Monday, February 25, 2008

Why does Revolution Money require my social security number?

A couple days ago I found out about Revolution Money Exchange, a competitor to PayPal. It offers a $25 sign-up bonus. I know that many of my readers were initially attracted to Prosper or Lending Club based on sign-up bonuses so I decided to share Revolution Money with my readers. Although it's not peer to peer lending, my audience is web savvy and comfortable with internet finance.

As I signed up, I was promoted for my social security number. Alarm bells went off. There are plenty of reasons not to share personal information online, especially a social security number. I stopped the registration process right there and went searching. Is this a reputable company? Mentions in the mainstream media and the players associated with the company seemed to indicate so.

Washington Post – "Former AOL chairman Steve Case is at it again, this time using his Revolution LLC investment firm to start a new credit card company he's calling Revolution Money…AOL vice chairman emeritus Ted Leonsis will chair the new company…the board also will include former Treasury Secretary Lawrence Summers, former Mastercard CEO Russell Hogg, and former Charles Schwab chief executive David Potruck."

USA Today - "Leonsis predicts the service will have 1 million merchants and 1 million customers signed up within a year."

ReadWriteWeb - "The company recently announced a $50 million Series B round of funding from Citi, Morgan Stanley, Deutsche Bank and others."

Bloomberg - Case's Revolution Introduces Credit Card With Lower Fees - Case, 49, has invested $100 million of his own money in Revolution.

Computer World - CEO Jason Hogg says, "At the same time, you have greater security. I think there are opportunities for a better model, and an Internet-based payment platform affords us that opportunity."

Wall Street Journal – "Revolution Money is also offering the first anonymous credit card with PIN-based encrypted technology. There is no name or account number on the card, 'drastically reducing the risk of identity theft, fraudulent charges and other consequences of cards being lost or stolen,' the firm said."

TechCrunch - "Of course, if they want the money, they have to sign up for the application, and link it to their bank account. But that's exactly how PayPal went viral....In truth, Revolution Money sees MoneyExchange as a loss leader for its real business, which is the RevolutionCard, its credit card that undercuts Visa and Mastercard. It has no intention of making money off of MoneyExchange by charging for transactions because in its eyes the online payment service is just a way to build up a valuable network of potential credit card customers. You can be sure that every MoneyExchange member will get an offer for the RevolutionCard. Steve Case is just seeding the market."

Ok, the site seemed legit. As I was returning via search engine I discovered that there were two sites – and I got the sinking feeling that one of the two was set up for phishing. Some more searching…

There are others too, unrelated to money, like Steve Case is trying to build the revolution brand but it makes it easier for phishing websites to capture people's information. From his AOL days Steve Case certainly has experience with phishing.

Two of the most common phishing attacks are link manipulation or website forgery. If users expect different URLs from Revolution Money then it will be easier to be lured into entering private information on a site with a similar URL. It is also more difficult to spot a misspelled URL when it is long like instead of something shorter like or

URL aside, why does Revolution Money need my social security number? I do not remember giving my SSN to PayPal. Revolution's FAQ gives this answer:

"You might wonder why we ask for certain pieces of information that you may be nervous to share, such as your Social Security Number. We would not ask for any information that was not necessary to enable the security we promise to you. Also, to help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account.With identity theft on the rise, we use your Social Security Number to confirm your identity by cross referencing it against other personal data you provide. This way, if someone were to get a hold of your Social Security Number, a MoneyExchange account could not be set up in your name without knowing your other personal information. So, sometimes it may seem as if you have to share more information about yourself, but in the end it actually protects your financial information to an even greater degree."

There are occasional reports in the news about large losses of data – credit card data, school records and the like. How do I know that Revolution Money is not going to lose my information making me vulnerable to identity theft? I found this answer on their website:

"Your MoneyExchange account is held at First Bank & Trust in Brookings, SD (Member FDIC). Protecting your information is our highest priority."

In the end, everyone has to make a decision about how much information they are willing to share online. Personally I feel comfortable with Revolution Money because there is over $100 million dollars invested in the company. Any public loss of data would instantly cripple the company. They have a lot riding on protecting my data.

What about their privacy policy?

"We may disclose all of the information that we collect..."

"We may disclose nonpublic personal information about you to affiliates and nonaffiliated third parties, including:

  • Financial service providers, such as mortgage bankers, loan companies, securities broker-dealers, and insurance agents;
  • Non-financial companies such as retailers, direct marketers, airlines, and publishers; and
  • Others, such as non-profit organizations."

This is much more liberal than PayPal's privacy policies. While PayPal will share most of your information, they provide more detailed information about when they will share information and generally assure you "will not use this information to market their services to you unless you have approved it."

In the end, I do not think Revolution needs my social security number but they will keep it safe. I think TechCrunch is right - Revolution Money Exchange is a loss leader for Revolution Money Card and we will soon receive offers to sign up for the "revolutionary" new card where I use a PIN and my name is not on the card.

What do you think?

Update (3/26): Revolution Money Exchange has made it easier to get the $25 bonus. Here's the link. After you sign up you can refer others and receive a $10 referral bonus.

Refer A Friend using Revolution Money Exchange


Anonymous said...

"Consumers can set up a free Revolution MoneyExchange account in just minutes by registering at, and start transferring money to friends, family, or merchants."

This is not true. I've been trying to get an account set up since Mar 1, 2008 and can get nothing but the run around. No replies to my e-mails. They have all of my information and I even supplied them with more information than the basic info requested. STILL I can not access my account. Site seems rather glitchy. Or is it a scam? I don't know since I can't get past step 1!

Tom said...

It worked just fine for me. I'm not sure why your having a hard time.

Is there a specific error message you are getting? What do you mean it won't let you past step 1?

Anonymous said...

Set my account up-no prob this morning. Set one up for my wife too-$25.00 for me--$25.00 for her and I got a $10 refer fee. Easiest $60.00 I ever made.

Anonymous said...

Very easy and very safe! I have had everyone in my family and friends sign up so there is no hassle in paying back. This is so much better than PAYPAL!

Anonymous said...

I have not had any problems at all with Revolution Money Exchange. I have been referring people like crazy and getting all kinds of money from RME through referral bonuses!

Anonymous said...

being on that has hassled with paypal and greenzap over the years,this was very easy to set up and is easy to use.Thanks,I really hope this one is the paypal killer

Matt said...

I signed up and referred my wife. She also signed up so that made for a quick and easy $60.

Anonymous said...

Revolution Money Exchange is truly a SCAM. I referred several friends and family, to Revolution Money Exchange several signed up for an account, the referral money was transferred into my account. When I requested a check to be mailed, the only thing, I received was a email saying my account has been suspended. At least Pay Pal paid me when I referred people to become account holders, I personally haven't had any problems with Pay Pal I have been a member since 2002.

Warning Stay Away From Revolution Money Exchange

Tom said...

Anon - why specifically was your account cancelled? I had no problem transferring out $495 in referral bonuses.

And why did you request a check be mailed to you instead of transferring it to a bank account? Electronic transfers are free. I think they charge a dollar or two to mail a paper check. Who uses paper checks anymore?

Matt said...

I also did an electronic transfer of money out of my Revolution Money exchange into my bank account. I was able to transfer the money out without any problems. Haven't tried the paper check method because the electronic transfers are free.

Anonymous said...

Revolution Money is going under. They have run out of money. The Board of Directors and Executive Management are to blame. The Board tried to drive accounts with a huge marketing spend. This is typical of AOL where the business model was to drive accounts and not take care of the customer. The online approach mirrored that and the user interface, customer issues and processes were not a priority.

One problem was they didn’t take care of the customer or look for long-term value and the user interface required an overhaul or temporary band-aids. None of which were done. The online interface was actually an AOL-esque application and not a web-based interface.

Online issues were identified early yet there was no course correction. The senior management and directors did not have experience with an immature online business that needed to take care of the customer. Directors and VPs were hired who had little or no online experience. Early hiring strategy was to hire the executive staff, rather than hire workers. Several VPs was upset that they did not have a secretary to manage their schedule.

While the business model was solid, the executive management did not have the expertise to run an integrated online and direct marketing campaign. While their response will be - failure was caused by an economic downturn, this is far from the truth. For example, the executives gold-plated the IT operation, installed it and then saw funds were low and fired all the contractors who helped install this. Worse, the Executives purchased the new Mac Air Notebooks when their PC laptops were just fine. Proven web strategies were ignored in favor of driving accounts. Priorities were ever shifting and became a running joke amongst the staff. Also, the call center was moved in-house from an outside location, which may have redirected IT and other resources from existing priorities.

This failure will be a great study for B-Schools. Also, the lessons of the Internet business in the late nineties and 2000 were ignored.

Tom said...

Interesting perspective. Did you work for the company?

Anonymous said...

If you basically look at it any on-line service any one could get your information. You look at people search just put your name in that and your information will come up and you do not have to be on a credit/debit service to get information.

All you need on people search is the person 1st or last name . It will show you the information where they live, there phone number or numbers, and where they lived years before and all you did was type in a 1st or last name.

I use paypal but I do not like the service only because they charge 2 fees if you sell on ebay they only charge 1 fee. It takes up to 60 days to get approved for a debit/credit card and if they approve you. Your money is in your account and if you do not have a checking account the money stays there.

RME I signed up the 1st day and called the number to get my credit/debit card the 1st day, no waiting period and I did not have to link my bank account either.

Want to talk about people getting your information & worry about your SSN getting in the wrong hands.

Did you know that I can type in someone's name (1st or last or state where they live) and pay a small fee and find out anything I want to know about someone.
If you do not believe me try it.
Go to yahoo people search and type in your name & it will show your information for the whole world to see & get.

That is sad but it is true. So you see no matter if you give your SSN out to create an account with a service company on-line, there are other ways to get information on-line without doing anything.