American Express and PayPal - Revolution

American Express and PayPal - Revolution

With its deal to buy Revolution Money, American Express is taking aim at the growing market for alternative payments using IT connectivity, in a challenge to recognized leader PayPal, analysts say. The financial IT services giant announced plans Wednesday to buy the Web payments firm started in 2005 by Internet firm AOL founder Steve Case, with the purchase price set at 300 million dollars.
"I think it's a challenge to PayPal, but it's more than that," said Ed Kountz, an analyst who follows financial technologies at Forrester Research. Kountz said a variety of new technologies are emerging for person-to-person and alternative payments, but that few IT companies have been able to get the critical mass with both consumers and merchants to gain a foothold.