What to make of Amex deal for Revolution Money

American Express generated headlines when it announced it would buy Revolution Money, a start-up controlled by Steve Case, of AOL fame. The firms offers a unique card that seems to blend the idea of traditional credit and debit cards with Internet-based payments along the lines of PayPal and Google's service.

One pundit who cares mainly about what the firm will do for businesses was not impressed. He suggests that the business model was something of a threat to its consumer card business, which prompted the deal in the first place. Revolution Money, which has just 400,000 users, aims to disintermediate the traditional card companies a bit; these firms charge merchants hefty interchange fees.

Revolution Money reduces this fee by presumably relying on the Internet rather than the traditional networks maintained by card companies. One product allows people to load money from a bank onto a card, which doesn't have a name or signature or account number attached to it. We'll see how the other big boys react.

For more:
- here's a Forbes article