ENTRA CARD

The Dutch finance group Fortis and Entra, subsidiary of TietoEnator, has signed a licence agreement concerning Entra’s credit card management solution, Entra Card. Fortis will use Entra Card for the issuing and administration of Visa and Europay cards on the Dutch market. The system delivery and related consultancy work is the single largest deal for the Entra Group so far. The deal also includes a five years support agreement for the card system. The system went live at the end of August 2001.

“The deal with Fortis is our largest single project so far,” says Erik Clausen, Business Area Manager, Entra Payment Solutions. “The financial sector is developing with the earlier mainframe environments being replaced by more scalable platforms. The market for this kind of solutions is large and Entra Card is well positioned for the IT-developments that are taking place among our customers.”

Entra Card is based on IBM eServer iSeries. It’s a software product for the issuing, authorization, acquiring and administration of credit cards. More than thirty global customers use Entra Card for their credit card management including banks, retail chains, telecom operators, hotel chains and financial companies. The Entra Card system gives the customers a cost efficient administration of the cardholders, their transactions and the merchants linked to the system. Entra Card supports VISA, Europay and MasterCard as well as the banks’ EMV-standard.

“The new system for credit card management provides us with a well-suited platform for existing and future services,” says Wim Vliegenthart, Financial Director at Visa Card Services, Fortis operations for card issuing. “The continuous development of our card operations makes it necessary for us to develop our underlying systems on an ongoing basis. Entra has proved to be a strategic partner for this purpose.”

Visa Card Services serves 1.7 million cardholders, has agreements with 90,000 merchants and processes tens of millions of transactions per year. Through the joint venture Betafin, Fortis also handles the private label card programme for the Dutch retail chain Bijenkorf. This programme is also included in Entra’s project for the finance group.

The project has been running for two years and was started after a selection procedure where 25 suppliers’ products were evaluated of which three were pilot tested, as a basis for the company’s choice of supplier.

Entra is a part of TietoEnator, Finance Sector. For further information, visit www.entragroup.com . The services of TietoEnator Finance Sector are based on a strategic partnership with our customers. Finance Sector’s solutions business concentrates on key technologies and the goal is, via Europe, to be a global e-finance solutions provider. In addition to net banking solutions, Finance Sector also commands strong expertise in payment systems and selected capital market solutions. Finance Sector operates in 11 different countries with more than 1600 experts and over 300 customers world-wide. TietoEnator Finance Sector is the leading partner for the banking, insurance and finance sector in Northern Europe.

With a staff of 10,000 and annual net sales of 1.1 billion euro, TietoEnator is a leading supplier of high value-added IT services in Europe. TietoEnator provides consulting, systems development and integration, operation and support, product development services for customers, and software services. The Group has in-depth knowledge of its customers’ businesses in areas such as telecommunications, finance, the public sector and the forest and energy industries. www.tietoenator.com

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Real-Time CCS Link

Global Cash Access, a supplier of cash access, financial management and customer relationship marketing technologies to the gaming industry, has launched a “real time” interface to its Central Credit Services. The interface, Central Credit Real Time, uses leading-edge technology to facilitate the credit decision-making process by bridging a property’s in-house casino management software (CMS) with the Central Credit database. Patron updates can now be made as they occur at a property, or in real time, so the amount of time required for credit reporting requests is substantially reduced. Information is automatically, securely and transparently delivered to Central Credit. “Prior to Central Credit Real Time, casino personnel spent a great deal of time trading phone calls between Central Credit and various properties to determine a patron’s credit status,” said Pamela Shinkle, chief operating office of GCA and president and chief operating officer of Central Credit LLC. “Central Credit Real Time considerably reduces the amount of time required for gaming inquiries by insuring up-to-the-minute information at the click of a button.” With implementation of the Central Credit RT interface, properties send transaction types through a message engine to Central Credit as they occur. Central Credit validates the transmission, acknowledges receipt and stores the data for future inquiries. Some examples of transactions that are automatically updated include establishing new patrons; updating patron names, account numbers or preferred status; issuing/paying of markers; and posting/paying of returns. Central Credit RT stands to deliver measurable benefits to casino properties. Casino personnel no longer have to update data in their property’s CMS and then inform Central Credit of changes. Automatic information updates increase cage and credit personnel productivity by reducing manual requests and the number and length of calls to and from Central Credit. Casinos also benefit from quicker response times for gaming inquiries, thus reducing the amount of time for casinos to grant credit to their patrons. Faster response times improve customer relations and increase dollars to the gaming floor.

Although Central Credit RT interface does require a few simple system changes, it provides properties with more accurate data in a real time environment, said Shinkle.

About Global Cash Access

Global Cash Access was formed in 1998 and is a joint venture of First Data Corp. and M&C International, Inc. Providing access to the gaming industry’s largest patron database, Global Cash Access uses Internet technologies to deliver funds transfer, financial management and customer relationship marketing services to more than 1,000 gaming properties nationwide. More information on the company is available at [www.globalcashaccess.com][1]. CONTACT: Katcher Vaughn & Bailey Dana Coleman or Roy Vaughn, 615/248-8202 dcoleman@kvbpr.com rvaughn@kvbpr.com

[1]: http://www.globalcashaccess.com

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YINLIAN CARD

People’s Bank of China announced it will issue a new banking card that can be used to withdraw cash from any ATM located in five major cities. The ‘Yinlian’ card will access funds from any bank account at any ATM in Beijing, Shanghai, Hangzhou, Guangzhou and Shenzhen. The new program will take effect before the end of this year.The national payment system currently links banking networks in 18 major cities, where certain bank cards can be used to withdraw cash and to make deposits at any of the payment terminals. More than 50 financial institutions in China had issued 330 million bank cards as of mid-year, up 18.4% from one year. Annual bank card volume is about 4.85 trillion yuan (US$577.3 billion), an increase of more than 200% from a year ago. The country has 129,000 banking outlets and 49,000 ATMs.

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Fee Waivers

Metris Companies, and its subsidiary Direct Merchants Credit Card Bank, announced Thursday they will waive late fees for cardholders in geographic areas centered around New York City and Washington. Metris says customers in these areas with payment due dates from Sept. 11 to Oct. 11 will not incur late fees due to possible delays in the United States postal delivery system. American Express, Discover and most, major VISA/MasterCard issuers have announced they will waive late fees and in some cases boost credit lines for those in the affected areas.

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4Q/01 Outlook

Fourth quarter retail sales will only rise 2.2% this year, instead of the 4.0% previously projected, and holiday sales will only increase by 2.5%-3.0%. Furthermore, after last week’s abrupt 20% decline in credit card charge volume, it is expected that card activity for the final quarter of this year will rise a minuscule 3% as the country plunges into a deep recession and a war-time economy. The National Retail Federation said the revised projections for the fourth quarter were due to sagging consumer confidence, which is at its lowest level in more than eight years. The NRF says consumers are shaken by last week’s events and will pull back on retail spending. Yesterday Fed Chairman Alan Greenspan testified to the U.S. Senate that aggregate measures of production, employment, and business spending continue to be weak. However, consumer spending moved higher in August and appeared to be reasonably well maintained in the first part of September. However, consumer spending, as measured by card volume, dropped dramatically last week in the wake of the terrorist attacks.

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E-Check Rules

Consumers will be able to make e-check payments over the telephone under new rules from NACHA — The Electronic Payments Association that became effective on September 14, 2001. The new rules permit merchants, billers and government agencies to offer e-checks by telephone as a payment option.

“An e-check authorized over the telephone is an easy and convenient option for consumers to make payments,” said Elliott C. McEntee, President and CEO of NACHA. “A consumer paying a bill or making a purchase would have an alternative to mailing a check.”

An e-check is an electronic debit to a checking account that is initiated on the Internet, at the point-of-sale, over the telephone, or even by a bill payment sent through the mail. An e-check is processed using the Automated Clearing House (ACH) Network, and typically takes 1-2 business days to be posted to a checking account.

Under the new rules, a consumer can verbally authorize an e-check payment by telephone. The authorization is either tape-recorded or a written confirmation notice is sent to the consumer.

E-checks by telephone are covered by the Federal Reserve’s Regulation E, which defines specific consumer protections from error and fraud. There are no similar protections for paper check payments. NACHA’s rules for e-checks by telephone mirror the Federal Trade Commission’s telemarketing sales rule, and provide an additional consumer protection by specifically prohibiting companies that cold-call consumers from using e-checks for any resulting sales.

Since July 1999, NACHA has been conducting a pilot program to test e-checks by telephone. From its inception through July 2001, the latest month for which statistics are available, the pilot has originated more than 10.5 million e-checks.

The NACHA Operating Rules standardize payment formats for the ACH Network, and define the rights, obligations and warranties of parties involved in ACH payments. Operating rules provide a uniform business and legal framework for the exchange of payments, which enhances participants’ confidence in the safety and reliability of the payments system.

The ACH Network serves 20,000 financial institutions, 3.5 million businesses, and 100 million individuals. The ACH Network is commonly used for Direct Deposit of payroll and government benefits such as Social Security, Direct Payment of consumer bills, business-to-business payments, federal tax payments, and, increasingly, e-checks and e-commerce payments. In 2000 there were 6.9 billion ACH payments made worth more than $20 trillion.

About NACHA — The Electronic Payments Association

NACHA is the leading organization in developing electronic solutions to improve the payments system. NACHA represents more than 12,000 financial institutions through direct memberships and a network of regional payments associations, and 650 organizations through its industry councils. NACHA develops operating rules and business practices for the Automated Clearing House (ACH) Network and for electronic payments in the areas of Internet commerce, electronic bill and invoice presentment and payment (EBPP, EIPP), e-checks, financial electronic data interchange (EDI), international payments, and electronic benefits transfer (EBT). Visit NACHA on the Internet at .

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Online Commerce

Despite a softening US economy, the number of online users and buyers continues to grow, according to the new report released yesterday. The new report from eMarketer says that US B2C e-commerce revenues, which totaled $38.3 billion in 2000, will quadruple to $156 billion by 2005. The report also reveals that the online buying population continues to grow, reaching 79.3 million this year. Other key highlights include: the number of US Internet users will rise from 116.5 million last year to 184.1 million by 2005; and Americans buying online will more than double, from 64.1 million in 2000 to 130 million by 2005. eMarketer places the online customer conversion ratio at 2.9% for 2000, an improvement from 1.9% of 1999. For 2001, the ratio will jump to 3.5% as e-tailers attract and win new customers with more targeted, customized marketing campaigns. VISA projects online credit-card fraud rates between 25 cents and 28 cents per every $100 charged, significantly higher than the 7 cents for all transactions.

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Revolt Spreads

Walgreen joined the caravan on Interlink opposers yesterday. The nation’s largest drug store chain says it will no longer accept debit cards using the VISA ‘Interlink’ network, effective Oct. 13. Walgreens will continue to accept debit cards processed through other networks, including Star, MAC, NYCE and Pulse networks. Fewer than 10% of Walgreens debit card transactions use the Interlink network. The company has 3,520 stores in 43 states. Earlier this week Florida-based Publix Super Markets announced it will stop accepting ‘Interlink’ point-of-sale debit cards in mid-October. Last week, Racetrac Petroleum, a gasoline convenience store retailer that operates stores in twelve Southeastern states, announced it will stop accepting Interlink debit cards next month. Two weeks ago, Wal-Mart Stores announced it will not accept VISA’s Interlink on-line debit cards in its 2,700 stores, effective October 13. On October 13th, VISA’s new rate schedule goes into effect which will raise the merchant fee from 20 cents to 45 cents per transaction. More than 50 million cards carry the Interlink logo with most of the U.S. cardholders located on the west coast, where the network was established. There are more than 675,000 Interlink merchant acceptance locations in the U.S. VISA made the decision in June to boost Interlink transaction fees for most merchants from 45 basis points (0.45%) +3 cents with a 20 cents maximum to 65 basis points (0.65%) +12 cents with a 45 cents maximum.

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Laser VISA

Drexler Technology confirmed Thursday it has received a $4.8 million order for ‘LaserCard Triple-Image’ identification cards for an ongoing U.S. border-crossing ID card program. The new optical memory cards will be used as U.S. Department of State ‘Laser Visa’ cards for frequent visitors from Mexico crossing the border into the states of Texas, Arizona, and California. Mexico is the only country designated by the U.S. DOS to utilize the ‘Laser Visa’ card for tourist visas. The card order is part of an $81 million government procurement program for U.S. INS ‘Green Cards’ and DOS ‘Laser Visas’. Under the five-year U.S. government subcontract, awarded to Drexler last June, up to 24 million ‘LaserCard’ optical memory cards will be needed. The ‘Triple-Image ID’ card contains a color photo image on one side of the card, comparable to a drivers license face photo. On the opposite side is a laser-engraved image of the same face photo, which is used to compare with the color photo for confirmation of identity. It is virtually impossible to alter the matching laser-engraved facial image. The DOS and INS cards also contain the digital image and a biometric template of the cardholder’s fingerprint.

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HH Re-signs Rhodes

Household International, the $101 billion (managed assets) consumer lender, announced that its retail services business has signed an exclusive five-year agreement to continue managing the Rhodes Furniture private-label credit card program including John M. Smyth’s Homemakers, which was recently acquired by Rhodes. As a result of this agreement, Household will manage more than $400 million in private-label credit card receivables for Rhodes, including both in-store and Internet sales.

“We have a true partnership between two companies that understand the needs and expectations of today’s consumer,” said Sandy Derickson, managing director and CEO of Household’s retail services business. “Household’s private-label credit card gives Rhodes customers a choice of flexible payment options and attractive financing promotions.”

This agreement extends a successful relationship between Household and Rhodes since 1992. “We have relied on Household to provide quality service to our customers for nearly 10 years,” said Joel Dugan, executive vice president/chief financial officer, Rhodes Furniture. “Rhodes, founded in 1875, has been serving customers for generations and the credit facility provided by Household enhances the customer buying experience.”

Household’s retail services business is one of the nation’s largest private-label credit card providers, processing over 3.6 billion transactions for 220 merchants annually in the U.S., U.K., and Canada. In addition to Rhodes, Household offers private-label credit cards and sales finance products for retailers and merchants in a variety of industries including consumer electronics, department stores, specialty discount, furniture, and apparel. Household also provides financing for dealers in motorcycles, ATVs, personal watercrafts, and snowmobiles.

About Rhodes

Atlanta-based Rhodes, which had furniture, bedding and accessories sales of $468.3 million last fiscal year, is ranked 13th of the top 100 furniture stores in the U.S. This privately-held company operates 89 retail stores under the names Rhodes, Marks Fitzgerald, and Homemakers, along the southeastern seaboard and into the Midwest.

About Household

Household’s businesses are leading providers of consumer loan, credit card, auto finance and credit insurance products in the United States, United Kingdom, and Canada. In the United States, Household’s largest business, founded in 1878, operates under the two oldest and most widely recognized names in consumer finance: HFC and Beneficial. Household is also one of the nation’s largest issuers of private-label and general purpose credit cards, including the GM Card and the AFL-CIO’s Union Plus card. For more information, visit the company’s web site at .

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Pounding Continues

American Express and Providian lost again yesterday as the stock market ground both down to new 52-week lows. Providian hit $20.00 per share yesterday but closed up at $20.70 for a net loss of 2.8%. Providian is now trading at less than 30% of its $67.00 52-week high set in January. AmEx dropped to $25.20 per share yesterday, closing at $26.00, losing another 1.4%. Capital One and MBNA were knocked down by another 4.5% yesterday, while Advanta sunk 14%. The market opened sharply lower this morning.

9/19 9/18 9/19
COMPANY CLOSE %CHG LOW
Providian 20.70 -2.817 20.00*
NextCard 5.54 -1.110 5.50
Amer Exp 26.00 -1.380 25.20*
Metris 21.70 -2.472 20.40
Advanta 9.16 -13.66 9.16
Cap One 40.08 -4.480 37.57
MBNA 25.20 – 4.72 23.70
Household 52.30 – 0.64 49.40
* new 52-week low

Source: CardData (www.carddata.com)

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USTT Investors

USA Technologies has completed the sale of slightly in excess of $4 million of equity capital to accredited investors in a private placement.

The offering consisted of shares of common stock at $.70 per share. For each share purchased, the investor received a warrant to purchase two shares of common stock at $.70 per share. One half of the warrants are exercisable on or before December 31, 2001 with the balance exercisable on or before June 30, 2002. If all of the warrants are exercised, the Company will receive additional funding of $8 million. These shares may not be offered or sold in the United States absent registration or applicable exemption from registration requirements.

A portion of the proceeds of the offering have been or will be used primarily to advance USA Technologies ability to help drive e-Port and e-Port Wireless into new and diverse worldwide markets. e-Port is turning vending machines into intelligent terminals capable of conducting e-business microtransactions. USA Technologies has recently penetrated the coin operated laundromat market and the taxi and limousine industry. The first cashless laundromat using e-Port technology opened in Chicago earlier this month and certain taxis and limousines could begin utilizing e-Port as early as January 2002.

George Jensen, Chairman and CEO of USA Technologies, stated, “This new financing is particularly exciting for the Company as we drive e-Port technology into new marketplaces. We believe our products and services have the potential to fundamentally change large, cash-based industries such as vending. e-Port will bring added convenience to consumers, and could fundamentally affect how companies market and sell their products and services as society moves more toward cashless transactions,” according to Jensen.

e-Port and its associated network services can be utilized in conjunction with vending machines, gas pumps, office equipment and almost any kind of point-of-sale terminal. The technology enables the conversion of unattended points of sale into intelligent “store fronts,” connected to the Internet, and capable of communicating operational data to operators, conducting cashless micro-transactions. It can come fitted with an interactive, touch screen that features interactive media/advertising at point of sale, giving location owners the ability to communicate with and improve the buying experience of consumers, promote products, provide free access to web based media such as news, sports and weather and possibly generate incremental revenues from interactive media.

USA Technologies is currently in negotiations with global consumer products, technology and other companies regarding mass rollout of e-Port and its related network services.

About USA Technologies:

USA Technologies is recognized as a leader in cashless micro transactions and interactive media technology and associated financial services. USA Technologies provides credit card activated and other cashless systems, allowing end users, ranging from consumers to business professionals, to communicate, conduct business or make ordinary commerce transactions, outside of the home or workplace. USA Technologies is an IBM (NYSE:IBM – news) Business Partner and an inaugural member of the Sprint (NYSE:FON – news) Enabling Application Service Provider Program for e-commerce. It has also established relationships with a number of global IT, multimedia, and telecommunications companies including Marconi Online Systems, RadiSys Corporation, DoubleClick Inc., and Xerox Corporation. Visit the USA Technologies home page at [www.usatech.com][1].

[1]: http://www.usatech.com

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