Comments on: How does REM make money?

Question: How does REM make money?

Ugh — Thu, 24 Apr 2008 23:00:31 -0800

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?

By: petethered

petethered — Fri, 25 Apr 2008 00:25:12 -0800

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.

By: youarenothere

youarenothere — Fri, 25 Apr 2008 07:01:59 -0800

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.

By: winston

winston — Fri, 25 Apr 2008 12:17:36 -0800

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.

By: thebrokedown

thebrokedown — Fri, 25 Apr 2008 16:52:58 -0800

Someone told me it might be the sweep. This is a concept that I had never heard of and is pretty interesting.

By: Ugh

Ugh — Fri, 25 Apr 2008 23:12:16 -0800

Seems like it might be a combination of all of the above. Thanks for the info.