Fleet Card Competition

Competition among fleet cards for the trucking industry got a shot in the arm yesterday as the FTC and Ceridian reached a settlement over Ceridian’s recent acquisitions. The settlement was reached with Ceridian Corp. and its subsidiary Comdata Holdings Corp. over the acquisitions of NTS Corp. and Trendar Corp. At the time they were acquired, NTS was Comdata’s most significant competitor in the fleet card market and Trendar owned the dominant point of sale system by which truck stops accept fleet card transactions. Under the terms of the settlement, Ceridian would grant licenses to other providers of these systems to process transactions using its fleet cards, and would also grant licenses to other fleet card issuers that want to process their cards through the company’s Trendar system. For three years, Comdata would be required to grant a 10-year license to the Trendar system to new and existing fleet card issuers. Comdata would also be required to refer licensees to a third-party developer approved by the Commission, which would perform all programming or other services necessary to enable the licensees to process transactions on the Trendar system. For three years, Comdata would also be required to grant a 10-year license to fuel purchase desk automation system suppliers currently processing the Comdata’s fleet cards, as well as to the first three new system providers that request a license. Licenses granted to new system providers would be transferrable, so if a better-positioned entrant emerges in the future, it can acquire a license. To help prevent the flow of confidential information obtained from Comdata’s competitors between the company’s fleet card and fuel purchase desk automation system businesses, Comdata would be prohibited from transferring any nonpublic information obtained by these businesses between one another.

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Behavioral Insights

Finding revolving cardholders made get easier for card issuers. Equifax introduced Equifax ‘Behavioral Insights’ yesterday, one of two new products from the Equifax ‘Dimensions’ knowledge management platform that is designed to facilitate a better understanding of consumer credit utilization patterns to significantly enhance credit marketing programs. Equifax ‘Behavioral Insights’ provides improved modeling and segmentation using time-series credit trend data. ‘Behavioral Insights’ provides four sets of data attributes based on solutions to common business issues: Propensity to Revolve, Balance Tracking, Mortgage Refinance and Usage and Loyalty.

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Bluefly VISA/MC

Bluefly, Inc. and First USA announced Wednesday the formation of a five year strategic marketing alliance through which First USA will offer a Bluefly-branded VISA or MasterCard credit card. Bluefly is an Internet retailer of designer fashions and home furnishings at outlet store prices. First USA is the first third-party marketer to be offered promotional space on Bluefly.com. Under the terms of the agreement Bluefly will receive a fee for each card issued under the agreement. Since its launch in Sep.1998, Bluefly.com has quickly grown into one of the most heavily trafficked apparel shopping destinations on the Internet, with the Web site’s unique visitor sessions growing to 5.1 million during the second quarter of 1999, up from 2.1 million during the first quarter of 1999 and 1.1 million during the fourth quarter of 1998.

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Petro-Canada Wireless Soars

Petro-Canada’s new portable terminals are speeding up credit card transactions, adding security and enabling customers to use Interac debit cards without leaving their cars.

The first major gasoline marketer in Canada to introduce wireless technology, Petro-Canada has rolled out secure portable payment terminals at many Ontario full-serve outlets this past summer. The wireless terminal is the only handheld point of sale device available in Canada that is both Interac approved and certified Intrinsically Safe to meet the special needs of the petroleum sector. The terminal was co-developed with WANN Connection Devices Inc., a subsidiary of Canadian Bank Note Company, Limited.

“Debit cards are the fastest-growing payment choice for our customers,” says Nigel Hill, Vice-President, Marketing. “We are enhancing service by enabling customers to authorize debit transactions from the convenience of their cars, without having to go into the station to enter their PIN number”.

“Additional security is guaranteed for both debit and credit cards, because the customer controls the transaction and never loses sight of their card,” Hill says.

Hill says Petro-Canada has responded to the customers’ need for added convenience. “It didn’t make sense to provide full attendant service and then ask the driver to walk into the station to authorize the payment or to wait for the attendant to go and process a credit card transaction. With this new technology, we get our customers back on the road fast.”

The new system will also award Petro-Points, so customers can earn points towards great rewards.

After a year of pilot testing, this summer Petro-Canada has trained staff and rolled out the wireless system in Ontario. It plans to extend its wireless credit and debit card terminals across the country later in 1999.

Headquartered in Calgary, Petro-Canada is one of Canada’s largest oil and gas companies, operating in both the upstream and the downstream sectors of the industry. With a coast-to-coast network of close to 1700 retail outlets, Petro-Canada and its more than 4,500 employees are committed to giving back to the community in the areas of environmental sustainability, education and the arts. Petro-Canada’s common and variable voting shares trade on Canadian stock exchanges under the symbol PCA, and its variable voting shares trade on the New York Stock Exchange under the symbol PCZ.

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BofA & TSYS

Total System Services announced last night a ten-year agreement with Bank of America to continue processing its credit card portfolio until 2009. The new agreement extends the existing agreement by two years and includes the card portfolios of Bank of America and NationsBank which merged in 1998. TSYS says BofA was its first client to convert to ‘TS2’. The company expects its continued processing of the Bank of America portfolio to produce a net profit margin consistent with its historical net profit margins. TSYS processes more than 196.7 million accounts for an estimated 275.3 million cardholders worldwide.

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VISA Reorganization

VISA International voted yesterday to break itself into two business units: “central operation” and “shared services”. The central operation will focus on VISA’s global business strategy, worldwide payment platforms and brand protection. The shared services unit will provide transaction processing and systems services to VISA members. VISA also decided to shift product development and marketing to its six regional units. VISA says the restructuring will make VISA more cost-efficient and cost-effective in meeting the needs of its member banks. The move also comes in response to members’ demands that VISA turn over more control, especially product development, to its members to better meet local and regional competition.

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Pet Blessing Card

Forget the pet just bring your card. A new e-card was announced yesterday by AmericanCatholic.org , web site of the Franciscan publisher St. Anthony Messenger Press in anticipation of the annual feast of St. Francis, Oct 4. The patron saint of animals is St. Francis of Assisi. Pet blessing ceremonies will be held at churches around the world this weekend. The ‘Pet Blessing’ e-cards allow people who can’t bring their pet to church a way to bless Fido at home. St. Anthony Messenger Press is publisher of St. Anthony Messenger, a 340,000 circulation national, Catholic family magazine.

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ATC & NPC

Air Travel Card announced Tuesday a partnership with QSP Inc. and National Processing called ‘InControl’. Utilizing QSP software with NPC as the processor, ‘InControl’ is the first system to provide airlines with a complete outsourcing solution for their ‘Air Travel Card’ billing needs. ‘InControl’ is a comprehensive service which processes ‘Air Travel Card’ receivables and account billing information. ‘InControl’ has multiple advantages over competitive products which include: cross-platform architecture, which allows it to run natively on both the mainframe and client/server environments commonly in use by airlines; full service outsourcing capabilities; interline accounting and settlement processing and international VAT tax calculation capabilities.

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TSYS Signs Retailer

Total System Services announced Tuesday it has signed a multi-year agreement to process a private-label card in Mexico for C&A, a department store fashion retailer originating from Holland. Processing will be in conjunction with TSYS’ joint venture partner, Total System Services de Mexico, S.A. de C.V.. The first C&A store in Mexico opened in Feb. 1999. C&A has more than 550 stores and 40,000 employees in 14 European countries.

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US Bank & Ariba

U.S. Bancorp and Ariba,Inc. announced an alliance yesterday to develop an integrated electronic buying and payment infrastructure for business-to-business eCommerce. The joint solution delivers fully electronic orders and invoices, automatically reconciles purchase orders with purchasing card charges, and integrates purchase data with the buyer’s financial systems, enabling businesses and their suppliers to streamline commerce, reduce operating costs and increase internal efficiencies by replacing paper-based payment processes with integrated electronic payment systems. This integrated solution has been successfully implemented at numerous leading organizations, including Hewlett-Packard Company, Boehringer-Ingelheim and VISA.

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Late Fees

Late fees have skyrocketed among larger bank credit issuers, now reaching $24.87 on average according to CardData ([www.carddata.com][1]). However retail card issuers are limited as to what they can charge consumers in some states, due to state regulations. Bank credit card issuers are exempt from these regulations under a U.S. Supreme Court decision reached two years ago. The Court’s decision mirrors the regulations pertaining to bank credit card interest rates reached by the Court in the mid-70’s.

LATE FEE LIMITS
KS, MO: $10 (except $5 if the installment is $25 or less)
PA: $12
AR,CT,GA,IL,
KY,NH,NJ,NM,
SD,TN,TX,VT: $10
WV: Lesser of 5% of amount past due or $5
ID,WY: Greater of 5% of amount past due or $10
NE: Greater of 5% of amount past due or $5
NC: $10 (except $5 if outstanding balance is under $100)
SC: 5% of amount past due ($10 max and $4.80 min)
Other States: No restrictions
Source: CardData (www.carddata.com)

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

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Internet TeleCheck

TeleCheck Services introduced the ‘TeleCheck Internet Check Acceptance’ service yesterday. The new service offers consumers a safe and easy way to pay by check over the Internet. The consumer places an order on a merchant’s Web site and then completes an online payment form with information off their check. The check data is encrypted then securely transmitted to TeleCheck where the payment information is matched against TeleCheck’s extensive positive and negative databases and evaluated for fraud risk. Within seconds, an approval code is returned to the merchant.

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