Diebold Mid-East

Diebold Middle East announced Wednesday that it has completed its Middle Eastern distribution network. Diebold has appointed distributors and service partners in Bahrain, Egypt, Jordan and Palestine, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia and United Arab Emirates. Diebold also announced yesterday the appointment of Hassan Hares as business development manager for the Middle East region. For the past five years, Hassan has been general manager of Electronic Banking Systems, at Alhamrani Universal Company, Diebold’s distributor in Saudi Arabia.


ATM Online Purchases

NACHA confirmed Wednesday it is developing a test program in which consumers will pay for Internet purchases by using their ATM cards combined with digital signatures instead of PINs. The electronic payments association said it found that 80% of U.S. households have ATM cards but cannot use them to make purchases on the Internet. In the pilot, a participating consumer would use a private key to generate digital signatures. The private key is securely stored in a chip on a device such as a smart card or within a web application. When making an Internet purchase, the consumer would use his or her ATM card number; but instead of using a PIN, the consumer would digitally sign an electronic authorization form. The form is then sent to the consumer’s financial institution, where the digital signature is verified. The merchant would then receive confirmation, the consumer’s checking account would be debited through a participating ATM network, and the payment would be settled through the ACH Network. The pilot program will also develop business practices and operational rules that will allow regional and international ATM networks to communicate with each other to approve consumer purchases. Current participants in the pilot include Citigroup, STAR, AmeriNet, Inc., Internet Revenue Network, PULSE, eFunds Corporation, and UTM Systems. Technical and security consulting is being provided by Certicom, and additional legal advice is being provided by the Georgia State University eCommerce Institute. A full-scale pilot program, conducting real transactions, is scheduled for the 2nd quarter of 2000.


One or Two Cards?

VISA released a study yesterday that cautions organizations to carefully weigh the many benefits and challenges of instituting a one card program in place of existing multiple commercial card programs. Last week MasterCard released a study which suggests businesses consolidate their various corporate card programs into an umbrella one card program to save time, money and generally improve the quality of management information and business process control (CF 10/22/99). The contradictory recommendations come amidst a heating up of the business card market. The Visa U.S.A. study, conducted by AnswerThink Consulting Group and its Hackett Benchmarkingsolutions research arm, found that while one card programs have existed for a number of years, adoption of the product has been limited. Eight percent of the 196 respondents, from a variety of industries and company sizes, reported use of one card programs, while 36 percent were not interested in a one card program for their organization. Some of the obstacles for usage included: administration, liability, transaction accounting and tax compliance. Further analysis, in the form of a white paper, from Visa U.S.A is scheduled to be available next month. The MasterCard study, conducted by Deloitte & Touche, found that using a one card program enables centralization of processing and program management. Ninety-two percent of study participants with a one card program administer their programs centrally. Eighty-two percent of study participants report detection of non-compliance to policy is easier within a one card program.


First of Omaha Merchant Processing

First of Omaha Merchant Processing announces the appointment of Nick Baxter to President of First of Omaha Merchant Processing, a wholly owned subsidiary of First National Bank of Omaha. Mr. Baxter has been with First of Omaha Merchant Processing since 1990 in several capacities including Risk Management Officer, Vice President and Sr. Vice President. Prior to joining First of Omaha Merchant Processing, Mr. Baxter’s experience included working as a lawyer in private practice and operating a small direct marketing catalog company.

He currently resides on the Visa Legal Issues Round Table Board and pursues credit card initiatives on several Visa and MasterCard operational and risk management ad hoc committees including the Visa U.S.A. Risk Identification Service Committee, Visa U.S.A. Key Entered Fraud Committee and the MasterCard Ad Hoc Midwest Regional Fraud Working Group — representing First of Omaha Merchant Processing’s client interests to the fullest extent. Mr. Baxter will report directly to Elias Eliopoulos, Executive Vice President, First National Bank of Omaha, who will maintain responsibility for all card related businesses at First National Bank and will retain the position of Chairman of First of Omaha Merchant Processing.

A native of Pattingham, England, Nick moved to the United States in 1987. He serves on the Board of the Omaha Theater Company for Young Children and is a graduate of the Leadership Omaha Program.

First of Omaha Merchant Processing is a premier processor in the direct marketing industry, and also processes bank card transactions for large and small retailers, restaurants, lodging merchants, petroleum marketers, associations/franchise groups and banks. Known for their superior customer service, First of Omaha specializes in providing clients the latest in card processing technologies. Through development of a diversified product line, First of Omaha has become a leader in the merchant processing industry, assisting clients in the reduction of chargebacks and fraud. First of Omaha is a wholly owned subsidiary of First National Bank of Omaha and is one of the few remaining in-house bank processors. First National Bank of Omaha, founded in 1863, is the 32nd oldest nationally chartered bank in existence. First of Omaha’s Internet address is [http://www.foomp.com][1].

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


Coinless Casino

Gaming clients at Sun International’s latest casino in South Africa are now using Schlumberger ‘Payflex’ smart cards to play the slot machines, to pay for meals and entertainment on the site, and at the same time to build up loyalty points. All customers are now given a card at the coinless casino. The card is then charged with money using a note acceptor. Stakes are debited from the card electronically, and any winnings are stored on it. The card also acts as an e-purse, when paying for drinks and meals in the casino. When the customer leaves, any winnings can be exchanged for a cheque, or paid directly into a bank account, or the customer can simply take the card home. Card and user authentication is carried out within the slot machines, using the same kind of Schlumberger security access module that is used in smart card point-of-sale terminals and ATMs. All the machines are networked, and information on every transaction is transmitted to a central server.


IVI Checkmate 3Q/99

IVI Checkmate Corp. , a leading North American provider of electronic payment solutions, announced its third quarter and nine month financial results for the periods ended September 30, 1999.

Revenue for the third quarter of 1999 increased 9% over the same period in 1998 to a record $32.5 million, which brings total revenue to date for 1999 to $76.3 million. In comparison, revenue for the third quarter and nine months ended September 30, 1998 were $29.9 million and $80.7 million, respectively.

The Company returned to profitability in the quarter with net earnings of $619,000 or $0.03 per share, which was in line with analysts’ projections. Net earnings for the third quarter of 1998 were $465,000 or $0.03 per share.

“After the product and sales issues that we faced earlier this year, we are pleased to have rebounded with our highest quarterly revenue ever recorded,” said Barry Thomson, President and CEO of IVI Checkmate. “Our improved performance can be attributable to strong sales to key customers and shipments of eN-Touch 1000 terminals.”

Mr. Thomson continued, “We intend to build on our positive momentum, as well as continue our focus on the ongoing development of our eN-to-eN solutions platform. However, as the new year quickly approaches, caution about Year 2000 issues have risen in our industry as well as the markets in general. As a result, this precautionary stance may affect the timing and/or quantity of our customers’ buying decisions, which may result in expected fourth quarter revenues to be lower than previously anticipated.”


CyberCash 3Q/99

CyberCash, Inc. , the world leader in e-commerce technologies and services for merchants, announced financial results for the third quarter and nine months ended September 30, 1999. CyberCash reported revenues of $5.1 million, up from $4.5 million reported for the same period last year. The company reported a net loss per share of ($0.65) for the three months ended September 30, 1999, as compared to a loss of ($0.51) in the third quarter of 1998, exceeding First Call’s expectations for the quarter of ($0.71). Included in the financial results were one-time expenditures of $5.0 million for a corporate branding campaign representing approximately ($0.23) per share of the third quarter net loss.

For the nine months ended September 30, 1999, CyberCash reported revenues of $14.0 million, an increase of more than 70 percent over the same period last year, when the company reported revenues of $8.2 million. Net loss per share was ($1.61) compared with a loss of ($1.71) per share for the nine months ended September 30, 1998.

“CyberCash is achieving its objective to grow its payments business through expanded sales and marketing efforts, and through initiatives to provide solutions that simplify e-commerce,” said Jim Condon, president and chief operating officer. “As a result, the company continues to expand its merchant base. We increased the number of merchants using the CashRegister service to approximately 16,000 in the third quarter, an increase of over 100 percent from a year ago. We also continued to grow the number of transactions from our merchant base with an average of 4.9 million transactions per month in the third quarter compared to 3.1 million transactions per month for the same quarter last year.

“In addition, we completed our acquisition of Tellan Software, Inc., which expands our software product offerings and provides us with a scalable platform to increase our time to market for both new products and services. During this quarter, the company increased the number of shipments of its software products sold, totaling 7,000 units, a more than 30 percent increase since the third quarter of 1998,” Condon said.

During the third quarter of 1999, CyberCash placed significant emphasis on providing transaction management services through its Agile Wallet platform(TM). In order to bring additional value-added services to merchants that will assist them in increasing and managing their transaction volume, CyberCash entered into strategic relationships with technology companies. These relationships included: NetGravity to add click-through banner ad capabilities to merchants; HNC to provide fraud screening; and Commission Junction to offer affiliate marketing services.

In addition, CyberCash succeeded during the quarter at enabling more than 350 merchant sites with its InstaBuy Form Wizard(TM) capability, allowing consumers to complete a sales transaction at a merchant site without manually filling in payment information. As transaction management technologies continue to emerge and adoption rates continue to increase, CyberCash has seen transaction volumes rise. In September of 1999 alone CyberCash processed approximately 54,000 InstaBuy transactions.

To further encourage the rapid widespread adoption of the InstaBuy service, CyberCash became the preferred wallet provider during the third quarter of 1999 for several top financial institutions and affiliations in the United States and worldwide, although these relationships have yet to be made public as a result of contractual agreements.

Dennis N. Cavender, chief financial officer, added, “Our growth rates as measured by revenues, merchant count, units sold and transaction volume during the third quarter, demonstrate that our core business fundamentals are strong and that we are proving the CyberCash e-commerce model.

“During August, we raised an additional $15 million in equity capital to fund strategic investments and the expansion of our business. We firmly believe that in order to substantially grow our revenues in the years 2000 and beyond, we must continue to invest in extending our suite of offerings with additional products and services and the ways in which those products and services are distributed. By investing in high-growth e-commerce opportunities today, we are paving the way to create value for our shareholders in the future,” Cavender said.

About CyberCash, Inc.

CyberCash is the world leader in secure, convenient payment technologies and services, enabling e-commerce across the entire market spectrum from electronic retailing environments to the Internet. CyberCash provides a complete line of software products and services allowing merchants, billers, financial institutions and consumers to conduct secure transactions using the broadest array of popular payment forms. Credit, debit, purchase cards, cash, checks, smart cards and alternative payment types (e.g., “frequent buyer” or loyalty programs) are all supported by CyberCash payment solutions.

For more information on CyberCash’s 3Q/99 results visit CardData ([www.carddata.com][1]).

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


Check Machine Deployment

TX-based ACE Cash Express has installed its first automatic check cashing machine in Irving, Texas. The project was developed using the ‘1062ix’ advanced function ATM with the optics professional platform from Diebold. The ATM utilizes technology, developed by ACE, that identifies typed and computer printed checks, and extracts information from the various components of each check. It offers more than 4 million ‘ACE Gold Card’ consumers the ability to cash checks at an automatic check-cashing machine for speed and convenience. ACE’s proprietary system then records the check details and sends the information to ACE’s network information system. When the verification process is complete, the customer’s cash is dispensed. ACE has placed an order with Diebold to expand its test to other stores in the Dallas/Fort Worth metropolitan area.


Citi’s Virtual Card

Although Citibank has been pounding mailboxes this month with its new virtual credit card that runs on the MasterCard network, the nation’s largest issuer officially announced ‘ClickCredit’ yesterday. ‘ClickCredit’ is a separate line of credit to be used exclusively for online purchases. Citibank is offering two versions of the program: ‘Click Citi Platinum Select’ and ‘Click Citi AAdvantage’. While these lines of credit are not issued in the form of a credit card, they carry many credit card features such as cash back rewards, airline mileage rewards and purchase/protection guarantees. ‘Click Citi Platinum Select’ members will receive 2% cash back on all Internet purchases made through May 31, 2000; thereafter they will earn 1% cash back. ‘Click Citi AAdvantage’ members will earn two American Airlines ‘AAdvantage’ miles for every dollar spent online, through May 31, 2000; thereafter they will earn one mile for every dollar spent. ‘ClickCredit’ customers also receive ‘Price Protection’ and ‘Extended Warranty’ protections. ‘Click Citi Platinum Select’ customers also receive ‘Purchase Assurance’. The ‘Platinum Select’ version offers a 0% APR for three months followed by a Prime +1.65% APR. To review solicitations for Citibank’s new product visit CardWatch ([www.cardwatch.com][1]).

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


$1 Billion Biz Cards

Advanta is approaching $1 billion in business card receivables according to the company’s 3Q/99 earnings report. Managed receivables for Advanta Business Cards at the end of the quarter were $930 million, up 4.9% from last quarter and 19.5% from the same quarter last year. The Business Card division also reported yesterday that $6.0 million in net income for the third quarter compared to $5.6 million last quarter. The average yield on the company’s business credit card portfolio, including fee income, increased this quarter to 22.35% from 21.72% last quarter due to increases in rates and higher fee income. Credit quality continues to improve as over 30 day delinquencies decreased from 3.74% last quarter to 3.42% this quarter. The net managed charge-off rate on business credit card loans of 5.25% this quarter was comparable to 5.22% last quarter. During the third quarter Advanta developed instant online approval for its business cards. For more details on Advanta’s 3Q/99 financials visit CardData ([www.carddata.com][1]).

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


3Q/99 Portfolio Update

Portfolio growth between the second and third quarters continues to be stagnant according to data gathered by CardData ([www.carddata.com][1]). Among major issuers reporting this week: US Bancorp and HSBC.

Recv: $6,225,377,000 $1,113,558,000
Q Vol: $7,874,836,000 $ 412,803,000
Accts: 3,921,000 741,577
Actives: 2,612,000 397,148
Cards: 4,710,000 898,637
Source: CardData’s 3Q/99 Portfolio Survey

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


100,000 Accts/Mo

Atlanta-based CompuCredit Corp. reported Tuesday it signed up 311,000 new customers for the third quarter, raising the total number of new accounts added in 1999 to 638,000. The sub-prime card specialist had a total of 801,000 originated accounts as of Sept. 30. Company earnings increased 52% from $5.8 million for 3Q/98 to $8.8 million for 3Q/99. The managed net interest margin increased to 23.1% for the third quarter versus 21.0% for 2Q/99. The managed net charge-off rate increased to 5.0% for 3Q.99 compared to 4.1% for the prior quarter. At the end of September, the 60+ day managed delinquency rate increased to 6.6% from 6.4% as of June 30. CompuCredit markets the ‘Aspire VISA’ card issued through Columbus Bank & Trust. CompuCredit went public in April. For more details on CompuCredit’s 3Q/99 financials visit CardData ([www.carddata.com][1]).

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