MARTA Smart Cards

Atlanta’s MARTA system received a report this week from Manuel Padron and Associates which recommended replacing MARTA’s ‘TransCards” with smart cards and discounting the fare structure. According to the Atlanta Journal and Constitution, the consultant suggested smart cards be discounted deeply enough to encourage up to 95% of MARTA’s 550,000 daily riders to use them. MARTA currently charges $1.50 for a one-way trip. Slightly more than half of MARTA’s current customers use weekly or monthly ‘TransCards’, which offer unlimited transportation for $12 weekly or $45 monthly. MARTA was previously involved in a two-year smart card pilot with NationsBank, which ended in July 98. The pilot involved 2,000 riders. MARTA says the cost of a changing card readers in the pilot, due to a technology change, was too expensive. MARTA’s board will consider the new recommendations this summer.


Contactless Bank Card

A Schlumberger wireless VISA Cash electronic purse card is being piloted in Spain. The new multi-application payment card – which combines a conventional debit function with an e-purse incorporates a contactless wireless interface. The first to exploit the potential of this new capability will be a consortium of transport operators and Spanish banks: a pilot scheme scheduled to start later this year will explore the use of the card’s VISA Cash for public transport ticketing in Madrid and Barcelona. This is believed to be the first time that a regular bank payment card has been fitted with a contactless interface. The new card offers two core functions. The first is VISA Cash which will currently uses a chip and the second function is the VISA Electron debit function which uses a mag stripe. The VISA Cash function will now go contactless.


Discover Recovers

Morgan Stanley Dean Witter reported Thursday that first quarter 1999 net income for its Credit and Transaction Services unit increased by 36% compared to 1Q/98. The fiscal quarter, which ended Feb. 28, shows net income for Credit and Transaction Services of $135 million versus $99 million one year ago. The significant jump in earnings was a surprise considering MSDW unloaded SPS, the Prime Option card portfolio and the Bravo card portfolio late last year. One of the main contributors was a 122 basis point drop in net chargeoffs and a 32 basis point drop in delinquency. As a result, provisions for consumer loan losses dropped 34%, from $684 million for 1Q/98 to $451 million for 1Q/99. For complete 1Q/99 financials for Discover visit CardData ( and click on Earnings Reports.


1Q99 4Q98 1Q98
Outstandings: $32.1b $32.5 $35.8
Total Cards: 37m 38m 40m
Merch. Locs: 100k 97k 90k
Chargeoffs: 6.28% 6.94% 7.50%
Delinquency: 7.08% 6.53% 7.40%
Yield: 14.06% 14.72% 14.72%
Spread: 8.23% 8.71% 8.46%

b-billions; m-millions; k-thousands; delinquency-30+ day;
yield-interest yield; spread-interest spread; CardData (



MasterCard International announced plans yesterday to issue more than 10,000 MasterCard ‘SET Digital Certificates’ by end of this year in Malaysia. MasterCard Malaysia says the certificates will be issued through the Hong Leong Bank. According to Bernama, The Malaysian National News Agency, yesterday’s announcement by MasterCard coincided with the launch of the ‘MEPS Secure Electronic Transaction’ payment gateway in Malaysia yesterday.


Biggest T&E?

VISA has surpassed American Express and MasterCard in card volume produced by international travelers purchasing core international travel and entertainment products and services worldwide. The findings are part of a new WEFA study which indicates that in 1997, travelers used their VISA cards to purchase more than $120 billion in core T&E products and services worldwide, representing over 38% of total T&E purchases for payment cards and a 7% edge over VISA’s closest competitor in the category, American Express (31%). WEFA’s report maintains that worldwide spending on core T&E segments totaled $680 billion in 1997.



Lodging Expenditures 38.5% 29.0% 22.0%

Cruise Sales 46.0% 25.0% 22.0%

Air Travel Sales 39.0% 34.0% 18.0%

Auto Rental Sales 37.0% 35.0% 19.0%

Source: WEFA


FTC Releases Collections Report

In its 21st Annual Report to Congress about the Fair Debt Collection Practices Act (FDCPA), the Federal Trade Commission observed that debt collection continued to be a principal subject of the many consumer complaints received by the agency in 1998. This law, which was passed in 1977, is one of several credit laws enforced by the Commission, and is specifically intended to prevent abusive, deceptive, and unfair debt collection practices in the marketplace.

According to the Commission’s report, “Such practices have been known to cause various forms of consumer injury, including emotional distress, invasions of privacy, payment of amounts that are not owed, and can severely hamper consumers’ ability to function effectively at work.” The report notes that while the agency has primary enforcement responsibility, it works with other federal agencies to enforce the Act and educate consumers. In addition to identifying practices that cause consumer concern, the report also highlighted the Commission’s enforcement and consumer education efforts. Further, the report contains four recommendations for changes to the FDCPA that the Commission believes will improve the statute’s clarity and its effectiveness as a law enforcement tool.

The Commission vote to approve the report was 3-0, with Commissioner Orson Swindle not participating due to illness.


Losses Abating?

Bank credit card chargeoffs continued to decline for the sixth consecutive month according to statistics released this morning by CardData ([][1]). Chargeoffs for February logged-in at 5.37% of outstandings compared to 5.46% for January. CardData also reports that delinquency dipped under 5.00% for the first time in 26 months. For February, the 30+ day delinquency rate, as a percentage of outstandings, stood at 4.96%, becoming the fourth straight month of decline. CardData tracks performance on $466.8 billion of bank credit card outstandings. Meanwhile Moody’s and Fitch IBCA both report chargeoffs and delinquency are edging down among card-backed securities. The ABA also released fourth quarter data yesterday showing 30+ day delinquency, as a percentage of outstandings, declined to 4.62%.



E-Commerce Services Organization

VeriFone, a division of Hewlett-Packard Company and the global leader in electronic payment solutions, Wednesday announced the formation of a comprehensive, worldwide services organization to help businesses work through the complexities of deploying new e-payment offerings.

This team of specialists provides expertise in Internet payment, payment processing, and smart-card services platforms to some of the world’s leading banks and processors, telecoms, retailers and ISPs. This new organization supports HP’s e-services vision.

“The expansion of electronic payment has resulted in two major shifts: Businesses must now have capabilities in enterprise platforms, and they must be in even closer touch with the different requirements of each region,” said Jan-Erik Rottinghuis, vice president and general manager of Worldwide Sales at VeriFone. “Lots of companies are delivering products, but few are truly capable of providing the expertise to help turn these products into functional services. This is a major differentiator for VeriFone.”

The new VeriFone E-Commerce Services Group includes a Technical Support Organization (TSO), Professional Services Organization (PSO), and Customer Support Organization (CSO). Together, the groups provide services ranging from needs analysis and product evaluation, to solution design and implementation, as well as ongoing support and management. The group also has the leverage of HP’s massive services organization of approximately 27,000 professionals worldwide, with extensive experience in enterprise computing.

“New payment applications and the emergence of the Internet have created both great opportunities and incredible challenges, and require the rapid adoption of new enterprise computing technology. It is difficult for businesses to keep up the internal expertise to effectively deploy and manage new e-commerce platforms,” said Tom Kilcoyne, vice president and general manager of VeriFone’s Electronic Commerce Software Division. “Very few organizations in the world have the diverse experience and global resources of VeriFone’s and HP’s service organizations.”

About VeriFone

VeriFone, a division of Hewlett-Packard Company, is the leading global provider of secure electronic payment solutions for financial institutions, merchants and consumers. VeriFone has shipped more than 7 million electronic-payment systems, which are used in more than 100 countries.


Spyrus Buys BlueMoney

SPYRUS, a leading provider of network security development tools, today announced the acquisition of BlueMoney Software Corporation. BlueMoney introduced the world’s first server-side wallet in 1997 and has a patent pending for this invention. Specific terms of the agreement were not disclosed.

“SPYRUS’ acquisition of BlueMoney shows its continued commitment to e-commerce, and to providing a broad range of digital content security and payment tools for network application developers and integrators,” said SPYRUS CEO Sue Pontius. SPYRUS also provides development tools for SSL implementations, which has become the de facto Internet security protocol. The company offers thin versions of SSL, optimized for imbedded systems such as TV set top boxes, and has been a leader in implementing the SET transaction protocol championed by Visa and MasterCard.

BlueMoney provides everything needed for Internet merchants and ISP’s who want secure credit card processing out of the box. The complete e-commerce payment solution includes the TITANIUM(TM) Commerce Server and an Internet Gateway for processing credit card transactions securely. The consumer payment is made with the server-side BlueMoney Wallet, which gives the consumer a convenient way to pay multiple merchants without re-entering personal information and credit card numbers for each transaction.

BlueMoney CEO John Sweet looks forward to the new relationship with SPYRUS citing the synergistic mix of tools for business. “The fusion of SPYRUS’ secure enterprise solutions and BlueMoney’s ‘server-side’ innovations, will create a new generation of products and solutions for business-to-business e-commerce.”

BlueMoney Software Corp. is a privately held venture specializing in software for secure Internet transactions. The company was founded in May 1996 by John Sweet, Chairman and CEO; Jeremy Barrett, Chief Technology Officer; and Ben Kavanaugh, Vice President of Engineering.

Sweet remains with SPYRUS as its Director of E-Commerce and Corporate Marketing. Barrett and Kavanaugh also remain with SPYRUS as senior research engineers.


SPYRUS is a leading provider of network security solutions to protect valued digital property for enterprises and governments. The company was named as the fourth fastest-growing technology company in the latest Deloitte & Touche Silicon Valley Fast 50. The SPYRUS Integrated Enterprise Security (IES) solution framework includes Certification Authority (CA) and Public Key Infrastructure (PKI) systems; high-assurance security tokens, available as smart cards and PCMCIA cards; and Secure Sockets Layer (SSL) channel security, SET, SPEX smart card, and Secure HTTP (S-HTTP) document security development tools. For more information about SPYRUS, visit the Web site at [][1].

All trademarks are the property of their respective owners.



Final Four Goes Wireless

Fans at this year’s Final Four will be able to use their credit cards to buy official memorabilia quickly and easily at numbers of “unwired” locations, thanks to wireless capabilities provided by Paynet Transaction Services and BellSouth Wireless Data.

Paynet Transactions, a leader in credit card processing for special events, and BellSouth Wireless Data, an expert in providing wireless data solutions, are providing wireless credit card point-of-sale (POS) terminals and service for use at the souvenir shops inside Tampa’s Tropicana Stadium, in the stadium parking lot and at area host hotels during the NCAA Basketball finals March 27 and 29, 1999.

The wireless POS terminals from Paynet and BellSouth Wireless Data enable souvenir vendors to have triple the amount of credit card terminals in Tropicana Stadium, making it quick and easy for fans to buy official merchandise…wherever they are in the stadium complex.

For fans that prefer the convenience of purchasing souvenir items right at their hotel, Paynet and BellSouth Wireless Data will temporarily furnish lobby souvenir shops of Tampa area host hotels with wireless credit card terminals. As most hotels do not have the resources available to accommodate multiple credit card terminals, Paynet and BellSouth Wireless Data provide the ideal portable, wireless solution because additional standard dial-up phone lines would be very expensive to add for a weekend event.

Each Paynet terminal is equipped with a wireless modem, allowing for rapid transaction transmission over the nationwide BellSouth Intelligent Wireless Network(sm) from BellSouth Wireless Data. Once a credit card is swiped, the terminals wirelessly transmit the data to Global Payment Systems, the front-end processor, via the BellSouth Intelligent Wireless Network, where it receives authorization and is securely broadcast back to the terminal. This process usually takes less than 10 seconds. Using standard dial up phone lines, this process would take longer.

The BellSouth Intelligent Wireless Network is ideal for conducting wireless credit card transactions because of features such as seamless, nationwide coverage by a single carrier, low latency, high reliability and guaranteed confirmation of transactions.

“Wireless credit card terminals are another example of how wireless solutions are moving into the mainstream bringing real-life benefits to vendors and customers alike,” said Lew Blumstein, BellSouth Wireless Data’s, vice president, industry marketing. “Be it the Final Four, the Super Bowl, or a major concert event, the wireless solution from BellSouth Wireless Data and Paynet will provide convenience to fans and increased sales to merchants.”

“Fans attending `once in a lifetime’ events like the Final Four tend to purchase expensive commemorative items such as sweaters or jackets with credit cards,” said Al Chan, vice president, for Paynet Transaction Services. “With the wireless transaction solution from Paynet and BellSouth Wireless Data, vendors at the tournament and area host hotels can quickly and cost effectively bring credit card convenience to fans”.

About Paynet Transaction Services

Paynet Transaction Services, Concord, California provides credit card processing for all types of merchant accounts. The company is one of the few credit card processors to maintain a special events department which does short term rental of credit card terminal, cash registers and radio frequency wireless modems which interface with the BellSouth Intelligent Wireless Network from BellSouth Wireless Data. Special events clients include the Rolling Stones tour, the US Open Tennis Championships, the New England Patriots (VUI), the Donna Karan Warehouse Sales, the George Strait tour, Sony Signatures, and many others for whom credit card acceptance at a temporary venue means convenience to fans and customers and increased sales to the merchant. E-mail:

About BellSouth Wireless Data

BellSouth Wireless Data, L.P., headquartered in Woodbridge, N.J., is an expert in providing proven wireless data communications solutions that eliminate the barriers between critical information and mobile users. The company, a winner of the prestigious Sears Innovation Source of the Year and Partners in Progress awards for 1997, delivers a competitive advantage and increases personal productivity for aggressive, innovative companies and individuals leveraging communications technologies to meet their strategic goals. BellSouth Wireless Data operates its wireless data service throughout the United States, covering more than 93 percent of the urban business population located in 266 metropolitan areas with a total population of 200 million people.

BellSouth Wireless Data is a subsidiary of BellSouth Corporation, which provides telecommunications, wireless communications, cable and digital TV, directory advertising and publishing, and Internet and data services to nearly 33 million customers in 19 countries worldwide. E-mail: Web site address: [][1].



ATC Promotes Crum

Air Travel Card announced today the appointment of Richard Crum as managing director. Crum, who previously served as Senior Director of Operations and Services for ATC, and most recently as Interim Managing Director began his new post as Managing Director on March 15th.

“Richard has done an outstanding job as Director of Operations and I have no doubt that he is the right person to lead our organization into the new millenium,” said John Reece, Chairman of the Air Travel Card, Board of Management. “Richard has been a great asset to Air Travel Card. As Managing Director, we expect that he will continue to focus on development of the Air Travel Card program to strengthen its position as a leading global corporate payment system.”

Some of Crum’s noted accomplishments while at Air Travel Card include:

Served as first Secretariat of the ATA Electronic Marketplace Committee; Developed strategic plan for re-energizing the Air Travel Card program in 1997; and Received Board approval in February 1999 for the development of the Air Travel Card Acquirer Network (ATCAN) – a system that, once implemented later this year, will greatly improve the processing of Air Travel Card sales globally.

In his new position, Crum is responsible for the overall strategic direction of Air Travel Card operations, product development, marketing, member relations, and subscriber services.

Richard joined Air Travel Card in 1996 after working at the Air Transport Association of America (ATA).

Air Travel Card is the business travel payment system offered by 28 airlines and accepted by more than 200 air carriers around the world. As a part of its global network, Air Travel Card owns and licenses the brands AirPlus¤ (Europe) and PassAge¢ (Asia) that provide value-added benefits to travelers.