Citi Card Bonds Rated

Duff & Phelps Credit Rating Co. (DCR) has assigned a ‘AAA’ (Triple-A) rating to the $750 million Class A certificates and a ‘A+’ (Single-A-Plus) rating to the $48 million Class B certificates issued by Citibank Credit Card Master Trust I Series 1999-1. The Class A certificates have a coupon of 5.50 percent and the Class B has a coupon of 5.75 percent. Both classes have a final maturity date of February 15, 2006.

This first series for 1999 represents the 37th outstanding deal and features a fixed-coupon and five-year tenor and is included in Group One of Citibank Credit Card Master Trust I.  The credit enhancement levels for this series are identical to that of Series 1998-9 issued last year, relying on 11 percent enhancement for class A and 6 percent for class B.  However, the 6 percent shared enhancement for both class A and B of Series 1999-1 comes in the form of the Letter of Credit instead of the Cash Collateral Account of Series 1998-9.

The enhancement contemplates supporting the weighted-average coupon (WAC) of the master trust, and therefore, does not vary from uncapped floating-rate deals to fixed-rate coupon deals.  Based upon DCR’s modeling, current credit enhancement more than covers potential investor loss caused by either a rapid and sustained increase in losses or coupon expenses, or the simultaneous occurrence of both.

This transaction requires enhancement levels that recognize the carrying costs of the entire trust, including the WAC.  DCR computes the WAC of the trust over the legal final life-span of all currently outstanding series and a worst case assumption of each index used on every floating rate deal.  The master trust currently supports 36 other deals, 28 of which carry a fixed rate, two of which are zero-coupon series with the balance floating with one of number of different indices.

For a copy of the New Financing Report Summary on this transaction, please call the DCR Hotline at 312-368-3198 or e-mail, [][1].



PaySys Durban ’99

PaySys International, Inc., the global leader in credit card processing software, will attend Computer Faire Durban ’99, in Durban, South Africa.

The fair provides a forum for IT manufacturers, distributors, dealers and service providers. It is expected to attract some 15,000 people.

PaySys’ South African office, located in Johannesburg, has been in operation close to a year. “We are very pleased with the response we have thus far received in South Africa,” said Roy Shellhammer, PaySys Vice President of Sales. “We feel our attendance at the Durban Computer Faire will allow more people to see our premier product, VisionPLUS. In addition, we are demonstrating our newest software, Desktop and Fraud Dossier, which brings the latest technology available to our customers,” he added.

VisionPLUS is considered the leader in credit card management software. Currently businesses using VisionPLUS in South Africa include Truworths Ltd., Woolworths Ltd., Topics, Edgars Stores Limited, and Foschini.

John Hopkins, Managing Director of the South African PaySys office, pointed out that although the PaySys office there is new, its product certainly is not. “Businesses know our name and products and are interested in learning more about VisionPLUS and PaySys,” he said.

PaySys International is a pioneer in credit card management software, and has installations running in more than 30 countries on six continents. More banks, finance companies and retailers use PaySys software solutions and more credit card accounts are processed on PaySys systems each day than any other card solution. Headquartered in Atlanta, Ga., PaySys has more than 400 employees and operates offices and support centers in Orlando, Fla.; Columbus, Ohio; Melbourne, Australia; Dublin, Ireland; Singapore; Costa Rica and Johannesburg.


AmEx Canada

1998 was a solid year of growth for American Express’ businesses in Canada.

Much of the company’s progress was fueled by strong consumer response to its credit card portfolio, and the addition of major new corporate card clients such as the Federal Government of Canada.  In fact, the company enjoyed its third successive year of achieving record new card acquisitions – a 22 percent lift over 1997.  Spending on Amex Cards was up by 14 percent in 1998 over the previous year.

On the Travel side, the impact of an overall increase in business travel volumes, together with new business travel accounts, led to a 10 percent rise in business travel sales.

Credit Cards Fuel Growth ————————     The driving force behind the growth of Amex’s Card business over the past two years has been the continued success of new credit card product launches. Amex’s range of credit cards, which allow Cardmembers to carry balances compared with the company’s traditional pay-in-full charge cards, are now playing a stronger role in the company’s consumer card portfolio.  Amex says that spending on credit cards alone is up more than 60 percent over 1997.

Record card acquisition in 1998 was led by the American Express AIR MILES Credit Card, which enables members to collect points for air travel and other rewards.  The Air Miles Card, first introduced two years ago, has now become the fastest growing product in Amex Canada’s history.

The company also reports a better than planned response to the blue American Express Credit Card, launched in January ’98 with a significant advertising and marketing campaign targeting young and aspiring professionals.

New card acquisitions in the corporate sector in 1998 were double that of the previous year thanks to the addition of several major new accounts.  The most significant of these was the Federal Government Corporate Card account – the biggest single card program in the country – which alone accounted for 65,000 new cards during the year.

Merchant Coverage and Spending Up ———————————     In 1998, the number of merchant locations that welcome the American Express Card in Canada grew by 13 percent.  Over the past three years, card acceptance has increased by more than 60 percent, with just over 50 percent of new merchant signings coming from the retail sector.

Noteworthy signings, which started accepting Amex Cards in 1998, include Canadian Tire and the Liquor Control Boards of Ontario and Quebec.

Amex also says it is making inroads in gaining card acceptance in new sectors such as financial services, telecommunications and healthcare services like dentists, chiropractors and veterinarians.  These “non- traditional” merchants accounted for almost ten percent of signings in the year.

An overall increase of 14 percent in spending on Amex Cards in 1998 can be attributed to a combination of factors, the company says.  These include the increase in cards and merchants, and generally healthy spending by both consumers and corporations, together with the impact of customer loyalty programs.

The company says that average monthly spending by participants in its Membership Rewards program is more than double that of non-participants. Enhancements such as Points Accelerator, which enables members to earn additional points, and discounts on air travel rewards through Canadian Airlines introduced in 1998 helped boost participation in the program.

Spending was also impacted by factors such as the January ’98 ice storm in Quebec and Eastern Ontario which resulted in a soft start to the year.  The weak Canadian dollar hit out-of-country vacation spending, but this was counterbalanced by a 15 percent increase in spending at Canadian merchants by foreign Cardmembers.

Total spending across Amex’s merchant network by both Canadian and visiting Cardmembers showed strong growth in key sectors in 1998.  Spending in retail establishments grew by 24 percent (including a 30 percent increase for the November/December holiday shopping season), restaurant spending was up eight percent, hotel/lodging up 15 percent, and airlines up 14 percent.

Business Travel Up, Leisure Travel Hit by Dollar ————————————————

American Express also operates Canada’s largest travel agency and saw overall travel sales in 1998 increase by seven percent.

Consumer travel sales were up by a marginal one percent.  This was due to the low Canadian dollar leading to a reduction in vacation travel and also because of the impact of the Air Canada strike.

Business travel, which accounts for over 80 percent of its travel sales, was up by ten percent, partly as a result of major new travel management accounts such as the Department of National Defence, CP Rail, CN Rail and London Life insurance.  But the company says other factors like increases in the volume of trips being booked by corporate clients and higher average ticket prices also played a role.


Hits Keep Coming

Credit card issuers advertising on CardWeb’s consumer channels have apparently discovered a gold mine of traffic. According to official Internet traffic statistics released last week, a record 4.4 million page views were delivered during January. One major card issuer revealed card application rates exceeded target by 147% and approvals hit 112% of the goal. All advertising slots for CardWeb’s consumer channels are currently booked under one year minimum contracts. Current participants include: Capital One, First USA, NationsBank, Chase Manhattan, AFBA, Wachovia, Commerce Bank, NextCard, People’s Bank and Arkansas National Bank. Harriet Bailey, CardWeb’s national sales manager, says the higher than average application and approval rates are due to a simple format, whereby consumers seeking info about the best credit card deals from CardWeb, do so without having to reveal any personal data. CardWeb’s high traffic is driven by many elements including its long-term credibility with the national news media. For example this past weekend CardWeb was cited to consumers by Parade magazine as the sole source of objective credit card information. Yesterday, Robert McKinley, president of CardWeb, announced after the firm’s annual board meeting in the Florida Keys, that CardWeb’s flagship consumer publication, CardTrak, will be switching this year to a not-for-profit structure.


ATM Record

NCR Corp. reported yesterday it delivered a record 46,509 ATMs to customers worldwide in 1998, representing a 10% increase over 1997 deliveries of 42,440 units.  In addition to new terminals, NCR delivered a record number of upgrades and kits both in volume and value. NCR said its offering of ATMs, associated software and service solutions has resulted in new orders from the biggest American banks including, Citibank, Bank One and Wells Fargo. Last week Diebold reported it shipped 26,286 self-service terminals and 26,211 upgrade modules worldwide in 1998.



American Express has upgraded the telecommunications network for its POS terminals in the UK and Europe. Transaction Network Services Limited was awarded the contract. The new system enables American Express to monitor all transaction statistics from its UK authorization center in Brighton, while providing detailed management data on each transaction passing through the network.


Retail Merger

Federated Department Stores and Fingerhut Companies jointly announced Thursday a definitive merger agreement under which Federated will acquire Fingerhut for $1.7 billion. Federated said Fingerhut’s state-of-the-art infrastructure for catalog and Internet order fulfillment, coupled with its prowess in database management and direct marketing, will provide a platform for further growth of Federated’s strong retail brands web site retailing operations. Federated also indicated it expects Fingerhut’s expertise to strengthen Federated’s private label credit card business.


Diebold Thailand

Diebold, Incorporated, will establish a subsidiary in Thailand to provide sales, service and support to the Thai market.  Diebold has appointed Verapun Patanayindee, managing director, Diebold Thailand.   He will oversee the company, a wholly- owned subsidiary, that will provide nationwide sales and service to Thailand.

“We’re very excited about establishing a direct Diebold presence in the Thai market,” said Michael J. Hillock, Diebold group vice president, International Sales and Service.  “Thailand’s banks have been using our automated teller machines for more than a decade.  We are very pleased to now work directly with our customers to develop innovative solutions to their business challenges.”

Diebold Thailand will initially employ approximately 20 associates, and expects to employ more than 100 within the next three years.     Prior to joining Diebold, Verapun Patanayindee, served as executive director for Sahaviriya Infotech Computer, a systems integrator in the banking and telecommunications industries, based in Bangkok.  Born in Bangkok, Verapun is a graduate of King Mongkut Institute of Technology University.

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 [][1]




IVI Checkmate Corp.formed an Integrated Transaction Solutions division yesterday. ITS will be responsible for marketing electronic payment products and solutions to VARs and distributors serving the middle tier retail marketplace. IVI’s direct sales force has focused on the top 200 retailers in North America and has giving the firm a 76% market share of installed check readers and over 72% market share of installed consumer activated debit/credit terminals in large multi-lane retail chains. The formation of ITS positions IVI Checkmate to provide industry leading electronic payment solutions for integration into VARs and distributor retail systems serving the middle tier retail market segment.



SIMS Communications announced yesterday it has released ‘Version 2.0′ of its POS terminal software. The new version allows a consumer to indicate the value of phone time being purchased on a SIMS prepaid phone card, and, by swiping the card through the terminal, activates the card’s PIN using data encryption technology for security. In the industry, prepaid phone cards are typically stocked live with their PINs usable, and they are primarily sold under normal credit terms at fixed, denoted prices, requiring multiple SKUs. SIMS ships the retailer inactive cards with dead PINs under a single SKU, and with no up-front billing. At the time of sale, the phone card is swiped through the terminal, the consumer enters the purchase amount, and using data encryption technology, it is remotely activated by SIMS’ phone card system. The wholesale price is then paid to SIMS through electronic funds transfer after the retailer has been paid for the sale.


Halifax Shifts Gears

Halifax Plc is to streamline its check processing with an approximately $2.3 million (U.S.) systems solution from leading systems integrator, BancTec, Inc..  The new system, due to go live in June, uses the latest imaging, workflow and archiving technology to handle up to 650,000 items per day.

The new BancTec solution incorporates BancTec’s ImageFIRST(R) TPS(TM) check clearing system and ImageFIRST(R) GeMS (General Enquiry Management Suite), together with ImageFIRST(R) OpenARCHIVE(TM).

ImageFIRST TPS recognizes details on the checks as they pass through the reader sorter transports at a rated speed of 1000 documents per minute.  Any ‘rejects’ are sent to PC workstations to be re-keyed by an operator, from an image on screen — rather than the paper original.  These images can also be used for signature verification.

All items are archived to BancTec’s ImageFIRST OpenARCHIVE, from where they can be retrieved by any terminal on the network, making the information instantly and easily accessible for later inquiry purposes.  Exceptions (e.g. unpaid items) are then passed to BancTec’s ImageFIRST GeMS system.  Here, they are routed by a workflow system through the various inquiry processes.

“The BancTec solution will enable the Halifax to process checks more efficiently.  Imaging technology makes data more easily and more widely available, and will enable us to improve still further the quality of the service we provide to our customers,” commented John Walsh, General Manager of Payment Systems at the Halifax.

“These solutions demonstrate our commitment to delivering IT systems that help deliver tangible business benefits to our customers,” said Grahame N. Clark, Jr., BancTec’s chairman and chief executive officer.  “This important project also underscores our success in delivering advanced transaction processing solutions to the world’s leading financial institutions.”

One of Europe’s largest personal services businesses, Halifax, looks after more personal savings in Britain than any other financial institution and services nearly one quarter of UK mortgages.  Other activities include financial services, providing life assurance, pensions and investment products; it also runs Halifax Property Services — a leading estate agency, Halifax Direct — a 24-hour telephone banking service and Halifax General Insurance Services Ltd. — offering a full range of personal insurance products.

BancTec is a worldwide systems integration and services company specializing in transaction management solutions for the banking, financial services, insurance, healthcare, government, utility, telecommunications and retail industries.  The company is also a leading provider of maintenance services for major computer companies, government and corporate customers. BancTec employs more than 4,000 people worldwide and is headquartered in Dallas, Texas.


Trajecta East Coast

Austin, TX-based Trajecta, Inc. announced the opening of its Atlanta office. The new office will service credit card and banking clients on the east coast by providing local customer service and sales support. Co-directing office activities will be Jim Heilman and Tim Bates, who have over 30 years of combined financial services and technology experience. Trajecta’s decisioning technologies predict, test, track and optimize strategic goals based on a complete and integrated view of revenue, risk and costs.