AssetExchange Expands

AssetExchange.com has added key executives and will expand its services to include not only credit card but also commercial mortgage portfolios. John McMenamin, Jr. has joined the company as SVP. He comes to AssetExchange.com after eight years with MBNA, where he most recently was Portfolio Acquisition Sales Officer. William Greenleaf, also a new SVP, will lead the development of AssetExchange.com’s newest asset classification, commercial mortgage portfolios. Greenleaf comes from Richmond, VA-based Dynex Commercial. The first business-to-business exchange to offer financial institutions the ability to buy and sell credit card portfolios on the Internet, AssetExchange.com registered buyers representing over 60% of the U.S. general credit card receivables in 1999.

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Web Buyer Satisfaction

While 88 percent experienced Web buyers abandoned their online shopping carts at some point during the 1999 holiday season and 40% reported various problems, they were generally more satisfied shopping online then anyplace else, according to a new Andersen Consulting study. Specifically, 73 percent ranked Internet shopping the highest in terms of overall satisfaction compared to brick & mortar stores (60%) and catalogs (56%), respectively.

“Even though online shopping has its flaws, experienced Internet users love shopping on the web. But the long-term message is clear: Internet retailers must solve their infrastructure problems or suffer consequences,” said Steve Johnson, Andersen Consulting Partner and co-director of the firm’s eCommerce program. “Thirty-five percent of online shoppers who experienced problems on a particular site left that site for another, our study revealed. Given high customer acquisition costs, eTailers can’t continue to lose one of every three consumers and expect to survive. Their top concern must be infrastructure improvements.”

Top 10 Problems Experienced % Internet Buyers
————————— —————–

1. Gift wanted to purchase was out of stock 64%
2. Product was not delivered on time 40
3. Paid too much for the delivery of the product 38
4. Connection or download trouble 36
5. Didn’t receive confirmation or status report on purchase 28
6. Selections were limited 27
7. Web site was too difficult to navigate 26
8. Web site didn’t provide information needed to make purchase 25
9. Prices were not competitive 22
10. The web site didn’t offer enough gift ideas for me 16

A bright future for Internet shopping as Web outperforms brick & mortar
stores

Ninety-six percent of experienced Internet users anticipate they will
use the Web to purchase products next holiday season, and 72
percent will use the Internet for day-to-day shopping in 2000, according to
the study.
The Internet outperformed catalogs and bricks & mortar stores on all
the key attributes that mattered most to online shoppers:
competitive price, obtaining everything from one source, convenience, and
time savings. The study found:

Internet Catalog Stores

– Offers most competitive price 21% 10% 13%

– Offers Everything I need From One Source 12% 7% 10%

– Is Convenient 59% 41% 12%

– Saves Time 62% 33% 3%

Additionally, books – the first product category to be sold en masse on
the Web – remain at the leading edge of shopping in the
eEcomony. Experienced Web users bought more books online than in stores
this holiday season. In fact, according to the survey, books
and videotapes were the only categories in which more online shoppers made
more purchases on the Web than in stores or via catalogs.

Type of Gift Via Internet Via Catalog Via Stores

Toys 48% 33% 57%
Books 47 15 34
Music 42 15 46
Videotapes 35 17 30

Clothing 29 41 81
Computer Hardware/Software 25 10 29
Collectibles/Candles/ 23 26 48
Knickknacks
Household Items/Appliances 17 12 34
Consumer Electronics 17 10 25
Cosmetics/Personal Care 16 – 29
Sporting Goods 14 – 16
Greeting Cards 13 – 35
Food/Wine 11 10 17
Gift Certificates 9 6 38
Flowers or Gardening Items 9 – 5
Pet Gifts 6 – 21
Subscriptions to Magazines or 5 – 4
Newspapers
3 – 24
Jewelry
– – 8
Furniture
Other 13 11 8

Product Features That Will Drive Future Spending

When asked which type of product or service feature would increase the
likelihood of purchasing more products or services over the
internet in the future, respondents cited the following features:

Internet Feature % Internet Purchasers
—————- ———————

1. Free product delivery 98%
2. On-time delivery guarantees 95
3. No sales tax 91
4. Coupons/promotions such as “buy three, get one free” 83
5. Customer assistance via a toll-free telephone number 68
6. Live, on-line customer assistance 62
6. Customer reviews or recommendations 62
8. Helpful hints for colors, sizes or other aids 58
8. Free gift-wrapping included 58
10. Gift suggestions 46

Andersen Consulting is an $8.3 billion global management and technology consulting organization whose mission is to help its clients create their future. The organization works with clients from a wide range of industries to link their people, processes and technologies to their strategies. Andersen Consulting has approximately 65,000 people in 48 countries. Its home page is [http://www.ac.com][1].

Methodology

Taking respondents from Andersen Consulting’s October 1999 pre-holiday shopping study of 1,492 online shoppers, a total of 541 of these Internet users responded to a follow up poll over an eight-day period beginning Monday, December 27, 1999 through Monday, January 3, 2000. The survey was administered on the Internet. Finally, the data was weighted to the Internet population and a small number of respondents who did not purchase holiday gifts were eliminated from the sample. As a result, the total weighted sample, comprising 502 respondents, will be used throughout the remainder of this analysis.

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

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November Explosion

Following four months of stagnation revolving consumer credit exploded in November. According to preliminary figures released Friday afternoon by the Federal Reserve, Americans piled on more than $4 billion in outstanding revolving credit during November. Since July, revolving consumer credit, mostly credit card debt, has been stuck at $584 billion. During November 1998 Americans paid down $1 billion in revolving credit for an annual growth rate of -2.4%. Overall consumer credit is now growing at a 13.7%, according to the FRB. At the end of November American consumers were $1.387 trillion in debt, exclusive of home mortgages.

REVOLVING CREDIT HISTORICAL
Nov99 Oct99 Sep99 Aug99 Jul99 Jun99 May99 Apr99 Mar99 Feb99 Jan99

%GRWTH: 9.1% -0.5 0.0 2.5 12.1 13.8 4.5 5.6 -0.9 3.4 11.6
$OWED: $588.8 584.3 584.5 584.5 584.6 578.5 572.2 569.9 567.3 567.5 565.9

Source: Federal Reserve; revised figures as of 1/07/00; For complete
historical data visit www.carddata.com.

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Small CU Issuers 4Q/99 Update

Credit unions in the $60 million portfolio range consistently beat the industry averages for growth in outstandings last year.

ISSUER 99/4Q RECV 98/4Q RECV %CHG
Security Service (San Antonio, TX) $83,718,565 $84,796,037 -1.3%
Wash. State Employ. (Olympia, WA) $69,207,741 $62,984,861 +9.9%
Desert Schools (Phoenix, AZ) $67,561,007 $65,469,693 +3.2%
Randolph Brooks (Univ.City,TX) $64,033,448 $57,298,511 +11.8%
Visions (Endicott, NY) $62,990,036 $58,697,639 +7.3%

Source: CardData (www.carddata.com) 4Q/99

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Small Bank Issuers 4Q/99 Update

Whitney National Bank in New Orleans posted extraordinary growth during 1999.

ISSUER 99/4Q RECV 98/4Q RECV %CHG 99/4Q ACCTS 98/4QACCTS %CHG
Dial Bank $333,115,436 $280,000,000 +19.0% 275,885 260,000 + 6.1%
FirstMerit $109,369,934 $ 99,847,160 + 9.5% 106,674 90,825 +17.5%
TrustMark $ 65,191,945 $ 61,010,251 + 6.9% 68,116 68,490 – 1.0%
Whitney $ 22,036,453 $ 17,780,748 +23.9% 24,184 18,621 +29.9%

Source: CardData (www.carddata.com) 4Q/99 Portfolio Survey

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CyberMark & Coin Acceptors

CyberMark announced today a strategic alliance with Coin Acceptors, Inc. of St. Louis, Missouri. The multi-year agreement will provide the smart card marketplace with a comprehensive solution for the use of electronic cash, and a loyalty application with state of the art vending machines from Coin Acceptors.

“Coin Acceptors’ expertise in the development of unattended point-of-sale hardware, coupled with CyberMark’s leading smart card applications, provides our customers with best of breed solutions,” said Kevin Ward, Assistant Vice President of Smart Card Products for Coin Acceptors, Inc. Mr. Tom Burke, Vice President of Marketing for CyberMark describes the alliance as “an extension of a comprehensive product development strategy providing SmartWorld(R) cardholders with a compelling suite of applications for use in closed campus environments and the Internet.”

Coin Acceptors specializes in development, manufacturing, and marketing of coin acceptors, bank note acceptors, smart card readers, and related vending technology. The company is privately held and based in St. Louis, MO, with field sales and support offices in over 14 countries.

CyberMark has teamed with Microsoft, Gemplus, and First USA, via the SmartWorld(R) Partnership Program to offer comprehensive smart card solutions. Founded in 1996, CyberMark is a leading electronic commerce company, specializing in the creation of smart card communities on the Internet and in closed campus environments. Cardholders conduct smart card based transactions using their cards at sites displaying the SmartWorld(R) logo. SmartWorld(R) is a registered trademark of CyberMark.

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Smallest Bank Issuers 4Q/99 Update

Card issuers at the bottom of the chain continued to struggle with portfolio growth in 1999.

ISSUER 99/4Q RECV 98/4QRECV %CHG
F&M Natl Bnk (Winchester, VA) $16,203,985 $17,288,077 -6.3%
Bnk of Canton (San Fran, CA) $ 7,269,255 $ 8,033,420 -9.5%
Clinton Natl Bnk (Clinton, IA) $ 1,225,848 $ 1,249,845 -1.9%
Grundy Natl Bank (Grundy,IA) $ 454,485 $ 469,029 -3.1%
Monroe Cty Bnk (Monroeville,AL) $ 457,753 $ 439,621 +4.1%

Source: CardData (www.carddata.com) 4Q/99 Portfolio Survey

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Web-Lending.net

Creating and building Internet lending profitability will be the focus of a special industry conference to be in Orlando at the end of March. Top executives from Lending Tree, Microsoft HomeAdvisor, Citicorp, Loancity.com, QuickenMortgage, Sallie Mae, Laureate, and other leading Internet Companies are slated to speak at the event. Produced by World Research Group ([www.worldrg.com/fb017][1]), the three-day conference will feature workshops, panel discussions, and special presentations to help diagnose, develop and implement an Internet lending strategy to produce long-term web-based profits. Robert McKinley, CEO of CardWeb.com, will handle a first day presentation titled: “Capitalizing on the Web-Credit Card Frenzy”. The event runs from March 29 through 31 and is being held at the Sheraton Studio City.

[1]: http://www.worldrg.com/FB017

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Approve.net Sold

MerchantOnline.com announced Friday it has completed the merger agreement to acquire Approve.net, a privately held San Diego-based credit card processor. The acquisition includes Approve.net’s subsidiary, ChargeSolutions.com, another San Diego-based Internet payment processor and developer of CS-VPOS payment processing software used by Internet payment processors. Founded in 1997, MerchantOnline.com offers customers real-time credit card processing, shopping cart services, online checking transactions and secure hosting services at prices unmatched in the industry. Last month, the company began trading on the German Berlin Tradegate Exchange.

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CompuCredit Financing

CompuCredit Corporation announced Friday it has secured an additional $275 million of receivables financing facilities through four existing relationships. Bank of America, N.A. provided a $100 million increase to its existing facility, First Union National Bank added $75 million to a similar facility, and Barclays Capital, the investment banking division of Barclays Bank, PLC, and SunTrust Equitable Securities Corporation, the investment banking affiliate of SunTrust Banks, Inc., each provided increases of $50 million to similar facilities.

“These facilities allow CompuCredit to continue its dynamic receivables growth at competitive commercial paper rates,” said David Hanna, chief executive officer of CompuCredit Corporation. “We continue to add 20,000 to 25,000 new Aspire Visa cardholders to our client list each week, making CompuCredit one of the top 10 credit card issuers in terms of net new account growth. We believe that the increases to these securitization facilities is a validation by the capital markets of our proprietary modeling technology and marketing execution.”

CompuCredit Corporation is a credit card company that uses technology based analytical techniques it has developed to identify credit-worthy consumers who it believes are not currently being served by more traditional consumer credit providers. CompuCredit markets Aspire Visa credit cards to these consumers on an unsecured basis through traditional channels such as direct mail and telemarketing, as well as through its Internet marketing services subsidiary, AspireCard.com, Inc. CompuCredit also markets life insurance, card registration, telecommunication products, membership in buying clubs and travel services to its cardholders. Aspire Visa cards are issued by Columbus Bank and Trust under an agreement with CompuCredit. CompuCredit completed its initial public offering in April 1999. CompuCredit was included in the Russell 2000(R) Index in July of 1999.

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ValueLink Agency

SmithAgency.com Friday announced that the shop has signed Coral Springs, Fla.-based ValueLink, as its newest client.

The full service shop will handle creative, media, and public relations for ValueLink.

The agency won the account without review, based on prior project work performed by its Pix’L Creative division. Pix’L created print ads and collateral for the stored value card company. “We’ve been extremely happy with the agency’s creative on a project-by-project basis,” said Jerry DeWitt, ValueLink’s director of corporate card solutions. “In seeking a full service agency, our practical needs were twofold; we wanted a single agency with full media and creative capabilities that was local to our South Florida division, but which could increase productivity through simultaneous communication with any of our offices. SmithAgency.com’s use of the Internet to accomplish that goal helped,” he concluded.

“This win is another demonstration of the benefits in our model of unbundling agency services,” said Jim Lobel, SmithAgency.com’s president and CEO. “We established a relationship by doing project work, and when the time came for the client to step-up to a full service relationship, we were ready, willing, able, and – most significantly – proven,” he concluded. See the new ads at .

SmithAgency.com is a wholly owned subsidiary of publicly traded QuikBIZ Internet Group (OTCBB:QBIZ), an Internet-related business-to-business communications company. For further information about QuikBIZ Internet Group, Inc., visit the company’s Web site at [http://www.quikbizgroup.com][1].

ValueLink, a service of First Data Corporation, is an industry leader in stored value card programs, offering a wide range of transaction processing, card acquisition, card fulfillment and customer service capabilities. Over a million times each month, a consumer is completing a transaction with a card supported by ValueLink – which serves the country’s leading department store, discount store, specialty, video and gasoline retailers. For more information about ValueLink, visit the company on the Internet at [www.valuelinkcards.com][2].

Atlanta-based First Data Corporation (NYSE:FDC) is a global leader in payment systems, electronic commerce and information management products and services. First Data and its principal operating units process the information that allows millions of consumers to pay for goods and services by credit, debit or stored value card at the point of sale or over the Internet; by check or wire money. For more information about First Data, please visit the company on the Internet at [www.firstdatacorp.com][3].

[1]: http://www.quikbizgroup.com/
[2]: http://www.valuelinkcards.com/
[3]: http://www.firstdatacorp.com/

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