Prosper eliminates defaults

In a site update today, Prosper eliminated all defaults - well, they renamed them. Defaults will now be known as "charge-offs". As reported on their blog:

"We are changing the way we display seriously delinquent loans on the marketplace performance page, renaming “Defaults” as “Charge-offs”, and moving the “4+ months late” loans into the “Charge-offs” category. We want to have transparency in the reporting of our marketplace’s default rate, and this change should help lenders take a more direct measure of the market’s charge-off rate. This change is the first step in a larger change we will be making in the way delinquent loans are displayed in lender portfolios."

In addition, Prosper will now allow some new lenders to make loans with PayPal and credit cards. Borrowers can invite family and friends to bid on their loan. After clicking on the link in the invitation, new lenders can place their first bid via PayPal or credit card. This is an attempt to make the site easier to use for new members.

Revolution Money Exchange improves referral program

Many exciting new companies are launching at the intersection of finance and technology. Mostly I write about peer to peer lending, but last month I wrote about Revolution Money Exchange - a PayPal competitor.

Much to my surprise, the article is now the most popular article on this site. A follow up article, Why does Revolution Money Exchange require my social security number?, is the third most popular. Lately, more people are coming here looking for information on Revolution Money than P2P lending.

Like Prosper and Lending Club, Revolution Money offers a $25 sign-up bonus. Last week they improved the referral program making it easier to promote on websites.



Previously you could only refer friends by emailing them. Now there is an ad that you can place on your website. After you sign up with the $25 bonus you can refer friends and earn a $10 bonus. Here's their ad:



And, yes, it does work:


When you click on the ad, you are directed to the following sign up page:


In my opinion, this is far better than Lending Club or Prosper's landing page. Compare all three if you want:

All three offer a $25 sign up bonus. When people click on an ad offering $25 they expect to learn how to get the $25. Revolution does that and keeps it simple. In my opinion, Prosper tries to present too much information on their Landing Page. Lending Club, on the other hand, makes no mention of the $25 bonus on their landing page. In addition, Lending Club might do better if they just request an email on the initial landing page instead of security questions and a consent form. Keep it simple.

Many people have signed up for Prosper and Lending Club via this website but a very small percentage of those become eligible for the $25 bonus. With Prosper you have to make a loan of $50 and with Lending Club you have to verify your bank account and transfer funds to your account. Revolution Money is much easier - they transfer the $25 in your account immediately. Then, if you want to pull it out you have to verify your bank account.

I think some people signing up for Prosper or Lending Club through a $25 referral button become confused at the requirements to get the $25 and do not follow through. Revolution Money has a much higher conversion rate.

So, I'm quite pleased with Revolution Money's improvements to their referral program and I challenge Prosper and Lending Club to continue to improve their programs.

PayPal competitor Revolution Money Exchange offers $25 sign-up bonus

Peer to peer money exchange site, Revolution Money Exchange launched nearly four months ago. At the time, chairman Ted Leonsis said, "We want to become for social networks what PayPal is for EBay." Former AOL chairman Steve Case is behind Revolution Money and hopes that merchants use it to circumvent the traditional fees of 1.9 percent that credit card networks charge.

Revolution Money Exchange is aggressively courting new members with a $25 sign-up bonus. They advertise that it takes 24 hours for the $25 to be credited to your account but it took me less than a minute to sign up and a minute later the bonus was immediately available in my account.

Revolution Money doesn't charge many fees. It's free to register, add money, send money, receive money, request money and withdraw electronically to a bank account. There are fees to withdraw money by check or to receive a paper statement.

I'm sold. I'll be using Revolution Money Exchange instead of PayPal. Even if you don't use PayPal it's worth a couple minutes for the sign-up bonus.

Of course, if you haven't signed up for Prosper or Lending Club yet you can also get a $25 referral bonus there too. Some quick math - If you signed up for all three of these services and then referred your spouse you would make a quick $160. Of the three, only Prosper requires that you actually use their service by lending at least $50 to a borrower.

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.




Update (2/25): Why does Revolution Money require my social security number?