Joining the stampede to gift cards this holiday season, Tower Records expanded its plastic gift certificate yesterday. Tower Records is one of the first traditional retailers to offer the ‘Gift Card’ online and its web site is equipped to handle multiple tender transactions, allowing online customers to pay for part of a purchase using their ‘Tower Gift Card’, and place any remaining balance on a credit card. In addition, all purchases made with the ‘Gift Card’ are transacted by American Express. Tower Records ‘Gift Cards’ can be purchased and redeemed at all U.S. Tower locations and online at Tower Records.com. Tower Gift Cards are available in denominations ranging from $10 – $100 and carry no expiration date. Tower owns and operates 178 stores worldwide, with fifty-three franchise operations in seven countries.Details
Preview Travel and First USA announced the launch Monday of the ‘Preview Travel Platinum MasterCard’. The new card rewards consumers with points for every dollar spent both online and offline. The reward points are redeemable for discounts on airline purchases made through Preview Travel. When consumers accumulate 5,000 reward points, they will automatically be issued a $50 credit coupon redeemable on their next Preview Travel airfare purchase. Cardholders will also be to review their most recent monthly statements and current transactions, as well as track their rewards account balance and pay bills online. The no-annual-fee card offers a 3.9% intro rate and a 9.99% go-to rate. Preview Travel has a online community of more than 9 million registered members and reported gross bookings of $200.1 million in 1998 and $166.7 million in the first half of 1999.Details
Drugstore chain, Rite Aid, has selected Card Capture Services and Diebold to install and maintain its network of 870 store-based cash dispensers. The three parties developed a unique, seven-year agreement where Diebold will provide the ATMs, on-going remote system monitoring and on-site maintenance services. CCS will respond to all consumer issues, provide transaction processing and national cash management services. The Rite Aid arrangement is a departure from past practices for Diebold. Diebold will now operate and service ATMs placed in retail locations. The Rite Aid installation includes more than 800 Rite Aid stores across the U.S. Stores will be equipped with Diebold ‘CashSource Plus 200′ mid-range retail cash dispensers. The units’ color display screen will be used to present promotional and marketing messages. Installation will be complete by April. Rite Aid has approximately 3,800 stores in 30 states.Details
Associates First Capital reported net earnings for the third quarter reached $386.8 million, a 22% increase over the third quarter of 1998. Managed receivables at the end of the period were $81.7 billion, 24% greater than a year ago. Overall chargeoffs, as a percentage of average managed receivables, increased to 2.73% from 2.38% for 3Q/98. Overall delinquency (60+ day) also increased from 2.39% last year to 2.81% this year. However in its credit portfolio of $11.1 billion, Associates reported that chargeoffs declined from 7.55% for the second quarter to 6.83% for 3Q/99. Credit card delinquency (60+ day) notched up from 1.65% for 2Q/99 to 1.77% for the third quarter. For more information on Associates 3Q/99 statistics visit CardData ([www.carddata.com]).
While VISA and MasterCard gold cards have lost much of their glitter, Boeing has come up with the ultimate gold card. Boeing Business Jets announced Monday a new partnership with Air Routing and Delta Air Lines to provide the ‘BBJ Gold Card’. Last month Boeing delivered the first business jet. With the use of a ‘BBJ Gold Card’, owners will have access to an integrated network of flight support services including emergency roadside service, significant fuel discounts, and consolidated invoices and billing statements. Delta Air Technical Operations Division will provide emergency roadside Service for BBJ customers. The business jet is a high-performance derivative of the Boeing Next-Generation 737-700 and provides a business jet platform that has a range of more than 7,000 statute miles. Since its launch as a joint venture between Boeing and General Electric, the Boeing Business Jets has received 56 orders. To date, 28 BBJs have been delivered.Details
Thomson Financial Media, parent company of Faulkner & Gray and American Banker, confirmed yesterday the appointment of a new editorial team for its flagship daily newspaper American Banker. David Longobardi has been named Editor in Chief , Kieran Beer has been named Editor, and Richard Melville, has been appointed Managing Editor. Thomson says its new leadership team comes to American Banker with diverse backgrounds, including, in addition to banking, experience in covering such areas as the capital markets, brokerage, investment banking and financial technology.Details
Schlumberger announced this morning it has extended its Access payphone family with the introduction of ‘Access Combo’. ‘Access Combo’ adds an advanced coin mechanism to proven smart card and magnetic stripe card payment options which stores coins during a call and refunds coins at call termination. The mechanism can be reprogrammed on-line to accept different coin denominations and currencies. The coin vault is isolated from the main housing to ensure maximum protection against theft. In addition to coin, smart card and magnetic-stripe payment options, key features include higher electronic integration with non-mechanical magnetic hook detection for enhanced robustness, remote initialization capability to allow installation by third parties, and a modular structure and design that supports remote diagnostics and facilitates replacement for repair purposes in under 10 minutes. Schlumberger also announced this morning it has added GSM connectivity to its ‘Access’ payphone family.Details
Trajecta, Inc. Monday announced that it has merged with Pavilion Technologies, Inc., the world’s leading provider of Production Chain Optimization solutions for manufacturing operations. Using Pavilion’s proprietary technology since its 1995 inception, Trajecta has become a leading provider of optimization solutions to financial services and pharmaceutical industries. The newly created organization is uniquely capable of delivering breakthrough real-time optimization solutions across companies and into new industries. Under the terms of the merger, Trajecta becomes a wholly owned subsidiary of Pavilion.
The merger reunites the advanced neural network technology that provided the foundation for a strategic alliance between the companies in 1995. Together, the two companies have greatly enhanced the core foundation of technology by developing numerous patented adaptive learning technologies with a concentration on optimization applications. Combined, the companies will total 140 employees, many of whom hold advanced degrees in optimization, computer science, mathematics and statistics.
Pete Perialas will lead the merged entity. Perialas, appointed Pavilion’s CEO and President in May of this year, has served as a senior executive for several large corporations including Computer Science Corporation, American Express and Discover. His extensive background in successfully acquiring companies and leading major high tech projects uniquely positions the merged entities for significant growth in key markets, as well as further acquisition opportunities.
‘Both Pavilion and Trajecta customers are already achieving significant returns on their technology investments,’ Perialas said. ‘Our complementary advances combined with our industry-focused resources will enable us to leverage our knowledge to further penetrate existing and new markets. A key focus will be to expand Pavilion’s online, real-time advances and e-commerce initiatives to strategically advance the commercial optimization businesses.’ Perialas added that the companies, jointly, plan to deliver their technology under a single object-oriented architecture with more robust automated decisioning engines and optimization capabilities. This will provide a broader application of the technology facilitating expansion into new and upcoming growth markets, he said.
Founding Trajecta Board member and former Dell Computer Corporation President Lee Walker will join the Pavilion Board of Directors, which will now be chaired by Perialas. ‘This merger makes strategic business sense for both companies,’ Walker said. ‘By combining Pavilion and Trajecta, the companies gain critical mass to capitalize on significant market opportunities. Under the direction of Pete Perialas, this company is positioned for tremendous growth.’
About Trajecta, Inc.
Founded in 1995, Trajecta, Inc. is a leading provider of optimization solutions. The company’s customer base includes major financial services companies, pharmaceutical manufacturers, and Fortune 500 companies including Wachovia, CompuCredit, Federal Express, Searle, and Entergy. Together with Trajecta, these companies are now able to optimize the value of each individual customer relationship. For more information, visit the Trajecta website at [www.trajecta.com].
About Trajecta’s Optimization Simulation Environment The Trajecta O.S.E. is an innovative software system that was designed to be the most complete and sophisticated prediction, simulation and optimization platform in the marketplace. It is the first such solution developed to capture and measure the causal relationships and interaction effects of all customer behaviors in a complete and structured manner. The result is a fully integrated decisioning environment that provides managers with detailed account-level action plans. While incorporating real-world business constraints and policy parameters, the plans provide recommendations that produce maximum economic returns to each account over the entire portfolio.
About Pavilion Technologies, Inc.
Founded in 1991, Pavilion Technologies Inc. is the world’s leading provider of Production Chain Optimization solutions for analysis, control and optimization of manufacturing operations. With offices in the U.S., Japan, Germany and Belgium, Pavilion has approximately 1,700 successful installations in more than 200 plants, generating stations and mill sites world-wide. The company’s primary installed base includes numerous blue-chip corporations in the refining, chemical and petrochemical, pulp and paper, power generation and food processing industries. For more information, visit the Pavilion website at [www. pavtech.com].
Visa International, an official sponsor of the Rugby World Cup 1999 , has teamed up with Mizuno, an official supplier of the Rugby World Cup 1999 and with the leading rugby Internet site, Planet Rugby, to offer fans a unique opportunity to put their questions to some of the world’s top rugby players during the tournament.
“For RWC ’99 we wanted to work together with Mizuno and Planet Rugby to bring the game closer to the fans,” said Tom Shepard, senior vice president of Marketing Partnerships and Sponsorships, at Visa International. “The Internet chat sessions will give fans an opportunity to really get to know their favorite players, and interact with them on a more personal level.”
In a series of 30 minute long chat sessions, held over the course of RWC ’99, select members of Mizuno’s Player Advisory Committee, will be online live at [http://www.planet-rugby.com] to answer questions and offer insight to their preparation and progress through the tournament. Fans can either chat with the players live or send their questions to the players ahead of time and have them answered on the day of that player’s chat session.
The scheduled chat sessions at [http://www.planet-rugby.com] include:
October 11 — Allan Bateman, Wales
October 12 — Dion O’Cunneagain, Ireland
October 13 — Mark Andrews, South Africa
October 14 — Kenny Logan, Scotland
October 15 — Garin Jenkins, Wales
October 18 — Richard Cockerill, England
October 21 — Pieter Muller, South Africa
Starting time for the chat sessions will be listed on Planet Rugby.
In addition to the Rugby Chat Sessions, Visa has teamed with the Sunday Telegraph in London to create a special online overview of the tournament which can be viewed at [http://www.telegraph.co.uk].
Philips Semiconductors Monday announced MIFARE PROX, the industry’s first family of powerful, high-security, dual-interface controller ICs designed for multi-application, contactless smart cards.
The devices build on Philips Semiconductors’ successful WE family of controller ICs and provides the highest level of security required for applications such as banking, e-commerce and secured network access. The convenience and speed of the contactless interface also benefits applications such as ticketing, electronic payment and identification.
“MIFARE PROX is ideally suited to high-level languages and operating systems, such as Java or Multos, and will become the target platform for contact and contactless multi-application cards,” said Alexander Harrer, product line manager Chip Card ICs at Philips Semiconductors. “This product family enables service providers to offer user-friendly electronic payment programs, and supports recently defined banking industry standards, including EMV (the Europay, Mastercard and Visa standard for credit and debit) and CEPS (Common Electronic Purse Standard).”
About MIFARE PROX
MIFARE PROX dual interface ICs enable the extended level of security and functionality required for multi-application contactless cards that was previously only possible in contact applications. Philips Semiconductors’ unique smart card hardware firewall, which includes an on-chip memory management unit (MMU), securely separates different applications from one another, allowing a particular application to run in ‘virtual memory space’, with no access to other memory on the chip and, therefore, no access to other applications.
The MIFARE PROX dual-interface IC family is based on the proven high-security features of Philips Semiconductors’ WE products. The devices feature a triple Data Encryption Standard (DES) coprocessor and an optional 32-bit FameX crypto-engine, the most accepted accelerator for public key encryption such as RSA or elliptic curves. Additional features include a contact and a contactless MIFARE interface on a single chip, as well as a unique smart card hardware firewall. The P8RF5016, the first member of the MIFARE PROX family, also features 64 Kbytes user ROM, 2.3 Kbytes RAM and 16 Kbytes EEPROM.
The contactless interface of the MIFARE PROX is fully compatible with the widely used MIFARE interface technology, complying with the international standards for both contact and contactless smart cards. MIFARE interface technology, used in 85% of all contactless smart card programs, is the industry standard for contactless smart cards, with more than 45 million chip card ICs in use and over 450,000 read/write units in operation worldwide.
Pricing and Availability
Samples of the family’s first derivative, P8RF5016, are currently available in a 0.35 micron process technology, with volume production scheduled for the second quarter of 2000. The devices are available in quantities of $100,000 for $4.70. Significant reductions in price can be expected in the million-range and higher volumes.
About Philips Semiconductors
Philips Semiconductors, a subsidiary of Philips Electronics North America Corporation and an affiliate of Royal Philips Electronics, headquartered in Eindhoven, The Netherlands, is the eighth largest semiconductor supplier based on Dataquest’s 1998 report.(1) Philips Semiconductors’ innovations in digital audio, video, and mobile technology position the company as a leader in the consumer, multimedia and wireless communications markets. Sales offices are located in all major markets around the world and are supported by systems labs. Additional information on Philips Semiconductors can be found on the home page at [www.semiconductors.philips.com].
Global One, the international joint venture of Deutsche Telekom, France Telecom and Sprint, Monday reached an agreement with Singapore Telecom (SingTel) to offer Global ATM solutions in Singapore. This agreement distinguishes Global One as the first international carrier to provide end-to-end ATM services to the fast-growing Singapore market.
“We are delighted with this opportunity to team up with SingTel in offering multinational business customers flexibility and cost-savings through providing Global ATM solutions on an end-to-end basis,” said Johnny Murray, Global One Managing Director for ASEAN. “With the increase of MNCs establishing regional hubs in Singapore, this collaborative effort between Global One and SingTel will provide seamless, end-to-end business communications solutions to meet their requirements.”
“Global service providers choose SingTel because of our advanced, reliable and proven network and support services. For many, Singapore is also their hub within Asia to serve customers in the region,” said Lim Shyong, SingTel’s Executive Vice President of Global Business. “The business arrangement with Global One allows us to offer and support a full range of seamless global services which our customers can choose from and tailor to meet their telecommunications needs.”
The Global One ATM backbone network is currently the world’s most far-reaching ATM-based network, deployed in more than 800 cities in over 40 countries. Monitored 24 hours a day, 365 days a year, leading-edge network automation systems provide around-the-clock automated fault protection. The network carries out automated pro-active monitoring, automated testing and diagnosis, and automated corrective actions. These features are backed up by the support organizations of Deutsche Telekom, France Telecom, Sprint, and Global One, respectively. Their seamless backoffice capability includes order entry, provisioning, billing and 24-by-7 customer support.
Global ATM has the capacity to operate at extremely high switching speeds of up to 155 Mbps rates. Lower speeds, starting from T-1 (1.544 Mbps) can be tailored to specific customer needs. It delivers high-speed bandwidth on demand and virtual networking. Two Global ATM categories of service provide efficient, cost-effective support of both time-sensitive and time-insensitive applications over the same network. The CBR (Constant Bit Rate) category of service supports applications such as voice and private line applications, which require tight timing and fixed bandwidth, while the VBR-nrt (Variable Bit Rate — non-real time) category of service supports “bursty” applications, such as LAN interconnections. Global One provides customized service level agreements (SLAs) to customers of Global ATM, including clear commitments to service availability, repair times, transit delays, cell loss ratio, and cell delay variation.
Global One offers a single source for the provision of seamless voice, data and IP services for businesses, carriers and consumers around the world. Set up as a worldwide joint venture of Deutsche Telekom, France Telecom, and Sprint, Global One is a fully integrated company in its own right, with over 1,400 network access centers in more than 65 countries. Global One offers the world’s most far-reaching ATM-based network and in 1998 had revenues of more than US$ 1.1 billion.Details
Taken with the most recent of government releases, Fitch IBCA’s monthly Credit Card indexes paint a somewhat paradoxical picture of consumer behavior that shows credit card debt being repaid at record rates as spending and borrowing patterns soar. Viewed with the Federal Reserve’s consumer credit statistics, Fitch IBCA’s index results may yield some valuable clues to understanding consumers’ overall financial positions as detailed in the latest edition of `Credit Card Movers and Shakers’.
Fitch IBCA’s index results for August’s collection period show chargeoffs, serious delinquencies, and excess spread on securitized pools improving broadly and personal bankruptcy filings declining sharply versus year earlier levels. In addition, monthly payment rates arose to their highest level in eight-plus years.
Consumers are piling debt at several levels to purchase everything from computers to automobiles to everyday household items for their new homes. So much so, that year- to-year growth in total consumer credit–revolving (cards) and non-revolving (autos)–is now over 7% and accelerating.
`While troubling at first glance, it appears less so after noting that Fed statistics for revolving credit do not net out monthly payments made on credit card balances. Rather, they track only the gross purchases made on credit cards for a given month,’ said Michael Dean, senior director of the credit card group. `Therefore, to the extent charge volume rises, so too will the revolving component of consumer credit. Which is why MPRs take on added importance when judging overall consumer leverage.’
While this is not new information, Fitch IBCA believes the current level of MPRs may be sustainable given shifts in underlying card usage behavior. Those shifts include a portion of traditional retail cash purchases being replaced by credit purchases on the internet, as well as the ongoing widespread use of rewards cards, and consumers’ rising personal incomes. Previous explanations focused mainly on cash out mortgage refinancings and home equity loans as sources of the higher payment rates. Those sources, however, have dried up considerably over the past six months due to higher interest rates with no impact to the rising payment rate environment.
If the higher MPR trend does prove sustainable, it spells a clear positive for credit card ABS bondholders. Higher payment rates return principal faster in a deteriorating credit environment, meaning bondholders will be subject to rising portfolio losses for a shorter period.
For a copy of `Credit Card, Movers and Shakers’ please visit Fitch IBCA’s website at [www.fitchibca.com] or call market services at 1-212-908-0500.