Fitch warned this week that regulatory scrutiny could limit the ability of credit card companies looking for ways to diversify their funding sources away from securitization or public debt markets. Fitch says one option that has been aggressively pursued by consumer finance companies that maintain or started bank or thrift charters has been to raise bank deposits through brokered channels or direct marketing. The rating agency says the recent announcement that the bank subsidiaries of Advanta Corp. each reached agreements with their respective bank regulatory agencies could be a prelude to further regulatory scrutiny of other consumer finance companies. While Fitch does not believe that all companies will be cast into the same situation as Advanta, companies that are not diligent in the management of their sub-prime lending operations will be more at risk of scrutiny from bank regulators.Details
Bull Smart Cards & Terminals, world leader in the field of electronic purses, with over 62 million cards in use in some twenty countries, has been chosen to supply two million reloadable electronic purse cards in Switzerland.
The cards, which are based on the Proton technology, have been Selected by Union des Banques Suisses, Credit Suisse and by the regional and local (canton) banks for their performance, capacity and high level of security.
The ambitious electronic purse programme undertaken in Switzerland four years ago has now generated massive popularity, and 6 million units are now in use. Around one third of the cards are renewed each year by the programme’s partner banks, enabling carriers of “Cash” cards to enjoy constant access to the latest functionalities and technological progress.
In a highly competitive call for bids involving all the leading potential suppliers, the secure performance of Bull’s cards was the decisive factor in clinching the contract award. The company, which had supplied Switzerland with its first six million cards has again been selected and will supply a further two millions units in the coming weeks.
About Bull Smart Cards & Terminals
The history of Bull Smart Cards & Terminals goes back to 1977, the year in which the company filed its first patent. Since then, Bull has been the undisputed leader in smart card technology. Today, 20% of all microprocessor cards in circulation worldwide operate with software developed by Bull. Bull is the world leader in the field of software for bank cards, and has a 30% share of the world electronic purse market. In 1999, the company ventured into the GSM market and is now at the leading edge in the development of UMTS, the third generation of SIM cards. It is also promoting the world’s first “Internet” smart card.
More information at: http://www.cp8.bull.net, and on Groupe Bull at: http://www.bull.com.Details
Pulling in the reins and pulling out of a highly competitive market, Bank One announced this morning it is exiting the credit card business in the United Kingdom. As a result Halifax Group has signed agreements to purchase Bank One’s UK retail credit card portfolio. Bank One launched its UK credit card business in Dec. 1998 and has a retail and affinity card customer base of more than 200,000 cards. Bank One’s UK affinity card programs include Yahoo!, Lycos, Wimbledon Lawn Tennis Championships, Manchester City F.C. and the Welsh Rugby Union. Halifax currently has 1.2 million credit cards in-force including 200,000 affinity cards. Halifax currently offers the ‘Halifax VISA’, ‘Halifax Gold MasterCard’ and ‘VISA Balance Card’. Halifax’s ‘VISA Charity Card’ has raised over 12 million pounds sterling to-date for three of the UK’s leading charities. James Corcoran, currently President of Bank One’s UK credit card operation, will join Halifax as Managing Director of Halifax Card Services, overseeing both the acquired business and Halifax’s existing card operations. Halifax said this morning it aims to double its credit card base by 2004.Details
The Federal Trade Commission has obtained stipulated final judgments against two firms offering phony credit card protection offers. OK-based Universal Marketing Services was banned from marketing any credit card registration or protection service and is required to post a $200,000 bond for engaging in any telemarketing of goods and services. The company and its principals were also required to pay $45,000 as a monetary judgment. UMS told consumers that the Y2K bug could affect the computer files at credit card companies and additional protection was warranted. Most consumers did not order the protection, but those who did were charged up to $199 and received little of value in return. In addition, some consumers who declined the coverage were billed anyway. In the second action, the FTC authorized the filing of a modified complaint and permanent injunction in the form of a consent decree against GEP, Inc. d/b/a Bank Card Security Center.Details
It’s difficult to ascertain who is working harder in the card association’s defense of antitrust charges: attorneys or public relations specialists. This week VISA is utilizing Washington, DC-based Americans for Consumer Education and Competition as a propaganda tool. Since the start of the trial ten days ago VISA and American Express have been churning out a record number of press releases to fortify arguments being made in the federal courtroom. Since June 12 AmEx has announced three major card partnerships with foreign financial institutions and VISA has made major announcements concerning smart cards and innovative card security technologies. This week the VISA-funded Americans for Consumer Education and Competition issued a news release warning consumers that “if American Express prevails” in the courtroom then “we could all be spending more for credit card transactions”. The group also ran an ad in The Wall Street Journal to explain the “facts of this case to consumers and public opinion leaders”. The ACEC was formed in early May and is being chaired by former US Rep. Susan Molinari. The group’s purported mission is “fostering consumer education and financial literacy while promoting competition in the marketplace”. The group’s first press release quotes Molinari as saying “this trial . . . is about bailing out a competitor”.Details
Coinstar Inc. announced a late summer partnership with Wherehouse Music, one of the country’s top music and home entertainment retailers. Between August 27 and September 24, anyone who processes at least $10 worth of change through Coinstar in the United States will receive a coupon for $3 off any Wherehouse CD or tape, priced at $9.99 or higher.
Consumers can use their $3 off coupon at any one of the more than 500 Wherehouse Music stores in the United States, or by visiting the Wherehouse Music Web site.
Today’s announcement with Wherehouse Music is the third national promotion announced by Coinstar this year. It follows partnership agreements with the United States Mint and Disney Channel. During the United States Mint promotion, Americans redeemed 25% of the offers received, demonstrating the popularity of the promotion. The Disney Channel promotion, announced last week, began yesterday.
“Coinstar is committed to leveraging our coast-to-coast network to provide extra value for our customers,” said Dan Gerrity, president and CEO of Coinstar. “These national promotions with well known household names such as the United States Mint, Disney Channel, and Wherehouse Music, provide us with an opportunity to do just that.”
About Coinstar Inc.
Recently ranked the country’s eighteenth fastest growing technology company, Coinstar Inc. (NASDAQ: CSTR) and its subsidiaries, Meals.com and Coinstar International, uses technology to deliver time and money saving services to consumers in their local supermarkets. Coinstar’s 7,500 strong network of machines is currently available to 125 million consumers in 40 states and the District of Columbia, as well Canada and the United Kingdom. Consumers can visit www.findcoinstar.com.Details
A new study shows that most of the affluent in North America use the Internet more than other consumer groups. According to a report from Forrester Research millionaires research and buy everything from books and jewelry to airline tickets and groceries online. The research also found that those with investable assets of at least $1 million are 124% more likely to visit financial sites. The affluent own more technology products than other consumers, including fax machines, projection TVs, DVD players, digital cameras, and writeable CD drives, with the average affluent household owning two PCs. They also use their PCs more often than other users, with two-thirds turning on their machines every day versus half of the nonaffluent. About 56% of today’s wealthy households are wired versus 43% of the general population. Half of these millionaires have been going online for at least three years, with only one-third of nonaffluent consumers having as much experience. Beyond sending email and using search engines, reference guides, and directories, a deeper interest in finance distinguishes the affluent from other surfers.Details
A major step towards fighting Internet bankcard fraud has been made as Equifax has agreed to integrate its global non-credit data for almost 300 million consumers into HNC’s ‘eFalcon’ Internet fraud prevention system. The combined solution will help online merchants to more accurately predict Internet bankcard fraud, verify the integrity of billing and shipping addresses on Internet orders, and expand into international markets. Currently, many Internet merchants do not sell goods to consumers when the shipping address does not match the consumer’s bankcard billing address because the merchant cannot verify the shipping address. With this new partnership between eHNC and Equifax, merchants can now check the ship to address provided on the Internet order against the Equifax address file. The enhanced ‘eFalcon’ service will feature Equifax’s identity verification technology and security system to improve the way online merchants authenticate and verify bankcard transactions worldwide, including the United Kingdom, Canada, Spain, and Latin America. Today, online merchants must rely on an address verification system, valid only in the USA, to verify consumer billing addresses. Under terms of the partnership eHNC will also become a VAR of Equifax’s fraud detection solutions including ‘SafeScan’, ‘Gemini Verify Score’ and ‘eSecure’.Details
America West Airlines announced a new way to earn frequent flyer miles-FlightFund Dining.
“FlightFund Dining allows customers to earn miles at thousands of great restaurants across the nation,” said Mike Smith, senior vice president, marketing and sales. “Enjoy a fine meal nationwide and earn miles for free travel worldwide.”
There is no cost to enroll in FlightFund Dining. Members can call 1-877-272-8355 and register up to three credit or debit cards to use when paying their dining bill. Visa, MasterCard, American Express or Discover Card credit cards or Visa and MasterCard debit cards qualify. The program is completely discreet and does not require a separate identification card.
Members earn 10 miles for every qualified dollar spent on food, beverages, tax and tip, up to a maximum of 6,000 miles monthly on the first transaction at each participating restaurant. Miles earned in the FlightFund Dining program will be automatically posted to members’ accounts.
Participating restaurants are located in major cities all across the U.S., including Phoenix; Columbus, Ohio; Dallas; New York; Chicago; and Los Angeles. Members can call the convenient 24-hour customer service hotline at 1-877-272-8355 to obtain up-to-date information on participating restaurants, restaurant locations and toll-free fax-back service.
FlightFund Dining is being co-developed with Transmedia Network Inc. (NYSE: TMN), a leader in the development and marketing of transaction-based dining and other consumer savings programs. Transmedia will be responsible for managing the program’s merchant network.
FlightFund, America West’s worldwide frequent flyer program, offers travelers a unique and flexible program featuring First Class upgrades and worldwide award travel. New members will receive 2,500 miles after their first flight. Awards begin at 20,000 miles. Customers who are not already FlightFund members can contact the FlightFund Service Center at 1-800-247-5691 to enroll or sign up on the Internet at [www.americawest.com].
America West Airlines, the nation’s ninth-largest carrier, serves 88 destinations with more than 860 daily departures in the U.S., Canada and Mexico. Along with its codeshare partners, America West serves more than 140 destinations worldwide. America West Airlines is a wholly owned subsidiary of America West Holdings Corporation, an aviation and travel services company with 1999 sales in excess of $2.2 billion.
Transmedia Network Inc., based in North Miami, Fla., is a leader in the development and marketing of transaction-based dining and other consumer savings programs. The company is now the largest membership based dining savings program in the United States, with more than 2.7 million members and approximately 9,500 restaurant merchants.
The NYCE Network, one of the country’s leading electronic payments companies, processed the industry’s first online, real-time verification of a paper check payment.
The transaction was processed on behalf of First Union. The milestone highlights NYCE’s reputation as a leader in emerging electronic payments solutions, and marks the beginning of the pilot phase of the SafeCheck project.
Created by the Small Value Payments Company, L.L.C. (SVPCo), SafeCheck essentially transforms any paper check into a single-use debit card, as it is used to verify the account and the availability of the funds, and in the future, to debit the account. SVPCo established the SafeCheck project in early 1999 as a consortium of major U.S. banks and EFT Switches.
Here’s how SafeCheck works: a consumer presents a check for payment, and it is processed through a standard MICR reader.
The MICR data and purchase amount are then transmitted into the system where it is routed by the electronic funds transfer (EFT) switch – such as NYCE – to the consumer’s financial institution for processing.
Carol Malicki, Senior Vice President at First Union said, “We were delighted to work with NYCE to process this historic first transaction. NYCE is an important partner for First Union, and we know that we can count on NYCE for being at the forefront of new initiatives which leverage the real-time data infrastructure.”
Dennis F. Lynch, President and CEO at NYCE Corporation added, “SafeCheck is an exciting proposition for us as a financial services infrastructure company. The product allows NYCE to extend the real-time, online DDA access model to check processing.”
Lynch added, “The SafeCheck project is poised to revolutionize check payments by verifying funds in real-time and helping to eliminate the risks associated with the 18.1 billion checks that are presented at the point-of-sale annually. This should provide tangible benefits to our financial institutions and the merchants to which they provide payments services.”
Headquartered in Woodcliff Lake, NJ, NYCE Corporation is one of the largest electronic payments companies in the U.S. Currently, the NYCE Network has 2,400 financial institution participants and services more than 45 million cardholders through 35,500 NYCE-branded ATMs and 215,000 point-of-sale retailer locations. The company processes nearly 77 million transactions each month.
In addition, NYCE Corporation provides financial institutions with electronic funds transfer processing services that support ATM deployment and debit card issuance solutions.
A frontrunner in the electronic payments arena, NYCE innovated SafeDebit, the industry’s first PIN-secured debit payment solution for Internet shopping that requires no special hardware for consumers. NYCE’s web site address is www.NYCE.net.
SVPCo is spearheading the SafeCheck initiative along with 11 banking companies, which account for 35 percent of the nation’s demand-deposit accounts. NYCE, along with peer electronic payments/ATM networks Pulse and Star, is also an owner.
First Union (NYSE:FTU), with $254 billion in assets and stockholders’ equity of $17 billion at March 31, 2000, is a leading provider of financial services to 16 million retail and corporate customers throughout the East Coast and the nation.
The company operates full-service banking offices in 12 East Coast states and Washington, D.C., full-service brokerage offices in 41 states and international offices nationwide. Online banking products and services can be accessed through www.firstunion.com.Details
Paymentech, the nation’s largest processor and acquirer of bankcard transactions, has recruited Daniel J. Charron to be group executive and president of the company’s expanded e- Business Group. Charron will build upon Paymentech’s leadership in card-not- present processing by guiding product, technology and business development activities for current and future e-commerce activities. He will also spearhead company-wide solutions for retail and business-to-business Internet transactions. Charron is based in the company’s Atlanta office.
Paymentech currently processes almost half of all Internet-related point- of-sale bankcard transactions according to card industry estimates. For instance, the company manages payment authorization and settlement for four of the nation’s five largest electronic retailers (as recently ranked by the NextCard ‘eCommerce Index’) and most large Internet service providers. Paymentech’s online capabilities grew from a long-standing leadership in non- face-to-face processing for direct marketers.
“A focused management approach will sustain our dramatic electronic commerce growth and fuel new markets,” said Michael P. Duffy, Paymentech’s president and chief executive officer. “This specialized team will execute a well-defined strategy that addresses ongoing initiatives such as our expansion of enterprise-wide payment services for retail and business-to-business Internet transactions. He will also guide enterprise-wide online applications for services such as merchant enrollment, customer service and financial reporting.”
Charron’s 15-year career includes leadership accountability for strategic planning, customer service and national business development. He was previously a managing partner for marchFIRST (formerly USWEB/CKS), a leading global Internet professional services firm. Charron cultivated the vision and strategic leadership of the company’s Atlanta office. He led a team of 350 individuals in creating and growing online businesses through strategic consulting, marketing, information design, development, quality assurance, and network solutions.
Charron, a Georgia State University alumnus, is active in the Atlanta business community, focusing on Internet and e-commerce interests. He is actively involved in local start-ups Changeaddress.com, Queit.com and Hoteltools.com.
“The challenge of securing Paymentech’s top position as the e-business payment processor of choice excites me,” said Charron. “We are the central mechanism for authorizing and settling payments in an expanding and dynamic landscape. Our goal is to remain a premier infrastructure provider in this area.”
The 36-year-old Charron also brings payment processing experience. Prior to USWEB, Charron served as group vice president and corporate development executive at Total System Services, Inc., a leading credit card processor based in Columbus, Ga. There he was responsible for new products, services and business lines, and oversaw the company’s electronic commerce group.
Prior to joining Total System in 1991, Charron was a captain in the United States Army Corps of Engineers. He holds a bachelor’s degree in Civil Engineering from the United States Military Academy at West Point and a master’s degree of Business Administration from Georgia State University in Atlanta.
Dallas-based Paymentech ([www.paymentech.com]), founded in 1985, is the nation’s largest processor and acquirer of credit card transactions and the leader in Internet payments. In 1999 Paymentech processed approximately 3 billion total transactions and $93 billion in bankcard sales volume, delivering premier merchant acquiring, point-of-sale transaction processing and commercial card solutions.
U.S. Wireless Data announced that it has appointed three vice presidents to its senior management team.
Karen Hochman has joined the company as Vice President of Marketing, with responsibility for the company’s branding, advertising, and public relations efforts.
Ms. Hochman joins USWD with 20 years of experience in marketing and advertising. Prior to joining the company, she was vice president of marketing and product development at HealthStreet Interactive, where she led the development and marketing of Web-based searchable databases of doctors, dentists, and other healthcare providers. She previously served as president of Jordan, McGrath, Case & Partners/Direct, an integrated marketing agency; as president of The Loyalty Partnership, Ltd.; and as a vice president of marketing at Citibank. She holds a B.A. from Boston University and an M.B.A. from the Columbia University Graduate School of Business.
Kristine Demareski has joined the company as Vice President of Product Development, with responsibility for managing the development and implementation of the company’s flagship product, Wireless Express Payments Servicesm (WEPSsm), as well as other product enhancements.
Ms. Demareski joins USWD with over 10 years of experience in the telecommunications industry. Prior to joining the company, she was a product director for AT&T’s Data business unit, where she led the development of advanced packet services such as ATM, frame relay and DSL optimized for local markets. Earlier in her career, Kristine had a variety of sales and marketing assignments with Teleport Communications Group’s Data and Internet Business Unit and CompuServe Business Network Services (now MCI WorldCom). She holds a B.S.E.E. from Lafayette College and an M.B.A. from New York University Stern School of Business.
Kenneth Byers has joined the company as Vice President of MIS, with responsibility for the company’s Management Information Systems in Colorado and New York.
Mr. Byers joins USWD with over 20 years of experience in information technology. Prior to joining the company, he was director of MIS for Channelpoint Inc. where he led the MIS function, expanding it threefold to support the company’s growth. He previously served as president of KD Enterprises, an IT and financial consulting firm; as manager of IT infrastructure for LSI Logic; and several senior IT management positions at Lockheed Martin. He holds a B.S. in physics from Fairleigh Dickinson University and an M.B.A. in finance from the University of Southern California Graduate School of Business.
About U.S. Wireless Data, Inc.
U.S. Wireless Data, Inc. ([www.uswirelessdata.com]), founded in 1991, markets proprietary technology that brings together three large, rapidly growing industries -transaction processing, wireless data transport and the Internet – to enable wireless payment processing. The Company’s WEPS platform provides a gateway among all of the parties within a wireless point-of-sale (POS) transaction. This enables businesses that require mobility (i.e., not tethered to a telephone line) and/or faster transaction speed to accept wireless point-of-sale payments. By providing a seamless interface among merchants’ POS terminals, wireless carriers and card processors, credit, debit and other card transactions can be processed as fast as cash, without the cost and inconvenience of a telephone line. In addition, WEPS’ Internet-based tools offer on-line, real-time transaction monitoring, remote diagnostics and automated terminal activation. The Company is headquartered in New York City.