GE Buys JCP Cards

GE Capital announced Monday it has signed a definitive agreement to acquire JCPenney’s private label credit card accounts receivable portfolio and JCPenney’s credit card service facilities. Under other terms of the deal, GE Capital will provide JCPenney with private label credit card services for an initial 10-year term. GE Capital is paying between $3.8 billion and $4.0 billion for the acquisition. The deal is expected to close by Dec. 31. Last year, JCPenney had credit card volume of $7.8 billion generated from 35 million private label card accounts. Card receivables are slightly less than $4 billion. GE will assume the operations of JCPenney’s 11 credit card service facilities, which employ about 2,500 people in 10 U.S. cities and Puerto Rico. GE indicated yesterday that it will continue to operate all facilities with existing personnel. JCPenney says by selling its receivables portfolio, the company will free up substantial cash to reduce debt, strengthen its balance sheet and pave the way for the creation and IPO of approximately 20% of a tracking stock covering JCPenney’s Eckerd Drugstore business.

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FDR Buys USPI

First Data Resources has purchased Milwaukee-based USPI, LLC from Transaction Systems Architects. USPI provides transaction processing services for the EFT industry, including on-line debit card processing and ATM switching. Under the agreement, approximately 60 employees will join First Data and will remain in Milwaukee. First Data processes over 658 million off-line debit card transactions annually, from more than 56 million debit cards issued by over 450 financial institutions. First Data says the acquisition will give the company the ability to enter the on-line debit processing arena.

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Cybermoola Update

San Francisco-based Cybermoola that is has selected CyberSource to power the buy button for its recently launched pre-paid Internet shopping card for teenagers. Cybermoola provides the Internet’s first pre-paid card that allows teens to shop and make purchases directly and independently online. Cybermoola also offers online merchants customized marketing initiatives such as sponsorships, banner ads and co-branded opportunities to build their brands, Web site traffic and online sales. On the Cybermoola site, CyberSource ‘Credit Card Services’ is used in conjunction with CyberSource ‘Internet Fraud Screen’ enhanced by VISA.

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Cap One UK Goes Tower IDM

Tower Technology, the fastest growing provider of Integrated Document Management solutions in Europe, announced that Capital One, a world-leading credit card provider, has chosen Tower Technology to implement an advanced customer relationship management system to support is continuing rapid growth in the U.K.

Capital One is one of the world’s largest issuers of credit cards, with Business Week ranking it 15th in its list of the top 50 performers of the Standard & Poors 500, and Fortune Magazine naming the company one of the “100 Best Places to Work”. Established in the U.K. for only three years, Capital One has experienced dramatic growth due to superior customer service and its flexible product range.

The award-winng integrated document management system, Tower IDM from Tower Technology, has been chosen to form an integral part of Capital One’s electronic customer information system designed to support the customer services departments at its Operations Center in Nottingham, England.

A Capital One spokesperson said that by adopting this technology the company would be able to provide further improvements to the customer service operation while continuing its rapid expansion in the U.K.

“The potential of this system is to greatly improve our speed of response in processing credit card applications and will underpin all our customer service activities,” the spokesperson said.

Damian Hyland, managing director of Tower Technology, Ltd. said, “Capital One is an innovative leader in its business and we are very pleased to be able to assist them in their growth.”

About Capital One

Headquartered in Falls Church, Virginia, Capital One Financial Corporation is a holding company whose principal subsidiaries, Capital One Bank and Capital One, F.S.B., offer consumer lending products.

Capital One’s subsidiaries are among the largest providers of MasterCard and Visa credit cards in the world. Capital One trades on the New York Stock Exchange under the symbol “COF” and is included in the S&P 500 Index.

Using its proprietary Information-Based Strategy (IBS) to generate constant innovation, Capital One has quickly become one of the world’s largest issuers of credit cards and wireless phone service. The IBS combines advances in information technology and sophisticated analytical techniques to identify, manage and take advantage of business opportunities.

[www.capitalone.com][1]

About Tower Technology

Tower Technology is a worldwide leader in delivering award winning, high-volume, production imaging, case management and integrated document management solutions. Tower Technology has a proven track record of providing mission-critical solutions on time and on budget. Many of the world’s largest imaging and document management systems, some of which have hundreds of millions of objects on-line, are powered by Tower Technology. Tower Technology supports customers around the world and has offices in the North America, Australia and Europe. For more information on Tower Technology and Tower IDM, contact Tower Technology by e-mail: inquiry@towertech.com or visit the web site at [www.towertechnology.com][2].

[1]: http://www.capitalone.com/
[2]: http://www.towertechnology.com/

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Signio AS/400

Signio, Inc. has expanded its transaction processing platform to include native support for the ‘IBM AS/400’. Through seamless integration, Signio offers all the key components to automate payment for ‘IBM AS/400’-based Web sites and enables companies to authorize, process, and manage multiple payment types, multi-currency options and different payment schemes online. The solution uses a fixed, flat fee monthly pricing model. There are more than 650,000 ‘AS/400’ servers shipped worldwide. Pacific Sunwear is the first company to integrate the ‘Signio AS/400’ solution.

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Bank One Skids

Bank One reported this morning that the net interest margin for the First USA credit card unit declined an estimated 40 basis points in the third quarter from the second quarter. The nation’s second largest bank credit card issuer also confirmed that growth of its credit card outstandings slowed significantly in the third quarter. Total managed loans (which includes private label cards) were $70.0 billion at Sept. 30, a 7% increase from one year ago and up 1% from the end of the second quarter. Bank One says actions are underway to reduce customer attrition and stabilize returns at First USA. The issuer opened 1,835,000 card accounts during the third quarter, sharply lower than the 2.5 million accounts opened during 3Q/98 and the 2.3 million accounts opened in 2Q/99. Delinquency (30+ day) also notched up for 3Q/99 to 4.74% from 4.30% in 2Q/99 and 4.50% in 3Q/98. The only good news is that chargeoffs declined to 5.33% from 5.43% one year ago. However chargeoffs inched up between the second quarter and the third quarter by eight basis points. At the end of the third quarter Bank One has 64,523,000 cardholders and third quarter volume of $29.6 billion. For more details on Bank One/First USA’s third quarter results visit CardData ([www.carddata.com][1]).

[1]: http://www.cardweb.com/carddata/main.html

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PULSE & Infolynx

PULSE EFT Association and New Jersey-based Infolynx have jointly announced that PULSE has chosen Infolynx, a PC-based information management and invoicing system, as a data warehouse solution for its member financial institutions.

Infolynx will be used as a key resource in PULSE’s efforts to manage information effectively across many functions and will streamline such functions as database management, management reporting, profitability analysis and invoicing.

“The selection of Infolynx will enable PULSE to leverage its information more effectively and in ways that bring real benefits to our member financial institutions,” notes Stan Paur, PULSE’s president and chief executive officer. “The software will allow us to support multiple applications and advanced functionalities.”

The Infolynx platform will consolidate and integrate various databases, expand PULSE’s management reporting capabilities and boost service to PULSE members through the use of improved data retrieval capabilities.

To facilitate the evaluation and selection of a vendor, PULSE issued a Request for Proposal in May 1998. Out of the six vendors who responded, Infolynx was chosen as the system that can best meet the needs identified by PULSE.

“We are excited that PULSE has selected Infolynx,” said Raymond J. Zoltowski, president of Infolynx Inc. “The unique structure of Infolynx, combining the power of an extensive data warehouse with the convenience of a PC-based system, makes it a perfect fit for PULSE and its member financial institutions.”

PULSE is one of the nation’s leading electronic financial services networks. The Houston-based not-for-profit cooperative serves more than 2,000 member banks, credit unions and thrifts in nine primary states including Alabama, Arkansas, Colorado, Louisiana, Mississippi, New Mexico, Oklahoma, Tennessee and Texas. The network processes in excess of 37 million transactions monthly between member institutions and features more than 52,000 ATMs and 202,000 PULSE(R) PAY point-of-sale terminals in all 50 states.

Infolynx Inc., based in Iselin, N.J., is a privately-held software development company dedicated to serving the needs of the EFT and retail payments industry by providing solutions for administrative and back-office support. Alliast LLC is the exclusive distributor of Infolynx products, with offices in Ridgewood, N.J. and Madison, Wis.

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Triad & Creative Payment

Creative Payment Services , a leading provider of pre-authorized check and electronic payment services to merchants in the direct marketing industry, announced Friday that it will be processing payments for one of America’s leading discount shopping services.

Triad Marketing, of Boca Raton. Florida and its affiliate companies provide programs for direct marketers to help them maximize profit potential of each customer. Triad has developed an array of exciting premium programs used by catalog centers and telemarketers as an add-on to each sale. These unique add-on programs help direct marketers build additional revenue streams, customer loyalty, and recurring revenues.

CPS President David Weiss estimates that direct marketers could be losing 20% to 35% of their potential customers every day by not accepting checks over the phone the same way they accept credit card orders.

Triad’s “Best Price” Membership Program is offered as an after-sale add-on by some of the largest direct marketers and catalog order processors in the country. Among the companies offering one or more of Triad’s programs are: American Express, Hanover Direct, Citibank, HBO, Omaha Steaks, Time-Life, Smirnoff, and many more.

Triad has contracted with CPS in order to allow the direct marketing companies who are offering Triad’s add-on products to accept checking information directly from consumers over the phone. It is believed that check acceptance will dramatically increase sales and improve customer relations, by targeting consumers who do not have, or do not wish to use, credit cards for purchases over the phone, fax, or Internet.

Triad’s “Best Price USA” membership program contains name brand products and services at the lowest prices, including travel, entertainment, electronics, car rentals, appliances, furniture, moving, flowers, and more.

Businesses using CPS’ services can take orders by any means (phone, fax, or Internet). CPS processes payments for some of the Country’s largest direct marketers, and provides live account verification, pre-authorized draft printing, and electronic fund transfer services.

CPS is a privately held Florida corporation.

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VISA Chairman

VISA U.S.A.’s board of directors have elected Philip Heasley as chairman of the board. Heasley, 50, is president and COO of U.S. Bancorp. He has been a VISA U.S.A. board member since 1998. Carl Pascarella, the president and CEO of VISA U.S.A. since 1993, will continue to oversee the association’s strategic plans and day-to-day operations. Heasley succeeds William Boardman, senior EVP of Bank One Corp. Boardman was named chairman of VISA International earlier this year. VISA U.S.A. has more than 330 million cards in circulation, including 78.9 million VISA Check Cards and has generated $668 billion in transactions in the U.S. alone over the twelve month period which ended June 30.

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BVG Smart Cards

The ERG Motorola Alliance announced this morning it has successfully implemented the first phase of a contactless, smart card automated fare collection system field trial for the Transport Authority of Berlin, or BVG. The BVG initiated the new fare system allowing a select group of 25,000 riders to use smart cards as a form of payment on the U-2 and U-4 subway lines and their 33 stations involved in the field trial. The remaining phases of the trial, which include two bus routes with 44 buses and one tramline with 14 trains, are scheduled to be implemented by the end of this year. Up to 150,000 transactions per day are expected, including transfers between stations and modes of transport. The BVG expects full system implementation covering Berlin and the surrounding greater Brandenburg area by 2002.

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EMMA Certification

Cash Technologies has successfully completed testing POS credit card transactions from its ‘EMMA’ system with the credit card processing arm of Concord EFS. Card Technologies recently received certification for ‘EMMA’ ATM card transactions. ‘EMMA’ is the first TCP/IP certification to be completed on Concord’s networks. Through ‘EMMA’, consumers will have access to a wide variety of financial services on an ATM or financial kiosk, including check cashing, electronic bill payment, real-time activated pre-paid phone cards, money order issuance, event ticketing, Internet based e-commerce products and services, interactive advertising, marketing data acquisition, traditional ATM cash dispensing and other functions, using a variety of payment methods, including ATM cards, credit cards and cash.

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