IC One Board

IC One, Inc. announced this morning the addition of James A. Williams, Senior Vice President and Chief Information Officer of PacifiCare Health Systems, to its Board of Directors.

Williams has been with the California healthcare giant for six years, where he is responsible for the entire Information Technology Initiative within PacifiCare. Previous to that, he was Senior Vice President of Sanwa Bank California, Director of Customer Services and Bankcard Systems with Citibank, and Senior Vice President of Strategic Systems Development for Security Pacific Automation Company. “IC One, with its emphasis on cutting- edge technology and information systems, was a great fit for me professionally,” Williams said. “I look forward to being able to forge a closer partnership between my industry contacts and IC One to benefit all involved.”

The IC One Board of Directors consists of: Williams; David J. Simon, Chairman & CEO of IC One, formerly CEO of Schimatic Technology, Inc. and a longtime consultant to and executive with PacifiCare Health Systems, the Pacific Stock Exchange, Bank of America, Security Pacific National Bank, US West Network Systems, Electronic Data Systems and several US government defense organizations; Paul Christensen, currently the managing member of WESPAC Holdings, L.C., which invests in and jointly develops Marriott and Hampton Inn Hotels; and Peter Bennee, formerly President & CEO of The Regent Group, Chairman & CEO of Hawaii Federal Mortgage Corporation, Co-Founder and President of AlphaMation, Inc., a sight, sound and motion simulation company, and currently Corporate Secretary of IC One. The addition of a fifth Board Member is anticipated in the very near future. Actor Anthony Quinn is a member of the Advisory Board.


Amer Pac Control

American Pacific Bank issued 55,000 shares of common stock and a 5 year warrant to purchase an additional 550,000 shares at $4.65 per share (with the exercise price of the warrant increasing at the rate of $0.50 per share per year during the following four years) to its chairman, Mr. Fai H. Chan, in a private placement for $255,750.

These funds will be used to fund the Bank’s continuing growth. As of September 30, 1999, the book value of the Bank’s stock was $4.22.

This purchase increased the holdings of Mr. Chan from nearly 31% of the outstanding shares to 414,674 shares representing 34% of the outstanding shares. If Mr. Chan were to exercise the warrants in full, his holdings would be increased to 964,674 shares which would then represent a clear majority (55%) of the outstanding shares. The president stated that the existence of the warrant “could prove a deterrent to persons who might be interested in acquiring a controlling interest in the Bank.”

American Pacific is a full service, state chartered commercial bank, headquartered in downtown Portland, and services clients in the Portland metropolitan area and the Willamette Valley. The Bank provides construction lending, commercial loans, permanent mortgages, business financing, consumer loans, credit cards and deposit services. For the nine months ended September 30, 1999, total net loans of the Bank grew from $37.4 million to $42.9 million, an increase of 14.7%.


Extramoney Card

New York City-based Extrameasures LLC rolled out this month a ‘VISA GiftCard’ in denominations ranging from $25 to $500. The new card goes head-to-head with three serious competitors offering ‘MasterCard GiftCards’ this holiday season. Extrameasures is offering the card directly to the public via a toll-free phone number and a Website. Last week, the firm made a direct mail pitch to Inc. Magazine subscribers offering a $5 discount, per card, if three or more gift cards are purchased. The firm, which has a processing center in Lansing, MI, is charging a $9.95 shipping and handling fee for each card. Among the four major gift card players this year, only the ‘OmniGift MasterCard’ offers a “good-thru” term of one year and automatically refunds any remaining balance after the expiration date. Extramoney’s card term is four months and SwiftGift’s card term is three months. Extramoney and SwiftGift do not refund unused balances. Newport Beach, CA-based CardEx markets its ‘MasterCard GiftCard’ exclusively through cobranded relationships or in quantity to corporations. CardEx charges 6% of the face value plus a $5.00 handling fee per card to its corporate clients.

1999 VISA/MasterCard Consumer Gift Cards (cost per denomination)

Product $25 $50 $100 $500 $1000
Extramoney VISA $34.95 $59.95 $109.95 $509.95 NA
OmniGift MasterCard $30.95 $55.95 $105.95 $517.95 $1028.95
SwiftGift MasterCard $31.95 $57.45 $108.45 NA NA

Source: CardWatch (www.cardwatch.com) and CardTrak (www.cardtrak.com)


CSI Name Change

Card Services International the world’s leading smart card management software company, announced that as of January 1, 2000 the company will change its name to CardBASE Technologies.

The company is changing its name to reflect the focus of the organisation and to provide a .com Internet address for Customers and Partners worldwide – [www.cardbase.com][1] will be live from January 1, 2000.

Founder and Chief Executive Officer, Aonghus Geraghty commenting on the change said: “the new name unifies the company and its product brand. Our core technology, CardBASE(R) delivers the most advanced chip card management product available in the market today. CardBASE Technologies plans to continue to dominate the market for advanced chip card life-cycle management systems. The current industry excitement about the potential of multi-application chip cards and the role these cards can play in the delivery of secure eCommerce, pays little attention to exactly how these multi-application cards will be managed at the back-end. CardBASE addresses these issues and provides a fully integrated solution for the volume personalisation and issue of chip cards, plus the collection, processing and clearing of associated transactions.

Today, CardBASE is the technology behind some of the world’s leading chip card payment schemes including ChipCASH, ValuCard, and Visa Cash. In total these schemes issue hundreds of thousands of cards and process millions of transactions annually.

As the smart card market continues to develop, CardBASE will provide card life-cycle management solutions for PKI security chip cards and other advanced applications.

For our employees and shareholders our new name reaffirms our commitment to the development of a global brand and enhances the company’s growth and earnings potential.”

About CardBASE Technologies

CardBASE Technologies(R) (formerly CSI) is a European company serving world markets from offices in Ireland, the United States and Africa. Since its foundation in 1993, CardBASE Technologies has positioned itself at the forefront of eCommerce software solutions, providing innovative smart card management systems for the Internet, Banking, Oil Distribution and Airline Treasury Management.

CardBASE(R) offers clients the ability to issue smart cards, which can manage Multiple Applications, Card Personalization, Card Management, Transaction Processing and Settlement. CardBASE solutions have been specifically designed to support the Visa International led Common Electronic Purse Specification (CEPS) and Public Key Infrastructure (PKI) standards.

CardBASE Technologies Internet address will be [www.cardbase.com][2] from January 1, 2000.

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


Rev Credit Skids

Revolving consumer credit continues to decelerate in the USA. According to preliminary figures released by the Federal Reserve, Americans paid down $300 million in outstanding revolving credit during October, marking the third straight month of decline. The peak occurred in July when consumers owed $584.6 billion in revolving credit, which is mostly credit card debt. Last year Americans added nearly $6 billion to revolving credit during the month of October. Revolving credit is now growing at a negative rate of 0.6%, according to the FRB. Meanwhile, preliminary results from CardData’s ‘3Q/99 Portfolio’ survey indicated bank credit card debt is growing at a 3% annual rate, the lowest rate of growth since 1991. Overall, consumer credit is growing 3.7% annually. It should be noted that the FRB figures do not net out monthly payments made on credit card balances. Monthly payment rates have been rising sharply this year which dampens the real growth in revolving credit. Among credit card-backed securities the average monthly payment rate for October stood at 16.2%. Overall, American consumers were $1.371 trillion in debt, exclusive of home mortgages, at the end of September.

Oct99 Sep99 Aug99 Jul99 Jun99 May99 Apr99 Mar99 Feb99 Jan99
%GRWTH: -0.6% 0.1 2.5 12.1 13.8 4.5 5.6 -0.9 3.4 11.6
$OWED: $584.3 584.6 584.5 584.6 578.5 572.2 569.9 567.3 567.5 565.9

Source: Federal Reserve; revised figures as of 12/07/99; For complete historical data visit [www.carddata.com][1].

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


RPM Partner

San Francisco-based InnoVentry Corp. has established a strategic alliance with Diebold which includes a contract under which Diebold will integrate, install and service InnoVentry’s new ‘RPM Cash Management Machines’ in key target markets in the USA. InnoVentry’s ‘RPM’ has been developed to provide secure financial transactions for the self-banked (an estimated 37 million US adults who do not have bank or checking accounts or maintain only nominal balances in the accounts they do hold). The ‘RPM’ consists of Diebold’s advanced-function, ‘1062ix’ ATM and InnoVentry’s cash management technology. InnoVentry has secured commitments for 1,500 sites for its new ‘RPM’ with major convenience store and supermarket retailers. The company, formerly known as innoVisions, was formed in May 1998 as a private company with investments from the wholesale bank of Wells Fargo and Cash America International.


Green Tree Name Change

Private-label credit provider Green Tree Retail Services has been renamed to Conseco Finance Corp., Retail Services Division. The name change follows the June 1998 acquisition of Green Tree Financial Corporation, one of the nation’s largest multi-line finance companies, by Conseco, Inc.

Conseco Finance’s Retail Services Division adds value to the sames efforts of retailers and manufacturers through the design and execution of innovative marketing programs. Founded in 1996, the division has grown to become a top-five third party private-label credit provider, with 30 retail and manufacturer relationships, more than $1.2 billion in receivables and over 1.6 million cardholders.

Headquartered in Carmel, Ind., Conseco is one of middle America’s leading sources for insurance, investment and lending products. Through its subsidiaries and a nationwide network of insurance agents and finance dealers, Conseco provides solutions for both wealth protection and wealth creation to 12-1/2 million customers.


Concord Deal

Concord EFS announced this morning that SUPERVALU INC. has signed an exclusive contract with Concord to provide end-to-end processing for credit and debit card payments at their store locations nationwide. SUPERVALU, the tenth largest food retailer in the nation and the largest food distributor to supermarkets, operates or supplies on a primary or secondary basis, about 5,000 retail food stores nationwide. SUPERVALU is a long-time front-end processing client of Concord’s recently-acquired subsidiary, BUYPASS Corp. The new agreement extends the contract for front-end processing and adds Concord’s back-end processing services, which includes settlement and funds movement for credit card payments. The agreement also adds Concord’s check authorization service to the range of payment options supported.



San Francisco-based Creditland closed its second round of financing yesterday and has hired a new president. Billing itself as the “Internet’s only unbiased credit marketplace” the online startup closed a $15 million equity financing deal. Investors to-date include: Wheatley Partners, Pacific Century CyberWorks, Thomas Weisel Partners, and Robertson Stephens. The firm has also received investments from First Union Capital Partners and umbrellabank.com, a division of Argo Federal Savings Bank, FSB. The new firm also announced Thursday that Michael Bartholomew, former COO of Cheap Tickets, has been named president and COO. Creditland is a free service that matches consumers to auto loans, home loans, personal loans and credit cards provided by participating vendors.


Return Cards

Borders has come up with a novel way to handle holiday returns. The global retailer will issue a platinum prepaid card in the amount of the return credit. Borders electronic return card will hold a balance up to $500 and can be used anywhere in the store to buy books, CDs, videos or Borders Cafe Espresso items. Customers can check their available balance via an 800# or at store registers. The new prepaid return is being introduced this week at all Borders stores. The company also issues a prepaid gift card.


Troubled Cards

Another sub-prime issuer is struggling with rapid account growth and a simultaneous sharp rise in chargeoffs. Dallas-based UICI acknowledged yesterday that it expects to post a $79 million loss for the fourth quarter. The loss is attributed to UICI’s United CreditServ subsidiary which needs to boost reserves for credit card losses associated with the relatively new, sub-prime ‘ACE VISA’ credit card program. United CreditServ says over the past twelve months it has experienced a significant increase in new ‘ACE VISA’ cards issued and is now taking steps to substantially restructure and reprice the credit card product. The issuer has also installed an entirely new management team this year which included the hiring of W. David Huddleston, former President of Associates National Bank, as President and CEO of United Credit National Bank, United CreditServ’s SD-based credit card issuing bank. Under the ‘ACE VISA’ program applicants are offered a $400 minimum credit line in exchange for charging a $300 personal finance educational program, a $19.00 processing fee and a $49.00 annual fee. According to CardWatch ([www.cardwatch.com][1]) the required $300 personal finance educational program consists of five booklets and two videotapes produced by a group called: American Credit Educators. The ACE program is similar to the now defunct ‘Best Bank VISA’ program which offered a $600 credit line in exchange for charging a $500 travel club membership fee. The ‘ACE VISA’ carries a 19.92% APR and a $25 annual fee for any additional cards.

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


CardEx Expansion

Corporate gift certificate and gift card specialist, CardEx, announced yesterday it has added seven major brands to its gift certificate program. The new brands include: Waldenbooks; Borders Books; Sunglass Hut; Virtual Vineyard; Planet Hollywood; Orvis; and The Bon Marche department store chain in the Pacific Northwest. CardEx now offers gift certificates from more than 100 popular national merchants to corporate gift and incentive buyers. CardEx gift certificates are sold at face value with no service charges. All CardEx gift certificates are available in denominations of $25 and are delivered to buyers overnight. In addition to merchant gift certificates, CardEx offers the ‘CardEx MasterCard GiftCard’.