News Week Begins

Fax machines at news offices around the world will be working overtime this week as a number of major announcements pertaining to payment systems and e-commerce are expected to be released. The world’s largest card event gets underway this week in Paris. The Cartes ’99 event will draw more than 12,000 visitors, 1,000 delegates, 250 exhibitors, 200 journalists from more than 100 countries. Cartes ’99 will open tomorrow and run for three days. This is the fourteenth year for the Cartes event. Meanwhile the 20th annual fall COMDEX information technology expo and convention opened over the weekend. This is the largest event held in Las Vegas and will draw more than 200,000 visitors, 2,000 exhibitors and 3,500 news media attendees.

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AmEx Gift Card

American Express has directly joined the hot gift card market with the introduction of the ‘Be My Guest’ gift card. The prepaid stored value card can be redeemed at any restaurant in the U.S.A. that accepts the American Express card. American Express cardholders can order the ‘Be My Guest’ card in any amount ranging from $25 to $250. There is a $5.95 handling fee. The AmEx ‘Be My Guest’ program has been in existence for more than 20 years as a paper-based gift certificate. Cardmembers who purchase a ‘Be My Guest’ card before March 12 will earn 350 bonus points and/or Skymiles if they are enrolled in the ‘Membership Rewards’ program or carry an AmEx ‘Delta Skymiles’ card. American Express is also involved with other gift cards such as a Tower Record gift card.

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Equifax – Federated

Equifax announced that it has been awarded a multi-year contract with Federated Department Stores, Inc., to provide Equifax’s full line of credit information solutions to the retail giant. Federated has been a user of Equifax Check Solutions since 1997. The addition of credit information solutions exemplifies the “Total Solution” for which Equifax is known. Equifax enhanced its relationship with Federated by leveraging the strength of its Information and Payment Services businesses.

“Equifax is a customer-driven company,” said Bill Catucci, executive vice president, Equifax North American Information Services. “We like nothing better than to be able to bring our total solution to a customer by providing complementary services that minimize risk throughout the entire credit and payment life cycles.”

The new contract gives Federated access to a myriad of Equifax risk assessment and management tools, including credit reports, risk scores, portfolio review and custom predictive models as well as credit marketing services and recovery and collections services.

Sherri Mewha, senior vice president, Equifax Retail Solutions, said, “The Equifax solutions will be even more dramatic with the employment of Equifax’s dynamic new range of knowledge-based products and services, created specifically for the retail industry, which have the capability to enhance customer relationship and loyalty management.”

Equifax solutions will be deployed in all Federated department stores throughout the country, including Bloomingdales, The Bon Marche, Burdines, Goldsmith’s, Lazarus, Macy’s, Rich’s and Stern’s.

Federated, with corporate offices in Cincinnati and New York, is one of the nation’s leading department store retailers with annual sales of more than $17.3 billion. Federated currently operates more than 400 department stores in 33 states. Federated also operates the Fingerhut, Bloomingdale’s By Mail, Macy’s By Mail and Macys.com direct-to-consumer catalog and electronic commerce subsidiaries. Information on Federated and its operating divisions is available on the Internet at [http://www.federated-fds.com][1].

Equifax ([http://www.equifax.com][2]), a worldwide leader in shaping global commerce, brings buyers and sellers together through its information management, transaction processing and knowledge-based businesses. Atlanta-based Equifax serves the financial services, retail, credit card, telecommunications/utilities, transportation, information technology and healthcare industries and government. Equifax adds knowledge, expertise, convenience and security to provide value-added solutions and processes for its customers wherever they do business, including the Internet and other networks. Entering its second century in business, Equifax employs about 13,000 associates in 17 countries with sales in almost 50 and has more than $1.7 billion in revenue.

[1]: http://www.federated-fds.com/
[2]: http://www.equifax.com/

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Bank One’s Struggle

There is speculation this morning that Bank One will either sell off its First USA credit card unit or that the entire company might be up for grabs. Bank One’s stock price dived 9% Wednesday and 2.5% Thursday following news that its problems in the credit card unit cannot be repaired soon. First USA provoked higher than average attrition through its aggressive cardholder fee policies and weak customer service. The issuer has also watched margins slip as it chopped interest rates and raised marketing expenses. First USA lost more than one million accounts during the third quarter. Exacerbating the problem is the recent management changes at First USA. Bank One dismissed First USA’s chairman and CEO Richard Vague following the release of its third quarter earnings report Oct. 19. Bank One says its full review and outlook for 2000, promised during the fourth quarter, will now be delayed until January due to the First USA management changes. Bank One’s troubles spilled over onto other card issuers yesterday. MBNA’s stock fell nearly $2 yesterday to close at $24.50 and Capital One fell slightly more than $1 to close at $45.75.

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VISA Worldwide

VISA cardholders worldwide rackup $4 billion each day in transaction volume according to mid-year figures by VISA International. Over the twelve months, ending June 30, 1999, VISA processed $1.48 trillion in charge volume from transactions in 300 countries and territories, a 17.4% increase over the previous year. Card transactions conducted on VISA’s worldwide processing network rose 17.9% to 19.47 billion. VISA debit product volume now accounts for 41% of total VISA volume. Debit volume worldwide grew 26% over the previous year, from $478 billion to reach $600 billion. Debit POS volume grew by 31%, from $233 billion in the year ending June 1998 to $305 billion as of June 1999. The number of total cards issued in the VISA family of products and services rose to exceed 880 million. And VISA added more than 40,000 additional ATMs to its global network, bringing the total ATMs available to its cardholders to over 530,000 in 120 countries.

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Euronet Dillard Deployment

Euronet Services Inc. announced a recently completed project with Dillard’s, Inc., to provide the retailer with a complete turn-key solution for placement and operation of 334 automated teller machines in Dillard’s Department Stores throughout the U.S. The project involves all Dillard’s stores in 29 states and was completed on schedule on November 4th.

The turn-key solution involves the in-store placement of ATMs from Triton, Inc. The ATMs accept all bankcards and most credit cards. Euronet will process the ATM transactions through the DASH Network using its own ARKSYS(TM) software brand.

“Providing ATM access in our stores is another way we can provide added services to our busy customers,” said David Helm, Dillard’s Assistant Treasurer. “By selecting DASH and Euronet as our ATM solutions provider, we were able to make this project happen quickly and efficiently, just in time for the holiday shopping season,” Helm added.

“We’re very pleased to have been selected by Dillard’s,” said Euronet Chairman and CEO, Michael Brown. “This is our first project with a retailer in the United States and it is a logical extension of the outsourced ATM network services Euronet has been offering in Europe.”

Established in 1996, DASH provides transaction switching, and ATM and debit card services to 24 financial institutions in Arkansas, Louisiana, Oklahoma and Texas. Including the new Dillard’s ATMs, the DASH network currently operates 446 customer-owned ATMs. DASH, located in Little Rock, Arkansas, is a subsidiary of Euronet.

Euronet Services Inc. is a leading provider of electronic financial solutions and transaction processing services. Euronet operates a network of over 2,000 ATMs in Europe and the U.S. and offers ARKSYS(TM) ITM software, an integrated software suite for electronic payment and transaction delivery systems compatible with the IBM AS/400 computer. With offices in eight countries on two continents, Euronet Services offers ATM network development and participation, outsourced management solutions, comprehensive software solutions, and professional and consulting services to retail banks and companies in more than 70 countries around the world.

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VISA Millionaire

America Online and e-Visa announced a new sweepstakes that will make one online shopper an instant millionaire. Online shoppers who sign up for Shop@AOL’s Quick Checkout digital wallet with their VISA card will be automatically entered to win the million dollar prize. Eligible participants will receive one entry when they register for Shop@AOL’s Quick Checkout between now and December 13. One grand-prize winner will be chosen via a random drawing and awarded a $1 million ‘VISA Prize Card’ issued by First USA. AOL’s digital wallet enables customers to enter information from ten different credit cards, billing information and up to 50 shipping addresses. Discover is currently running a millionaire sweepstakes that will award $1 million to a Discover cardholder on New Year’s Eve.

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ConnectIC

Oberthur Card Systems introduced yesterday ‘ConnectIC’, the world’s first Wireless Application Protocol -enabled smart card. The ‘ConnectIC’ card is ideal for securing mobile Internet services such as mobile banking, mobile ticketing, as well as providing secure access to corporate intranets. ‘ConnectIC’ incorporates a special ‘Java 2.1’ applet that performs the ‘WAP Identity Module’ functions. This can be combined with other applications, to create a multi-application environment for additional e-commerce, loyalty, SIM Toolkit and authorized transaction services, as well as Internet browsing. ‘ConnectIC’ can store issuer-defined connectivity information including IP addresses, dial-up access numbers and homepages, as well as the cardholder’s personal information.

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First USA CarsDirect Package

Car buyers will soon be able to save hundreds of dollars in financing by participating in a breakthrough program developed by CarsDirect.com, the leading automotive e-tailer, First USA, the world’s largest Visa credit card issuer, and CD1 Financial.com, a full-service Internet automotive lender and joint venture between CarsDirect.com and Bank One. The innovative financing package is designed to save customers time and money and make coming up with a down payment easier than ever.

The complete financing package – including down payment and loan or lease – will be targeted to qualified First USA cardholders who are in the vehicle purchasing cycle. As part of the program, First USA will offer qualified cardholders a convenience check made out to CarsDirect.com. The check will be applied to the down payment on a new vehicle purchased from CarsDirect.com, using the cardholder’s credit line at a special interest rate as low as 3.9%. CD1 Financial.com will further assist program participants with a loan or lease at a special low rate for the rest of the financing term. CarsDirect.com will also offer First USA cardmembers who respond to the program $250 in free gas for their new CarsDirect.com vehicle.

The program, which begins in November in select markets, is expected to roll out nationwide beginning early next year.

“Through this campaign, First USA takes another step into the growing world of e-commerce,” said Carter Warren, executive vice president, marketing, First USA. “Our Cardmembers already turn to us when it comes to paying for vehicle maintenance and service as well as purchases over the Web. Now we can help them buy a car over the Web. And by partnering with CarsDirect.com, we know our Cardholders will get great, upfront prices, a unique value and the ultimate in customer service and convenience.”

“This three-way alliance will help us to both expand our reach and demonstrate the power of our service,” said Scott Painter, CEO, CarsDirect.com. “Through this alliance with First USA, we’re underscoring the first principle of our company – that our customers are the real winners. Not only does this program make coming up with a down payment easier than ever, but customers will save money and time in the financing end of the transaction. This partnership exemplifies our commitment to innovate financing packages that really raise the bar beyond traditional brick-and-mortar solutions.”

CarsDirect.com is the first nationwide online source that lets consumers research, price, select, customize, finance, order and take delivery of a new vehicle. CD1 Financial.com, a full service Internet automotive lending and leasing company designed to redefine the world of online automotive finance, was created through a joint venture with CarsDirect.com and Bank One, the nation’s fifth largest bank and a major automotive lender.

About First USA

First USA (), a subsidiary of Bank One Corporation (NYSE: ONE), is the world’s largest issuer of Visa credit cards. First USA offers credit cards for consumers and businesses under the First USA, First Card and Bank One names and on behalf of more than 2,200 marketing partners. Bank One Corporation is the nation’s fifth-largest bank holding company with assets of more than $264 billion.

About CarsDirect.com

CarsDirect.com ([http://www.carsdirect.com][1]) is a revolutionary new Internet company that lets consumers complete the vehicle purchase transaction. With CarsDirect.com, shoppers can research, price, customize, order and finance a new car or truck over the Web — selecting from among 2,500 makes and models by every major manufacturer. Unlike referral services, which point people to a dealer to accomplish the transaction, CarsDirect.com takes the customer from inquiry through financing right up to delivery. CarsDirect.com was recently named the top car-buying site on the Internet by Gomez Advisors of Lincoln, Mass.

Based in Los Angeles, CarsDirect.com is an idealab! company. Its investors include Goldman Sachs, Foundation Capital, idealab! Capital Partners, MSD Capital L.P., and Primedia Ventures, among others.

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

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Citibank Smart Cards

Citibank is set to deliver 20,000 Gemplus smart cards to Citibank customers in Hong Kong. This is the first fully operational banking card system using the ‘JavaCard Open Operating System’. The ‘Sun Hung Kai Properties Club VISA Card’ offers a contactless application for SHKP residents to access buildings, and a contact application offering ‘VISACash Purse’ and loyalty. The smart card used in the Citibank/SHKP project is ‘GemXpresso 210 PK’ featuring public key cryptography with a VISACash applet provided by IBM Research. This card is the world’s first commercial multifunctional smart card using ‘VISA Open Platform’ technology and Hong Kong’s first credit card to feature the ‘VISA Cash’ function.

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Fleet AltaVista Deal

CMGI’s AltaVista Company and Fleet Credit Card Services have signed a credit card agreement valued at nearly $50 million. The new AltaVista credit card, to be released in early 2000, will enable cardholders to earn points toward more than one million products at the all new AltaVista Shopping.com. The new ‘AltaVista Incentive Rewards Program’ will offer rewards for every card purchase in the form of electronic cash. AltaVista Shopping.com gives users the ability to search quickly across millions of products throughout the Web, read through thousands of in-depth product reviews, view side-by-side comparisons, and choose from thousands of retailers located online or within driving distance from the consumer. Fleet says the new AltaVista card will carry a low APR, no annual fee, and its Internet fraud guarantee. Based on the success of the program over several years, Fleet will pay AltaVista in a deal valued up to $50 million or more for co-branded credit cards and promotion throughout the AltaVista Network, a top 10 Internet site with 40 million visitors monthly.

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