[geeks] UnPaypal?

[Chad McAuley]

Phil Stracchino wrote:
> Anyone come up with a good alternative to PayPal yet?  I just had a 
> friend move to New Zealand, in the process of which PayPal did 
> everything they could within their terms of service to steal $2600 from 
> him.  Combined with the new move further to the Dark Side by eBay, who 
> now owns PayPal, my discomfort level with PayPal is rising almost daily.
> 
> 

I haven't had a chance to try it out yet, but a lot of people on the 
various deals sites and forums with buy/sell/trade sections are excited 
about Revolution Money Exchange[0].  It's not an exact PayPal 
replacement though.  Basically what it is is a bank account[1] backed by 
a FDIC insured bank that also happens to be set up to allow easy money 
transfers between account holders.  I haven't read a whole lot about it, 
yet, but here's what I know so far:

- You've got to provide the same information you'd provide if you wanted 
to open any other bank account, including your SSN.  Some folks are 
running into trouble with the online registration system and are having 
to fax them additional forms of identification or address verification.

- There's some big names behind it.  Ted Leonsis is the chairman, and 
other executives include Larry Summers (former US Treasury Secretary), 
David Potruck (former Charles Schwab CEO), Russell Hogg (former 
MasterCard International president/CEO), and it's part of Steve Case's 
Revolution LLC investment firm.  The company also has backing from Citi, 
Morgan Stanley, and Duetsche Bank.

- No fees on transfers between members or deposits, but there are the 
usual assortments of fees[2] like you have with any other bank account.

- You can send or receive up to $1000 a day (not to exceed $2500 per 
calendar month), and your aggregate account balance cannot exceed $2500, 
so this probably won't be able to replace PayPal for every situation.

- They're offering a free $25 sign-up bonus and $10 per referral (up to 
$500), probably as an incentive to get more people using the service.


Since the service is so new, we'll have to wait and see if it can 
develop into a serious PayPal competitor.  Looking around their website 
I noticed something that has me interested in the future of this 
company.: they also offer their own credit card.  All transactions with 
the card require a 4-digit PIN to be entered (like ATM/debit 
transactions);  you can change the PIN as often as you want and you can 
also create temporary PINs for one-time purchases or dealing with 
unfamiliar merchants.   The card is not embossed with the cardholder's 
name or account number, nor is that information stored in the magstripe. 
  Being a new product, there's only a limited number of merchants that 
currently accept it, but they're saying they've already got 100K 
merchants signed up (including B&N, Whole Foods, Buy.com, Office 
Depot/Max, and Walgreen's) and they just signed an agreement with Fifth 
Third Processing Solutions that will allow the card to be used at 
merchants/ATMs that are part of their Jeanie processing network. 
They've also got a prepaid gift card like Visa and MC do that has all 
the same features of their standard credit card.

[0]: http://www.revolutionmoneyexchange.com
[1]: Issued by First Bank & Trust of Brookings, South Dakota (part of 
the Fishback Financial Corporation)
[2]: Withdraw funds by check: $2.50
      Stop Payment: $20
      Paper Statements: $5 per copy
      Returned ACH transaction: $35
      Overdraft: $35