Credit card competition is heating up more in the UK as Providian Financial moves in and Lloyds drops its interest rates. Providian will begin marketing a card next month with a 13.9% APR and no annual fee. The middling offer is targeted to sub-prime consumers. Jim Elliott, EVP of Providian’s European operations, is heading the move. Meanwhile Lloyds TSB Group PLC is dropping the annual fee and cutting the interest rate on its ‘Asset’ card. The new pricing will be a tiered rate with an APR of 18.9% for balances under 1,000 pounds and 15.9% for balances over that amount. Phone financial services company, Direct Line, has also entered the UK market. Last week the firm rolled out a no-fee card with a six-month intro rate of 6.8% and a go-to rate of 15.9%. Capital One introduced, last month, a fixed, long-term interest of 11.9% to new customers. USA-based People’s Bank (CT) and Advanta market cards with a six-month teaser rates of 6.9%.Details
Telepartner A/S Thursday announced that it has entered into an agreement with DANKORT which will allow Telepartner to accept on-line credit card payments on its [www.909.dk] Web site for the first time.
DANKORT, the Danish bank and credit card system, is the largest credit card system in Denmark with more than 2.6 million users. As a result of the agreement, Telepartner will begin accepting credit card payments immediately through its e-commerce Web site.
“Until now, it has been impossible to use the Danish credit card DANKORT as a means of payment on the Internet,” said Aldo Petersen, chief executive officer of Telepartner. “As one of the largest Scandinavian retailers of music over the Internet, we will be better able to service our customers as a result of this new agreement with DANKORT.”
According to Petersen, Telepartner has one of the most active Web sites with overnight distribution in all of Scandinavia.
“The DANKORT agreement will greatly simplify payment for CDs and music selections from our on-line music shop,” Petersen said. “When coupled with the overnight delivery services we introduced last year, I see even greater potential for e-commerce than ever before in this area.”
Formed in 1986, Telepartner A/S is an Internet solutions integrator, ISP, and telecommunications company that provides a host of services and products to businesses and consumers, primarily in Scandinavia.
These many services include domain name registration, international telephony, e-commerce, Web site design and hosting, business and consumer e-mail services, and a wide variety of other telecommunications products and services.
Checkfree customers have had a frustrating week trying to use dialup PC banking. According to the Atlanta Journal and Constitution as many as 500,000 consumers of twenty banks have been unable to bank online by dialing directly into the bank. The problem has apparently been linked to Checkfree’s recent move to its new ‘Genesis’ technology platform. The Orlando Sentinel says SunTrust Bank customers have been completely shut out of all PC banking while only 15% of Wells Fargo’s customers have been unable to conduct business by computer. Checkfree says this is the first service interruption of this magnitude. The company processes more than 11 million transactions per month for more than 2.8 million subscribers.Details
MBNA signed affinity card agreements with the Pittsburgh Pirates and the Marine Corps Association yesterday. MBNA says it now has the endorsement of 17 ‘Major League Baseball’ teams and is the “Official Credit Card Issuer of Major League Baseball”. MBNA has issued nearly 900,000 ‘Major League Baseball’ affinity cards. MBNA also announced Thursday that the Marine Corps Association has entered into an agreement with MBNA to issue credit cards to nearly 100,000 Marines, former Marines, and their families. The MCA was formed in 1913 by the Marines of the Second Provisional Brigade at Guantanamo Bay.Details
Wachovia Corporation announced that it has been issued a patent for the processes and systems that support the Wachovia Connection Image Workstation for Disbursements. The patent protects the method that allows corporate customers to retrieve account information and images of cleared checks using customer- supplied search criteria.
“Wachovia’s corporate customers have been benefiting from this high-tech image technology since 1994,” said Frank D. Robb, manager of Information Services for Wachovia. “Receiving a patent indicates the U.S. Patent and Trademark Office’s recognition of the innovative use of the technology Wachovia has developed for customers.”
Several banks now offer imaging products, but, according to the patent, the Wachovia processing system is unique. Wachovia’s Image Workstation system allows corporate customers to search and retrieve an image based on additional payment data supplied by the customer in addition to data captured from the cleared check.
“Our corporate customers provide us with information that is key to their operations, such as their customer account or policy numbers. That data is used to integrate our database and their systems,” said David T. Bellinger, a Wachovia vice president and one of the inventors. “For example, an insurance company, which may issue millions of checks a year, can use a policy number to retrieve an image of a check it needs to review. It no longer is necessary to sort through a variety of statements, checks or check images. The Wachovia technology saves time and money and improves customer service.”
This recently-patented image technology forms the foundation for other processes being developed by Wachovia that also may be submitted for patenting.
Wachovia Corporation, parent to Wachovia Bank, N.A., is the nation’s 16th largest bank holding company with assets of $65.3 billion as of March 31, 1999.
Wachovia and Wachovia Connection are registered service marks of Wachovia Corporation.Details
ORGA Kartensysteme GmbH, the German-based global leader in smart card development and delivery, will officially launch its new customer loyalty system, Leo, at CardTech/SecurTech ’99 in Chicago.
At the Show, ORGA will also announce its participation in two exciting new technology initiatives with MasterCard and American Express.
The Leo Smart Card-based Loyalty System addresses the biggest challenge facing retailers today: how to attract and retain customers. ORGA’s secure, flexible, highly configurable technology engine offers merchants an effective customer retention solution far superior to traditional standalone paper card alternatives. For systems integrators, Leo represents a quick yet powerful loyalty application development tool.
Banking: ORGA will demonstrate its new ACE Smart Card Accepting Device Approver, a highly reliable test simulator for banking terminals. This fully automated testing instrument supports a variety of Smart Card-based credit/debit and electronic purse applications. It has already won both EMV and Geldkarte (ZKA) approval for use.
Health Care: In addition to featuring its innovative DentCard dental application at CTST ’99, ORGA will provide information on its ongoing role in the trendsetting Health Passport Project. Sponsored by the Western Governors Association of the U.S., this trial is being conducted in the states of Wyoming, North Dakota and Nevada. ORGA is supplying more than 40,000 multifunction microprocessor cards, which will be issued primarily to women and small children who receive benefits from more than one national support program. The cards store personal and medical data as well as food vouchers, which recipients use for cashless shopping.
Emerging Markets: ORGA will be demonstrating a unique new smart card application which ensures the privacy and authenticity of Internet services. The company’s sm@rt c@rd goes online (SGO) system provides a secure process for accessing the World Wide Web. As a result, Internet usage can be more effectively monitored and sensitive information found on Web pages can be protected from tampering by unauthorized individuals.
Telecommunications: ORGA will feature its SIMtelligence family of products, which cover all aspects of GSM network service implementation, from initial consultation to SIM cards, programming tools and network infrastructure. The company’s SIMtelligence Center allows operators and users of mobile phones fast and easy access to new or existing value-added services. Depending on the subscriber’s needs, applications can be downloaded, activated or deactivated by utilizing ORGA’s Over-The-Air (OTA) updating capabilities.
In addition, ORGA is presenting its full line of HPS personalization systems, from desktop to high-capacity, multi-order production capabilities. The HPS family offers high-speed, full-color processing, a fully automatic solution for chip programming, testing and laser engraving. These systems personalize all standard memory and processor cards from various manufacturers and can produce personal identification, mobile telephone, access control and health services cards.
ORGA Kartensysteme GmbH Germany has been a pioneer in the development of microprocessor-based smart card technology since 1985. Application areas include: telecommunications, health care, retail/loyalty, banking, personal ID and e-commerce. ORGA enjoys a world-wide presence with subsidiaries, branch offices and joint ventures in Brazil, China, France, Great Britain, Russia, Singapore, South Africa and the USA. Visit our Web Site at: [www.orga.com]
Capital One announced this morning its Board of Directors has approved a three-for-one stock split of the company’s common stock.The three-for-one stock split will be in the form of a 200 percent stock distribution, or two-share stock dividend, to be distributed on June 1, to stockholders of record on May 20, 1999. The split will increase the outstanding number of Capital One shares from approximately 65 million to 195 million. Also at yesterday’s meeting, the Board of Directors approved a special stock option program, known as ‘EntrepreneurGrant’. Under the new program the company’s two top executives have given up all remaining compensation through the year 2001. Richard Fairbank, Chairman/CEO, and Nigel Morris, President/COO, gave up one additional year’s salary and two additional years of annual cash incentive, annual option grants, and Senior Executive Retirement Plan contributions, in exchange for a one-time option grant. The options vest early if the stock price reaches $300 at anytime on or before June 15, 2002, and in any case, in nine years or upon a change of control, regardless of the stock price. Mr. Fairbank will receive an option to purchase 376,887 shares and Mr. Morris will receive an option to purchase 251,258 shares of the company’s common stock. About 141 senior managers are also able to participate in the program, by electing to give up all annual stock option grants for the next two years, in exchange for the ‘EntrepreneurGrant’.Details
Atlanta-based sub-prime credit card specialist CompuCredit Corp. reported Thursday it added over 90,000 new ‘Aspire’ credit card accounts so far this year. The company says it generated over 40,000 new accounts during the first three weeks of April, from a March marketing program. During the first quarter CompuCredit spent $3.4 million in marketing and added 39,000 accounts. The issuer now has 382,000 accounts compared to 343,000 accounts at yearend 1998. For the first quarter ’99 managed loan balances increased to $487.7 million compared to $44.1 million for 1Q/98. As with a typical sub-prime portfolio, delinquency and chargeoffs remain extraordinary high. CompuCredit’s net chargeoff rate for 1Q/99 was 16.4% compared to 9.8% for 1Q/98. Delinquency (60+ days) climbed to 8.2% from 3.8% last year. CompuCredit completed its IPO, raising net proceeds of approximately $54.8 million, and began trading on Nasdaq under the symbol “CCRT” last Thursday.
For more financial details on CompuCredit visit CardData ([www.carddata.com]).
GlobeSet Inc., the world’s largest OEM provider of software solutions for electronic commerce, announces the general availability of the GlobeSet ServerPOS 1.0 at Internet & Electronic Commerce Expo.
The GlobeSet ServerPOS 1.0 is the company’s next-generation point-of-sale payment platform for online merchants needing to process secure transactions over the Internet. Available through GlobeSet’s worldwide OEM partners, the GlobeSet ServerPOS 1.0 extends the company’s product line into the high-end merchant-processing arena for aggregators such as commerce service providers, Internet service providers, acquiring banks, independent service organizations and online malls.
Designed to provide merchants with the ability to accept payment instructions from their online customers and route those instructions to their financial institution for processing, the GlobeSet ServerPOS software architecture is comprised of two components:
— A server-based POS engine that resides on a centralized server at the acquiring bank or service provider location and performs all associated payment transaction operations on behalf of online merchants, and
— A storefront adapter and thin client plug-in that reside on the merchant’s Web server and securely link to the ServerPOS engine over the Internet.
Using the server-based engine and thin-client approach to accept and route transaction information eliminates the need for an online merchant to install, configure and manage the large amount of software normally associated with a traditional online POS system. Alleviating the need to be proficient in managing an entire POS system provides the online merchant with the freedom to focus solely on marketing and selling products to their customers, and not become experts in payment processing.
In addition to a safe and simpler deployment architecture, the GlobeSet ServerPOS 1.0 provides capabilities for payment and shopping system independence, simplified integration and internationalization — robust features to meet the needs of global online merchants.
A major feature of the GlobeSet ServerPOS 1.0 is the flexibility it provides online merchants to process various forms of payment instructions using multiple levels of security.
ServerPOS 1.0 GA/2
Specifically, the GlobeSet ServerPOS 1.0 can process plain-text credit, off-line debit card, SSL and SET transactions, providing merchants with an application that can be used today with a built-in migration path to SET when it becomes widely deployed. Future versions of the GlobeSet ServerPOS 1.0 will include support for other payment instruments such as smart cards, electronic checks and micro-payments.
In addition to payment flexibility, the GlobeSet ServerPOS 1.0 is payment system independent. It supports both free-flow ad hoc shopping, structured shopping, and can be integrated with standards such as the Open Trading Protocol — a proposed standard currently being reviewed by the Internet Engineering Task Force. The importance of shopping system independence is that online merchants and their customers are not forced to use a specific shopping protocol for Internet selling and purchasing.
The GlobeSet ServerPOS 1.0 also contains new technology that makes integrating the plug-in with an existing merchant server quick and easy. Additionally, the GlobeSet ServerPOS 1.0 supports leading industry merchant-server solutions including Microsoft Site Server 3.0, Commerce Edition, Microsoft Commerce Server 2.0, iCat Electronic Commerce Suite 3.0, InterShop3, and Cat(a)log International Cat(a)log 2.5.
“The GlobeSet ServerPOS 1.0 supports the way online merchants do business today and greatly reduces the barriers to entry for merchants who are not already online,” said Wes Byrne, vice president, Product Development, GlobeSet. “This product is a standards-based, secure, robust and extensible payment platform that is future-proof for those who adopt it.”
“We believe the GlobeSet ServerPOS 1.0 gives our global OEM partners a payment platform their on-line merchants can use to deliver branded services and content to their customers,” said Dennis Jolly, vice president, Sales, Marketing and Operations, GlobeSet. “We are confident in the ability, experience and resources of our partners as they launch customized, branded versions of the GlobeSet ServerPOS to meet the needs of their customers.”
GlobeSet Inc., is the world’s largest provider of electronic commerce transaction software for OEM solutions. The company’s server-based products enable e-commerce production deployment and offer a migration path across multiple evolving transaction/certificate standards. Founded in 1996, GlobeSet Inc. is a privately held corporation headquartered in Austin, Texas. Additional information about GlobeSet can be found at .Details
Diebold, Incorporated announced the promotion of Jeffrey J. Van Cleve to vice president and general manager of Diebold Credit Corporation, Diebold’s wholly owned leasing subsidiary. He will report directly to Robert J. Warren, vice president and treasurer for Diebold. Van Cleve is responsible for leading global development of customer financing programs.
“Our strategic plan is to grow and expand financing options in order to support the sales of Diebold solutions globally,” said Gerald F. Morris, executive vice president and chief financial officer for Diebold. “Diebold Credit Corporation plays a key role by focusing on the unique leasing and financing needs of Diebold’s customers worldwide.”
Van Cleve joined the company in 1996 as manager, Diebold Credit Corporation. Prior to joining Diebold Credit Corporation, Van Cleve was senior sales representative for Dana Commercial Credit, Toledo, Ohio. He received a bachelor’s and master’s degree in business administration from Bowling Green State University in Ohio. A native of Toledo, Ohio, Van Cleve, currently resides in North Canton.
“Diebold Credit Corporation has a proven track record as a leading provider of customized financing solutions to Diebold’s customers,” said Warren. “Under Van Cleve’s direction, Diebold Credit Corporation is well positioned to continue its leadership in support of Diebold’s ongoing growth in global markets.”
Diebold, Incorporated is the global leader in providing integrated delivery systems and services. Founded in 1859, the company employs more than 6,000 associates in some 120 locations worldwide with headquarters in Canton, Ohio, USA. Diebold reported revenue of US$1.2 billion in 1998 and is publicly traded on the New York Stock Exchange under the symbol ‘DBD.’ For more information, visit the company’s Web site at [www.diebold.com].
Electronic Clearing House Inc. Thursday announced the completion of the acquisition of Magic Software Development Inc..
ECHO had announced an agreement in principle on March 8, 1999, and final recording of the acquisition with the appropriate state agencies occurred on April 27, 1999. Magic, which will operate as a wholly owned subsidiary of ECHO, is based in Albuquerque, N.M., and is a provider of electronic check conversion, electronic check re-presentment, check verification, and check guarantee solutions to financial services companies and retailers across the nation.
Under the terms of the acquisition, ECHO issued 1 million shares of ECHO common stock. The shares will be held in escrow and 500,000 shares will be released to the Magic selling shareholders on April 1, 2001, and 500,000 shares will be released on April 1, 2002.
An additional 1 million shares of ECHO stock will be placed into escrow to be issued to the Magic selling shareholders under a performance clause wherein, should the Magic subsidiary’s performance meet or exceed predetermined earnings goals for fiscal year 2000 and 2001, a proportionate number of performance-based shares will be issued.
Any shares issued under the performance clause will be held in escrow and 50% will be released on April 1, 2003, and the balance will be released on April 1, 2004.
Kris Winckler, president of Magic, will remain the president of the ECHO subsidiary and Dave Griffin, vice president of ECHO, has been designated director of Check Services and will assist in the integration of Magic products and services with the ECHO family of products and services.
“We believe it is logical for a merchant to expect their payments processor to provide a full complement of payment options and, with the addition of Magic, ECHO will be one of a select few processors in the nation who will have fully integrated credit card and check services,” stated Joel M. Barry, chief executive officer of ECHO.
“We intend to make both forms of payment available in real time over the internet, which will further distinguish ECHO from other less technically capable processors, and maximize the benefit to our growing Internet base of merchants,” stated Barry.
Magic has been an active member of the Electronic Check Counsel, a group of national retailers, banks and electronic processors, that was set up by the National Automated Clearing House Association (NACHA) to investigate and advise NACHA on new electronic check products.
“NACHA just announced its approval of new rules relating to electronic check conversion which will result in substantial cost savings for both retailers and financial institutions,” said Winckler.
In a check conversion transaction, the consumer presents a retail merchant with a check which is run through an electronic reader to capture the consumer’s bank account number, routing information, and check serial number. The merchant then returns the check to the consumer with a “void” stamped on the check. The consumer signs a receipt authorizing the electronic transaction and keeps a copy as a record of the purchase.
The merchant initiates an Automated Clearing House (ACH) debit, using the check information and transaction amount, which is processed electronically through the ACH network. The ACH Network is commonly used for payments such as Direct Deposit of payroll and Social Security benefits, and automated bill payments. In 1998, more than 5.3 billion ACH payments were made worth over $16 trillion.
The benefits to retailers of using electronic checks at the point of sale include reduced costs from the elimination of paper handling, faster and more effective redeposit and return item processing, simplified reconciliation, detailed settlement and transaction reporting, improved customer information flow, and a lower incidence of fraud.
“Magic is a leader in developing and deploying electronic check services and, with ECHO’s background and capabilities in credit card and internet-based processing, the combined suite of services we will be able to offer to merchants should make ECHO a highly preferred processor with merchants across the nation,” stated Winckler.
“The Magic team of programmers and engineers match well with ECHO’s distinction as a technically competent company,” stated Barry. “We think some innovative products and services, especially in the internet, will naturally result from this combination of talent.”
Electronic Clearing House 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. ECHO also designs, develops and manufactures software and point-of-sale hardware that is utilized as credit card processing terminals, automated money order dispensers, inventory tracking devices, and casino cash advance systems.Details
ZeitControl cardsystems, developer of the world’s first smart card that can be programmed in BASIC, will be showcasing its inexpensive, easy-to-program BasicCard at CardTech/SecurTech ’99 in Chicago, IL.
Celebrating its 10th anniversary in the smart card business, the company has established a reliable track record by delivering highly cost-effective application development solutions to the marketplace.
Microsoft Corp. announced late last year its plans to develop a BASIC programmable smart card for its Windows operating system. But according to Wolfgang Salge, managing director for ZeitControl, his company’s unique BasicCard is already available and has proven itself to be an efficient smart card-based application development tool for the Windows environment.
“Using our proven platform, BASIC programmers can custom design their own smart card in a single afternoon, with no previous experience required,” Salge declares.
The BasicCard is available in two versions: the Compact BasicCard and the Enhanced BasicCard. Both products contain 256 bytes of RAM, plus user-programmable EEPROM: 1 kilobyte in the Compact BasicCard, and 8 kilobytes in the Enhanced BasicCard.
The Enhanced version now also contains a DES + 3DES algorithm as well as Elliptic Curve Cryptography, making it possible to process an electronic signature in only 9 seconds without coprocessor (a plug-in Elliptic Curve library will be on display at ZeitControl’s CTST booth).
Because these two cards require smaller chips compared to other programming alternatives, pricing is extremely attractive. The Compact BasicCard costs $3 and the Enhanced BasicCard is currently priced at $4.35.
ZeitControl, in partnership with Philips Semiconductor, is now developing a Mifare Pro BasicCard (contact and contactless in one chip). The first sample cards will become available by the end of the summer. Future products in their early planning stages include an RSA-based Public-Key BasicCard as well as a Multi-Application BasicCard.
ZeitControl expects to unveil the industry’s first PC/SC compatible reader with USB and a working PC/SC driver at this year’s CTST Show. The single unit price for the “cybermouse” will be $39, with large-volume orders running about $20 per unit. A slightly less expensive version of the “cybermouse” comes equipped with a serial interface (RS232).
ZeitControl cardsystems GmbH, headquartered in Minden, Germany, is a pioneer in the development of BASIC-programmable smart cards. The company designed the first chip card readers for the German health service.
Founded in 1989, ZeitControl has delivered more than 5 million cards to customers around the world. For more information on ZeitControl and its BasicCard, visit the company’s Web Site at www.basiccard.com or [www.zeitcontrol.de]