Portfolio Litigation

A nasty battle is brewing between two parties involved in a real estate secured credit card affinity program. CA-based First Alliance Mortgage confirmed this morning that it filed a lawsuit against Fidelity Federal Bank, FSB, a wholly-owned subsidiary of Los Angeles-based Bank Plus Corporation. The litigation centers around four agreements that include an agreement requiring First Alliance to purchase, at the expiration of the contract, all of the outstanding accounts and related receivables. The contract expired two weeks ago and is now in arbitration after First Alliance refused to open its books and records as required under the program servicing agreement. First Alliance then filed the lawsuit, seeking to obtain a temporary restraining order against Fidelity in connection with a First Alliance $2.7 million reserve fund held by Fidelity. However the court denied First Alliance’s request after Fidelity promised not to convert the funds to other uses. First Alliance said this morning that it anticipates that a conflict of interest issue involving Bank Plus’s current CEO and his role in the original negotiation of the agreements will significantly impact the arbitration. At the time of the negotiation of the agreements in Feb. 1997, Bank Plus’s current CEO was both on the Board of Directors of Bank Plus, and the CFO of First Alliance Corp., purportedly acting on behalf of First Alliance in the negotiations. As of January 31 total credit card receivables under the program totaled $17.3 million.

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MoneyGram Intl Discount

MoneyGram Payment Services has announced a special promotion offering customers a $5 discount when transferring money to Africa, Asia, Australia, Europe and the Middle East.

The offer runs until April 15, and all normal transaction fees to these areas will automatically include this special discount.

According to MoneyGram, one of the world’s leading international money wire transfer services, customers will be able to send $100 to any of these five regions for just a $5 fee. The company says the promotion results in some of the lowest fees in the money wire transfer service industry. Fees differ based on the amount transferred above $100.

In addition to the transfer fees for a transaction, a currency exchange rate set by MoneyGram or its agents will be applied.

“We want to make it easy for customers to save with no coupons or calculations,” said Ann Doelling, senior director of International Marketing. “Now customers who wire money overseas can take advantage of MoneyGram’s worldwide network for fast and reliable service.”

MoneyGram has 15,000 agent locations in the United States and operates in more than 120 countries..

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Red Hot e-Connect

CA-based eConnect has emerged as the hottest OTCBB stock, setting new volume records and surpassing price gains, on a percentage basis, of most NASDAQ traded stocks. The San Pedro, CA-based firm is a developer of global Internet ATM and PIN cash payment transactions. The company’s stock soared more than 300% last week. On Friday the firm announced it has structured a licensing arrangement with PalmPilot to enable first-ever wireless hand-held Internet terminal transactions. The PalmPilot deal is part of a joint venture deal with FL-based Pilot Island Publishing’s ‘PocketPay’ solution. The ‘PocketPay’, which will be a hand-held combination ‘Palm VII’, phone and bank card Internet terminal, will send encrypted ATM card with PIN or credit card data to the ‘Palm VII’ proxy server center, which in turn will then send on the data to the ‘eConnect/RGTecq Linux Transaction’ server, which in turn will pass on the transaction to the eConnect host systems for bank card authorization. eConnect also confirmed this morning that the ‘eConnect/RGTecq Linux Transaction’ server successfully sent a full Internet ATM card with PIN message format to eFunds over the weekend. The company is also aiming to bring instant cash payment by ATM card and PIN to Internet commerce. The company further announced this morning a new merchant portal featuring more than 200 paid merchant listings with an additional 1,500 merchants projected to join the site before the end of April. The re-designed PowercClick portal builds on eConnect’s recent acquisition of the Powerclick network.

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E.piphany into eCardSMART

CardSystems, Inc., announced that it has signed an agreement with E.piphany, Inc., to offer the E.piphany E.4 system to the financial services industry with focus on the electronic payments segment. E.piphany’s real-time analytics are being integrated as part of CardSystems’ end-to-end eCardSMART electronic payment processing solution. By combining the data warehouse that inherently exists in a payment processing environment provided by CardSystems with the real-time analytic capabilities provided by E.piphany E.4, CardSystems expects to deliver renewed value from the huge volumes of data processed within the electronic payments industry.

CardSystems will provide the E.piphany E.4 Reporting and Analysis solution to financial institutions as licensable software or as an Application Service Provider (ASP). In the ASP model, CardSystems will host E.piphany E.4 in its Tucson, Ariz., processing center. Through the emerging ASP delivery model, CardSystems offers its customers “software rental.” CardSystems’ customers will have access to E.piphany capabilities, including trend analysis and one- to-one customer data analysis, using a standard web browser over the Internet. By embracing E.piphany’s solution along with the ASP model for software delivery, CardSystems expects to immediately enable the Customer Relationship Management component of the eCardSMART(R) Intelligent Processing Suite under the product name eBIS-Merchant(R).

“In keeping with CardSystems’ strategy of incorporating best-of-breed solution components with proprietary eCardSMART(R) functional components delivering complete end-to-end eCardSMART(R) electronic payments solutions, CardSystems has identified E.piphany E.4 as the best-of-breed data mining solution in the marketplace today” said John S. Cramp, chairman and chief executive officer of CardSystems. “By leveraging our full-service processing center with E.piphany’s ASP delivery option, we will be providing the state- of-the-art data analysis tool our customers need in a format that is easy to embrace. And the ASP option significantly reduces the infrastructure barriers cited by many of our customers as an obstacle to adopting a CRM solution.”

“The electronic payments industry, with its huge transaction-based data marts, provides the ideal backdrop for our solution,” said E.piphany’s president and chief executive officer, Roger Siboni. “CardSystems’ eCardSMART(R) solution framework, with its use of flexible, contemporary technologies, provides market differentiation that complements our approach to solutions delivery. CardSystems’ ability to implement our ASP option will provide an even greater number of companies within the electronic payments industry with the ability to quickly establish, maintain and continually improve customer relationships, as merchant acquirers of all sizes are able to quickly begin using E.piphany E.4 for robust, real-time analytics.”

About CardSystems

CardSystems, Inc., is a leading provider of applications to the global electronic payments industry, offering solutions to financial institutions and other transaction-oriented companies. Since its October 1999 merger with Maverick International Processing Services Inc., CardSystems has become the industry’s first Application Service Provider (ASP), evolving its proprietary eCardSMART(R) card processing methodology across a wide spectrum of applications. Additionally, CardSystems has developed intelligent enabling technologies that include an expert system, neural network and software applications optimized for the card processing industry. The eCardSMART(R) suite of intelligent products and Internet solutions give clients control over their proprietary customer data, dramatic productivity gains and compelling return on investment (ROI). CardSystems has deployed payment solutions in more than 30 countries. For more information on CardSystems, visit the company’s web site at [http://www.cardsystems.com][1].

About E.piphany

E.piphany is the provider of real-time analytical applications that create a single enterprise-wide view of the customer enabling insight and personalized action across all touch points. The E.piphany E.4 system is designed to help companies establish, maintain and improve customer relationships for the new customer economy. The E.4 system is an integrated suite of software solutions that enable companies to profile and analyze individual customer characteristics and preferences and then leverage that information to drive marketing campaigns and individually tailored products and services.

E.piphany, E.4 and the E.piphany logo are trademarks of E.piphany, Inc.

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

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Bank One 1Q/00

Bank One Corp. warned investors on Friday that analysts’ profit projections for the first quarter will most likely fall short due to continued weakness in the First USA credit card unit. The company said it encouraged analysts to lower their first-quarter estimates to 60 cents a share, down from the current range of 62 cents to 69 cents. Bank One predicted that the first quarter would the weakest quarter of 2000, however, full year net profits were still on track to exceed $3 billion. Bank One continues to revamp its credit card business amidst intense price competition and changing cardholder economics. The bank indicates that cardholder attrition has slowed, re-pricing is in place, and overall efficiencies have improved. Bank One also continues to search for a permanent chief executive to replace John McCoy, who resigned in December as chairman and CEO. Bank One’s stock declined 4.5% on Friday following the 1Q/00 earnings news.

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Convenience Usage

Another survey validates the migration to convenience usage of bank credit cards by consumers. CT-based Greenfield Online says a recent survey of 1,000 consumers showed that 43% of cardholder pay their balance off in full each month.

CREDIT CARD PAYMENT HABITS
(By Household Income)

Pay Total Under $50K $50-$99K $100K+
Minimum Due 9% 12% 6% 1%
More than
minimum but less
than full 48% 52% 48% 32%
Full Amount 43% 35% 46% 67%

Source: Greenfield Online

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Robins to Recruit ISOs

First American Payment Systems, Inc., one of the fastest growing non-bank merchant credit card processing acquirers, recently announced that Stephen Robins has joined the company as Senior Vice President of National Sales. Robins is responsible for recruiting programs to attract Independent Sales Organizations and sales agents to the company.

“Steve’s years of valuable experience in the credit card industry strengthens the implementation of First American’s aggressive growth plan,” said Neil L. Randel, president and chief executive officer.

Robins has 18 years of experience in both the acquiring and issuing sides of the credit card business. In the early 1980s, while working for Zion’s Bank, Robins developed and implemented one of the first electronic authorization and draft capture systems for credit and debit card processing.

Robins was most recently Senior Director of Network Sales for Paymentech, where he managed the marketing of electronic transaction authorization, capture and settlement services to banks and ISOs. Prior to that, he worked for GENSAR Technologies, which was acquired by Paymentech during his tenure, where he led GENSAR’s marketing program.

Before joining GENSAR, Robins served as Vice President and Manager of Third Party Sales at National Processing Company (NPC) and prior to that was Senior Account Executive at VISA USA.

“I am excited about the possibilities First American has in the existing marketplace. We have a solid operational process in place that can support a very high growth rate. Also, First American has demonstrated their willingness to move quickly and take advantage of the ever-moving trends that are a part of the acquiring business. I enjoy being a part of this kind of organization,” Robins said.

About First American

First American Payment Systems, Inc., a privately owned corporation founded in 1990, provides full-service electronic credit card authorization and payment systems to retail, mail order, telephone order, Internet and home-based merchants throughout the United States. First American’s other divisions include national ATM deployment, Secur-Chex(TM) check guarantee, FirstPay.Net e-commerce payment gateway and Merimac Capital point of sale equipment and ATM leasing. For more information on First American Payment Systems, visit the company’s Web site at [www.first-american.net][1].

[1]: http://www.first-american.net/

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NextCard Opens Phoenix Center

NextCard, Inc., the leading issuer of consumer credit on the Internet, announced this morning it is opening a customer contact center in Phoenix, Arizona.

The site, which will open by June 2000, is designed to meet the company’s continued aggressive growth targets, while delivering superior customer service.

“We have experienced phenomenal growth this past year. Our expansion into Phoenix will prepare us to service our expanded customer base and future product offerings, such as the Amazon.com and Priceline.com co-branded cards and e-commerce services,” said Tim Coltrell, chief operating officer of NextCard. “Everything we do at NextCard is designed to continually enhance the consumer’s online transaction experience. The Phoenix site will allow us to extend our leadership position and prepare us for the growth ahead.”

NextCard’s 100,000-square-foot facility, when fully occupied, is expected to employ more than 700 people to support NextCard’s growing customer base with email, real-time chat interaction and telephone support.

The company also announced that Mark Attinger, a 13-year veteran of American Express, will head the new facility as vice president of operations for NextCard.

Mark adds, “NextCard’s inventive operations model allows the Company to employ leading-edge Web-based technologies to provide superior customer service. The Phoenix center enables us to deliver on that promise by tapping into the significant local labor force, recruiting skilled resources in Customer Service, Collections and eCommerce.” Mark most recently headed an Authorizations service center for American Express in Greensboro, North Carolina.

This new facility marks NextCard’s first major expansion into a multiple center approach, and represents significantly increased capacity from its initial facility in San Ramon, just outside San Francisco, California. NextCard plans to launch a product development and test center from its existing facility in San Ramon later in 2000, which will facilitate the rapid testing and successful implementation of innovative e-commerce products, services and operating strategies.

Individuals interested in applying for management and entry level jobs in customer service, credit & collections, fraud investigations, internet operations, and telecommunications can contact the company via email at azjobs@nextcard.com, or by visiting the company’s website [www.nextcard.com][1] for a listing of available positions.

About NextCard

NextCard, Inc. ([http://www.nextcard.com][2]) is considered the leading issuer of consumer credit on the Internet. Launched in 1997, the company was the first to offer online credit card approval within 30 seconds, a choice of customized credit card terms, automated balance transfers, personalized PictureCard(SM) and 100% Safe Shopping Pledge. NextCard is committed to providing the most robust consumer shopping experience on the Internet and has continued to innovate with its complete GoShopping!(SM) Web site, NextCard Concierge(SM), exceptional online customer management site and comprehensive rewards program.

NextCard is consistently a top ten online advertiser, operates a network of over 35,000 affiliates and has exclusive card relationships with leading brands including Amazon.com, priceline.com and DILBERT. The Company publishes the NextCard eCommerce Index(SM), the premier source of online purchase activity, and was named the No.1 credit card brand according to ZDNet’s BrandIQ research study. In 1999, NextCard was listed as a Top 50 Financial Web site by Money magazine, a HOT 100 Company by Upside magazine and one of The Standard 100 most important and influential companies in the Internet economy by The Industry Standard. The Company also owns a minority stake in Flooz.com, the premier online gift currency.

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

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BofA Online

Bank of America announced this morning that its number of online banking customers has exceeded two million. BofA says it is signing up more than 100,000 new online customers a month. Approximately 125,000 new customers signed up for online banking in January, the highest number in one month to date. In addition to more than two million retail customers, BofA has more than 1,650 commercial and corporate clients doing business online. The bank offers online checking, savings, CDs, IRAs, mortgages, credit cards, debit cards, and auto loans.

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Fundraising Solution

Entango Corporation and Heartland Payment Systems announced a partnership to help nonprofit organizations extend their fundraising reach to millions of consumers on the Internet.

Entango’s SiteWrap technology and Heartland’s credit card merchant accounts provide the two key ingredients for secure,0 convenient donations right on the nonprofit organization’s website.

Entango is the leading provider of secure, risk-free, hosted online fundraising services to nonprofit organizations in the US and Canada. Entango’s solution brings leading edge technology to the nonprofit sector with no out-of-pocket costs, and no software to install.

Entango’s unique SiteWrap technology adds a secure online donation engine to the nonprofits website effortlessly. Each nonprofit organization adds one or more “donate now” buttons to their site and they gain instant access to millions of online consumers overnight.

Heartland is a full-service merchant card processor and provides credit card processing accounts to thousands of Internet merchants. Heartland is now the premier provider of online credit card processing for Entango’s nonprofit customers.

The Entango/Heartland online application will offer these organizations the ability to obtain an approval in under 48 hours and in some cases in as few as 2 hours. Heartland also provides discounted rates for nonprofit organizations that sign up through the Entango/Heartland website at

“This is a huge leap for nonprofit fundraising. Now, for the first time, a nonprofit can decide to add online fundraising to their website in the morning and be taking donations that afternoon,” says Steve Harkness, CEO of Entango, “Heartland is leading the e-commerce revolution and this partnership is breaking new ground for our nonprofit clients.”

With Heartland Payment Systems’ easy online merchant account application, nonprofits organizations can begin to accept credit cards in as few as 48 hours. Heartland’s services include credit card and debit card processing, check authorization and verification, software and equipment sales, equipment leasing, and secure real time processing solutions.

“This partnership opens the doors to this emerging market,” says John Waldron, Heartland’s Vice President of Internet Marketing and Sales, “We are very excited to take and active role in helping to propel nonprofit organizations into the world of online donations.”

About Entango Corporation

Entango Corporation provides a secure online fundraising and transaction service for non-profit organizations, with no setup or recurring costs. Nonprofits using Entango obtain online contributions instantly through direct transfers of credit card payments to their bank accounts. The service fully integrates into customers’ existing Web sites. Entango is based in San Jose, California. For more information, visit [www.entango.com][1].

About Heartland Payment Systems

Heartland Payment Systems provides businesses of all sizes with professional, one-stop solutions for online credit card processing including fast approvals, real-time processing, dispute resolution assistance, chargeback reduction programs and fraud prevention and protection programs. Heartland Payment Systems is a subsidiary of Heartland Bank, St. Louis, Missouri. Founded in 1887, Heartland Bank is chartered nationally and permitted to conduct business throughout the US. Heartland Payment Systems is online at [www.visa-mc.com][2] or can be reached by calling 1-888-702-3321.

[1]: http://www.entango.com/
[2]: http://www.visa-mc.com/

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