How does REM make money?

April 24, 2008 11:00 PM

What's the catch with Revolutionary Money Exchange?

It is a lot like Paypal, only it appears to be free to send and receive money. Apparently they are even giving $25 to new account holders. So how do they make their money? Surely they aren't going to support the site with stop payment and paper statement fees? Should the fact that Steve Case is involved comfort or dissuade me?

posted by Ugh to work & money (5 comments total)

Interest. Leave your money in your account and they get to collect the interest.

Most likely their bank account is one where the interest compounds daily or weekly. That way any money in their account earns them fractional income.

Same way Paypal likes to have you leave money in your account.
posted by petethered at 12:25 AM on April 25

The company sees Money Exchange as a loss leader for its upcoming credit card--the aptly named "RevolutionCard." It has been posited that they plan to make no money off of the Exchange service, but rather just build up a network of potential credit card customers.
posted by youarenothere at 7:01 AM on April 25

That's exactly what PayPal was like for the first few years, except they only paid you a $5 bonus.

PayPal actually went so far as to promise that they would never at any time in the future ever charge a fee for sending money. They planned to make money off the interest on the float.
posted by winston at 12:17 PM on April 25

Someone told me it might be the sweep. This is a concept that I had never heard of and is pretty interesting.
posted by thebrokedown at 4:52 PM on April 25

Seems like it might be a combination of all of the above. Thanks for the info.
posted by Ugh at 11:12 PM on April 25