Discover Dine-Out

Discover Financial Services announced Friday the launch of its second annual ‘Dine Out with Discover Card’ program. Under the program all participating restaurants that are enrolled receive a full rebate of their ‘Discover Card’ discount fees for the month of August along with complimentary check presenters, wait staff books and tip trays. Participating restaurants have also agreed to use the check presenters, wait staff books and/or tip trays. Discover says about 4,500 new merchant partners have signed on to the program since its inauguration a year ago, increasing the number of participating restaurant locations from 42,000 last year to a total of 64,000 this year. Among new restaurants participating: The Cheesecake Factory and Cracker Barrel.

Details

POS-X

Los Angeles-based Cash Technologies released its new client software which allows the wide range of financial and retail services offered by Cash Tech’s ‘EMMA’ transaction processing platform running on a counter-top POS terminal. The ‘POS-X’ terminal consists of a PC running the new ‘POS-X’ software and includes peripheral devices, such as a check scanner, card reader, receipt printer and biometric devices, to support various advanced function services, such as check cashing, bill payment, phone card issuance and Internet products. Instead of customers guiding themselves through a self-service application at an ATM, a cashier or teller will operate the POS-X system using a simple touch screen interface like those seen on other retail POS terminals. The ‘POS-X’ application will be beta-tested in a number of planned pilots, including an upcoming ‘Popular Cash Express’ installation. The company says that eventually, small, low-cost POS terminals, similar to those used in restaurants and gas stations, will support the new ‘POS-X’ software and permit ‘EMMA’ services to be distributed inexpensively into almost any retail environment.

Details

Debt Rollercoaster

Revolving consumer credit continues to grow at a much faster rate than last year. In revised figures for May and April, consumer revolving credit grew at an annual pace of 12.2% and 13.5% respectively. However June’s preliminary data shows a braking effect. According to preliminary figures released last week by the Federal Reserve, Americans added nearly $3.7 billion in outstanding revolving credit during June, compared to $6.3 billion in May and $7.0 billion in April. Since the start of this year, American consumers have tacked about $35 billion onto total consumer debt, which is mostly credit card debt. In January, U.S. revolving consumer debt broke through the $600 billion level for the first time. Since last Summer, consumer revolving debit has soared from $578.5 billion to $632.5 billion. Overall consumer credit is now growing at a 9.9% rate, according to the FRB. At the end of June, American consumers were $1.464 trillion in debt, exclusive of home mortgages.

REVOLVING CREDIT HISTORICAL

Jun00 May00 Apr00 Mar00 Feb 00 Jan00 Dec99
%GRWTH: 7.0% 12.2 13.5 13.8 9.4 18.5 12.5
$OWED: $632.5 628.8 622.5 615.5 608.5 605.0 595.8

Nov99 Oct99 Sep 99 Aug99 Jul99 Jun99
%GRWTH: 10.2 -0.5 0.0 2.5 12.1 13.8
$OWED: 589.8 584.3 584.5 584.5 584.6 578.5

Source: Federal Reserve; revised figures as of 08/07/00;
For complete historical data visit www.carddata.com.

Details

Net-Ratings

Capital One continues to dominate online “viewed” credit card banner ads. For the week ending Aug. 6th, Capital One landed four of the top ten positions on the most viewed at-home banner ads. Meanwhile, NextCard delivered 76,399,000 banner impressions to reach 17% of the Internet marketplace. The top Capital One banners ads include: #4 “How FAST do you want your credit decision?”; #5 “0% Intro>>9.9% Fixed. Not just another pretty card”; #7 “How FAST do you want your credit decision?”; and #8 “Capital One VISA PLATINUM”. Citibank also placed in the top ten with its #6 ranked banner ad: “2.9% APR on balance transfers for 9 months”.The data are based on research conducted by Nielsen//NetRatings.

![][1]

[1]: http://www.cardweb.com/ads/capitalone/jmpplat2.gif

Details

Barad Resigns

Providian Financial Corporation announced that Jim Rowe, previously executive vice president and head of the company’s domestic e-commerce operations, has been promoted to president of Global E-Commerce.

“I have tasked Jim with building the online component of what I believe will be the financial services company of the future,” said Shailesh Mehta, chairman and CEO of Providian. “As the Internet continues to create an evolving business world, I want to ensure that Providian Financial has staked out a position as a leader in the financial services marketplace on a global basis.”

Rowe’s responsibilities will include developing new online financial businesses, driving existing Internet initiatives and building Providian’s global online presence. He will also absorb some of the initiatives of the Emerging Business group that were related to online financial services.

The Company also announced today that Seth Barad has resigned his position as president of the Company’s Emerging Businesses division to pursue a new opportunity focused on providing management consulting to philanthropic organizations.

“Our entire management team will miss Seth. He has been a substantial contributor to the Company. We wish him well in his new endeavor,” added Mehta. Barad’s resignation will take effect later this month.

“This was a difficult decision for me, especially when Providian is poised to take advantage of so many growth opportunities, ” said Barad.

Reflective of these changes, the Company further announced plans to organize its core businesses into four main divisions. First, the Integrated Card Business (ICB), which handles Providian’s 14 million credit card accounts, will continue to be led by its president, David Alvarez. Alvarez will also take on the added responsibility of managing the Company’s membership products group.

Second, the Global E-Commerce division which, as previously mentioned, is led by Rowe, consists of Aria.com, Getsmart.com, the Company’s Internet-based deposit business and other online initiatives.

Third, First Select Corporation, a wholly-owned debt services company, will be led by its president, Kirk Inglis.

And fourth, a newly-created International division, which includes the Company’s operations in the United Kingdom (led by Executive Vice President James Elliott) and Argentina (led by Executive Vice President Wayne Johnson), as well as any future international expansion. Providian Financial Chairman Mehta will personally lead this new division on an interim basis.

San Francisco-based Providian Financial Corporation ([http://www.providian.com][1]) is a leading provider of lending and deposit products to customers nationwide and also offers credit cards in the United Kingdom and Argentina. Providian serves a broad, diversified market with loan products that include credit cards, secured cards and membership products. With a commitment to 100% customer satisfaction, Providian’s mission is to help its customers protect and responsibly use credit by providing a quality borrowing experience that leads to active and lasting customer relationships. The sixth largest bankcard issuer in the nation, Providian Financial was recently named one of America’s Most Admired Companies by a survey in Fortune magazine, and the nation’s top financial institution by US Banker magazine. The Company has $27 billion in assets under management and 14 million customers.

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

Details

MerchantOnline Execs

MerchantOnline.com, provider of secure credit and debit card processing for Internet e-tailers, has expanded and strengthened its executive committee, selecting two industry veterans to help increase sales and enhance the company’s risk management capabilities.

The two executives, Eleanor Duffek, Vice President of Marketing, and Arnold Wenzloff, Operations Risk Manager, bring over 30 years of experience in wireless communications, consumer products and risk management to MerchantOnline.com.

“These additions to our staff will enable us to move closer to becoming the preferred secure transaction network,” said Tarek Kirschen, President and CEO, MerchantOnline.com. “With her considerable marketing experience, Eleanor will become a vital part of our management team, allowing us to move rapidly to get more PC Pay(R) units in the market. Arnold will help us develop a consistent, reliable risk management strategy in what has become a fast-changing risk environment.”

In her 20 years in marketing communications, Duffek has either assisted in or coordinated several marketing projects with companies such as Primeco Personal Communications, Pepsi-Cola, Dunkin’ Donuts, General Cinema and Rexall Sundown. In addition, she served as show director for COMDEX, the world’s largest computer trade show. At MerchantOnline.com, Duffek will focus on increasing retail sales of the PC Pay device.

Developed by MerchantOnline.com subsidiary Innovonics, PC Pay incorporates patented “next generation” encryption technology using bank ATM network standards. The swipe device, similar to those used by customers in retail stores and gas stations, plugs into home or office PCs to accept ATM, debit, credit and smart cards. Unlike other encryption technology for PCs, card data and personal identification numbers (PINs) are encrypted within the secure device before entering a computer, offering a higher level of security.

Wenzloff’s 10 years of experience in risk management at Visa International and Southeast Bank serves to expand MerchantOnline’s capabilities in managing fraud and determining risk involved with Internet transactions. He will oversee MerchantOnline.com’s online transaction risk management with financial institutions and payment/processing networks.

About MerchantOnline.com

Founded in December 1997, MerchantOnline.com provides a secure transaction network that enables businesses and consumers to use one payment system for both their real world and virtual world needs utilizing credit card, ATM/debit card and other payment programs. For more information see [www.MerchantOnline.com][1].

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

Details

NextCard Funding

NextCard, Inc. , the No. 1 Internet credit card, announced it has closed a $150 million asset-backed facility arranged by Chase Securities, Inc., the investment banking subsidiary of Chase Manhattan Bank. The asset-backed commercial paper facility will be used to fund credit card receivables at competitive commercial paper-based interest rates. This financing follows the recent completion of a $150 million increase in the facility provided by Barclays Capital. In total, NextCard has raised approximately $1 billion in asset-backed commercial paper facilities over the past year.

In addition to the larger funding capacity available through multiple conduit providers, NextCard(R) has also successfully built its ability to raise funds through NextBank, a wholly owned banking subsidiary. Year to date, NextBank has raised over $250 million in FDIC-insured Certificates of Deposits, with maturities ranging from 3 months to 2 years. “We continue to enhance the diversity, size and quality of our funding sources,” said John Hashman, Chief Executive Officer of NextCard, Inc. “This $1.25 billion in available funding is combined with a cash position of nearly $200 million. These funding sources are an important component of NextCard’s overall business strategy and will support our continued growth.”

NextCard, Inc.

NextCard, Inc. ([www.nextcard.com][1]) is the No. 1 Internet credit card and the most visited financial services Web site. Launched in 1997, the company was the first to offer instant online credit card approval, a choice of customized credit card offers, personalized PictureCard(SM) designs, and exceptional online customer service. NextCard is committed to providing the most robust consumer shopping experience on the Internet and has continued to innovate with its complete GoShopping!(SM) service, NextCard Concierge(SM) one-click shopping assistant, online bill payment services, and comprehensive rewards program. NextCard is also one of the leading direct marketers on the Internet, operates a network of more than 60,000 online affiliates, and has exclusive card relationships with leading brands, including Amazon.com and MyPoints.com. NextCard owns a minority stake in Flooz.com, the premier online gift currency, and PayTrust, a leading service that lets consumers receive, review, pay and organize all of their bills online. NextCard was named the No. 1 online credit card in 2000 by Gomez Advisors, was ranked the No. 1 credit card that Internet consumers would consider for use (according to ZDNet’s 1999 BrandIQ study), and was nominated for a 2000 Webby Award in the finance category. NextBank N.A. is a wholly-owned subsidiary of NextCard, Inc.

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

Details

Fingerhut Losses

Federated Department Stores, Inc. reported net income of $63 million for the second quarter of 2000 versus earnings of $137 million for the same period last year. The decrease results from previously announced larger bad-debt reserves required to cover credit delinquencies at the company’s Fingerhut subsidiary. Diluted earnings per share were 30 cents for the second quarter of 2000, compared to 61 cents for the second quarter of 1999.

For the first half of 2000, Federated’s net income was $152 million or 72 cents a diluted share. In the same period last year, earnings were $224 million or $1.02 a diluted share.

James M. Zimmerman, Federated’s chairman and chief executive officer, said the company’s second quarter earnings reflect the previously announced credit problems at Fingerhut and satisfactory earnings from the department store segment.

“This was a difficult quarter, as we recently indicated it would be, and we are very disappointed,” Zimmerman said. “Federated’s core businesses continue to perform reasonably well and we were satisfied with the profit performance of our department store segment, despite lackluster apparel sales in the quarter.

“We have initiated a number of steps aimed at stemming the tide of credit delinquencies at Fingerhut,” Zimmerman noted. “We will continue working diligently to remedy this situation so as to eliminate its negative impact on our future earnings. Meanwhile, it is significant to note that absent the incremental Fingerhut bad-debt problem, our diluted earnings per share for the second quarter this year would have been 74 cents, which is above prior consensus estimates.”

Operating Income

Operating income for the second quarter of 2000 was $220 million or 5.4 percent of sales, down 31 percent from operating income of $318 million or 7.9 percent of sales for the second quarter of 1999.

For the first half of 2000, operating income was $473 million or 5.8 percent of sales, a decrease of 13 percent from operating income of $543 million or 7.1 percent of sales in the same period last year.

Sales

Sales for the second quarter of 2000 totaled $4.065 billion, an increase of 1.5 percent over total sales of $4.006 billion in the same period last year. On a comparable-store basis, sales were up 1.9 percent for the second quarter.

For the first 26 weeks of 2000, sales totaled $8.097 billion, an increase of 6.5 percent over sales of $7.606 billion for the same period a year ago. On a comparable-store basis, sales for the first half of this year increased 2.4 percent.

In the quarter, Federated opened two new stores — a Macy’s in Stonebriar Mall, Dallas, and a Rich’s Northpoint furniture store in Atlanta.

Federated, with corporate offices in Cincinnati and New York, is one of the nation’s leading department store retailers, with annual sales of more than $17.7 billion. Federated currently operates more than 400 department stores in 33 states under the names of Bloomingdale’s, The Bon Marche, Burdines, Goldsmith’s, Lazarus, Macy’s, Rich’s and Stern’s. Federated also operates the Fingerhut, Bloomingdale’s By Mail, Macy’s By Mail, macys.com and bloomingdales.com direct-to-consumer catalog and electronic commerce subsidiaries.

FEDERATED DEPARTMENT STORES, INC.

Consolidated Statements of Income (Unaudited) (Note 1)

(All amounts in millions except percentages and per share figures)

13 Weeks Ended 26 Weeks Ended
——————– ——————–
July 29, July 31, July 29, July 31,
2000 1999 2000 1999
——- ——- ——- ——-

Net Sales $ 4,065 $ 4,006 $ 8,097 $ 7,606
——- ——- ——- ——-

Cost of sales (Note 2) 2,379 2,319 4,774 4,493

Percent to sales 58.5% 57.9% 59.0% 59.1%

Selling, general
and administrative
expenses 1,466 1,369 2,850 2,570

Percent to sales 36.1% 34.2% 35.2% 33.8%
——- ——- ——- ——-

Operating Income 220 318 473 543

Percent to sales 5.4% 7.9% 5.8% 7.1%

Interest expense – net (108) (85) (207) (160)
——- ——- ——- ——-

Income Before
Income Taxes 112 233 266 383

Federal, state
and local income
tax expense (49) (96) (114) (159)
——- ——- ——- ——-

Net Income $ 63 $ 137 $ 152 $ 224
——- ——- ——- ——-
——- ——- ——- ——-

Basic Earnings
per Share (Note 3) $ .31 $ .65 $ .73 $ 1.07
——- ——- ——- ——-
——- ——- ——- ——-

Diluted Earnings
per Share (Note 3) $ .30 $ .61 $ .72 $ 1.02
——- ——- ——- ——-
——- ——- ——- ——-

FEDERATED DEPARTMENT STORES, INC.

Consolidated Statements of Income (Unaudited) (Note 1)

Notes:

(1) Because of the seasonal nature of the retail business, the
results of operations for the 13 and 26 weeks ended July 29, 2000
and July 31, 1999 (which do not include the Christmas season) are
not indicative of such results for the fiscal year. Certain
reclassifications were made to prior period amounts to conform
with the classifications of such amounts for the most recent
periods.

(2) Substantially all department store merchandise inventories are
valued by the retail method and stated on the LIFO (last-in,
first-out) basis, which is generally lower than market.
Application of this method did not impact cost of sales for the
13 and 26 weeks ended July 29, 2000 or July 31, 1999.
Direct-to-customer merchandise inventories are stated at the
lower of FIFO (first-in, first-out) cost or market.

(3) Common shares outstanding used in computing basic earnings per
share were 206.6 million and 209.9 million for the 13 weeks ended
July 29, 2000 and July 31, 1999, respectively, and 209.7 million
and 209.4 million for the 26 weeks ended July 29, 2000 and July
31, 1999, respectively. Potential common shares used in computing
diluted earnings per share were 208.5 million and 221.9 million
for the 13 weeks ended July 29, 2000 and July 31, 1999,
respectively, and 212.4 million and 219.2 million for the 26
weeks ended July 29, 2000 and July 31, 1999, respectively.

FEDERATED DEPARTMENT STORES, INC.

Operating Segment Data (Unaudited)

(millions)

13 Weeks Ended 26 Weeks Ended
——————- ——————
July 29, July 31, July 29, July 31,
2000 1999 2000 1999
——- ——- ——- ——-

Net Sales

Department Stores $ 3,644 $ 3,569 $ 7,185 $ 7,006

Direct-to-Customer 421 437 912 600
——- ——- ——- ——-

Total $ 4,065 $ 4,006 $ 8,097 $ 7,606
——- ——- ——- ——-
——- ——- ——- ——-

Operating income

Department Stores $ 428 $ 398 $ 736 $ 671

Direct-to-Customer (183) (27) (206) (29)

Corporate and
other (Note 1) (25) (53) (57) (99)
——- ——- ——- ——-

Total $ 220 $ 318 $ 473 $ 543
——- ——- ——- ——-
——- ——- ——- ——-

Depreciation and
amortization expense

Department Stores $ 149 $ 151 $ 298 $ 304

Direct-to-Customer 10 14 22 17

Corporate and
other (Note 1) 23 22 47 39
——- ——- ——- ——-

Total $ 182 $ 187 $ 367 $ 360
——- ——- ——- ——-
——- ——- ——- ——-

Note:

(1) Corporate and other consists of the income or expense associated
with the corporate office and certain items managed on a
company-wide basis (e.g., intangibles, financial instruments,
investments, retirement benefits and properties held for sale or
disposition).

Details

NCR & iATMglobal

TRM Corporation’s San Francisco-based independent subsidiary iATMglobal.net, an e-commerce infrastructure company, announced a strategic equity investment by NCR Corporation. NCR invested $5 million in exchange for 20% ownership interest in iATMglobal.net. NCR has agreed to enable iATMglobal.net’s e-commerce software on NCR ATMs.

![][1] iATMglobal.net will provide retailers, financial institutions and non-bank deployers of ATMs with a turnkey, software solution that Internet-enables ATMs facilitating the dynamic migration of e-commerce offerings from the Web to an ATM, giving consumers easy access to Internet transactions. In conjunction with strategic e-commerce partners, iATMglobal.net’s product suite will deliver to ATM users a wide variety of e-commerce transactions now available on the Web, such as movie, event or travel ticketing, pre-paid long distance or cellular service, Internet banking services or Internet product purchases.

Daniel Cohen, chairman of iATMglobal.net, commented that “our Company is creating a virtual distribution channel with convenient access to e-commerce goods and services through the worldwide network of ATMs. The strategic relationship with NCR not only validates our technology but significantly enhances our ability to rapidly scale our solution on a global basis.”

Pat Cronin, senior vice president of NCR’s Financial Solutions division said the iATMglobal.net solution fits tightly with the NCR strategy of enabling all ATMs with e-commerce capabilities.

Aided by investments from TRM and NCR, iATMglobal.net plans to introduce its first software solution later this year.

[1]: /graphic/trm/trm.gif

Details

Gold Line & Siemens

Siemens Information and Communication Networks, Inc. announced Gold Line Telemanagement, the largest independent supplier of pre-paid telephone services in Canada, has purchased Siemens’ Fast Feature Platform for implementing Internet-controlled pre-paid calling card services. Siemens Fast Feature Platform II (FFP II) is the platform that interacts with a switching system to enable telephony services such as PPDC. Along with the award-winning Fast Feature Platform, Gold Line is using Siemens’ networking products, including the EWSD digital switching system, the most widely deployed switching system in the world and the award-winning Customer Care and Business Management Platform (CCP), a platform to support customer service agents and generate reports to optimize operating profits.

“Gold Line maintains the highest Canadian volumes of calling card service sales, therefore we need a pre-paid system to maximize the benefits to our customers. We chose Siemens because they provided a complete package which allowed us to streamline our processes using the Internet. This gives us a competitive edge in a market where customer service is imperative for maintaining loyal customers,” said Ata Moeini, President, Gold Line. “Gold Line prides itself on providing the highest quality of services combined with the lowest prices. The pre-paid platform provided by Siemens enables us to meet our own standards to offer our customers better service without a need for any additional charges.”

“In the competitive pre-paid market, Siemens is able to offer our customers an advantage by providing them with their own in-house switching equipment, to go along with the FFP II. This gives Gold Line control over all activities on a daily basis,” said Michael Hanson, director of the AIN Business Unit for Siemens. “Siemens user-friendly Fast Feature Platform allows Gold Line to keep in touch with its customers and insure customer satisfaction.”

The FFP II is a robust, highly scalable, advanced multi-services platform designed to handle high performance, large network demands from growing service providers, hosting a wide variety of local and/or long distance services simultaneously.

Gold Line is taking advantage of a new group of revenue-producing, internet-enhanced advanced intelligent network (AIN) telephony services enabled by Siemens’ Fast Features Platform. These Internet-AIN based service concepts use the Internet based web browser to allow subscribers and small businesses to control powerful, yet easy-to-use services hosted on the Fast Feature Platform (FFP) system. This capability enables the end user to purchase, modify, and activate powerful new services via the Internet. Thus, powerful services become self-provisioning and activated by the end user. This creates additional revenue streams for Gold Line while reducing/eliminating the administration load on the service provider.

The award-winning Customer Care and Business Management Platform (CCP) supports customer service positions, allowing the customer service agents to access calling card histories in real-time and update calling card accounts while talking to customers. The CCP also enhances business profitability by running the industry standard Crystal Reports to generate tailored business reports needed to optimize operations in the fast-moving prepaid calling card market.

Siemens EWSD switches provide a robust platform, rated the most reliable in the United States by the FCC. The EWSD has the flexibility and scalability to address the increasingly diverse local and long distance voice, data and networking communications needs, for a wide range of residential and business customers.

About Gold Line

Gold Line Telemanagement Inc. is the largest provider of pre-paid long distance calling cards in Canada. Established in 1991, Gold Line is the only company of its type in North America that retains complete ownership and control of all aspects of its business. Based in Toronto, Canada, Gold Line has the highest volume of sales in the pre-paid market, as well as providing service internationally to over 55 countries across the globe. For more information about Gold Line and its products, please visit our Web site at http://www.goldline.net

About Siemens Information and Communication

Based in Boca Raton, Fla., Siemens Information and Communication Networks, Inc., is a leading provider of integrated voice and data networks with a comprehensive portfolio of products and solutions for enterprises, carriers and service providers. Last year, the company’s 7,000 U.S. employees generated sales of nearly $2 billion. For more information, visit the company’s web site at [http://www.icn.siemens.com[.][1]][2]

Siemens Carrier Networks, LLC, is creating converged carrier-class networks incorporating the intelligence and reliability of real-time voice networks into packet based networks. Its open architecture allows a variety of new multimedia based services to be introduced quickly and independently across a variety of network platforms.

Siemens’ Information and Communication Networks Group has many years of experience in consulting, planning, installing and operating converged networks. It is an integral part of the Information and Communications (I and C) business segment of Siemens AG, one of the world’s largest electrical engineering and electronics companies with sales totaling more than $74 billion. I and C comprises the three Groups Information and Communication Networks (51,500 employees, $10.6 billion in sales), Information and Communication Mobile (20,000 employees, $5.3 billion in sales), and Siemens Business Services (34,000 employees, $5.3 billion in sales).

[1]:
[2]: http://www.icn.siemens.com/

Details

AmEx Chile

Banco Santiago and American Express launched American Express charge and credit cards yesterday. Denominated in the Chilean peso, the cards are issued by Banco Santiago and accepted on the American Express global merchant network. With this launch, Banco Santiago becomes the first bank to issue American Express Cards in Chile. Under the agreement, Banco Santiago is responsible for all operations supporting the cards, including billing and payment systems, accounting, customer servicing, credit management and charge authorizations, as well as marketing the cards in Chile. In addition, Banco Santiago will take over responsibility for acquiring and servicing local merchants accepting the American Express Card in Chile. AmEx has now developed 64 such partnership arrangements in more than 70 countries. In Latin America alone, AmEx has established 19 partnership arrangements in 15 markets.

Details