Chase Flattens

Chase Manhattan’s credit card portfolio was virtually unchanged between first quarter 1999 and first quarter 1998, however charge-offs climbed and delinquency improved. Chase reported yesterday end-of-quarter card loans of $31.4 billion, net charge-offs (as a percentage of average loans) of 6.11% and delinquency (90+ day) of 1.95%. Average credit card receivables for the first quarter stood at $32.1 billion. According to CardData ([][1]) Chase’s fourth quarter receivables stood at $32.2 billion. CardData shows Chase’s net charge-offs for the fourth quarter logged in at 6.27% and 5.70% for first quarter 1998. Chase’s 90+ day delinquency dropped slightly from 2.17% for fourth quarter 1998 and 2.02% for first quarter 1998, according to CardData. Chase also reported Tuesday that noninterest credit card revenue grew 26% over the past twelve months, from $300 million to $379 million. For complete first quarter financials for Chase Manhattan visit CardData ([][2]).



Smart Card Acceptance

The Smart Card Forum released a new report this morning that concludes Americans are ready, willing and anxious to start using smart cards. A significant number of respondents said they would want to use the cards for functions including bank access and ATM services, to carry a record of driver and health insurance information, and as credit cards. They would be willing to pay up to $50 for the card itself and a $25 annual fee. Generally, those most interested in smart cards were early adopters with PCs, cell phones or other high-tech devices, tended to be in their 30s, had higher incomes and already carried an average of more than six cards in their pockets. Respondents favored a card with the look and feel of a credit card, probably with a photo of the bearer on it. Focus group participants indicated that the ideal smart card could do many things as well as a current card does, but should not be a card that can do one thing better than anything else. The SCF study is available for $6,000 per copy.


MasterCard ’98

MasterCard International reported yesterday that the number of acceptance locations is growing by 3,300 a day and ended 1998 with 16.2 million locations, an industry record. At the end of 1998, nearly 700 million MasterCard, Maestro, and Cirrus cards were in the hands of consumers in 220 countries. MasterCard says gross dollar volume worldwide for 1998 totalled $650.2 billion, up 7.6% from the $604.4 billion charged in 1997. In the U.S. market, MasterCard’s gross dollar volume rose by 17% to $310.7 billion. In Latin America, gross dollar volume rose 13.8%; in Canada, it was up 16.8%; in Europe, 17.5%; Mideast/Africa, up 22.8%; while Asia/Pacific declined 8.4%. MasterCard cards, excluding Maestro, were used for more than 7.4 billion transactions, up 14% year-to-year. The MasterCard/Cirrus ATM network handled 609 million transactions in 1998, a 28% increase. MasterCard says it demonstrated its Y2K readiness last year by processing flawlessly an average 6.7 million transactions on cards with 2000 or later expiration dates.



First, Inc., and Asia Internet Limited (), a Hong Kong based ISP, Monday announced the signing of an agreement to provide Electronic Bill Presentment and Payment services to Asia Internet customers.

This will also include a revenue sharing program, ultimately designed for ISPs around the world.

Under the agreement Asia Internet will use the First credit card processing systems to enable all Asia Internet customers to pay their monthly bills over the Internet. Additionally, Asia Internet will be able to process all its web hosting clients’ online credit card sales in real time, again using the First processing systems. Asia Internet is currently ecommerce enabled via the First systems, and is now processing credit card sales. The EBPP systems are expected to be fully operational by the end of June 1999.

Under the joint revenue sharing program, Asia Internet will refer all its web hosting clients to First for merchant approval, and will be able to earn a commission on all the sales of its clients. Clients whose web sites are hosted with Asia Internet will now have the ability to transact in multiple currencies and carry out batch processing.

This is the first time in Hong Kong that an ISP will be able to offer its customers easy sign up and auto payment options, a development made possible through the use of the First payment gateway. With this system in place, customers will be able to choose the billing plan that best suits them, and review their statement of account online. Customers will also be able to make changes to their credit card details and pay their bills online. Asia Internet will be the first ISP to offer this ecommerce solution to its clients and will participate in the ISP referral program.

“The First payment gateway fills a vacuum in Asia,” said Mike Mahboobani, President of Asia Internet. “For a long time now we have been asked by our web hosting clients to commerce enable their web sites. Without an online processing system, this has simply not been possible, as the banks do not issue Internet Merchant Id’s. We are excited to be the first ISP to offer these services to our clients, and see our relationship with First as providing us with the ability to earn additional recurring income from our web hosting clients. We plan to now offer free web hosting facilities to all our merchants who sell over the Internet.”

“Increasingly Internet Presence Providers are under competitive pressures to reduce web hosting charges,” said Gregory Pek, President of First “The revenue sharing plan that we offer to ISPs that host web sites helps them to replace declining web hosting revenue streams with a transaction based revenue model. We see our processing system as being a major marketing tool for ISPs around the world, as they can offer free web hosting, yet still experience earnings growth.”

About First

First, Inc., is a U.S. company trading on NASDAQ OTC-BB under the symbol FECC. First provides online credit card transaction processing services for merchants outside of North America. Through a series of strategic alliances, First approves merchants and processes transactions in a tax-neutral jurisdiction without the need for using U.S. banking institutions or U.S.-based ISPs. Using First Data Corp.’s processing platform, First offers online credit card processing solutions for merchants in their preferred currency. For more information, contact First at (888) 305-8233 or by email at

About Asia Internet

Established in 1997, Asia Internet is one of the fastest growing web hosting companies in Hong Kong. Asia Internet currently hosts approximately 10% of Hong Kong’s active web sites, and more recently has established a branch office in Singapore. The company offers systems integration, leased line, web hosting and consumer dial up services to the general public.


Scan Debit Bureau

Deluxe Payment Protection Systems announced Monday that ‘SCAN Electronic Check’ is now enhanced with ‘Debit Bureau’. The check service, which converts paper checks into electronic transactions at the point-of-sale, draws on ‘Debit Bureau’ to improve front-end authorization and provide higher back-end collection rates. Retailers using ‘SCAN Online’ for paper check authorization experienced a 38% improvement in their ability to prevent losses by identifying high-risk transactions. ‘Debit Bureau’ information includes check order history, check-writing histories, account opening and closing data, information about lost or stolen checks and external data sources. Debit Bureau now has more than 1.7 billion records.


Zebeck Wins Marketing Award

The Midwest Direct Marketing Association announced that Ronald N. Zebeck has been presented with the prestigious Direct Marketer of the Year Award. Zebeck is president and CEO of Metris Companies Inc., one of the nation’s fastest-growing direct marketing companies.

The award, which was presented at a luncheon in Zebeck’s honor Thursday, is given to an individual who has influenced a company’s direct growth in sales revenue and profitability, expanded direct marketing into new industries, received a high level of national and international publicity, maintained a high level of professional and ethical conduct and adapted cutting-edge technology to further advance the industry.

“I am deeply honored to accept this award on behalf of Metris, in part because it reflects our innovation and success in the industry, but also because it mirrors the contributions of the more than 2,200 Metris employees nationwide,” Zebeck said.

Zebeck, a recognized leader in the credit card and financial services industries, was recently elected chairman of MasterCard’s U.S. Board of Directors and also serves as a member of MasterCard’s Global Board of Directors.

Over the last five years, Zebeck has established Metris as one of the nation’s top five providers of fee-based services and the thirteenth largest issuer of credit cards. An industry pioneer, Zebeck has received awards from American Banker, Direct Magazine, Credit Card Management and the Direct Marketing Association.

During his 25 years in direct marketing and financial services, Zebeck helped build successful credit card businesses at Citicorp, Advanta and General Motors. His accomplishments include developing Advanta into one of the most sophisticated direct response companies and credit card lending organizations in the nation. In 1992, Zebeck launched the GM card, which set an industry record by amassing one million accounts less than one month after its introduction and is still considered one of the most successful credit card introductions ever.

Zebeck also spent ten years with Citicorp, New York, where he was responsible for the Citibank Visa, the Choice Card and Citicorp Ready Credit Products. Before serving as Managing Director of The GM Card, Zebeck served at Advanta Corporation and Colonial National Bank USA as Director of Marketing. During this time he was responsible for the development of Advanta’s Gold card program, one of the first no-fee gold card programs to be introduced on a national scale.

A native of Baltimore, Maryland, Zebeck is a graduate of Towson State University with a bachelor of science degree in business administration and marketing.

Metris Companies Inc. is an information-based direct marketer of fee-based services and consumer credit products primarily to moderate income consumers. Based in St. Louis Park, Minnesota, Metris also has operations in Tulsa, Oklahoma; Baltimore, Maryland; Champaign, Illinois and Phoenix, Arizona and Jacksonville, Florida and currently employs over 2,200 people.

Visit Metris on the internet at [][1].

Since 1960, the Midwest Direct Marketing Association (MDMA) has served professionals who work in all facets of direct marketing, including advertising agencies, marketing consultants, printers, telemarketers, copywriters, designers, illustrators, publishers and retailers



Citibank #1 Again

Citibank has reclaimed its ranking as the #1 U.S. bank credit card issuer with $69.4 billion in first quarter managed card receivables compared to BankOne/First USA’s $68.4 billion. Delinquency and losses also improved in Citibank’s card portfolio during the first quarter according to statistics released by Citigroup yesterday. Full financial details for Citigroup’s first quarter as well as historical data are available via CardData ([][1])


1Q/99 4Q/98 1Q/98
Receivables $69.4b $69.6b $46.8b
Volume $36.8b $42.2b $25.3
Accounts 41.4m 40.5m 25.6m
Chargeoffs 5.34% 5.30% 5.98%
Delinquency 1.46% 1.45% 1.85%

volume- quarterly volume only; charge-offs- 12 month lagged net credit
loss excluding Universal Card Services; delinquency- 90+ days past due
Source: CardData (



Diebold 1Q/99

Diebold, Incorporated announced Monday its 1999 first quarter earnings, which include record first quarter earnings per share (EPS).

In the quarter ended March 31, Diebold reported net income of $29,124,000, or diluted $.42 per share, on revenue of $283,483,000. This compares to first quarter 1998 net income of $26,850,000, or $.39 per share, on revenue of $295,739,000. This represents an increase of eight percent over the first quarter in 1998.

Highlights include:

* Total operating expenses down eight percent compared to the same period in 1998.

* Product gross margins increased to 40.1 percent while service gross margins increased to 29.1 percent.

* Increased service revenue of $11.8 million, or 11.5 percent.

* United States and Diebold direct international business both improved.

* Software and professional services, Campus Systems and MedSelect grew, reflecting Diebold’s commitment to expand those portions of its business.

As expected, revenue reflected the drop-off in IBM business. However, product gross margins continued to rise because of the higher profits on product sold through Diebold direct sales channels.

“We continue to make important progress toward recovering from the setbacks we experienced in the first half of 1998 and are growing those areas of our business which will move us forward in our industry,” said Robert W. Mahoney, Diebold chairman and chief executive officer. “Favorable gains in our software and service-related businesses as well as continued cost-control efforts will help us produce profitable returns well into the future.”

Given this shift of Diebold’s overall business, which is resulting in a greater mix of professional services, software and networking services, incoming product orders can no longer be considered a reliable barometer for future results. As such, the company will no longer report product orders.

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 .


Three Months Ended
March 31,
1999 1998
Net Sales
Product $169,113 $193,130
Service 114,370 102,609
Total 283,483 295,739

Cost of Goods 182,395 193,604

Gross Profit 101,088 102,135

Percent of Net Sales 35.7% 34.5%

Operating Expenses
Selling, General and
Administrative 47,457 49,746
Research, Development
and Engineering 11,951 14,930
Total 59,408 64,676
Percent of Net Sales 21.0% 21.9%

Income Before Taxes 45,864 40,993
Percent of Net Sales 16.2% 13.9%

Taxes on Income 16,740 14,143
Effective Tax Rate 36.5% 34.5%

Net Income $29,124 $26,850
Percent of Net Sales 10.3% 9.1%

Basic Weighted Average
Shares Outstanding 68,927 69,045

Diluted Weighted Average
Shares Outstanding 69,177 69,647

Basic Earnings Per Share $0.42 $0.39

Diluted Earnings Per Share $0.42 $0.39


Compaq Goes Skipjack

Skipjack Merchant Services has been selected by Compaq Computer Corporation to provide online credit card transaction processing as part of its new Online Services initiative.

Compaq, whose servers process close to 90 percent of the world’s securities transactions and 66 percent of all credit card transactions, has named their new electronic commerce storefront service “ezStore.” It comes complete with Skipjack Merchant Services’ credit card transaction payment gateway, protected by the highly secure Skipjack IC encryption protocol.

Compaq’s ezStore enables merchants to set up and create their Web stores using an easy interface and pre-designed templates. Skipjack Merchant Services provides the technology to automate the acceptance and real-time processing of credit card payments for online sales orders. “Compaq’s ezStore is a browser-based, complete web storefront solution,” explains Kenny Kurtzman, VP, GM, Division. “With their customers rushing to the Web, merchants need an answer like this.”

Skipjack Merchant Services is a service of Evolv. Brad Hoeweler, President, Evolv, said, “We’re excited Compaq has selected Skipjack, and we’re looking forward to contributing to the inevitable growth of online sales.”

“There is a solid base of small and medium-sized businesses out there who are going to love the ezStore service,” says George M. Farnell, Jr., Vice President, CTO of Evolv. “Up until now, a company had to play Sherlock Holmes just to figure out all the pieces of the e-commerce puzzle. This is an excellent answer because of the best-of-breed technologies involved. As an example, Skipjack benefits from the fast, stable and flexible qualities of the ProLiant server platform and Compaq’s DISA architecture.”

“Skipjack proves itself in the field every day and serves a growing population,” said Brian D. Griffin, Evolv Vice President, Business Development. “It has been adopted by a wide range of merchant acquirers, acquiring banks, Internet Service Providers, and back-end processors. Plug-ins have been developed for an array of shopping cart and catalog developers such as INEX, Deadline Solutions, Inc. and ShopSite and the company makes its API available to developers of all types,” he said.

Skipjack Merchant Services supports Visa, MasterCard, American Express, Discover Card, Diners Club, JCB, and debit cards. It features real-time authorization and settlement as well as email receipts for customers and fulfillment entities.

More about Compaq and services designed for the small and medium-sized business at: . More about Skipjack at:


NextCard Exclusive

The No. 1 newspaper Web site,, signed an exclusive marketing agreement with NextCard yesterday. Under the terms of the agreement, NextCard becomes the exclusive credit card issuer on and becomes a sponsor of ‘Marketplace’,’s e-commerce section. The company has previously advertised on USA Today’s website, with banner ads appearing above-the scroll, on the first screen. NextCard has aggressively advertised on other high traffic websites, including CardWeb’s consumer channels. San Francisco-based NextCard launched its “The First True Internet VISA” in Dec. 97 and has attracted 1.5 million applicants to-date. Yesterday’s agreement comes on the heels of several recent long-term, exclusive online deals by NextCard’s chief competitor, First USA.


Bank One 1Q/99

Bank One reported this morning that managed credit card loans slipped from $70.0 billion to $68.4 billion during the first quarter. The figure includes both bank credit card and private label products. However average managed credit card loans increased 18% from 1998’s first quarter to $69.1 billion. First USA, Bank One’s credit card division, reported it added 2.9 million accounts in the first quarter, matching the record setting fourth quarter. Credit card revenues grew 13% to $347 million, while service charges and commissions increased 5%. Compared to the fourth quarter, fee-based revenue declined due to the seasonal level of credit card fees. Managed net charge-offs for credit cards were 4.89% and the 30+ day delinquency rate for the first quarter was 4.51% compared to 4.82% one year ago. Full financial details for Bank One’s first quarter as well as historical data are available via CardData ([][1])


1Q/99 4Q/98 1Q/98
Receivables $68.4b $70.0b $57.7b
Volume $26.9b $29.2b $22.7b
Cards 58.3m 56.6m 51.2m
Chargeoffs 4.89% 4.79% 6.05%
Delinquency 1.51% 1.41% 2.09%

volume- quarterly volume only; charge-offs- net credit loss;
delinquency- 90+ days past due
Source: CardData (



Canadian Tire Affinity

Canadian Tire unveiled Monday its first affinity MasterCard in support of the Ontario Women’s Hockey Association. The new no-fee card is the first of its kind in Canadian retailing. Under terms of the agreement OWHA will receive a financial contribution based on the number of cards and a percentage of every purchase made with the new card. Funds, are anticipated to reach a six-figure amount over the next three years and will directly support women’s hockey.The new ‘Canadian Tire OWHA Affinity MasterCard’ features an intro rate of 6.9% for cash advances and balance transfers for the first five months and a 21-day interest free grace period. Cardholders will also receive special offers on hockey equipment and other Canadian Tire merchandise.