Should PayPal be Worried about the new Revolution MoneyExchange Payment Service?

Posted on April 11, 2009. Filed under: Paypal | Tags: , , , , , |

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The short answer: PayPal Should NOT be worried about MoneyExchange….. YET

It is true that Revolution MoneyExchange does have two distinct advantages: (1) they are FREE to use and (2) they are an actual FDIC bank account:

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But Revolution MoneyExchange does not provide any type of buyer protection like PayPal does. 

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According to the Revolution MoneyExchange terms: “We have no responsibility, and make no warranties of any kind, with respect to goods or services purchased or sold using your Account, including without limitation, the delivery, return, quality, safety, legality or fitness for use of any goods or services. All such disputes should be addressed to the other party or the other parties to the transaction.”

MoneyExchange users are effectively handing over cash to the other party and any disputes would have to be resolved in the courts.  Revolution MoneyExchange was created to be the number one social media payment service.  It is not really intended to be a payment service for goods and services purchased online.  However, I can see where MoneyExchange could challenge PayPal if they provided any type of dispute resolution service or if MoneyExchange were widely accepted on a social media ecommerce platform where consumer trust and seller performance were both high so that dispute resolution services were not widely needed.  One such example that comes to mind is Bonanzle. 

I could also see possibilities if Revolution MoneyExchange hooked up with Amazon.  With Amazon’s A-to-Z Guarantee, online shoppers would still be protected if they paid for purchases using a service such as MoneyExchange.

Online buyers who use PayPal can fund their payment by using their checking account or by using a credit card.  PayPal prefers buyers to fund their payments with their checking account (or by using funds already in their PayPal account that they received by selling something) because there is no direct transaction costs for these type of transactions.  They are very profitable for PayPal because PayPal charges a fee to the person receiving the funds even though PayPal does not have to pay a direct transaction fee like they do when they process a payment funded by a credit card. 

So, the banking account transfers supported by Revolution MoneyExchange, with no fees assessed to either party, could be a credible threat in the future to PayPal’s most profitable segment.  And this especially rings true since many consumers are moving away from using credit to purchase items.  If I were Paypal, I would certainly be watching Revolution MoneyExchange with a critical eye.

For more information about Revolution MoneyExchange, you can visit their website by clicking HERE

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3 Responses to “Should PayPal be Worried about the new Revolution MoneyExchange Payment Service?”

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Paypal’s buyer and seller protection is a FARCE and a LIE! Search the internet for “Battle over bag: Seller loses out in online sale” for the REAL story about Paypal’s so-called protection. Read users real nightmares with Paypal at http://aboutpaypal.com/submit_your_stories?msgbrd=1&msgstart=0 To learn how buyers and sellers are NOT protected by Paypal, go to http://www.screw-paypal.com/tos_exposed_section/tos_exposed.html and read the red text on it’s, “PayPal User Agreement Exposed”

PayPal has no reason to worry about MRE for the very simple reason that MRE is only available to Americans living on American soil.

With significantly more than half of eBay marketplace revenue coming from outside the US, and a very tight grip on which payments services can and cannot be used, there is no competition for PayPal there. But, outside of eBay, the remaining portion of PayPal revenues are again mostly from overseas marketplaces, or cross-border into / out of the US.

MRE does not cover those transaction types, therefore they only compete with PayPal in a very small sector of the PayPal marketplace, and if PayPal cannot win in that small sector, they should not be where they are today.

Excellent point gazouteast !


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