You may remember Steve Case from your spam-filled AOL inbox and your junk-CD-filled postal mailbox. The former CEO of AOL and now the head of the Revolution Health, a flailing healthcare startup, is giving it another go. His latest venture? launched Revolution Money, a nontraditional credit card combined with a PayPal clone. The former would be interesting if we didn't already have Visa and MasterCard, and the latter if we didn't have, well, PayPal. The basic sales pitch for the card is, alas, utterly flawed. Sure, it's cheaper for merchants, which may win it some acceptance among businesses. But since Visa and MasterCard make money by charging fees to sellers, not buyers, that price cut won't make any difference to consumers when they hit the mall. This obvious point is perhaps not lost on the star-studded investors Case attracted to his earlier venture.
Revolution Health investors and board members included a series of boldface names: Colin Powell, Carly Fiorina, Jim Barksdale, Frank Raines, Steve Wiggins, Miles Gilburne, John Delaney, Jeff Zients and David Golden. None of them showed up for Revolution Money, whose backers instead include retired AOL executive Ted Leonsis, controversial former Harvard University president Larry Summers, ousted Charles Schwab CEO David Pottruck and Russell Hogg, the father of Revolution Money CEO Jason Hogg. Perhaps Case's old moneymen have started paying attention to his track record.