Pegasystems Beefs-Up PegaCARD Smart Dispute

MA-based Pegasystems has added extensive new functionality in its automated card dispute and chargeback solution, as well as its automated payment exceptions solution . The latest release of “PegaCARD Smart Dispute” and “PegaPAYMENT Smart Adjust” builds on Pegasystems’ recently announced horizontal application, “Pega Quality & Exception Manager.” “Smart Dispute” and “Smart Adjust,” as well as “Pega Quality & Exception Manager,” leverage the power of Pegasystems’ new “Process Commander Version 4” BPM platform. With integrated business rules and process management, “V4” is designed to handle decision-intensive processes, manage processes across multiple departments and empower business users to effect rapid change of both rules and processes. The applications support global financial institutions with multi-currency and multi-language capabilities, sophisticated reporting and activity monitoring for improved control, and the flexibility to continuously adapt to the company’s operations. “PegaCARD Smart Dispute” helps credit and debit card companies minimize unnecessary write-offs, improve operational efficiency and reduce the cost of processing disputes. “Smart Dispute” includes association regulations for automated reason code handling to help save costs and improve resolution times.

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AmEx OnlineTax Offers an Incentive to Cardholders

American Express is offering “AmEx Delta SkyMiles” cardholders a 1,000 mile bonus for filing federal taxes through “American Express OnlineTax.” American Express OnlineTax is a quick, easy and accurate tool for individual taxpayers to prepare their taxes online. The program prompts users to answer a few simple questions and then automatically selects the correct state and federal tax forms. The tool performs all calculations, completing both state and federal tax returns. The American Express Company is a diversified worldwide travel, financial and network services company founded in 1850.

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The RAM Group Offers SAP Business One – The American Express Edition

SAP Canada announced its first joint solution with American Express for small and midsize businesses, under the brand “SAP Business One – The American Express Edition. The solution is offered exclusively by American Express and its Canadian channel partner, The RAM Group. “SAP Business One” provides real-time access to integrated financial, operational and sales management information. The “SAP Business One” components include financial (general ledger, accounts payable, accounts receivable, banking), distribution (inventory management, purchase order processing, sales order processing) and customer relationship management. The “American Express Edition” extends the “SAP Business One” functionality with integrated wireless warehouse management, electronic data interchange, document management, credit
card processing and sales and use tax.

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InterCept Loses its CFO Next Week

Atlanta-based InterCept announced that its CFO, Scott Meyerhoff, is leaving the company at the end of March to become the CFO of Agilisys. Carole M. Collins, InterCept’s Treasurer and Vice President of Corporate Governance/Risk, will assume interim responsibility for financial matters until a new chief financial officer is appointed. InterCept, Inc. is a single-source provider of a broad range of technologies, products and services that work together to meet the technology and operating needs of financial institutions and merchants.

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MasterCard Electronic Card Enters the Croatian Market

Croatia’s Hypo Alpe-Adria Bank is launching an unembossed business card with a zero floor limit for the country’s 58,000 small and medium businesses. The new “MasterCard Electronic BusinessCard” is designed to curb fraud and control exposure in relatively high-risk markets. This is the first time MasterCard has combined its “MasterCard Electronic” card with a business card program. Besides being 100% issuer authorized with a $0 floor limit, the “MasterCard Electronic” card can only be used for face-to-face transactions at a merchant terminal. The card can be used cross-border with a “local-use-only” option. There is also an optional ATM access feature. Additionally, MasterCard offers a unique brand, card design, and BIN range. MasterCard Europe says this is the first “MasterCard Electronic” program to be introduced in Croatia.

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Telemarketers Must Scrub Lists Monthly Next Year

As expected, the FTC has amended the “Do Not Call” rules to require telemarketers to purge numbers on the “Registry” from their call lists every month, instead of every quarter as the rule originally required. The new rule will become effective on January 1, 2005, as telemarketers will be required to “scrub” their lists against the “Registry” at least every 31 days. The FTC chose the interval “thirty-one (31),” as opposed to “thirty (30) days,” to provide sellers and telemarketers the maximum time allowable under the “Consolidated Appropriations Act of 2004” to simplify the process of scrubbing lists on a monthly basis. The FTC received 186 comments in response to the notice of proposed rulemaking from consumers, consumer groups, businesses, and trade associations. To date, consumers have registered 58.4 million phone numbers on the “Do Not Call Registry,” and according to the FTC, most telemarketers have been diligent in their efforts to scrub their lists and to meet the “Registry’s” requirements.

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Incurrent Reaches Profitability During 2003

Parsippany, NJ-based Incurrent reported yesterday that it had its first profitable year in 2003 since its founding in 1997. Testament of the company’s success appeared in the February 2004, Forbes Internet magazine, which recognized Incurrent as one of the nation’s top 25 fastest-growing privately-held technology companies. While other emerging companies were disappearing from the technology landscape almost on a daily basis, Incurrent not only survived the economic downturn, but pulled away from the pack by focusing on the basics, ultimately achieving profitability. Incurrent develops and operates advanced online products for financial institutions in the global payment card industry, including issuers of consumer, small business, purchasing card, corporate T&E, and private label cards.

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ABA Finds Card Delinquency Persistently High in Q4

Credit card delinquency, based on the number of accounts 30+ days past due, hit an all-time high of 4.43% in the fourth quarter. Based on total dollars outstanding, bank card delinquencies rose to 4.92%, compared to the previous quarter’s 4.66%, but below the record of 5.45% set in 1996. The news comes as all major closed-end consumer loan delinquencies decreased during the fourth quarter. According to the American Bankers Association’s latest “Consumer Credit Delinquency Bulletin,” it is a rare combination wherein credit card delinquencies increased as all other consumer lending delinquencies declined. The ABA blames weak job creation for keeping credit card delinquencies at persistently high levels. The ABA noted that the average length of unemployment remained near 20 weeks in the fourth quarter. Also energy costs rose and, on average, financial obligations remained above 18% of personal income.

4Q CREDIT CARD DELINQUENCY HISTORY
(based on total dollars outstanding)
2003: 4.92% 1999: 4.28% 1995: 4.45% 1991: 4.61% 1987: 3.65% 1983: 2.74%
2002: 4.63% 1998: 4.62% 1994: 3.20% 1990: 4.46% 1986: 4.80% 1982: 3.57%
2001: 4.67% 1997: 5.38% 1993: 3.64% 1989: 3.22% 1985: 3.88% 1981: 2.26%
2000: 4.25% 1996: 5.45% 1992: 4.11% 1988: 3.40% 1984: 2.85% 1980: 3.00%
Source: American Bankers Association Delinquency Bulletin

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BestBank Executives Barred from Banking

The FDIC yesterday issued prohibition orders against the two major principals of Century Financial Group, which operated the sub-prime credit card operations of the failed BestBank of Boulder, Colorado. Glenn Gallant and Douglas Baetz are prohibited from further participation in the banking industry without FDIC approval. The FDIC says its action is based on allegations that Gallant and Baetz engaged in reckless mismanagement of the credit card program that rendered the bank insolvent. In 1996, the President and CEO were paid at total of $1.3 million which ballooned to $9.5 million in 1998. Bank regulators questioned the generous amount of the executive bonuses and the negative effect the payments had on the bank’s capital structure in February and October 1996. However, despite repeated comments by the examiners, the bonuses, fueled by the rapid growth, continued until the bank failed in 1998. Under the “BestBank VISA” program consumers received a $600 credit limit in exchange for a $498 club membership fee and a $45 annual card fee. The program signed up 500,000 cardholders in its two year run and produced $240 million in credit card outstandings. The bank was seized by authorities in 1998 after BestBank’s bad debt topped $134 million. The failure cost depositors more than $200 million. (CF Library 7/27/98; 8/27/98; 6/2/03)

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SCM Microsystems Enters the Physical Access Control Market

SCM Microsystems announced plans to enter the physical access control market. To-date SCM has shipped several million smart card readers worldwide to major enterprises, financial institutions and government agencies, including more than 1.5 million units through systems integration partners for the U.S. Department of Defense Common Access Card program. The company holds more than 80 relevant patents and participates actively in standards initiatives guiding the changes taking place in the physical access control market. The new product line will support the latest technologies adopted by the physical access control market including contact and contactless smart cards, and it will position companies for fingerprint biometrics going forward. SCM will market the terminals to both government and corporate customers through its existing channel partners, the top-tier OEMs and systems integrators serving the physical access control, smart card and security sectors.

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MC ELECTRONIC BUSINESSCARD

Hypo Alpe-Adria Bank is launching an unembossed business card with a zero floor limit for Crotia’s 58,000 small and medium businesses. The new “MasterCard Electronic BusinessCard” is designed to curb fraud and control exposure in relatively high-risk markets. This is the first time MasterCard has combined its “MasterCard Electronic” card with a business card program. Besides being 100% issuer authorized with a €0 floor limit, the “MasterCard Electronic” card can only be used for face-to-face transactions at a merchant terminal. The card can be used cross-border with a “local-use-only” option. There is also an optional ATM access feature. Additionally, MasterCard offers a unique brand, card design, and BIN range. MasterCard Europe says this is the first “MasterCard Electronic” program to be introduced in Croatia. The Croatian Ministry of Economy, Work and Entrepreneurship and the Croatian Chamber of Commerce says the number of small and medium enterprise in the country has grown from 38,000 to more than 58,000 enterprises between 1993 to 2003.

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