January Roar

American consumers added more than $5 billion in revolving debt during January according to preliminary figures released Friday afternoon by the Federal Reserve. Historically January is a credit contraction period, however, this year, revolving credit and total consumer credit grew at its highest annual rate in more than one year. For January 1998 revolving credit card debt grew at annual rate of 4.3% versus this year’s 12.2% annual rate. Last January revolving credit stood at $533.0 billion. Overall consumer credit is growing 13.5% annually according to the FRB. At the end of January, American consumers were $1.315 trillion in debt, exclusive of home mortgages.

Jan 99 Dec 98 Nov 98 Oct98 Sep98 Aug98 Jul98 Jun98 May98 Apr98
%GRWTH: 12.2% 8.5 -2.5 12.9 7.4 10.6 -4.3 9.2 -1.4 5.4
$OWED: $565.9 560.2 556.3 557.4 551.5 548.2 543.4 545.3 541.2 541.8

Source: Federal Reserve; revised figures as of 03/05/99;
For complete historical data visit www.carddata.com.



Germany’s ORGA has won a contract for India’s first smart card-based driver’s license.The project will take place in the Indian state of Gujarat for an estimated 10 million driver’s licenses. The first phase will involve installing 25 issuing systems across the state of Gujarat, which will then be followed by a full state rollout. The smart driver’s license will store the owner’s fingerprint as well as traditional personal details. India represents one of the highest potential markets for payment cards with a total of 950 million people.


@PayPOS Update

GlobeID Software announcedlast week it has integrated its ‘@PayPOS’, a java-based >point of sale software, with Microsoft ‘Site Server 3.0 Commerce Edition’ for the Windows NT Server platform. The integration of ‘@PayPOS’ with Microsoft ‘Site Server’ allows merchants to >focus their resources on sales and fulfillment processes, while outsourcing the complexities of real-time Internet payment processing to ‘@dvanced Payment Solution’ operators.


ORCC Network

With recent announcements about new content and nationwide access to its services, Online Resources & Communications Corporation, a leading service bureau in the Internet and remote banking industry, has achieved its goal of integrating its proprietary technology and services with its well established network links to financial institutions, consumers, and financial content.

By creating a “network of networks” and integrating and packaging the data that flows through them, Online Resources can provide financial institutions and their clients a content-rich, cost-effective and easily implemented suite of interactive financial services. Online Resources’ network of networks for financial electronic commerce (EC) includes:

–An EFT (electronic funds transfer) Gateway to a network of processors, ATM networks and financial technology companies that link Online Resources to financial institutions.

–A Content Gateway (the Financial Services Center or FSC) to a network of third-party financial content providers that supplement Online’s billpaying and banking services.

–An Access Gateway to a network of access providers or Online’s proprietary servers, giving consumer multiple access options through the Internet or dial-up networks using a variety of enabling devices and software.

Alex Seltzer, executive vice president, systems & technology, said the company has simplified what is highly complex technology. “At the heart of our financial EC network of networks is a sophisticated integration capability,” Seltzer said. “By integrating our proprietary technology with well established network links to financial institutions, consumers and content, we do much more than merely link gateways; we can pull data from various sources, integrate and package it into value-added consumer financial services and information.”

Online Resources’ EFT Gateway enables “plug and play” implementation of online financial services. With technological links to more than 50 companies, Online has a real-time transaction path to substantially all U.S. financial institutions for online bill paying and account information.

The recently announced FSC is the centerpiece of Online Resources’ Content Gateway. The FSC supplements Online’s core billpaying and banking services by providing consumer access to online insurance, loan approval, securities trading, investment information, financial planning tools and shopping services. Online built and maintains the FSC, but it appears as a bank-branded service on the institution’s Web site.

Online Resources has long been known for its Access Gateway that offers multi-access capabilities, linking consumers to their money through the Internet, private PC networks, telephones and ScreenPhones. On PCs, consumers can use Online’s banking and billpaying interface, personal financial management (PFM) software such as Intuit’s Quicken or Microsoft’s Money, or other banking and billpaying software provided by Online access partners such as Aftech, Fiserve, Ultradata, Voice Access and other providers of Internet and dial-up access servers.

McLean, Va.-based Online Resources & Communications Corporation ([www.orcc.com][1]) provides Internet and remote banking services to financial institutions that “privately brand” them. The company’s patented ATM network-based architecture allows real-time bill paying and account information with major cost and quality benefits. And by merging various network access and device alternatives with comprehensive financial content and the banking industry’s established payments infrastructure, Online Resources has developed a network of networks and a one-stop electronic commerce solution for financial institutions. The company, founded in 1989, is privately-held and serves 315 financial institutions nationwide.

[1]: http://www.orcc.com


Tikitbox Expands into Hawaii

The Pathways Group, Inc. announced recently that it has entered into a letter of intent with Consolidated Amusement Company, Inc. in Honolulu, Hawaii. The letter of intent anticipates a contract between Pathways and Consolidated Amusement Company, Inc. to provide an integrated system for unattended electronic ticketing, concession purchases, and loyalty program cards to a new “Sixteen- Plex” Consolidated Amusement Company theater located at the Pearlridge Shopping Center. The system will include Pathways’ existing Smart Card technology, as well as terminals and other PC-related read/write devices, card fulfillment, transaction processing and related backroom support services. Pathways’ integrated system and backroom support will also provide Consolidated Amusement Company, Inc. with database management, reports, interfaces, security, card stock management, personalization, fulfillment, clearance, and the facilitation of account settlement.

The pending agreement calls for the installation of Pathways’ proprietary TIKITBOX(TM) product at various locations within the theater. These ticketing kiosks will allow Consolidated Amusement’s customers the ability to purchase tickets in an unattended fashion. Customers will also be eligible for acquiring loyalty points, frequent movie passes, and concession purchases using a smart card. The loyalty points will then be available for redemption for purchase of products or services in the theater or at other merchants participating in the program. Further, an exclusive client card program, which is part of the anticipated system, will have benefits that break new ground in the cinema viewing experience.

Carey Daly, President and CEO of The Pathways Group, Inc. said, “We are pleased to be extending our involvement in the Hawaii business market, and particularly pleased to be working with a client of Consolidated Amusement’s stature. We believe we can provide Consolidated Amusement with a high technology solution in the form of smart card and kiosk systems that exceed anything being offered in the industry today. The use of our core technology, in yet another new venue for Pathways, validates the company’s position as a leading force in Smart Card Technology.”

Consolidated Amusement Company, Inc. operates multi-screen theaters throughout the state of Hawaii, and is a wholly owned subsidiary of Pacific Theatres Corporation of California. The parent company operates over thirty additional venues of multi-screen configuration on the West Coast.

The Pathways Group, Inc. provides clients with innovative and unique solutions for securely creating, capturing and processing data and electronic transactions using custom application software and hardware systems. The company was established in 1987 by Carey Daly and has evolved into a leader in the development of custom software and hardware for electronic banking, data and transaction processing, and smart card applications. Pathways creation of proprietary “back room” systems allows for the capture and processing of data and transfer of funds via “ACH” protocol, the standard used in the banking industry for transfer of funds in retail, medical and institutional environments.

Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Act of 1995. Actual results may differ materially from those projected in any forward-looking statement. Investors are cautioned that such forward looking statements involve risk and uncertainties, including, but not limited to, dependence on the developing smart card marketplace; market acceptance of the company’s products; the rate at which the company’s customers deploy smart card solutions; and dependence on third party marketing arrangements.


Wachovia Digital Financial Services Division

Wachovia Corporation announced Thursday the formation of a Wachovia Digital Financial Services Division to focus on the delivery of Internet and electronic services for consumers.

“The new division demonstrates a commitment by Wachovia to Internet and related electronic consumer financial services that customers increasingly are using and demanding,” said Lawrence G. Baxter, executive vice president and head of the new division. “It will integrate and align existing Internet services and traditional financial services for electronic delivery through computers, laptops and TVs (with Internet access), as well as ATMs, debit and smart cards, and interactive kiosks.”

The division has responsibility for product management for the Internet and digital access devices, Internet alliances and marketing, and continued development of technology that supports Wachovia’s Internet presence and employee intranet. The division also will focus on web functionality, customer personalization, e-mail, privacy and security issues.

Wachovia’s Internet web site at http://www.wachovia.com, which includes Wachovia PC Access Online Banking and Online Investing, has been recognized by PC publications as among the leading financial services sites on the World Wide Web. Wachovia has more than 1,300 ATMs in Florida, Georgia, North Carolina, South Carolina and Virginia. The company also is a leader in banking and debit card services and has been among the pilot providers of stored-value cards.

Wachovia Corporation is an interstate bank holding company with headquarters in Atlanta and Winston-Salem, N.C. At December 31, 1998, Wachovia Corporation had assets of $64.1 billion. Wachovia Bank, N.A., the principal banking subsidiary, has more than 750 offices in Florida, Georgia, North Carolina, South Carolina and Virginia.

Wachovia PC Access is a registered service mark of Wachovia Corporation.


Las Vegas Deal

777WINS and eConnect (www.hpos.com) have signed a Letter of Intent for eConnect to acquire 777WINS by July 1999 with cash and stock.

777WINS.com has been consistently rated as one of the top 3 Internet casinos by Internet casino rating services.

777WINS.com is based in the free-trade zone of Costa Rica and enjoys current monthly earnings of $10,000 after having been in business for 4 months.

Over the next 60 days, 777WINS will increase its telecommunications bandwidth and will be able to service more than 300 players at any one time, which will result in a projected monthly earnings of $100,000-plus by the fourth quarter.

777WINS will generate additional revenues by acting as the Group Gate for PERFECT Internet Casino transactions, which are ATM card and smart card same-as-cash transactions being sent electronically from home and office terminals.

The 777WINS Internet Casino Group Gate will receive a transaction fee as competitor Internet casinos are being paid.

According to an eConnect spokesperson: “The next 24 months will show a global explosion of pay-per-play, same-as-cash electronic wagering by smart card and ATM card home and office terminals, which migrated into the home as a bill payment device but which will also be used to wager.

“The acquisition of 777WINS will not only bring the substantial earnings of 777WINS to the eConnect eGaming division, it will also position 777WINS to collect service fees for the eConnect eGate division (www.hpos.com) as it routes PERFECT Internet casino transactions to competitor Internet casinos.

“Over the next year, we will be acquiring a lottery, bingo and slots company that will service those respective gaming fields,” the spokesperson concluded.



Sears, Roebuck and Co. and the International Credit Association are working together to educate consumers on credit literacy. Sears is the corporate host of “Train the Trainers,” a nationwide credit education program for Illinois high school teachers. “Train the Trainers” is an important component of National Credit Education Week, which is celebrated all over the United States and educates individuals on how to use consumer credit wisely. The seminar takes place on Wednesday, April 21 at the corporate headquarters of Sears in Hoffman Estates, Ill.

“We’re excited to host this program during National Credit Education Week. Sears has been a long-time supporter of the ICA and advocate for increasing credit literacy. This seminar provides teachers with the tools they need to prepare high school students for their economic future,” said Alan Lacy, president, Sears Credit.

The seminar contains nationally known speakers from credit, government and consumer groups. The seminar begins with opening remarks from Mr. Lacy. Topics covered include: credit reporting, social psychology of credit, types of credit and budgeting. Other participating speakers include: Ron Wilwerding, chairman and CEO, Omnium Worldwide; Patricia Kelly, division chief, Attorney General’s Office; Bill Williams, vice president, Equifax; Cate Williams, president, Consumer Credit Counseling Services (CCCS); and Marty Callahan, vice president, Trans Union and ICA Chicago Chapter president.

ICA represents 10,000 credit executives from the entire credit card industry, including banks, savings and loans, financial institutions, retail credit companies, credit reporting agencies, consumer credit counseling services and many other credit-related organizations.

Sears, Roebuck and Co. is a leading U.S. retailer of apparel, home and automotive products and services. Over 60 million households in America have a Sears credit account. For more information on Sears, visit their web site at .

Media Inquiries should be directed to Rebecca Sullivan at Sears Roebuck and Co., 3333 Beverly Road, Hoffman Estates, Ill. 60179, 847-286-3796. For more information on National Credit Education Week, or to register for the program, please contact Robert O’Neal at Sears, Roebuck and Co., 847-286-0798.


Missed Market

About 70% of U.S. entrepreneurs use a personal credit card from an institution other than their primary provider, according to PSI Global. More than half of the nation’s 6.2 million small office/home office businesses pay for or finance business expenses with a personal credit card. In PSI Global’s recent national survey of the SOHO market, 58% of companies said that they are using a no-fee personal credit card for business purchases. Significantly more firms, 76%, said they should not have to pay an annual fee. And 65% of the SOHOs using personal cards for business viewed a rate under 12 percent as appropriate. According to PSI Global, 71% of SOHO companies reporting business use of personal credit cards within the last 12 months used them to pay for supplies, office equipment etc. Twenty-eight percent said they used their cards to finance the business itself, and 62% used the cards to pay for business travel.


CheckFree Responds

CheckFree Corp. issued a statement Thursday in response to Intuit Inc.’s suit against Checkfree over the way it distributes E-bills. CardFlash carried the story in yesterday’s edition. The news drove CheckFree’s stock down more than 11% or $4 per share yesterday to close at $31.50 per share yesterday. CheckFree says the recent contract with Countrywide Home Loans, Inc. is not affected by Intuit’s action, and is not at risk. Regardless of the outcome of Intuit’s action, CheckFree says it is committed to supporting bill presentment and payment through Internet portals, and continue to be fairly compensated for its efforts. There is nothing in Intuit’s complaint against CheckFree that seeks to restrict CheckFree from continuing its success in signing electronic billing and payment contracts with billers.



This morning a stretch limo will squire a Corona, California woman and her family to a local ARCO am/pm convenience store where she will be awarded a $25,000, 1999 Jeep Wrangler. The grand prize is the finale to KeyBank/ARCO’s “Key to Your Car” ATM sweepstakes. KeyBank’s says its network of 683 ATMs, located at ARCO am/pm convenience stores in California, Washington, Oregon, Nevada and Arizona is now producing a major impact for KeyBank. The bank also indicated the partnership with ARCO is significant because the KeyBank ATM network is recording 400,000 transactions a month in a region where KeyCorp does not have bank branches. Since their arrival in April, KeyBank ARCO ATM’s have recorded more than 4 million transactions. The ARCO partnership has expanded KeyBank’s ATM network by 30%. KeyCorp has 2,600 ATM units across the country. With 470 ATM’s, California now ranks third behind Ohio’s 504 and Washington’s 488.



The dot.com craze has spread to ISOs. Los Angeles-based Electronic Card Systems, Inc. announced Thursday it is changing its name to creditcards.com. The announcement was made in conjunction with the launch of ‘Virtual Terminal’. ‘VT’ allows merchants to key enter data directly on-screen, then instantly submit the data to their authorization and settlement processing networks via the Internet. The ISO has been a pioneer in non-face-to-face merchant banking services. For example, ECS claims it has created the first real-time risk-management system for credit card acquiring, which reduced chargebacks in the non-face-to-face environment by more than 90%. ECS was formed in 1992 after its founders had been serving as a credit card acquiring consultancy group since 1989. Company Chairman and CEO Richard Gordon is also the founder of the Washington, D.C.-based Electronic Commerce Association and serves as president of the Association of Internet Professionals.