Bad Quarter

American Express said this morning that first quarter earnings for the TRS unit are expected to only increase by 13% to 15% over 1Q/00, reflecting a slowdown in worldwide billed business growth, particularly in the latter part of the quarter as the economy and spending by corporations weakened globally. The news sank AmEx stock this morning. AmEx says it expects worldwide volume to increase 8% to 10% from last year’s first quarter. Worldwide lending balances are expected to increase more than 20%, reflecting in part recent acquisitions. AmEx also provided guidance that it expects first quarter earnings per share to be approximately 18% below the $0.48 that it earned in the same period a year ago.  The decline is expected to reflect pre-tax losses of about $185 million from the write-down and sale of certain high-yield securities. In pre-market trading AmEx stock price slipped well below $38 per share, after closing Friday at $41.30. AmEx will release its 1Q/01 data on April 23.



Paytrust unveiled its new electronic bill aggregation technology this morning. ‘SmartBills’ automatically retrieves electronic bills directly from a biller’s web site, providing the biller with all of the benefits of electronic bill distribution without requiring any additional programming effort or expense. The Paytrust ‘SmartBill’ engine is in production today with more than 20 major billers, which together represent over 30% of total consumer bill volume. ‘SmartBills’ extend Paytrust’s universal bill delivery capability, enabling online delivery of bills from any format supported by the biller, including paper bills, biller-direct web sites or standards-based electronic bill formats such as OFX.


Online Stats

While instant, online credit card approvals have been limited to a few advanced Internet issuers such as NextCard and Providian, all top ten U.S. issuers now offer online applications and electronic notification of approval. According to CardWatch ([][1]), of the top 50 issuers, based on 4Q/00 outstandings, 45 offer online applications and 18 offer online approvals. Sub-prime issuer, Cross Country, requires applicants to download the application and then fax it. Secured card and sub-prime specialist, OR-based First Consumer’s National Bank, and AL-based Compass Bank, promote credit cards, but require applicants to call to apply. A recent consumer survey shows that Internet marketing of credit cards produced four million new accounts last year. Since 1996 more than 13 million new credit card accounts have been opened as a direct result of online marketing. (CF Library 3/13/01)

[1]: /cardwatch/main.html/


Omni 3300 Certified

VeriFone, a division of Hewlett-Packard Company, and worldwide leader in electronic payment solutions, announced that Vital Processing Services, a leader in technology-based commerce enabling services, is the first U.S. merchant processor to Class A certify VeriFone’s Omni 3300 payment terminal running VeriFone’s advanced Verix operating environment and SoftPay e-payment application.

The compact, easy-to-use terminal takes full advantage of VeriFone’s global Verix operating environment to support and run multiple applications on a single device and allow information to be shared securely between applications.

“Our acquiring clients who select the Omni 3300 can offer merchants basic credit, debit and Electronic Benefits Transfer (EBT) payment capability with Vital’s Class ‘A’ merchant help desk support. The tremendous benefit to our clients is the ability to add new functionality without having to re-certify their payment applications, which will help increase speed to market and decrease costs,” said Eric Turille, executive vice president of Vital Processing Services.

In addition, the terminal is capable of downloading value-add applications, such as private label, gift card, loyalty and supply ordering. The Verix operating environment is unique, in that it has application separation at both the hardware and software level. Verix also features a TCP/IP library, enabling the Omni 3300 to support new Internet-based applications that can provide new revenue streams and improved customer loyalty. VeriFone is already working with e-service providers to develop Internet-based applications for VeriFone terminals. VeriFone’s Developer Forum ([ loperforum/][1]) also facilitates the creation of new applications for Verix-based terminals. “For years, our customers have looked for ways to differentiate themselves in the marketplace by adding value-added functionality to their POS terminals, but they always faced the issue that if they changed the application, their Class A certification would be lost,” said Patty Colby, manager of the US Processor Group at VeriFone. “The Omni 3300 eliminates this problem because it allows value-added applications such as private label, loyalty or gift card to be added easily to the terminals without losing Class A certification on their credit and debit applications. This capability has enormous potential for Vital clients looking to differentiate themselves with new value-added applications.”

Omni 3300 Terminal

Supported by VeriFone’s next-generation Verix operating environment, the Omni 3300 terminal securely supports and runs multiple applications in a single device and allows information to be shared securely between applications. VeriFone’s unique implementation of application separation at both the hardware and software level reduces the need for time-consuming and costly certifications when adding or modifying applications. The Omni 3300 also features the same intuitive ATM-style interface and SoftPay software featured on the Omni 3200, letting employees virtually train themselves and greatly reducing errors.

SoftPay Software

SoftPay software enables Vital’s acquiring clients to offer their merchants use of the VeriFone Omni 3300 payment terminals to accept EBT card payments, as well as credit and debit transactions. SoftPay supports card verification numbers for Visa, MasterCard and American Express. In an effort to help reduce credit card fraud at the point of sale, SoftPay is compliant with state requirements of credit card account truncation. The CPS Card Present and Address Verification features enable merchants to qualify for low interchange rates.

About Vital Processing Services ([][2])

Arizona-based Vital Processing Services(R) (Vital(R)) is a leader in technology-based commerce enabling services. Vital’s clients include acquirers and merchant service providers that offer electronic payment processing services to merchants, such as POS products, electronic authorization and data capture; VirtualNet(TM) Internet-commerce services; clearing, settlement and exception processing; accounting, billing and reporting; acquirer services; risk management; and customer service. Vital is a merchant processing joint venture of Visa(R) USA and Total System Services, Inc.(R) (TSYS) (NYSE:TSS).

About VeriFone

VeriFone ([][3]), a division of Hewlett-Packard Company, is the leading global provider of secure electronic payment solutions for financial institutions, merchants and consumers. The division has shipped more than nine million electronic-payment systems, which are used in more than 100 countries.

About HP

Hewlett-Packard Company — a leading global provider of computing and imaging solutions and services — is focused on making technology and its benefits accessible to individuals and businesses through simple appliances, useful e-services and an Internet infrastructure that’s always on. HP has 88,500 employees worldwide and had total revenue from continuing operations of $48.8 billion in its 2000 fiscal year. Information about HP and its products can be found on the World Wide Web at [][4].



Capital One has launched a new mail solicitation that directs recipients to a special Internet address to apply. The unique direct mail package for Cap One’s ‘Gold MasterCard’ includes a plastic ‘Pre-Selection Card’ which is attached to the front of the lead page. A toll-free number and a Web address are embossed on the attached card, according to CardWatch ( The ‘’ Web site prompts the visitor to enter his ‘Reservation’ number and ‘Access Code’. After entering the tracking information, the applicant is taken to a brief online application which prompts for SSN and DOB. The ‘Gold MasterCard’ offer includes a 0% APR for new purchases through the Sept billing period, followed by an on-going rate of prime +10.3%. Cap One is charging a $72 annual fee for the Gold MasterCard, billed monthly.



Now moviegoers can bypass long lines at the ticket sales and will-call counters, and breeze into theaters and other facilities with the new WavePass Internet movie ticketing system announced by AmaTech USA, Inc., a world leader in contactless smart-card development and manufacturing. The WavePass System represents a major technological advance for online ticketing venues, which had been searching for a truly seamless interface between their online sites and the bricks-and-mortar world of the theaters they represent.

“National Amusements has always been a leader and an innovator in adopting technologies that enhance the movie-going experience for our customers,” said William Towey, Senior Vice President, National Amusements, Inc. (a founding partner in “The WavePass System would allow us to provide yet another enhancement to the convenience patrons experience at our cinemas. Customers arrive at the theatre with their WavePass card in hand and can go directly to the concessions stands and to their seats without stopping at the boxoffice, or even at an automatic ticket kiosk. We also feel that our patrons’ ability to download cash for concessions and other purchases onto the same WavePass card is yet another plus service we can provide to them.”

The controversy has been whether or not online ticketing would revolutionize the industry or fade into the background as a mere marketing gimmick. Online ticketing venues have been finding it harder than expected to get visitors to their websites to take that extra step and click through to actually buy tickets on-line. There hasn’t been sufficient motivation to get people to actually buy tickets on line in enough volume to guarantee the industry’s success.

“Research has shown that many Web surfers are content to simply surf, and don’t make the connection from the Web to the brick-and-mortar economy,” said Dennis Ryan President of AmaTech USA, Inc. “There simply isn’t that much difference between buying a ticket online and then going to the theater to wait in line at the will-call window or kiosk, and simply waiting in line at the box office. And surveys have shown that even though moviegoers love their movies, they generally hate waiting in line. Until now existing online ticketing methods haven’t been able to successfully resolve this problem.”

“The WavePass system makes it a whole different game,” added Ryan. It forms the bridge between the Internet to the real world. Because of the added convenience and possible promotional tie-ins, it encourages the web surfer to make the connection — to actually buy the ticket online, load the ticket onto his WavePass card at home and go to the theater with little or no waiting when he gets there. There is really nothing else like the WavePass system. From the level of interest we are receiving, we expect the system to be in common use by the end of the year.”

The most visible element in the system is the WavePass smart card itself, the prepaid pass that customers need only move through the air near the WaveThru reader as they breeze into the theater. It is based on broadly used contactless smart-card technology pioneered by AmaTech, and found in mass transit systems, toll bridges, e-payment systems (Shell(R) and Mobil(R) service stations), access control, and other applications.

A contactless smart card contains an inexpensive microchip that receives, processes, evaluates and stores data (much like a personal computer) with a small antenna forming a transponder (a device which picks up and responds to radio waves). Because they use radio waves, WavePass cards never need to touch the reader — they are simply passed within a few inches of it; WavePass cards even get their power through radio waves from the reader/writer, no batteries to change — ever. And since mechanical contact with a reader is not required they can actually be manufactured into any form — key fobs, bracelets, pendants, etc., in addition to the standard credit-card shape and size.

With the WavePass System, before the moviegoer goes to the theater he selects the movie on the Internet and downloads tickets onto his WavePass smart card using a small WavePort(TM) reader/writer attached to his PC. Or, he could use a kiosk located at the theater or any convenient public area. It’s like having tickets delivered into your hand at home. The customer can also prepay for concessions at the same time by loading “electronic cash” on to the WavePass card. To enter the theater, the customer simply waves the card past a WaveThru(TM) point-of-sale reader and the ticket is deducted from the card. At the concession stand, the WavePass holder chooses movie treats and pays with the e-cash at another WaveThru point-of-sale terminal — reducing or eliminating another long line. Having a loaded WavePass card is like having a ticket in your hand, with prepaid concessions added in.

“This is proven technology already being used every day by tens of millions of people in Europe and Asia in mass transit. It’s a familiar technology!” said Alicia Espericueta, Director of Marketing for AmaTech USA. “A WavePass card is just like any credit card that you keep in your wallet, but now instead of taking out your credit card to buy a ticket (after waiting in line) your card is your ticket. And it’s contactless so there’s no stopping to fumble with the card; no ‘insert here’; no swipe; no slap. Simply pass it by the reader and skip the line.

“All around Asia, merchants surrounding transit stations (where smart-card use first took off) began accepting smart cards to pay for newspapers, food, and other sundry items. These merchants began accepting smart cards because their customers wanted to use them. Smart cards are cool, and people like to use them! Movie tickets online is simply the next natural step for this technology,” she added.

The WavePass package that theaters provide their customers contains a WavePass contactless smart card, a WavePort reader/writer for the home PC, installation software, and a purchase rebate coupon. When the customer signs up for the service online, the one-time registration process requires a credit card number and a password. The rebate value is loaded onto the card. Registration information goes to a secure database for transactions and for collection of demographic data (updated every time the moviegoer buys a ticket). With the customer’s permission, individualized promotions can be emailed that are based on the moviegoer’s tastes. Amatech’s expertise and manufacturing capabilities have turned this state-of-the art technology into an economical system that enhances the theater-going experience, and boosts the theater owner’s bottom line at the same time.

AmaTech USA, Inc. is a wholly owned subsidiary of AmaTech AG, (Security Code Number – WKN 519 280), the world leader in the volume production of radio frequency identification (RFID) systems and components such as contactless smart cards, smart labels, tags and readers as well as application software and system solutions. This globally operating company holds 72 worldwide patents on products, machines and manufacturing processes in the identification technology sector; an additional 89 patents are still pending, including the patent applied for on the WavePass system. AmaTech USA’s Product Development, Customer Service and Corporate Sales Offices are located at 460 Benson Lane, Suite 12, Chandler, AZ 85224. You can reach the company by phone at 480-726-8800, or via the Internet at [][1], [][2] and [][3].




ACI Worldwide announced this morning the launch of its second-generation software for electronic statement delivery and electronic bill delivery and payment. ‘M-Statement’ and ‘M-Bill’ enables companies to create, track and securely deliver content-rich statements and bills directly to their customers via e-mail and other delivery channels. Customers can electronically pay the billing company from within the bills they receive using payment types accepted around the world. Billers using ‘M-Bill’ can continue to accept the same methods of payment, clear payments via the corporate bank or payment-clearing provider they already use, and utilize existing payment infrastructures and national payment clearing services.


Credit Wise Initiative

MasterCard International today announced the selection of the “Are You Credit Wise?” class of 2001, a group of outstanding peer-educators who will execute this award-winning financial education initiative. These individuals will lead a semester-long, campus-wide effort to educate their fellow students about fundamental money management skills, from basic budgeting to bill payment, to responsible use of credit and debit.

Developed in 1999 with the support of national student leaders, MasterCard’s “Are You Credit Wise?” is designed to train students to become peer-educators and help the student body, especially college freshmen, in understanding key financial concepts.

“Student focus groups and campus pilot projects have demonstrated to us that there is strong value in equipping college students to deliver financial facts to their peers,” said Catherine Cummings, MasterCard’s vice president of consumer affairs. “In many ways, students are better able to communicate in a variety of campus environments, without lecturing, and they understand the financial challenges and other pressures of campus life,” she said.

In 2001, students attending University of Georgia, Oklahoma State University, San Diego State University, Florida State University, Duke University, University of Virginia, Rutgers University, Howard University, University of North Carolina-Chapel Hill and others will lead “Are You Credit Wise?” programs on these campuses. Over the last two years, students at dozens of other selected schools have distributed these educational materials.

Recognizing that money is a critical issue for most undergraduate students, the program seeks every available opportunity to offer smart money management tips. The peer-educators typically hold campus workshops, host informal financial presentations, distribute informational fliers and hang posters around campus. Also, they coordinate with professors, deans, orientation directors, resident advisors and campus organizations to identify additional opportunities.

Cummings continued, “Once we explain that our consumer education information contains no sales or marketing messages, campus officials have been eager to help us spread the word because they understand, as we do at MasterCard, that many students are managing money full time, for the first time. While we all experience a degree of trial and error, we don’t want that process to be the only education college students receive on their finances,” she said.

When students need more in-depth information, the peer-educators refer them to MasterCard’s non-commercial, education web site,, which offers a glossary of financial terms and interactive features that help students establish a workable budget and calculate credit charges. The web site also provides links to additional resources and credit counseling organizations.

“Are You Credit Wise?” is one of several MasterCard education programs for the college consumer. Another is the Money Talks initiative, cosponsored by College Parents of America. The Money Talks brochure and on-campus seminars are designed to encourage and support parents so that they can teach the financial facts of life to their high school and college students. Since its initial printing, more than 75,000 copies of Money Talks have been distributed directly to parents, or to colleges for their parent orientation programs. The Money Talks brochure also can be viewed online at .

MasterCard International has the most comprehensive portfolio of payment brands in the world. More than 1 billion MasterCard®, Cirrus® and Maestro® logos are present on credit, charge and debit cards in circulation today. An association comprised of more than 20,000 member financial institutions, MasterCard serves consumers and businesses, both large and small, in 210 countries and territories. MasterCard is the leader in quality and innovation, offering a wide range of payment solutions in the virtual and traditional worlds. With more than 19 million acceptance locations, no card is accepted in more places and by more merchants than the MasterCard Card. In 1999, gross dollar volume exceeded US$725 billion. MasterCard can be reached through its World Wide Web site at .


Foreign ATMs

FleetBoston Financial announced it is expanding its foreign language capabilities and functionality at ATMs throughout its Northeast network of 3,400 ATMs. Former Summit Bancorp ATMs will expand their foreign language access following systems conversions scheduled later this summer, bringing the total Fleet ATM network to more than 3,800 machines.

Today’s announcement also introduces a new language preset option, a feature that enables ATM users to select the language they prefer to use in all future transactions. Once selected, this language automatically appears each time the customer accesses a Fleet ATM.

Dramatically expanding its repertoire of foreign language capabilities, Fleet ATMs can now provide screen instructions in English, Spanish, Chinese, Korean, Portuguese or French depending on market needs. Russian will be added by early July, 2001. The languages available on particular ATMs will vary based on the region.

“Today we are again demonstrating our commitment to serving the diverse needs of our customers. Whether it’s through our ATMs, branches, call centers, or web banking, we continue to set the benchmark for our entire industry for inclusive community outreach. We want to ensure that all sectors of our society can share in the benefits of today’s financial mainstream,” said Robert B. Hedges, Jr., Managing Director of Retail Distribution at Fleet.

Last month, Fleet announced plans to introduce 1,420 “talking ATMs” for visually impaired ATM users during the next two years throughout its Northeast retail service area, from Maine to Pennsylvania. Fleet is investigating now with manufacturers the feasibility of meeting the foreign language needs of the visually impaired for future use.

Language Preset Option Also Introduced

As an added enhancement, all ATM users are also now able to select a one-time preset option to indicate a preferred language for future transactions, thereby bypassing the screen that currently asks users to select a language at the beginning of each new transaction. “We are listening and responding to our customers’ interests in the customized, efficient delivery of our services. Wherever and whenever possible, we want our customers to enjoy sophisticated yet highly personalized services that are easy to use,” said Hedges.

Fleet made its determination to introduce the language preset option based on research among its customers. Both English-speaking and foreign-language customers indicated strong preferences for the option. “Our research told us that our customers appreciated this option as a user-friendly and time-saving convenience. It is a small, but telling, step in our progress to make Fleet the bank of choice in every market we serve,” said Nandita Bakhshi, director of Fleet’s ATM/Self-Service Banking group. Today’s ATM technology can accommodate up to four foreign languages per machine. Approximately 75% of Fleet’s 3,400 ATMs now offer four languages. Spanish and Chinese are the most frequently installed second languages, now available in all machines accommodating four languages, or nearly 2,600 Fleet ATMs; Korean follows, in nearly 2,400 ATMs at Fleet. Where particularly diverse communities require more than four languages at a single locale, Fleet will offer additional alternative languages at nearby machines.

Fleet first introduced a second language in select ATMs — Spanish — beginning in 1991. It added French in 1993. It later introduced Chinese and Korean in 1994. Portuguese was added in 2000. Russian will be added this summer. Today’s announcement means that over 3,000 Fleet ATMs now offer a minimum of two languages at each machine. Based on 1990 Census data, nearly six million residents 18 or older speak non-English at home, representing about 20% of the population, within Fleet’s Northeast market.

FleetBoston Financial is the seventh-largest financial holding company in the United States. A diversified financial services company with assets exceeding $200 billion, Fleet offers a comprehensive array of innovative financial solutions to 20 million customers in more than 20 countries and territories. Among the company’s key lines of business are: retail banking, with nearly 1,700 branches and more than 3,800 ATMs in the Northeast; commercial banking, including capital markets/investment banking and commercial finance; investment services, including discount brokerage; and full-service banking through more than 250 offices in Latin America. FleetBoston Financial is headquartered in Boston and listed on the New York Stock Exchange (NYSE: FBF) and the Boston Stock Exchange (BSE: FBF).


AmEx Takeover?

There are rumors circulating this morning that Citigroup and Discover are mulling a potential purchase of American Express. This week’s issue of Businessweek says AmEx could fetch between $50 and $70 per share. AmEx is trading, in the pre-market this morning, at $38.50. American Express’ stock traded at nearly $63 per share in late September. AmEx has assets of $155 billion and a market capitalization of $53 billion. Citigroup has assets of $900 billion and a market value of $230 billion. Last summer, AmEx CEO Kenneth Chenault revealed details of a previous merger attempt with Citibank during his testimony in the DOJ antitrust trial against VISA and MasterCard. (CF Library 6/30/00)


MasterCard 2000

MasterCard released data yesterday showing its gross dollar volume in the USA soared by 20.2% last year to $423 billion. The nation’s second largest payment card association also showed an explosion in cards issued during 2000. The number of MasterCard-branded cards issued in the USA jumped 16% last year, more than five times the 1999 growth rate of 2.8%. The surge in cards-issued is attributable to the increase in card solicitations for MasterCard-branded products. BAI Global says MasterCard had a 57% U.S. bankcard mailshare last year compared to 45% for 1999. Also the nation’s two largest issuers, Citibank and MBNA, are squarely in MasterCard’s court. MasterCard ended 2000 with 235.1 million cards-in-force and $212.7 billion in outstandings in the USA. Globally, MasterCard-branded products generated $857 billion in gross dollar volume, a 21.5% increase over 1999. Global purchasing volume (excluding cash transactions) rose 17.3% to $633.5 billion for 2000. In Canada, the gross dollar volume increased 16.6% to CDN $37 billion. For complete details on MasterCard’s international data visit RAM Research Group ([][1]). For historical details on MasterCard’s USA data visit CardData ([][2]).



ATM Fees 2001

A national survey released Thursday revealed that the cost of using another bank’s ATM machine has nearly tripled over the past five years. In 1996 consumers paid only a single foreign ATM fee to their own bank, averaging $1.01, to use another bank’s ATM. The new study shows consumers pay both a foreign fee plus a surcharge that, combined, average $2.86 in 2001. The new U.S. Public Interest Research Group survey says the nation’s biggest banks charge the highest combined ATM transaction fees and are leading the way in charging a new annual ATM card fee. Nationally, 94% of all banks surveyed imposed surcharges averaging $1.47. Average foreign fees were $1.39. Big bank ATM fees averaged $3.07. Nationally, 97% of big banks charged surcharges averaging $1.55. Big bank foreign fees averaged $1.52. Ohio banks charged the highest combined fees of $3.49. The report also found that 18% of all banks imposed annual card rental fees averaging $13.76 on either ATM card or ATM debit card holders or both. The U.S. PIRG used the report to attack the Office of the Comptroller of the Currency. PRIG says the OCC has a long history of preempting state low-cost lifeline banking laws and ATM surcharge bans, even when Congress tells it not to do so.