Liberty’s 3 Millionth Card

Liberty Card Services, already recognized as one of the credit union movement’s leading card providers, has sold its 3-millionth card. Only seven months ago, the company celebrated its 2-millionth card sold.

First Education Federal Credit Union, Cheyenne, Wyo., placed the milestone order for design and manufacturing of a new Visa(R) credit card. “We’d been talking about designing a new credit card for four years,” said Kathy Boheler, Vice President, First Education FCU. “Liberty Card Services made it happen. They did a terrific job recognizing our needs and goals and representing them in the design of our new card. Visa(R) even complimented us on the design. Now that’s a real testimony.”

The card depicts a sculpture located outside the Laramie County Public Library called “Story Books.”

“It was very important for us to make a connection with our members,” said Boheler. “We knew our education-based membership would appreciate the image of the ‘Story Books’ sculpture. It certainly represents the goal of our wonderful members: to educate the children of Laramie County.”

As part of a new partnership project with Liberty Direct Marketing, Liberty Card Services is also providing First Education FCU with a comprehensive point-of-sale marketing package called Direct Visual for Cards. This new product will help First Education FCU promote its new card through personalized posters, flyers, and teller mats. Direct Visual for Cards is now available to all Liberty credit union customers.

Since 1995, Liberty Card Services has provided a full range of award winning ATM, credit and debit card design, manufacturing and personalization services. “We’re delighted to create the opportunity in which the First Education member will see their reflection, their community, their credit union in their credit card,” said John Mattes, president of Liberty Card Services. “We are thrilled with the confidence placed in us by the hundreds of credit unions for whom we’ve provided manufacturing and personalizing services.”

Liberty Card Services is part of the growing Liberty family of credit union-focused companies. Recognized as the credit union movement’s leading provider of payment systems and marketing services, Liberty serves nearly 4,500 credit unions in all 50 states, Guam and Puerto Rico.

For more information, contact Rick Foy, Liberty public relations manager, at 800-607-2435, ext. 2436.


AmEx Online Bank

American Express launched a direct bank yesterday that offers high rates on deposits, low rate lines of credit, rebates on ATM surcharges, free unlimited electronic bill payment and an American Express ATM card. ‘Membership B@nking’ is being offered through AmEx’s Centurion Bank. The new direct bank offers an annual percentage yield on money market accounts at 5%, deposits in interest-bearing checking accounts earn a 2% yield, and one year CDs carry a 5.90% yield. Customers with interest-bearing checking accounts also receive automatic rebates for ATM surcharges imposed by other banks, up to four times per month, and up to $1.50 per transaction. ‘Membership B@nking’ is available to cardholders as well as to consumers who do not currently have a relationship with American Express. A minimum deposit of $100 is required to open an account and CDs require a minimum $2,500.


Providian’s Glitch

Despite being dogged by lawsuits during the second quarter Providian Financial reported Thursday second quarter net income of $126.5 million, an increase of 101% over the second quarter of 1998. However the company also took the opportunity yesterday to claim, in its 2Q/99 earnings report, that recent consumer lawsuits were primarily related to a “programming error” it recently identified. Providian says the “programming error”, which occurred over a period of months, resulted in the erroneous billing of late fees related to specific weekend days. The issuer says the problem is now fixed with steps in place to provide refunds to affected customers. The action produced a one-time charge of $20 million to cover the estimated cost. Meanwhile Providian reported average card loans of $14.0 billion compared to $12.6 billion for 1Q/99. Charge-offs dropped to 7.16% for 2Q/99 compared to 7.56% for 2Q/98. Delinquency (30+ days) also dropped from 4.90% last year to 4.70% this year. For other financial details on Providian’s second quarter visit CardData ([][1]).



Paymentech Expands PaymentNet

Paymentech’s commercial card unit introduced two major features to PaymentNet, its industry-leading Internet reporting system, at the National Business Travel Association convention this week. The company also announced the implementation of a MasterCard corporate travel and entertainment card program for Gap Inc..

Paymentech issues MasterCard and Visa commercial cards through its Salt Lake City-based First USA Financial Services unit. The PaymentNet enhancements, online expense reporting and electronic statement and payment, simplify travel and entertainment (T&E) reporting and payment for business cardholders using Paymentech’s commercial card products.

PaymentNet.ER (Expense Reporting), provides a simple, easy-to-use reporting module that allows cardholders to apply “trip based logic” and required IRS information to corporate card transactions while using PaymentNet’s core functionality to reconcile transactions. PaymentNet.ESP (Electronic Statement and Payment) allows corporate card users to receive, review and audit statements and make payments via the Internet. Employees securely view and pay corporate credit card bills, even when on the road.

“Proactive and knowledgeable client service magnifies the value of the Paymentech’s advanced technology,” said Calvin Chin, senior manager of expense and accounts payable at Gap Inc. “Service is integral to our business, and that naturally influenced our decision when looking at card programs. Successful companies require technology and ongoing support from their providers.”

PaymentNet Internet reporting tools provide secure access so companies and cardholders can manage commercial card activity data. With PaymentNet.ER, companies and cardholders who wrestle with different, inefficient processes for reconciling T&E and purchasing card transactions now have a solution for both. Whether documenting business meal attendees or allocating office supplies to multiple accounts, PaymentNet streamlines procedures and increases end-user satisfaction. PaymentNet.ER is designed for Paymentech customers with corporate card or combined corporate and purchasing card programs.

“For corporate and purchasing cards, PaymentNet.ER meets the company’s need for control and efficiency, and the employee’s desire for simplicity,” said James W. Baumgartner, president of Paymentech’s First USA Financial Services.

With PaymentNet.ESP, cardholders view their account(s) with protected access to current and past billing statements. They can sort items by date, amount, merchant, etc. With the click of a mouse, cardholders generate an “electronic check” via ESP. They then schedule an automatic payment to their Paymentech card account from a pre-established bank account(s).

“The employee saves time; the company saves money,” said Baumgartner. “The convenience factor encourages employees to pay promptly. They don’t worry with paper reports, mailed statements or handwritten checks. Companies can directly reimburse cardholders, based on approvals, through automated central pay.”

Paymentech also previewed future applications that will create the ability to download T&E notations from a hand-held personal digital assistant directly into PaymentNet’s database. “An executive could note ‘lunch with client, $50’ and then download from a PC into their PaymentNet expense report,” said Baumgartner. “Our goal is to create a start-to-finish virtual expense management process.”

With the PaymentNet cradle-to-grave product line, cardholders manage transactions (via a GUI interface for faster access) through the entire cycle to —

1. check and sort transactions, handle disputed charges, etc.

2. download transactions into the expense reporting system,

3. separate personal and business expenses and sort accordingly,

4. provide explanations for any out-of-policy expenses,

5. forward the expense report to their manager, and

6. use ESP to pay Paymentech, the commercial card provider.

Program administrators manage the life of a card online, from new card request through interim maintenance to final cancellation. Administrators can —

1. approve or decline an employee’s expense report online,

2. produce reports on spending patterns, etc.,

3. split charges between cost centers,

4. change cardholder profiles (address, credit lines, employee identification number, report hierarchy, etc.), and

5. adjust individual parameters for use (monthly credit limit, daily and monthly transaction levels and limits, merchant category blocking, etc.).

The latest version of PaymentNet is platform independent and requires minimal system integration. Users access the PaymentNet database via SSL compatible Internet browsers such as Explorer 4.x or Netscape 4.x.

Paymentech, Inc., founded in 1985, provides total electronic payment solutions for commercial card payment and information programs, and for merchant acquiring and third-party transaction processing. Paymentech is the nation’s third largest processor of bankcard transactions.



The concept of using handheld personal devices to pay each other with credit cards has taken a leap forward as Nokia decides to fund a startup. Palo Alto, CA-based Confinity, Inc. says its free ‘PayPal’ instant payment service will let users of small devices, such as the ‘Palm’ organizers, mobile phones and two-way pagers, pay each other with their credit cards. The new service is anticipated to be available in the fall. Telecommunications giant Nokia is the startup’s lead investor, contributing $3 million of Confinity’s $4.5 million first-round funding. Europe’s largest financial institution, Deutsche Bank, is also backing the startup. The product was officially launched yesterday as a representative of Nokia demonstrated the product by using his handheld organizer to send $3 million to Confinity’s CEO.


Discover Volume

Discover Financial Services said yesterday that its transaction volume of $16.3 billion, for the second fiscal quarter ending May 31, represented a 23% increase over the same period last year. Discover said the growth in volume was driven by its growing merchant acceptance. During the second quarter Discover signed more than 138,000 new merchant locations, the largest number of merchants signed in one quarter in its thirteen year history. Discover now is accepted at more than three million merchant and cash access locations. Discover launched an aggressive ad campaign this year aimed at merchants and communicating its position as the lowest cost credit card provider. Discover has also entered into major partnerships with United Airlines, Hyatt, Blockbuster and Alamo. The card issuer also introduced its ‘Platinum’ card this year featuring a double ‘CashBack Bonus’. On Aug. 1, Discover will launch its ‘Dine out with Discover Card’ program with more than 50,000 restaurants participating nationwide.


NP’s Interim CFO

National Processing Inc. announced that company controller and Senior Vice President David Fountain has been named interim chief financial officer of the company. Fountain will replace National Processing chief financial officer Jim Cate, who will leave the company, effective July 30, to pursue other interests.

Profile of National Processing Inc.

National Processing, Inc. (NYSE: NAP) is a leading provider of transaction processing services and customized processing solutions. Deploying technology and applications software, NPC provides products and value-added services for merchants, outsourcing of administrative and financial functions, and ticket processing and settlement for providers of travel-related services.


Sears 2Q/99

Second-quarter credit revenues for Sears Roebuck & Company declined 13% from a year ago, to $973.4 million, primarily due to lower late fee income and a reduction in the level of owned credit card receivables. The company said yesterday that credit quality has improved significantly and has more than offset any decline in credit revenues. Sears reported Thursday that its net earnings were driven by the performance of its credit business. At the end of the second quarter Sears held $26.2 billion in domestic card receivables compared to $27.2 billion for 2Q/98. Net U.S. charge-offs for 2Q/99 logged in at 7.11% compared to 7.37% last year. Delinquencies have declined to 7.29% for 2Q/99 from 8.07% for 1Q/99 and 9.28% for 4Q/98. For complete details on Sears’ 2Q/99 performance visit CardData ([][1]).



The King is Back

The Elvis Presley credit card has returned. Elvis Presley Enterprises Inc. announced yesterday that it has signed an affinity card deal with MBNA America to issue the official ‘Elvis Presley’ credit card. The new cards feature two images of Elvis and will benefit the Elvis Presley Charitable Foundation’s Presley Place, a transitional-housing project that will provide homeless families up to one year of rent-free housing, child day care, job training and counseling, and financial guidance. The Elvis Presley program is the newest affinity program in MBNA’s ‘Alliance Sector’, which has now established credit-card programs with 300 organizations and groups including the Frank Sinatra program. MBNA has nearly 4,000 affinity programs worldwide. According to CardTrak ([][1]), the ‘Elvis Presley MasterCard’ was formerly issued, since the late 1980’s, by Memphis-based Leader Federal Bank. Last year Bank of Scotland introduced an ‘Elvis MasterCard’ for British fans.



ECHO Gets U-Haul

Electronic Clearing House announced Wednesday that Phoenix-based U-Haul International has awarded to ECHO a bid for credit card processing service for its independent dealers who participate in the ‘Preferred Dealer Program’. ECHO developed and manufactured the software and hardware that provides inventory processing services for U-Haul dealers. ECHO also processes and supports the daily transaction activity for more than 11,000 dealers. ECHO will enhance the software in the system to include credit card processing for the dealers’ non-U-Haul activity. ECHO provides credit card processing, check guarantee, inventory tracking services and various Internet services to more than 19,000 retail merchants and U-Haul dealers across the nation.


Creditrust 2Q/99

Creditrust Corp. announced Wednesday net earnings of $4.9 million or $0.46 per fully diluted share for its second fiscal quarter ending June 30, 1999, versus net earnings of $2.4 million or $0.28 per fully diluted share for the quarter ended March 31, 1999. Profitability increased largely due to costs of operations which dropped to 55% of revenues, from 64% of revenues in the first quarter of 1999.

Last year’s net earnings for the quarter ended June 30, 1998 were $3.0 million or $0.51 per fully diluted share. The 1998 second quarter included a gain on sale of $6 million while 1999’s second quarter earnings were driven entirely by substantial growth in recurring income on receivables, which increased by $13.8 million. Year to date net earnings increased $3.9 million to $7.3 million in 1999 over the same period a year ago or $0.76 per fully diluted share from $0.58 in 1998.

Collections on managed receivables hit a record $20.4 million over $13.4 million last quarter and $3.7 million for the same period a year ago. Purchases of receivables were $36.0 million representing a face value of $482.3 million. The Company has over 1.7 million accounts under management with a face value of $3.8 billion.

Revenues for the second quarter increased $6.4 million to $18.4 million, compared to $12.0 million for the first quarter or an increase of 53%. Revenues for the second quarter increased $10.0 million over the same period last year.

Operating expenses increased 33% from $7.6 million to $10.1 million in the second quarter over first quarter. Income from operations increased 89% from $4.4 million to $8.3 million over the first quarter. Operating expenses increased from $3.3 million to $10.1 million over the same quarter last year. Income from operations increased from $5.1 million to $8.3 million for the quarter ended June 30, 1999 over June 30, 1998.

Earnings before interest expense, income taxes, depreciation and amortization (EBITDA) rose to $9.0 million for the quarter ended June 30, 1999 over $4.7 million for the first quarter of 1999 and $5.0 million for the same quarter a year ago.

Founded in 1991, Creditrust Corporation acquires, manages and collects delinquent consumer receivables utilizing an information-driven strategy. The Company uses proprietary technology to acquire receivables primarily consisting of charged-off Visa(R), MasterCard(R), and private label credit card accounts issued by major banks and merchants.

For more information on Creditrust’s 2Q/99 financial results visit CardData ([][1]).



MBNAbuy Service

MBNA and CyberCash, a leading provider of online wallet technology, have launched the MBNAbuy service ([][1]). MBNAbuy, an electronic wallet service, is designed to store customer payment, shipping, and purchase information on a secure electronic server to allow safe completion of online transactions.

MBNAbuy allows Customers to make one click purchases at any Web page that displays the Instabuy logo. It uses industry standard Secure Sockets Layer (SSL) technology and 128-bit encryption along with two part consumer authentication to ensure Customer information security. The stored information allows the Customer to shop with ease online without having to repeatedly fill out credit card and shipping information for each online store.

“Most industry observers agree that online holiday shopping in 1999 will eclipse the dramatic increase we saw during last year’s holiday season,” said Russ Stevenson, senior vice president, CyberCash. “MBNA is positioning itself just right to take advantage of the explosive growth in Internet commerce, and CyberCash is very pleased to be working with MBNA toward that goal.”

“Providing superior Customer service is important to us,” said John Cochran, executive vice chairman of MBNA. “As our Customers become increasingly active on the Internet, we want that experience to be as safe, secure, and easy as possible. Electronic wallets allow us to achieve these objectives.”

“MBNA wants to make online shopping as easy and safe as possible for its Customers. We are confident that the inclusion of the Instabuy technology in MBNA’s program will eventually ensure MBNA a leadership position in the rapidly evolving world of e-commerce,” said Nancy Goldberg, executive vice president, CyberCash.

MBNA Corporation (NYSE: KRB) ([][2]), a bank-holding company and parent of MBNA America Bank, N.A., a national bank, has $64.5 billion in managed loans. MBNA, the largest independent credit card lender in the world, also provides retail deposit, consumer loan, and insurance products.

CyberCash is the world’s leading provider of e-commerce technologies and services spanning the retail point of sale through the Internet. CyberCash, the CyberCash logo, Agile Wallet, and Instabuy are trademarks, service marks, registered trademarks or registered service marks of CyberCash, Inc.