Optus & TelPay Partner

Web development and Internet billing specialists Optus Corporation announced a partnership with bill payment service provider TelPay. The deal will let consumers immediately “click and pay” their on-line bill from any biller’s website. The bill payment transaction will trigger an automatic electronic debit from the customer’s bank account at any financial institution, without the need for the consumer to leave their biller’s website or visit a bank website.

“This agreement gives Optus the most extensive suite of on-line bill payment options in the Canadian market, so billers can offer customers maximum choice in how they pay their on-line bills,” said Jon Hantho, President and COO of Optus.

As a technology partner with Canada’s two key consolidators, e-route and EPOST, Optus creates and installs electronic billing systems and facilitates bill payment for companies whose customers pay bills through EPOST or through their bank website. As a partner with TelPay, Optus can process payments for customers who choose to pay on-line bills through individual biller web sites.

TelPay is Canada’s largest non-bank electronic payment processor, processing seven million payment transactions annually. Optus is Canada’s largest non-bank remittance processor, handling high-volume sales draft and remittance processing for some of Canada’s largest billers. The two organizations have a long and strong nine-year relationship, with Optus currently processing more than 250,000 TelPay telephone and Internet transactions annually.

“We at Optus have been impressed by the inroads TelPay has made over the past year, and we are thrilled to partner with them to offer this unprecedented and formidable on-line bill payment solution for billers,” said Hantho. “It means that for the first time ever, customers who pay bills through a biller’s website will have the same convenient payment options as customers who pay from their bank site or through a consolidator.”

According to Hantho, many billers — especially marketing-oriented organizations such as retailers and credit card providers – like the idea of posting customer bills for payment on their own website, because they see the bills as ‘sticky’ content. However, the drawback to this approach has typically been the lack of a viable payment option.

“Optus and TelPay offer a payment solution that makes the ‘biller-direct’ model for electronic bill presentment and payment far more attractive and viable for billers,” said Hantho. “Our deal with TelPay also reinforces Optus’ uniqueness as the only service provider with dedicated expertise spanning the entire lifecycle of a bill – from bill design, to bill marketing, to programming and production for paper-bills, to web development and presentment for on-line bills, to bill payment.”

“By partnering with OPTUS, we have given billers the option to retain control of their customer relationships,” said Bill Loewen, President, TelPay. “An organization’s most valuable asset is its customers. Until now billers have not had a complete ‘biller direct’ option. OPTUS offers an excellent solution for this model, and when combined with the simplicity of the ‘Pay By TelPay’ process you have a natural EBPP solution.”

About Optus

As one of Canada’s premier customer communication and relationship management service providers, Optus Corporation helps companies acquire, maintain, and maximize the lifetime value of their customer relationships by incorporating the power of personalization into their on-line and off-line strategies. As a leading web-developer, systems integrator and application service provider, Optus develops and deploys some of Canada’s most complex and critical on-line transaction processing and e-commerce systems. Optus is the Business and Technology Services unit of MDC Corp., and is part of MDC’s Secure Transaction Products and Services division. More information is available on the Optus website at [www.optuscorp.com][1]. More information on MDC is available on its website at [www.mdccorp.com][2].

About TelPay

TelPay Bill Payment Service, a division of CTI ComTel Inc., was originally part of Comcheq Services Ltd. Founded in 1985 TelPay provided the first electronic bill payment service for consumers. TelPay now offers electronic bill payment and automated banking services to consumers and businesses at or through financial institutions across Canada. Processing over 7 million transactions annually to over 1,200 billers, TelPay is the largest independent payment processor in Canada. Visit the TelPay website at [www.telpay.ca][3]

[1]: http://www.optuscorp.com/
[2]: http://www.mdccorp.com/
[3]: http://www.telpay.ca/


OrderTrust Hires Shapiro

OrderTrust, Inc., the leading provider of outsourced e-commerce infrastructure services, announced the appointment of Peter Shapiro to vice president of corporate strategy. Shapiro brings to OrderTrust more than 25 years experience in strategic marketing and expertise in defining and executing on Internet trends and strategies as a Principal at Arthur D. Little. Reporting directly to OrderTrust CEO Jim Daniell, Shapiro’s responsibilities will include analyzing and assessing emerging e-commerce market opportunities and developing the corporate strategic direction to address the future needs of the company and its customers. He will focus initially on opportunities in areas such as mobile commerce (m-commerce) and television commerce (t-commerce).

“Peter will add tremendous strategic value to an already strong management team here at OrderTrust,” said Daniell. “As we look to expand our services to support new channels, such as mobile and television commerce, we will be able to leverage Peter’s wealth of experience to help position OrderTrust as a leading provider of outsourced e-commerce services in these areas.” He added, “As the e-business market continues to evolve, OrderTrust is constantly scoping out how we can enhance our customers’ Internet expansion initiatives and Peter brings additional expertise to keep us in line with our corporate goals.” Prior to joining OrderTrust, Shapiro served as a Principal in Arthur D. Little’s Communications practice. While at Arthur D. Little, he specialized in marketing strategy, market assessments and industry analyses for his worldwide clientele, which consisted of telecommunications and cable TV services operators, Internet commerce services firms, equipment suppliers, financiers, attorneys and governments.

“I want to help shape the way companies develop their Internet businesses,” said Shapiro. “What drew me to OrderTrust was that it is already on the leading edge of e-business, with its powerful infrastructure enabling reliable and cost-effective transactions for e-commerce merchants and their trading partners. My research has led me to believe the winners in the next phase of e-commerce will be businesses like OrderTrust that focus on the future ways in which people will buy products and services. OrderTrust was a natural choice for me because it provides a platform for innovative new applications as e-commerce transactions extend from today’s PC-based services to new channels such as interactive TV and mobile terminals.”

Shapiro has been published in a variety of business trade and academic journals including the IEEE’s Transactions on Communications, and Encyclopedia Britannica. He has also chaired and presented at a number of industry events including the National Communications Forum, the New York Society of Securities Analysts, the Cable and Telecommunications Association for Marketing (CTAM) and TeleStrategies conferences.

Shapiro earned his Ph.D. in Communications Research from Stanford University and his Bachelor of Arts degree in political science from the University of British Columbia. He also was appointed as the first Research Fellow at Harvard University’s program on Information Resources Policy.

About OrderTrust, Inc.

Established in 1995, OrderTrust, Inc. delivers industry-leading, outsourced e-commerce infrastructure services to retailers, catalogers, suppliers and loyalty program providers. OrderTrust’s direct commerce services include order management, product sourcing for electronic marketplaces and on- and off-line consumer loyalty tracking.

With connections to over 850 commerce partners, OrderTrust’s commerce network offers a fully redundant and highly scalable communications extranet that provides seamless integration of merchant order-capture systems with real-time credit card authorization and inventory checking; flexible routing of fulfillment requests to multiple suppliers; and data exchange management so order information can be sent and received using native formats and protocols. OrderTrust clients include 1-800-FLOWERS, SkyMall, Inc., Blockbuster.com, S&H greenpoints, Transmedia/Dining a la Card, Publishers Clearing House, ShopExpert, Iconomy and VerticalNet, Inc. Visit [http://www.ordertrust.net][1] for more information.

[1]: http://www.ordertrust.net/


Strong Quarter

Most payment card issuers have reported a strong second quarter and American Express is clearly included. Yesterday AmEx reported record quarterly netincome of $740 million compared to $646 million for 2Q/99. AmEx largest business unit, Travel Related Services, made up $472 million of the total net income. TRS income increased 17% over the past twelve months driven by higher card volume and revolving balances. AmEx says the higher volume was driven by its rewards programs and expanded merchant coverage. However the net interest yield on its payment card business has declined 20% over the past year. AmEx says this is due to a higher percentage of loan balances on introductory rates and other lower-rate products. The new AmEx ‘Blue’ card has attracted nearly two million cardholders since last September and carries a 0% six-month intro rate. For complete details on American Express current and historical statistics visit CardData ([www.carddata.com][1]).

American Express U.S. Card Portfolio Snapshot
2Q/00 1Q/00 4Q/99 2Q/99 Ann Chng
Volume $55.8b $50.6b $51.7b $46.0b +21.5%
Loans $25.9 $24.2b $23.4b $18.3b +41.8%
Cards 32.5m 31.4m 29.9m 28.7m +13.1%
Delinq* 2.4% 2.6% 2.6% 2.7% -11.0%
Losses 4.4% 4.6% 4.5% 5.3% -17.0%
Yield** 7.4% 7.8% 7.7% 9.3% -20.0%

* 30+ days past due; ** net interest yield
Source: CardData (www.carddata.com


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


Gemplus & GeldKarte

Gemplus, together with Philips Semiconductors, has become the first card manufacturer to be certified for the new, type 1 GeldKarte (the German e-purse system), which will be available from October 2000. The Zentraler Kreditausschuss (ZKA – Central Credit Committee) has certified the hardware/software combination that consists of the operating system for the new GeldKarte, developed by Gemplus, and the highly secure and efficient Philips Semiconductors chip card IC P8WE6017. This solution is now officially approved for use on Germany’s banking chip cards.

![][1] With the new operating system the GeldKarte type 1 is ready for the introduction of the Euro and the increasing internationalisation of payment methods. A cross-border pilot project called PACE (Purse Application for Crossborder Use in Euro) has already started. Future security of the GeldKarte payment system has also been improved within the scope of the terminal software update and the adaptation of the background systems. One example of this is the additional authenticity check when a payment is made.

The GeldKarte type 1 operating system – developed by ODS prior to its take-over by Gemplus – is based on the revised interface specification for the 4.x version ZKA chip card. The approval was based on the positive acceptance test on functionality and the security expertise on hardware and software developed in close co-operation between Gemplus and Philips Semiconductors.

About Gemplus

Gemplus ([www.gemplus.com][2] ) is the world’s number one provider of smart card based solutions for security, wireless and e-business applications. Offering consultancy services, design, software, hardware, personalization and full implementation, Gemplus works with its customers around the world to deliver comprehensive, integrated and tailor-made smart card based systems. The Group’s customers use Gemplus memory and microprocessor smart cards, smart contactless cards, electronic tags, smart objects and magnetic stripe cards to simplify and secure a wide range of applications. From Web based and mobile commerce to financial transactions, loyalty, transportation, education healthcare, identity, pay TV and physical and logical access control, Gemplus provides intelligent end-to-end solutions that bring security, convenience and ease-of-use to millions of people worldwide.

Founded in 1988, Gemplus had sales of over 767 millions of Euro ($US 817 millions) in 1999, and employs almost 6,300 people in 17 manufacturing facilities, 7 R&D centers and 44 sales and marketing offices located in more than 37 countries.

[1]: /graphic/phillips/philips.gif
[2]: http://www.gemplus.com/


Cyota Nabs Heatherington

Cyota, a provider of online payment security solutions, announced the appointment of Gary Heatherington as Chief Executive Officer. Mr. Heatherington, former President & CEO of Bank One International in Canada, will have responsibility for overall strategic direction and operational management of Cyota. He will be headquartered in the company’s New York office.

“Gary’s vast e-commerce and payment systems experience is a tremendous asset to our team,” said Naftali Bennett, co-founder and President. “As the global e-marketplace continues to thrive, we are confident that he will help establish Cyota as the leader in online payment security.”

Cyota recently introduced its groundbreaking advance in online payment security, SecureClick, a software solution that allows consumers to shop online without revealing their real credit card number.

“Online security concerns are a major impediment to online purchasing,” added Mr. Heatherington, “with SecureClick and Cyota, I look forward to making internet transactions completely safe.”

Mr. Heatherington brings to Cyota a legacy of experience in banking, payment systems and e-commerce. As President and CEO of Bank One International in Canada, he established a subsidiary of the world’s largest Visa issuer. Prior to that, in his role as Executive Vice President, Global Markets at MasterCard International, Mr. Heatherington managed the MasterCard, Maestro and Cirrus brands in Canada and played a leading role in developing MasterCard’s global market strategy.

“The addition of Gary to the already stellar management team positions Cyota for success in the online payment security market,” says Ira Rimmerman, former President Citibank Credit Cards Worldwide, and Cyota Director.

About Cyota

Cyota is an online payment security company founded in 1999 by four veterans of elite intelligence units in the Israeli Defense Force. SecureClick, developed under the supervision of a world leading security expert, Prof. Adi Shamir, is Cyota’s flagship product that provides credit card issuers and their customers complete online fraud protection. The company is headquartered in New York City with an R&D subsidiary in Israel. Cyota is a privately held company, backed by a global venture capital corporation. For more information, please contact Cyota or visit our web site at [www.cyota.com][1].

SecureClick is a registered trademark of Cyota.

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


Advanta 2Q/00

Advanta confirmed this morning it is delaying the results of its second quarter due to the ongoing review of the company’s subprime lending operations with regulators. However the company’s business card portfolio is not affected by the review. Advanta did confirm that second quarter net operating income for its business card portfolio was $14.8 million, a 73% increase over the $8.6 million reported for the first quarter of 2000 and a 206% increase over the $4.8 million reported for the second quarter of 1999. Managed receivables for Advanta’s business cards at the end of the quarter were $1.4 billion, an increase of 17% over the first quarter of 2000, and 61% over the second quarter of 1999. For complete details on Advanta’s historical statistics visit CardData ([www.carddata.com][1]).

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


Sears Rebound

Improving credit quality contributed to Sears, Roebuck and Co.’s record second-quarter net income of $388 million. Credit operating income increased by 26.3% due to higher revenues, improved portfolio quality, securitization activity, and reductions in selling and administrative expense.


2Q/00 2Q/99
Receivables: $25,144,000,000 $26,103,000,000
Chargeoffs: 5.09% 7.11%
Delinquency: 7.15% 7.29%
Net Interest Margin: 13.80% 13.63%

Source: CardData (www.carddata.com)


CardData 2Q/00

Strong second results continue to be reported across the industry. Among major issuers reporting last week in ‘CardData’s 2Q/00 Portfolio Survey’: Household, Wachovia, Wells Fargo, First National Nebraska.

Household $ 13,660,396,000 $8,202,428,000 17,308,000 8,133,000
Wachovia $ 7,787,803,270 $2,396,976,113 7,769,274 2,763,510
Wells Fargo $ 4,527,535,308 $2,162,003,878 4,568,998 2,832,425
Frst Natl NE $ 3,119,500,000 $1,187,399,000 3,520,417 1,515,888

Source: CardData (www.carddata.com)


Fingerhut Credit

Federated Department Stores confirmed last week that credit delinquency problems are plaguing its Fingerhut subsidiary. The company said Friday it has identified the key contributing factors as: conversion from closed-end installment to revolving credit; implementation of late fees; aggressive deferred-credit offerings for newer customers; and economic conditions (higher interest rates and gas prices) that are beginning to make it harder for lower-income customers to meet credit obligations now. Fingerhut says it is addressing the problem by: increasing collections activity; lowering credit lines and tightening initial granting of credit; introducing new credit scoring criteria for moving credit lines up or down; initiating aggressive address verification practices for all new accounts; reducing deferred credit offerings and introducing a minimum-purchase requirement for deferred credit.



VISA U.S.A. and Compaq Computer introduced Friday the ‘Internet Commerce Program’. Under the new eCommerce program merchants will be able to obtain scalable hardware, software and services needed to enable secure credit and debit card transactions via the Internet. The ICP offers businesses a choice of pre-configured Compaq hardware platforms that are ready to run in any environment. VISA says its goal is to offer its member banks increased opportunities for differentiation and profitability as they develop their own merchant programs. The ICP’s pre-bundled solutions can also enable VISA’s member banks to attract and retain merchant partners. Working through VISA’s distribution channels, Compaq will also offer merchants the opportunity to take advantage of special discounts on Compaq products and services that are usually reserved for large companies.


E-Funds Report

In its first earnings report as a publicly traded company, eFunds Corporation reported Friday second quarter revenues of $101.0 million. Electronic Payment Solutions second quarter revenues increased 22.6% to $72.1 million. Higher inquiry volume coupled with a price increase, increased full-service collections activity, the DebitBureau agreement with the information solutions provider, and higher software sales contributed to second quarter growth, with risk management products seeing the highest growth. EFT transaction volume increased 16.6% over the second quarter of 1999 and 19.6% over the first six months of 1999. Account verification inquiry volumes increased 13.6% versus the second quarter of 1999 and 17.6% over the first six months of that year. For complete details on eFunds 2Q/00 data as well as 2Q/00 details on Deluxe Corp. visit CardData ([www.carddata.com][1]).

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


LML Gets Tech Check

LML Payment Systems Inc. is pleased to announce the acquisition of Check Technologies Inc. of Dallas, Texas.

Check Technologies Inc. is a 15 year-old check verification and recovery company with a client base primarily in Texas and Louisiana. Check Technologies adds an impressive list of household name retailers to the LML Payment Systems roster. Clients include: Dominos Pizza, Centennial Liquor, Whole Foods Market, Drug Emporium and Paragon Cable. Check Technologies President, Roger Jahnel, will assume a marketing and sales role with LML, focusing on both internal and external growth strategies.

“I have been in this business for quite some time, and for the past 12 months I have watched the approach LML has taken and continues to take toward the industry. It is both fresh and impressive. What particularly pleases me about this opportunity is LML’s growing infrastructure including management, client base, service offerings and intellectual property. I am excited to be a part of it and look forward to making a significant contribution,” said Jahnel.

“We are quite pleased with this transaction. Mr. Jahnel and his management team have done an impressive job. Roger is well known throughout the industry and we look forward to working with him in his new capacity,” said Corporation President and CEO, Patrick Gaines. “We also look forward to combining Check Technologies’ operations with our existing infrastructure in Dallas, with a view toward reducing redundancies, achieving economies of scale and positively effecting overall performance.”

LML Payment Systems is a financial payment processor specializing in providing end-to-end check processing solutions for national, regional and local retail merchants. The company’s processing services include traditional check verification and collection along with electronic processing services including Electronic Check Re-presentment (whereby returned paper checks are represented for payment electronically) and Electronic Check Conversion (whereby paper checks are converted into electronic transactions right at the point of sale). The Company’s intellectual property estate will include a recently allowed patent application regarding internet checking transactions, in addition to U.S. Patent No. 5,484,988. U.S. Patent No. 5,484,988, describes a “Checkwriting point of sale system,” which, through a centralized database and authorization system, is capable of providing and administering various electronic payment services for customers and businesses.