Money Talks

In response to the continued criticism of card issuers targeting college students, MasterCard announced this morning it is renewing its support for a national educational program for college students and their parents. The program is anchored around a free brochure called ‘Money Talks’ which encourages parents to take an active role in their child’s financial literacy. The ‘Money Talks’ program was developed last year in association with Washington, DC-based College Parents of America. The educational initiative was introduced by MasterCard in 1998 and was also supported by MBNA. More than 25,000 ‘Money Talks’ brochures are now in circulation. College Parents of America has also endorsed MasterCard?s ‘Fundamental Principles on Serving the College Segment’, a set of guidelines for credit card issuers serving the college market. CPA charges a $25 annual membership fee.


Chargeback Report

A new report from Gartner Group says the average chargeback rate to merchants for credit card transactions on the Internet is about 15%, and can soar as high as 30% for merchants delivering digital products immediately at the time of purchase. Gartner says merchants that do not address the potential growth in costs associated with Internet fraud and chargebacks will face losses that will threaten the viability of their E-business. The new report also identifies several fraud detection methods, including address verification services, rules-based screening services, card verification methods and digital certificate systems.


People’s Card Head

Mark K. Vitelli has been named executive vice president of Credit Card Services at People’s Bank. Vitelli will be responsible for overseeing the bank’s national and international credit card businesses.

Most recently, Vitelli was senior vice president, national credit card, where his aggressive use of technology has helped People’s achieve one of the most efficient operations in the credit card industry.

“Mark has been instrumental in the success of our national credit card business,” said David E.A. Carson, People’s chairman and CEO. “His leadership has brought the business to its current position as the 17th largest issuer in the U.S. with the best asset quality of the top 25 issuers.”

“Mark has a keen understanding of the credit card business,” said John A. Klein, People’s president, and the former head of Credit Card Services. “He has been a major architect in the design and development of our database marketing initiatives and our risk management capabilities; all critical to accomplishing our marketing and asset quality objectives.”

Vitelli joined the bank in 1984 as a management trainee and has served in various management positions throughout the bank. In 1990, he was promoted to vice president, area manager in People’s Hartford Region. In 1991, Vitelli became vice president, Consumer Credit. And in 1993, Vitelli was made first vice president, Consumer Credit, responsible for credit card administration and strategic planning, including finance, operations, asset protection and the consumer lending business.

Widely regarded within the credit card industry, Vitelli has spoken domestically and internationally on collections as well as automation, telephone services and securitization. He is a member of the Visa Risk and Operations Committee.

A Milford resident, Vitelli holds a bachelor’s degree in economics and history from Yale University and a master’s in business administration from Sacred Heart University.

People’s Bank () is a diversified financial services company providing commercial, consumer, insurance and investment services. Founded in 1842, it is the largest independent bank in Connecticut with managed assets of more than $12 billion, 129 branches and 197 ATMs. People’s is a leader in commercial banking, residential lending, Savings Bank Life Insurance sales and supermarket banking. People’s ranks 17th nationally as an issuer of MasterCard and Visa credit cards.

People’s subsidiaries offer brokerage services through People’s Securities, Inc., asset management through Olson Mobeck & Associates, Inc., equipment financing and leasing through People’s Capital and Leasing Corp., and insurance services through R.C. Knox and Company, Inc.


WWW Commerce

Explosive growth of the Internet will thrust Internet purchases sky high. In recent market research, International Data Corporation reports the amount of commerce conducted over the World Wide Web will top a staggering $1 trillion by 2003.

“Because of the increase in the number of people who make purchases over the Web, the growth of the average transaction size, and the adoption of the Web as a viable vehicle for business procurement, Internet commerce will grow substantially,” said Carol Glasheen, director of primary research and market models at IDC.

According to IDC, the number of users who make purchases over the Web will jump from 31 million in 1998 to more than 183 million in 2003. Furthermore, there is ample opportunity to expand the 183 million as it will represent only 36% of all Web users.

Although the number of Web users is increasing in many foreign countries, Internet commerce is currently U.S.-centric. In 1998, 56% of Web users resided outside the United States; however, non-U.S. Internet commerce accounted for only 26% of worldwide spending. By 2003, IDC estimates 65% of Web users will be international, and the United States will account for less than half of worldwide Internet commerce.

“There are several reasons for the U.S. focus today,” Glasheen said. “For example, home PC penetration and the percentage of business PCs that access the Internet are much lower outside the United States. Additionally, the smaller number of users and slightly smaller transaction sizes outside the country generate smaller amounts of commerce. But this is changing as Europe and other regions quickly accept the Web.”

IDC’s report, The Global Market Forecast for Internet Usage and Commerce (IDC #B19262), sizes the market for Internet commerce, including the number of users and devices accessing the Web, the value of commerce transactions per user, and the number of pages on the Web from 1995 to 2003. The forecast is segmented by region (the United States, Canada, Western Europe, Asia/Pacific, Japan, and the rest of world) and user segment.

The market sizings and forecasts included in the report come from IDC’s Internet Commerce Market Modela, which is based on more than 40,000 primary research interviews annually in 31 countries and on IDC’s supply-side forecasts for PCs, network computers, modems, and other technologies. This model offers a unique perspective on the Internet and provides a detailed understanding of Web demographics and behaviors.

To order a copy of the report, contact Sue Beauregard at 1-800-343-4952, ext. 4774 or at

About IDC

International Data Corporation is the information technology industry’s most comprehensive resource on worldwide IT markets, trends, products, vendors, and geographies. IDC provides data, analysis, and advisory services to the world’s leading IT suppliers as well as IS professionals in finance,

insurance, entertainment, advertising, consumer goods, and publishing. IDC’s research and opinions are based on the results of more than 300,000 end-user surveys, in-depth competitive analysis, broad technology coverage, and strategic analysis. IDC is committed to providing global research with local content through its 500 analysts in more than 40 countries worldwide. Additional information on IDC can be found on its Web site at


Chinese Payment Network

Intermost Corporation yesterday announced that it has signed a joint venture agreement with Jiayin Investment Company Ltd. to develop China’s first network payment system. Jiayin’s telephone banking system and computer network technology is used by 75% of commercial banks in Shenzhen, the high-tech and information technology capital of China.

The name of the new company is tentatively called Jiayin Electronic Payment Technology Co. Ltd., subject to the company registrar’s approval. Under the terms of the agreement, Intermost will hold 70% interest in the joint venture company. Jun Liang, President of Intermost, said, “The registered capital of the new company is 5 million RMB. However, total investment for the new business is expected to be much more.”

Mr. Liang continued, “This joint venture comes during a major growth stage in the Chinese Internet market. The number of Internet users has grown steadily since China lowered its nationalized Internet access fees in March. Since then, the number of Internet users in China has ballooned from about 2 million to over 5 million. That’s a 150% increase in three months; China has suddenly become one of the largest Internet-user communities in the world. Intermost has a significant opportunity here since there is a tremendous bottleneck caused by the lack of a national electronic payment system. E- commerce applications are extremely limited in this market. Through our joint venture, we will be able to promote Jiayin’s proprietary E-commerce system, which is already a market leader, both technologically and in marketshare.”

Jiayin also has an exclusive agreement with the Shenzhen Financial Settlement Center, a central bank organization in Shenzhen, to pilot test a telephone and Internet payment system. The final version of the Internet payment system has been completed and is awaiting approval from the People’s Bank, China’s central banking authority. Jiayin will assign all related existing contracts, technology and patents to the joint venture and will no longer operate payment-related business in China.

Intermost is the first US-listed information technology firm from China. The Company is an Internet content provider in China, focused on business-to- business content hosting and maintenance. Intermost is a market leader in providing services to large organizations and export-oriented companies. Investor information can be found on the web at: or .


EasyPay Server

Atlanta-based NIIT introduced ‘EasyPay Server’ this morning. The new solution will enable service-oriented organizations, such as utilities and credit card companies, to directly present electronic bills to the consumer for payment via the Internet. Billers will also benefit from enhanced cross-selling revenue opportunities, improved bill and statement analysis and the flexibility to choose between two modes for implementing billing and payment solution: the ‘Biller Direct’ mode and the ‘Consolidated’ mode. The ‘Biller Direct’ mode allows the user to directly access the biller’s website, while the ‘Consolidated’ mode allows multiple billers to work through an Internet service provider to deliver one consolidated electronic bill to the consumer. NIIT says it is working closely with CheckFree to provide the consolidation and payments services to large billers, consumers and financial institutions.


Schlumberger 20 Years

Schlumberger celebrated 20 years of innovation in the smart card business at a press conference in Paris last week. Schlumberger manufactured the very first commercial smart card and lead the way for new mass-market applications such as with banking cards, GSM cards and phone cards. The company is now looking forward to the way this widely accepted technology will impact the way we work, travel, communicate and live in the twenty-first century.

The key benefit of smart cards remains the exceptional level of security and privacy they deliver in a personal and portable form. But accelerating performance and major advances in software mean they are no longer simply just ‘a better way’ of accessing networked services. They are the key enablers for a vast range of new services such as e-commerce and mobile banking.

“The first smart card dramatically reduced levels of bank card fraud,” says Olivier Piou, Schlumberger Vice President Smart Card Products. “Today’s smart card can secure complex e-commerce transactions. Tomorrow’s card will empower the individual and unlock the full benefits of the digital age.”

Market Catalyst

Today the smart card is already catalyzing markets around the world for example banks are reducing fraud and entering new markets such as on-line bill payments, secure stock trading and e-cash, telecommunications operators are delivering personalized online services to subscribers, corporations are securing access to PCs and networks, and transport operators are speeding operations with contactless electronic tickets.

The current rate of evolution of the smart card means that by 2005, cards will offer over 1MB memory – five times as much as the most advanced cards currently available – and processing capability will be an order of magnitude higher than today. On the software side we will see the increasing use of open systems and the introduction of enhanced security with cryptography and biometrics becoming standard. Smart cards will also be ‘network-friendly’ with their own IP number.

This will radically change the way that cards are able to interact with their owners, storing preferences and supporting multi-media communications and graphical interfaces. These developments will permit applications to be developed and introduced with astonishing speed, similar to that experienced over the past ten years with the PC.

Technological Convergence

At the same time we are seeing the convergence of technologies and communications methods: banking services are available over the mobile phone, soon Internet services will be available via a host of different media such as digital television, mobile phones and public payphones, and e-purse and city purse developments are seeing the integration of transport, retail,parking and other public services.

All these developments require a single portable identity system that can easily and securely recognize the individual user of the service.

This is where the smart card comes into its own. Smart cards have already been accepted as the most portable and secure system. With the introduction of biometrics and additional cryptographic capabilities to ensure even higher levels of security, individuals can carry their own personalized digital ID around with them: “smart cards maketh digital man.” Enter your smart card into your mobile phone, banking terminal or computer, present it to your doctor or at the airport security counter, and it will enable secure access to all the appropriate information in order to allow you to communicate, execute financial transactions, be reimbursed for medical expenses and travel freely.

“The 21st century will usher in the digital age and smart cards will provide the key to access its benefits,” says Olivier Piou. “The way that commerce has functioned for the last two millennia, via face-to-face contact, written signatures, handshakes and cash, will be fundamentally changed with electronic transactions. Smart cards are the solution and in the next twenty years every person on the planet will use the technology.”

Schlumberger believes it has a unique experience in all the different domains including smart cards, terminals, servers and systems integration expertise to facilitate this vision of the future. Irwin Pfister, Executive Vice President Schlumberger Test & Transactions, says, “With the objective of enhancing everyday life, improving mobility and communications, Schlumberger as been providing smart card-based solutions for twenty years and is uniquely positioned to meet the demands for ever more far-reaching applications.”

One Universal Card

What stands in the way of progress? In the short term, it’s almost certainly simple issues such as arrangements that allow issuers to share multi-application cards; and a culture shift which will see individuals accept the benefits that networks bring, and put their trust and ‘digital secrets’ onto their personal smart card. A watershed will probably occur when users are able to buy and configure their own cards. That will make the ‘universal card’ a reality, and it’s technically possible today.

“We deliver the technology required for service providers to share one universal card today,” adds Olivier Piou. “It would be already technically possible in 1999 for individuals to download their personal selection of different services onto a card. What would be required for this to become the norm, is for individuals to recognize that it will bring value to their everyday life and encourage a change in the way cards are issued.”

About Schlumberger

Schlumberger Smart Cards & Terminals is the leading provider of smart card-based solutions worldwide, shaping the new world of smart solutions by providing leading-edge technology to enable innovative smart card and terminal applications that enhance the security and convenience of businesses and communities of all kinds. Schlumberger smart card solutions encompass a wide range of cards, terminals, development tools and support in open configurations for operators, developers, integrators and distribution worldwide. As part of the Smart Village(R) vision, the Schlumberger offer includes the milestone Cyberflex(TM) card, the industry’s first Java(TM)-based smart card. The Smart Cards & Terminals group operates 45 facilities in 34 countries across the globe. Additional information is available on the World Wide Web at cards.

Schlumberger Test & Transactions is the parent division for Schlumberger Smart Cards & Terminals and Schlumberger Automated Test Equipment, leveraging the combined strengths of the two business units to provide leading-edge, cost-effective solutions to customers.

Schlumberger Test & Transactions is a business unit of Schlumberger Limited, a $11.8 billion global technology service company providing oilfield services, natural resources management, transactions-based technology and associated systems, and semiconductor test equipment.

Cyberflex and Cardlet are trademarks and Smart Village is a registered trademark of Schlumberger. Java and Java Card are trademarks of Sun Microsystems, Inc.


Card Backs

Faced with immense pressure from major banks, VISA and MasterCard logos will likely drop off the front of some payment cards by the end of this year. MasterCard’s board voted last week to permit certain issuers to move the MasterCard logo to the back of their debit or credit cards. However, MasterCard is requiring that issuers making the move commit to issuing more MasterCards. MasterCard, which announced earlier this year it was re-focusing on the needs of key members, was expected to give in to the logo placement issue first. However, VISA took some of MasterCard’s thunder away, as its International board decided earlier this month to launch a pilot, whereby any issuer of VISA’s off-line debit product, the ‘VISA Check Card, could test moving the VISA logo to the card back. The VISA pilot will begin later this year. In January Citibank quit VISA’s U.S. board and began a migration to issue more MasterCards after MasterCard showed more responsiveness to Citibank’s agenda. Citibank’s agenda included lowering its costs associated with the card brand and gaining more flexibility in building its ‘Citicard’ brand.



CUNA Service Group, and EDS have just expanded their 20-year business relationship to include Internet-based services that simplify IRA program management for credit unions.

CSG is the only IRA administrator that serves credit unions exclusively. Therefore, most credit unions with IRA programs choose to have CSG manage their entire program administration. CSG handles all back-office administration, including tax reporting and periodic payment calculations. Whether managed by CSG or internally, CSG’s electronically-enabled products and services help credit unions become more efficient, effective and compliant with federal laws governing IRAs.

“Credit unions will find that processing time is dramatically shorter with this fully automated, paperless system — which is part of our long-term goal to offer the products and services to make credit union operations smooth and successful,” said Peg Nugent Rectanus, senior vice president for CSG. “EDS, using their electronic business expertise, is helping us connect systems to make accessing and sharing data with customer credit unions faster, more flexible and more dependable.”

EDS helps IRA program administration become faster, easier and more efficient with an electronic data delivery service that links credit unions to CSG via the Internet. This Web-based technology, called Connect One, can accept any data from any type of system in any format that needs to be shared between one financial institution and another. Connect One electronically reformats the data, then transmits it safely to its destination without having to make even a tweak to current systems. Credit unions handle data in many formats, including credit card transactions, share drafts, checks, settlements with U.S. Central and Federal Reserve transactions, that Connect One transmits electronically. Credit unions can access the IRA system through Connect One Link, the Internet doorway to both systems.

“Through our long-standing relationship with CSG, EDS has built in-depth knowledge of CSG’s products, services, customers and the industry,” said Dana Rowlett, president of EDS’ Credit Union Industry Group. “Based on our relationship and that knowledge, we hope to continue to leverage EDS’ core credit union products to build end-to-end electronic interfaces to CSG products to better enable electronic business across the industry.”

Connect One is part of an EDS-developed technology that moves data from one company to another without making system changes, which makes system implementation a breeze. EDS processes 139 million transmissions per month between different types of businesses: between one financial institution and another, between doctors’ offices and insurance companies, and between retailers and suppliers, to name a few. This along with the new 20,000-employee E.Solutions organization supports EDS’ focus on electronic business.

With its network of affiliated state credit union leagues, Credit Union National Association (CUNA) serves more than 90 percent of America’s 11,200 credit unions, which are owned by more than 77 million consumer members. Credit unions are not-for-profit cooperatives providing affordable financial services to people from all walks of life. For more information on CSG and CUNA, visit the CUNA and Affiliates Web site at

EDS, a leader in the global information technology services industry for more than 35 years, delivers management consulting, electronic business solutions, and systems and technology expertise to improve the performance of more than 9,000 business and government clients in about 50 countries. EDS reported revenues of $16.9 billion in 1998. The company’s stock is traded on the New York Stock Exchange and the London Stock Exchange. Visit EDS via the Internet at


CreditDesk in Poland

Warsaw-based PKO PB, the largest network of bank branches in Poland with 465,000 sub-branches, 176 external outlets and nearly 6,000 agencies, will install Fair, Isaac and Company, Inc.’s CreditDesk origination and underwriting software to improve operational efficiency and risk management, and increase profitability in its consumer lending operations.

“CreditDesk’s functionality will enable us to enhance our risk assessment and provide faster processing of our customers’ applications,” said Jacek Oblekowski, director of Retail Banking at PKO BP’s Head Office. “We’re looking to streamline our operations and improve management of our consumer portfolio to increase profitability.” PKO BP has plans to use CreditDesk on other portfolios — such as retail, auto loans and mortgages — to speed up decision-making when processing loan applications, to improve the quality of its lending portfolio by reducing the number of bad loans, and to centralize and ensure consistency of credit risk management throughout the bank.

The company currently uses Fair, Isaac’s CrediTable International credit application models and FastTrack data analysis and reporting software.

CreditDesk provides credit grantors with a cost-effective, empirical method to increase acceptance rates, reduce losses and improve productivity. CreditDesk’s easy-to-use Microsoft Windows-based system assesses credit origination risk, retrieves and analyzes credit bureau reports, performs accept/decline letter generation and other processing functions, and produces a series of management reports.

Fair, Isaac ( helps businesses worldwide maximize the value of data to make more profitable decisions about their customers, operations and portfolios. Fair, Isaac delivers data management services, analytics, software, and consulting to the financial services, direct marketing, personal lines insurance, retail, and healthcare industries.

PKO BP offers a comprehensive range of banking services for enterprises, institutions, civic organizations, consumers, and local government agencies. The bank maintains more than 30 percent of the combined savings of Polish households, manages over 50 percent of all personal accounts, and was the source of 80 percent of all housing loans in Poland.


AMS & NDS at E-Gov

American Management Systems and NDS Americas, Inc. announced that they will team to demonstrate a world-class solution for public key smart card security in support of government web-based procurement at the e-Government Conference and Exposition; in Washington, DC tomorrow. The demonstration, which combines AMS’ expertise in Federal procurement applications with NDS Americas’ experience in smart card technology provides an industry-leading authentication solution for Government-to-Business transactions, enabling secure electronic commerce for the Federal government.

In conjunction with CommerceNet, an international non-profit consortium of companies developing and delivering electronic commerce solutions on the Internet, the software demonstration is part of each company’s role as a champion for Phase 2 of the Federal Government Catalog Interoperability Pilot. AMS is collaborating with multiple Federal agencies to define the entire ‘procure to pay’ process that will enable government workers to buy goods and services through interoperable electronic catalogs. NDS Americas is providing sophisticated security technology, including smart cards coupled with digital certificates that support a Public Key Infrastructure.

The Catalog Interoperability Pilot gives Federal buyers a powerful tool for electronically searching thousands of products now located in separate Federal and business online catalogs. When fully operational, the pilot system will allow Federal shoppers to quickly compare products, find the best price, and make secure purchases with a smart card.

“NDS Americas believes that procurement solutions based on AMS’ vision and technology, incorporating the NDS smart card system as a component, are the ideal way to deliver future Web-based procurement systems to its customers,” said NDS Americas’ Vice President and General Manager, Dr. Dov Rubin. “We believe that together we have an attractive product that can provide an excellent security solution for Government-to-business applications.”

“We are very pleased to have worked closely with NDS Americas to meet the strict requirements of the initial government pilot,” said Gregg Mossburg, manager of AMS’s e-Commerce initiatives for procurement solutions. “NDS AccessGear(TM) Smart cards make PKI secure and manageable.”

About AMS

AMS is a world-class international business and information technology consulting firm. As one of the 20 largest consulting firms worldwide, AMS provides a full range of services and solutions: eCommerce, customer value management, business re-engineering, change management, knowledge management, systems integration, and systems development and implementation. Founded in 1970, AMS is headquartered in Fairfax, Virginia, with over 8,000 employees and 57 offices worldwide. AMS had 1998 revenues of $1.06 billion, with eCommerce- related revenues representing 20%, an increase of almost 150% over 1997. Forbes magazine ranked AMS number 94 out of 400 of the best-performing big companies in the U.S. in their “Best of the-Biggest.”

AMS can be found on the World Wide Web at

Information about AMS’s procurement solutions can be found at

About NDS Americas, Inc.

NDS provides open solutions that enable the delivery of entertainment and information to TVs and PCs. The company supplies the leading technology, products and services to enable businesses to profit from the emergence of interactive digital television, and its intersection with the Internet via data broadcasting and e-commerce. NDS’ solutions are built on its recognized leadership in smart-card based security, encryption, video compression and digital software control and management systems and are supported by its extensive systems integration and customer support capabilities.

NDS, headquartered in the UK with offices world-wide, is providing its advanced technologies, products and services to many of the current and planned cable, satellite and terrestrial broadcasting systems around the world. Over 12 million subscribers around the globe use NDS conditional access systems to receive Pay-TV satellite and cable services. The company continues to make a major commitment to R&D, with over 700 of its 1,500 plus employees dedicated to its pioneering development work at research centers in Israel, the U.S. and the UK.

NDS is a subsidiary of News Corporation (NYSE: NWS), a leading global media company. NDS is on the World-Wide-Web at: More information about AccessGear(TM) is available at, or send an email inquiry to NDS Americas, Inc., located in Newport Beach, CA, handles relationships with a wide range of customers and partners in the United States.


MAS Cards

Rockport Healthcare Group announced this weekend the first revenues from the sales of their medical access savings cards sold. Rockport Preferred has introduced its basic and an expanded benefits card in the Texas market under the card name, ‘MAS’ and ‘MAS Plus’. The card provides members with up to 30% reduction on medical service fees. The basic card sells for $120 per household per year while the plus version sells for $180 per year per household.