Pathways – LinkOpps

The Pathways Group, Inc. announced that it has entered into a letter of intent with LinkOpp Marketing, Inc., a private company located in Hermosa Beach, California. The letter of intent anticipates a contract between Pathways and LinkOpp to provide a set of “turn-key” Smart Card solutions for LinkOpp’s national membership, currently transacting business on the Internet. These solutions include the adaptation of Pathways’ existing Smart Card technology and providing smart cards, terminals and other PC related read/write devices, card fulfillment, transaction processing and related backroom support services.

Under the terms outlined in the Letter of Intent, LinkOpp anticipates purchasing up to 1.5 million Smart Cards from Pathways, which will be issued to the LinkOpp membership as part of the initial rollout during 1st Quarter, 1999. These cards will be programmed with Pathways’ proprietary multi-purse technology and work in conjunction with a variety of Pathways’ merchant terminals. These solutions also include home user and eTeller(TM) software, which will be used by LinkOpp along with other offerings to their membership. The initial rollout is projected to include a large mix of Smart Card and Magnetic-Stripe Card compliant hybrid merchant terminals and several other PC compliant Smart Card read/write devices including PCMCIA technology and keyboards. It is anticipated that Pathways will also be providing other services to LinkOpp from their suite of transaction processing services. These services include credit and debit card adjudication, national “on-line” and telephone technical support as well as detailed management, member, and merchant tracking and reporting of transactions, which have occurred.

LinkOpp management seeks to issue an additional 10 million cards over the next eighteen months, with extensive expansion of the features to be offered to their members both with the Smart Card technology as well as providing other electronic retailing benefits.

Pathways anticipates adapting their Smart Card technology to work within the LinkOpp paradigm, giving LinkOpp the advantage of Pathways’ proven Smart Card technology as well as Pathways’ years of experience in the electronic transaction arena.

LinkOpp’s membership base, as well as their aggressive marketing plan, projects placing LinkOpp and Pathways at the forefront of electronic commerce on the Internet. LinkOpp and Pathways are believed to be the first cooperating companies to introduce Smart Card transaction processing, with affinity benefits, which will provide discounts and loyalty awards both in the LinkOpp retail merchant setting as well as those subscribing merchants who are part of the LinkOpp network of Internet merchants.

Carey Daly, president and CEO of Pathways said, “We are very pleased to be adapting our secure technology to the fast paced marketplace of Internet e-Commerce. Our proprietary Smart Card technology and our established electronic transaction processing abilities will guarantee a quick, efficient and successful rollout of this venture. By partnering with LinkOpp, we benefit from their knowledge and experience in Internet e-Commerce. This enhancement to our skill set will position Pathways as the premier Smart Card solution provider and processor in the country. LinkOpp will likewise benefit from Pathways’ experience and gain themselves significant advantages in both market timing and positioning.”

LinkOpp, a global Internet community, offers corporate web hosting, retailing, and membership based goods and services.

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.


No-Surcharge Crumbles

Sanwa Bank California says it has reluctantly decided to begin imposing a $1.50 surcharge on noncustomers who utilize its ATMs in California beginning in the spring. Sanwa operates 108 ATMs throughout the state. The decision comes after all of Sanwa’s major competitors, including Union Bank of California, Glendale Federal Bank and California Federal Bank, abandoned the “No Surcharge Alliance” they formed 18 months ago to fight ATM surcharges imposed by Bank of America and Wells Fargo. When founding member Union Bank of California officially left the alliance a few months ago, Sanwa was the only major regional bank remaining as a member.


PNC Exits

Just as the holiday break got underway Pittsburgh-based PNC announced the sale of its entire portfolio to MBNA. PNC will receive a 15% premium on outstanding credit card receivables of approximately $2.9 billion and 3.3 million accounts. The sale includes AAA-branded affinity credit card accounts. The transaction is expected to close within the first quarter. MBNA has also entered into long-term agreements with both PNC Bank and AAA. MBNA will market credit card products to the 3.3 million households served by PNC and the 36 million members of AAA. However PNC will continue to market consumer loan and deposit products to AAA members nationwide through the AAA Financial Services program. Fitch IBCA says the transaction will allow PNC to bolster lagging loan loss reserves, strengthen capitalization, and allow the company to reallocate capital resources to higher return, strategic businesses. Fitch also noted the card sale will benefit PNC’s consolidated capital ratios. According to CardData ([][1]) PNC had $3,867,150,000 in 3Q/98 receivables and 2,075,445 active accounts.



Weak Holiday Sales

FDC’s TeleCheck Services said Tuesday that weak West Coast sales is one of several factors dampening holiday spending, with same-store sales for the first 24 days of the holiday shopping period up 0.7% over the same period last year. The data, which covers the period from Nov. 27 through Dec. 20, are based on a same-store comparison of the dollar volume of authorized checks written by consumers at more than 27,000 of TeleCheck’s 200,000 subscribing locations. TeleCheck says the impeachment vote and the resulting fall-out in Washington, along with the Iraqi situation, undoubtedly diverted consumer attention and interest from shopping. Promotions and deep-discounts may have spurred sales, but reduced retailers’ total dollar sales volume.  And sales on the West Coast, which is experiencing problems connected with the weak export market and low energy prices, held down the national number. The strongest area for sales so far has been the Midwest with sales up 3.1%.  Wisconsin’s sales were up 3.3%, Illinois’ rose 3.2%, Michigan’s gained 2.9%, and both Minnesota’s and Ohio’s rose 2.6%.


Pizza Payment

IVI Checkmate Corp. announced that it has entered into a partnership with the Scotiabank, to supply portable wireless POS payment terminals for credit related transactions. Through a pilot program, Pizza Pizza will be the first Scotiabank client to adopt the payment solution. A Pizza Pizza store in Toronto and in Mississauga will participate in the pilot. Cantel AT&T will also play a key role in the pilot program, as it will carry the information transmitted from IVI Checkmate’s payment terminals via the Mobitex data network between the consumer and the vendor. The pilot program will initially be limited to credit transactions, mobile debit capability will soon follow.



American Express filed suit against Chase Manhattan yesterday for false and deceptive advertising practices. The ads in question are based on a J.D. Power & Associates survey which showed Chase’s cards as the highest in customer satisfaction. American Express is asking the court for a temporary restraining order before next Monday, barring Chase from beginning a 19.5-million piece direct mail campaign that uses the award to market its credit cards. American Express alleges that the survey excluded its platinum and gold charge cards. A spokesman for J.D. Power said Tuesday that the American Express gold and platinum cards were not included in the survey because they are charge cards, not credit cards. Chase indicated it has tried to settle but AmEx remains hell-bent on litigating the matter.


BAMS Merger

As expected BankAmerica and BA Merchant Services announced Tuesday the signing of a definitive merger agreement. BAMS will become a wholly owned subsidiary of Bank of America National Trust and Savings Association.  BAMS shareholders will receive $20.50 in cash per share. BankAmerica owns 66.6% of BAMS and controls 95.2% of BAMS voting common shares. The transaction is expected to be completed by the end of the first quarter. BAMS is the exclusive provider of merchant processing services for Bank of America. BAMS says it is the fifth-largest processor of merchant credit transactions and among the largest processors of debit card transactions in the U.S..


Discover Platinum

Discover Financial Services unveiled the ‘Discover Platinum’ card yesterday which features a double ‘Cashback Bonus’ award program. Like other VISA and MasterCard platinum programs, the ‘Discover Platinum’ features up to a $100,000 credit limit, a $500,000 travel accidental death insurance benefit and $25,000 in rental car collision damage waiver insurance. The card will carry a primary interest rate of 14.40%. The new platinum card will be offered starting next week through a major marketing initiative that includes a new advertising campaign as well as direct mail and telemarketing programs. The advertising, which begins Dec. 30, includes four 30-second commercials airing on network and cable programming. Thirty-second ads will begin airing on network and local radio at the same time, and a national print campaign will begin appearing in targeted publications in March.  A major direct mail and telemarketing program begins in January. Discover Card’s ‘Cashback Bonus’ award program allows cardholders to receive up to 1% paid yearly based on the annual level of purchases. Discover ‘Platinum’ cardholders can double their annual ‘Cashback Bonus’ awards through certificates redeemed with select ‘Platinum Partners’. The full set of ‘Platinum Partners’ will be announced in early 1999.


EBT Protection

In a move that may snowball across the country, California consumer groups are urging a state agency to require that EBT cards offer the same protections as credit cards.  Within the next year, California will choose a private company to provide a statewide system to replace paper food stamps with an EBT program. Yesterday, in a letter to the California Department of Social Services, more than 20 groups, including Consumers Union, California Food Policy Advocates, Catholic Charities of California, and the Western Center on Law and Poverty, urged the California Department of Social Services to require that the bidding companies provide the same protections to EBT program participants as protections provided by the private banking system in the event of a lost or stolen debit card. Consumers Union publishes Consumer Reports magazine.


Triton Cited

MS-based Triton Systems, Inc. has been named one of the top 25 most successful small manufacturers in the country by IW Growing Companies magazine.  Triton says it is the country’s leading manufacturer of off-premise ATMs. Over the past three years, Triton’s customer base has grown by more than 100%, while profit has grown an astounding 4,364%. To accommodate its rapid growth, Triton is currently building a 75,000-sq-foot manufacturing facility that is slated to go online in the fourth quarter of 1999 and a 30,000-sq-foot office complex that will house administration, marketing, and sales when it opens in 2000. As the third largest manufacturer of ATMs and ATM management software, Triton has been named two years in a row to Inc. Magazine’s “Inc. 500” ranking of the largest privately-held companies in the U.S..


Desert Fox Phone Cards

AT&T announced Tuesday that to help boost morale of U.S. troops stationed in harm’s way around the world, it is providing a gift of holiday calling, including donations of $10 prepaid calling cards to nearly 35,000 service personnel in Persian Gulf battle groups and in Bosnia.

Defense Secretary Cohen will present the cards during his visit this week to troops in the gulf.

“All of us at AT&T appreciate the sacrifices made by our men and women in uniform, especially during the holiday season,” said AT&T Chairman and CEO C. Michael Armstrong.  “AT&T has a long history of supporting our troops and we feel this is one small way we can continue that support.” “We know how much it means to the armed forces and their families to make it easy for them to call home over the holidays,” said Mary Jane McKeever, president, AT&T Government Markets, who presented the prepaid cards to Secretary Cohen this week.  “We’re happy to be a part of this effort.”  She said the holiday calling offer is being made in cooperation with the Army & Air Force Exchange Service (AAFES) and the Navy Exchange Service Command (NEXCOM). Summarizing the holiday calling offers, AT&T said: * About 28,000 service personnel in the Persian Gulf will receive $10 AT&T Global PrePaid(TM) cards.

* About 6,000 troops in Bosnia-Herzegovina, Croatia and Hungary will receive the $10 prepaid cards.  Troops there will also be able to call home on Christmas Day for a reduced rate of 45 cents a minute using AT&T’s Global Military Saver Plus(R) Plan.

* Troops stationed on bases in Bahrain, Kuwait, Egypt and Saudi Arabia will receive 50 percent off all calls on Christmas Day using Global Military Saver Plus.

* Military personnel in Korea will be able to call the U.S. mainland on Christmas Day at a reduced rate of  39 cents a minute using an AT&T Global PrePaid Card.

AT&T’s support for military personnel during 1998 has included sponsorship of concert tours, donations to the USO totaling more than $500,000, donations of free calling at Thanksgiving for troops in Korea and providing a ship-to- shore calling service for personnel at sea.


Euro Travellers Cheques

Thomas Cook has launched the first travellers cheque in the new euro currency — the closest form of euro cash to be available before January 2002.

The cheque, which is available to buy worldwide 1 January 1999, will enable holidaymakers to get used to transacting in the Euro currency before the notes and coins are introduced, which is not until January 2002 in the first participating countries.

John Hempsey, managing director, financial Services, The Thomas Cook Group, said: “Euro travellers cheques are an excellent way for people to start getting used to the new single currency. And, as with all foreign currency travellers cheques, including the new Euro travellers cheque, holidaymakers know in advance exactly how much foreign money they have to spend. They are therefore guarded against fluctuating exchange rates whilst abroad, and they don’t need to waste valuable holiday time shopping around for the best exchange rates.”

This cheque will bring the number of currency travellers cheques Thomas Cook offers to 13 and will be available to buy through numerous Financial Institutions, travel shops, and bureaux de change across the globe. A key advantage of Thomas Cook’s travellers cheques is that they offer security, as they can be quickly replaced, usually within 24 hours, if they are lost or stolen, backed by Thomas Cook’s 24 hour-a-day, 365 day-a-year global refund service.

The new Euro travellers cheques will be accepted globally, but holidaymakers will find them particularly useful in the 11 countries which are set to enter EMU in January next year. This includes seven countries for which Thomas Cook does not currently provide currency cheques – namely Austria, Belgium, Finland, Ireland, Italy, Luxembourg and Portugal – as well as France, Germany, the Netherlands and Spain. The currencies of all these countries will be fixed against the Euro from 1 January next year.