OBERTHUR EAL4

Oberthur Card Systems has received the highest security certification ever granted in France for a multi-application smart card. EAL4+ Common Criteria certification was awarded to Oberthur’s “CosmopolIC” by the Direction Centrale de la Sécurité des Systèmes d’Informations. The “CosmopolIC” smart card is the first Java multi-application card that enables applications to be downloaded or deleted after the card is issued without compromising its security components.

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NextCards Deactivated

Unable to find a buyer and facing an early amortization of NextCard’s securitized credit card assets, the FDIC decided this week to shut down about 800,000 NextCard credit card accounts. The FDIC began notifying cardholders on Tuesday, via email, of the deactivation action, which took effect yesterday. The action has no impact on the NextBank, non-securitzed credit card accounts sold to CardWorks and Merrick Bank last week. The FDIC informed cardholders there will be no refund of annual fees and that all points accrued in the NextCard incentive program have been eliminated. However, Amazon.com, an investor in NextCard, indicated it will honor the points. VISA reportedly said it has lined up two issuers to contact affected customers during the next few weeks to offer balance transfers. The FDIC estimated last week that the cost to the Bank Insurance Fund for the failure of NextBank will run between $300 and $400 million. The OCC closed NextBank on Feb. 7th and the FDIC was appointed the receiver. NextCard tried to find an acquisition partner after regulators determined last year that the bank was undercapitalized. The OCC said NextBank was classifying some delinquent accounts sold into a securitization trust as fraud losses, although the delinquencies were actually attributable to credit quality problems. (CF Library 2/8/02; 2/11/02; 3/14/02; 6/10/02; 7/3/02)

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@POS SIGNS NRT

Toronto-based NRT Technology Corporation has become a certified VAR for @pos’ POS terminals. NRT will implement @pos’ signature capture products, including iPOS 3100, TX.C, and iPOS TC terminals, with its Players Signature Capture System. The turnkey solution allows casinos to be compliant with Canadian government legislation regarding the storage of personal information such as gaming history. Patrons desiring to join a casino’s loyalty program must acknowledge a document that is electronically presented to them. The player’s card is swiped through an @pos terminal and the document is presented. If the patron agrees with the document, they sign on the terminal’s signature capture pad. The digital signature is stored with the player’s card information in the casino database as a cost-effective compliance solution.

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Basketball Card Options

MBNA and the NBA will launch, in October, a new program to enable basketball fans to choose a credit card featuring the logo and colors of any of their favorite NBA, WNBA, or NBDL teams. Fans can sign up for the credit cards on-site at a variety of NBA events and activities including NBA Jam Van, NBA All-Star Jam Session, Yahoo! Sports NBA Rhythm ‘n Rims presented by Reebok, and through NBA.com. MBNA will team with the leagues to market and issue the new team and league credit cards at these NBA events and through a national marketing campaign. The program will also extend outside of the US in the United Kingdom, Spain, and Ireland.

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THALES ACQUIRES CHR

Gloucester-based CHR Design is being acquired by Thales e-Security in an all cash deal. Thales said its flexible cryptography security solutions are already deployed in France, Norway and NATO, but the CHR acquisition will provide an additional range of capabilities in the UK. CHR Design develops technical cryptographic systems for some of the UK’s largest defence primes and a number of high profile UK Government departments. Thales e-Security also announced the expansion of its worldwide capability by investing in a US proxy company that will enhance the company’s offerings for the US Government’s high assurance security market place.

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Genpass Claims Bianco

Genpass has hired Ralph Bianco, formerly with MasterCard and GENSAR Technologies, as SVP of the Genpass Card Solutions division. Bianco will assume responsibility for card product management for Genpass, which has delivered several new specialized card services to the market, including payroll cards — used by corporations to replace check issuance and payroll accounting – and medical payments cards – used by consumers as direct payment from their medical benefits accounts for health care related expenses. Bianco will develop a national strategy for marketing these specialized cards and will play a large role in the development of additional card products for Genpass.

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DEBIT CARDS

Caracas-based Groupo Ingedigit has signed a deal for Florida-based ServiTrust to sell and distribute both its MasterCard stored value and pin-driven debit cards. ServiTrust says it expects to be distributing a minimum of 10,000 cards per month within the next 4 to 6 months. ServiTrust also expects to establish a low-cost, fulfillment-servicing platform primarily located outside of the U.S. that will be staffed by a highly educated, but less compensated workforce.

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VISA International Ratings

Moody’s Investors Service today affirmed the ratings of Visa International Service Association (Senior at A1/CP at Prime-1). Moody’s said that since VISA International has no direct responsibility for the obligations of VISA USA, including any potential damage claims against VISA USA, the ratings remain stable. If VISA USA were to lose the lawsuits challenging its operating rules, the direct result would be to allow U.S. banks to also offer cards on other payments networks, and to potentially limit VISA’s ability to expand its brand into new products at attractive prices. Such an outcome would likely slow down VISA’s rate of growth in the US. But Moody’s does not believe that it would result in large-scale defections of Visa’s largest members. Moody’s believes that VISA International’s credit profile still benefits from the substantial implied support of its member banks. This support is the result of VISA’s strong brand, the near universal acceptance of its credit card payments network by consumers and merchants, and VISA’s resulting pricing power in the credit card payments arena.

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KBC SMART VISAS

Seoul-based KBC Corporation has received approval from VISA/Asia Pacific to personalize VISA smart cards using the MIST NBS Smart EMV Card Issuance Process with Conquest Card Issuance Software and NBS Horizon and Advantage series card issuance machines. KBC Corporation is both a card service bureau and the exclusive reseller of MIST NBS Card Technology equipment in Korea. VISA expects to have more than 11 million EMV smart cards issued in the Asia Pacific region by the end of this calendar year.

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Discover Extends NASCAR Deal

Discover Card has extended its primary sponsorship for the remainder of the 2002 NASCAR Winston Cup Series season in conjunction with HAAS CARTER Motorsports. Todd Bodine will continue as the primary driver of the No. 26 Ford. The Discover Card Racing program will not only hit the race track every week, but also starting July 14th, the credit card company joins NBC as the title sponsor of the network’s pre-race show. Plus, Discover Card race fans will enjoy riding with Todd Bodine courtesy of in-car cameras at all of the races.

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Account Aggregation

Interest in account aggregation is lacking primarily due to a concern over security says a new report. The study by Chicago-based Spectrem Group also reveals a lack of knowledge about aggregation may contribute to a low interest level. Spectrem says early estimates for account aggregation were high. Celent predicted 3.4 million users by 2001 and 9.52 million in 2002. Researcher Piper Jaffray’s predictions were even more optimistic with over 10 million users in 2002. Current estimates reveal the total number of users to be less than one million, with usage within the affluent market at only 5%.

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