Paymentech Insurance Payments

Paymentech, the nation’s third largest credit card processor, is launching recurring credit and debit card payments for major life/health and property/casualty insurers. The new business signals growing interest in new electronic payment options that allow consumers to conveniently pay their bills. Paymentech projects almost two million transactions annually once all programs are fully underway.

Some of the programs also include processing for one-time payments for agent sales, phone transactions, and web site applications. Paymentech?s processing menu includes credit card, debit card and automatic checking account deduction.

Paymentech?s direct response unit is highlighting automated recurring bill payment programs for the insurance industry at the Insurance Accounting and Systems Association conference in San Diego. With recurring payments, consumers pre-select a credit, debit, or electronic check option to cover regularly scheduled automobile, property/casualty or life insurance premiums. Customers receive statements for their review and records.

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For recurring payments, Paymentech interfaces with billing systems to extract a file of non-check payments for authorization and settlement, including those that directly debit a bank account. Insurance providers electronically collect receivables, reduce the payment cycle time, and access funds sooner. Lock box, collection agency and insufficient funds bank fees are also reduced. Insurance companies believe customers find credit cards more convenient. There are no checks to write, stamps to buy or statements to return. Recurring payment programs can also be used as tools for building consumer loyalty. Responding to MasterCard and Visa market research, Paymentech, the largest processor for card-not-present payments, created programs specific to the insurance industry. ?Over half of the top 20 insurance companies offer some type of credit card acceptance,? said Gary Beck, senior director for recurring payments at Paymentech. Research also suggests that credit card usage can help close initial sales and reduce walk-in payments.

?Credit cards currently account for 5% of all premium payments. Automated monthly or quarterly payments will increase that,? said Beck. ?MasterCard research shows that 34% of consumers favor automatic recurring payments and that 82% of service companies cite customer service enhancements as the key reason for offering recurring payments.?

Paymentech, Inc., founded in 1985, is the third largest processor of bankcard transactions and a leading issuer of commercial cards in the United States The company processed approximately 2.2 billion total transactions and $54 billion in sales volume during calendar 1998.

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Paymentech Recurring Payments Fact Sheet

Recurring payments (RPs) account for over $500 billion in annual payments. Less than 2% is currently captured on cards. Approximately 5% of payments are made through direct debits of consumer checking accounts. (Nilson Report, August 1996) According to a MasterCard survey, 93% of all recurring bills are paid by writing a check, however, 36% of consumers currently use some type of recurring payment method for at least one bill. Automatic payment type preferences were

– automatic checking account debit (electronic check processing)
– automatic paycheck deduction
– credit card recurring

Consumer Research
– 34% of consumers (not currently using) would prefer a recurring payment
– about one in four consumers mentioned they would switch to a
competitor if that company could do automatic recurring payments

Insurance Industry Statistics
– total annual premium payments for homeowners, auto and life insurance is
$306 billion
– credit card volume accounted for about $767 million
Benefits of RPs
Merchants (service industry providers):
– secure transactions
– streamlined processing
– improved collections
– improved customer service and retention
– incremental sales

– convenience, saves time and money
– option to revolve
– earn points in co-branded and frequency award programs




Prenet E-Cash

VeriFone, Monday announced that it is offering retailers electronic gift-certificate and check-authorization applications. PreNet, a new VeriFone customer and electronic cash-card issuer, also is implementing IPS to offer a new payment-processing service. Retailers can add e-gift-certificate and check-authorization services to VeriFone’s open e-services technology framework. IPS is a new technology framework developed by VeriFone that incorporates Internet technologies and allows retailers to easily add and deliver new payment applications.


Truly International

VISA International’s Board of Directors elected William Boardman as it chairman yesterday to succeed Peter Ellwood. Boardman is a SVP at Bank One and is currently chairman of the VISA U.S.A. Board of Directors. Peter Ellwood, chief executive of Lloyds TSB of London, has served as VISA International chairman since 1994. Ellwood indicated last year he would relinquish the chair after Malcolm Williamson settled in as the new VISA International CEO. Ellwood said it was less than satisfactory for the Chairman and CEO to come from the same country. The Visa International Board also appointed Paul Vessey as vice chairman of the board, succeeding F. Phillips Giltner, chairman of First National of Nebraska. Vessey is EVP of Canadian Imperial Bank of Commerce.


Buy & Bonus Visa

Blue Square-Israel Ltd., together with Bank Leumi Israel Ltd., and Visa C.A.L, Monday announced the launch of the “Buy & Bonus – Visa” credit card. The initiative integrates Israel’s largest customer loyalty club, Buy & Bonus, with Visa. The “Buy & Bonus – Visa” can be used both as a normal credit card and for Buy & Bonus purchases. New members will receive a package of benefits, including free cellular phones, coupon booklets, discounted travel packages, extra Buy & Bonus points, and other special offers and gifts.


Providian’s Woes

Providian continues to encounter more lawsuits in the wake of allegations pertaining to its credit card practices. Last week shareholder litigation specialist Wolf Popper filed a class action lawsuit on behalf of persons who purchased Providian securities in the open market during the period Jan. 15, 1999 through May 18, 1999. The complaint alleges that Providian improperly obtained revenues, and misrepresented the source of its revenues and income in public filings and press releases. The suit charges Providian with improperly conducting its credit card business by, among other things, intentionally failing to post credit card payments on time in order to enable Providian to improperly record as revenues late fees and penalties, improperly enrolling new credit card customers without their permission, and improperly charging credit card customers for Providian’s fee-based products not requested. Wolf Popper says once the facts concerning defendants’ conduct became known and it was disclosed that Providian was the subject of an investigation by the San Francisco district attorney’s office, the price per share of Providian’s stock fell over 40%.Providian says it has not seen this particular lawsuit but firmly states that the allegations are absolutely without merit and it intends to defend itself vigorously against these claims. Yesterday Providian’s stock closed at 79 9/16 per share compared to its 52-week high of $138 per share.


MedSAFE2000 Optical Card

BSI2000, Inc. yesterday announced and demonstrated, at the American Healthcare Alliance 1999 Provider System Conference in Kansas City, Missouri, its new MedSAFE 2000 optical medical card system. In addition, BSI2000 and AHA announced that they have signed a contract, on a mutually exclusive basis, to take the MedSAFE 2000 optical medical card product to market.

BSI2000 designs and markets software/hardware products for the medical, drug and alcohol testing, and identification markets that substitute highly efficient and fraud-proof optical cards for older paper-based transaction systems.

American Healthcare Alliance (“AHA”) is a nationwide network of preferred provider managed healthcare systems and organizations with more than 18 million insured lives and 300,000 physicians in 3,800 hospitals and clinics across the country.

Optical cards are the same size and shape as regular plastic credit cards but hold millions of bytes of updatable information — thousands of pages of text (up to six megabytes) — in a secure, inexpensive, and permanent personal package. The market for optical cards is driven by their superior capacity — 750x that of smart cards; exceptional speed — 30x that of smart cards for writes; and far greater reliability and ruggedness.

MedSAFE 2000 stores and manages eligibility and medical information on optical cards, including: (a) Emergency information such as current medical conditions, allergic reactions, drug regimens, attending physician, next of kin, blood type, etc.; (b) Full clinicals, including detailed history of conditions, diagnoses, and treatments, detailed records of hospital stays and visits, surgical procedures, physician comments, and others; (c) Strong patient identification with digital photographs and automatic machine signature or fingerprint verification to virtually eliminate fraud and help prevent costly errors; (d) Insurance and payments records; and others. BSI2000 has already contracted with a small 5,000-patient clinic in Denver, Colorado — Western Medical Center, PC — to become the first MedSAFE 2000 site. Installation is scheduled for June 1999.


WesBanco Sells Card Portfolio

WesBanco yesterday announced the sale of its credit card portfolio to an Atlanta, Georgia-based InfiCorp. The credit card receivables are approximately $15 million. WesBanco and InfiCorp have entered into an agent bank arrangement in which InfiCorp will offer its credit card products to WesBanco customers using the WesBanco name. Current WesBanco credit card customers will be able to continue using their existing cards.


Picture-Perfect Security

Bank of America is offering picture security with its introduction of the Photo ‘Security Check Card’ and Credit Card in Texas and New Mexico. The Photo Security Cards feature a customer’s photograph and signature on the front of the card. Both the Check Card and Credit Card offer a new level of protection against card fraud and theft. Merchants who accept the card for payment can easily verify a customer’s identification by just looking at the card.


Capital One Partners With DoubleClick

Capital One and DoubleClick announced this morning that Capital One will be the preferred credit card partner on DoubleClick’s newly-created ‘Shopping and Services Program’, which was recently announced. Capital One will be able to utilize a variety of creative options-including banners,buttons and email text links-to acquire new customers and begin to learn more about the consumers’ interests and passions.


NextCard and UM Agreed

NextCard the First True Internet Visa, and United Media (), the licensing and syndication company, Friday announced a joint Internet marketing agreement to offer co-branded products and card services for DILBERT, the popular icon of American corporate culture. Under the terms of the agreement, NextCard and United Media will collaborate to create the DILBERT Visa card for Internet fans of Scott Adams’ comic strip.

“We are very happy to announce this partnership with NextCard,” stated Michael Zimbalist, general manager, OnLine Services, United Media. “The innovative online features of the DILBERT Visa credit card make it ideal for marketing on the web. We know DILBERT fans will sign up online and add the DILBERT Visa credit card to their wallet.”

“The DILBERT fans are tech-savvy and have a tremendously strong affinity with the characters,” said Richard Goebel, director of business development at NextCard. “With DILBERT’s active online following, we have a unique opportunity to create an innovative and distinctive product, and have some fun along the way.”

NextCard, Inc.

NextCard, Inc., creator of the First True Internet Visa, is considered the industry’s leading issuer of consumer credit on the Internet. Since its launch in December 1997, over 2 million people have applied for the NextCard Internet Visa, making it one of the premier online credit cards. NextCard continues to innovate with its Double Rewards program, GoShopping! tools, original PictureCard design, digital wallet and online customer service. ( )

About United Media

United Media (UM) is a fully-integrated, worldwide licensing and syndication company that focuses on building brand equity around a wide range of creative content through its two syndicates: United Feature Syndicate (UFS) and Newspaper Enterprise Association (NEA), and licensing: United Media Licensing (UML). UM licenses and/or syndicates a variety of properties including PEANUTS(TM) (), DILBERT(TM) (), Nancy and Sluggo, MIFFY, Wallace & Gromit, Raggedy Ann and Andy, Fido Dido and The State Hermitage. United Media () is an E.W. Scripps Company.


HyperSecur & Oberthur Sign Contract

HyperSecur Corporation ( announced today it has signed an International Agency Contract for Canada with Oberthur Smart Cards USA ( based in Rancho Dominguez, California.

The Contract gives HyperSecur exclusive Canadian rights and non-exclusive worldwide rights to sell Oberthur Smart Cards’ magnetic stripe, memory and microprocessor card products and personalization services. “Having a company like Oberthur provides us the opportunity to have access to their product line and dramatically accelerates our business development timeline,” said Charles P. Villeneuve, President, HyperSecur. “We have discussed with Oberthur the possibility of manufacturing smart cards using our HyperProximity(TM) chip but no decisions have been made at this time.” “HyperSecur is a key element of our North American strategy,” said Philippe Tartavull, Chief Operating Officer, Oberthur Smart Cards USA. “Oberthur Smart Cards believes in partnering with companies offering innovative products and services that complement our own. Their geographic location enables us to increase our opportunities in the Canadian market. This is clearly a win-win situation.”

HyperSecur recently acquired HyperSecur (Canada), which represented that its major asset is the HyperProximity(TM) chip. This technology was introduced last month at the STMicroelectronics, Inc. (NYSE: STM) booth at the CardTech/SecurTech Conference held in Chicago. The technology will be implemented in the ST16HF52 contactless smart card from STMicroelectronics. The chip is a dual proximity level contactless solution based on ISO 14443 Type B. Samples of the HyperProximity(TM) chip should be available by the end of this month with deliveries of chip orders at the end of the year.

About HyperSecur Corporation

HyperSecur Corporation plans to exploit the technology with strategic partnerships to develop the hardware and software necessary to market the new technology to card manufacturers, system integrators and end users. The final product will be a new contactless chip and smart card based operating system supporting an innovative security structure. Presently, there is very limited use of the HyperProximity technology. At this time, the Company has not fully evaluated the market potential of the technology and, therefore, is not sure of its size. The Class A common stock of the corporation is traded on the Over-The-Counter Electronic Bulletin Board (“OTCBB”) system with the symbol: HYURA.

About Oberthur Smart Cards

Oberthur Smart Cards, a leading manufacturer, technology and solutions provider of microprocessor cards and systems, is a division of Francois-Charles Oberthur, one of the world’s leading high- security printers. Oberthur manufactures and personalizes smart cards and magnetic stripe cards in three production centers in the United States and Europe. Oberthur Smart Cards produced over 225 million cards worldwide in 1998, including 30 million microprocessor cards and 45 million memory cards. Founded in 1987, Oberthur Smart Cards has become the world leader in microprocessor transaction cards and is also present in other market segments such as telecommunications, GSM, Internet, e-commerce, government, healthcare, pay-TV and transit.