PC Banking Explosion

It will take less than three years to double the number of households that have taken up PC banking since it was first introduced in the U.S. 14 years ago. Some 4.8 million American households are now doing PC banking, says market researcher Inteco Corp., and more than ten million will be doing it by the end of 2001. The company says the preponderance of the next wave of PC bankers will come from a select ten percent of U.S. households, which they labeled the “Early Majority.” Inteco characterized the group as “rational buying households,” who use technology to overcome time constraints. Almost all households in this segment consist of married couples with incomes of more than $80,000, with three quarters of them being dual-income families. In 55% of these households, both adults have college level education or beyond, compared to just ten percent in all households. The group least likely to become online bankers is by far the largest single segment, comprising 44% of U.S. households. Members of this “Laggards” group are, on average, 15 years older than the “Early Majority”, are less educated and are likely to live outside a traditional family structure. To complete its new study Inteco applied advanced modeling techniques to the results of 2,500 interviews conducted in May 1998 to identify and rank U.S. households into five segments in terms of likelihood of becoming PC Bankers.


On-Line Internet Banking

BancBoston Robertson Stephens senior electronic commerce research analyst Gary Craft has issued a research report titled “On-Line Internet Banking in the U.S.”  In this report, Craft discusses the five principal on-line banks in the U.S:  Compubank, NetB@nk, NextCard, Security First Network Bank and TeleB@nc Financial Corporation.

“In aggregate, these five banks hold $2.5 billion in assets and approximately half that amount in consumer deposits,” said Craft.  “These assets and deposits represent only a sliver of the industry’s $3 trillion, plus in assets, yet rich veins of deposits are often found below even the slightest cataract.  The point of our research and investment thesis is simple:  the modest cataract now characterizing the Internet banking industry runs very deep and when explored, should yield very high rewards.”

Craft feels that the five current Internet banks discussed in the report represent a colorful palette of corporate strategies.  “They range from traditional banking retrofitted for the Internet, to low-cost delivery/customer pass-through savings,” said Craft.  “The Internet is lowering the cost of funding for banks, and combined with the branch-less, low-cost banking platform, these banks are able to offer superior rates compared to the traditional brick and mortar bank.”

In the report, Craft also reiterates BancBoston Robertson Stephens Strong Buy rating on TeleB@nk (Nasdaq: TBFC).  “We believe that TeleB@nk is a direct play on the on-line banking and Internet phenomenon.  The company now reports that 48 percent of its customers and prospective clients interact with the bank through the Internet,” said Craft.

BancBoston Robertson Stephens is a leading international investment-banking firm focused on emerging growth companies.  The firm’s 55 senior research analysts cover over 575 companies.  The information contained herein is not a complete analysis of every material fact respecting any company, industry or security.  Although opinions and estimates expressed herein reflect the current judgment of BancBoston Robertson Stephens, the information upon which such opinions and estimates are based is not necessarily updated on a regular basis; when it is, the date of the change in estimate will be noted.  In addition, opinions and estimates are subject to change without notice.  This Report contains forward-looking statements, which involve risks and uncertainties.  Actual results may differ significantly from the results described in the forward-looking statements.  Factors that might cause such a difference include, but are not limited to, those discussed in “Investment Risks.”  BancBoston Robertson Stephens from time to time performs corporate finance or other services for some companies described herein and may occasionally possess material, nonpublic information regarding such companies.  This information is not used in the preparation of the opinions and estimates herein.  While the information contained in this Report and the opinions contained herein are based on sources believed to be reliable, BancBoston Robertson Stephens has not independently verified the facts, assumptions and estimates contained in this Report.  Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information and opinions contained in this Report.  BancBoston Robertson Stephens, its managing directors, its affiliates, and/or its employees may have an interest in the securities of the issue(s) described and may make purchases or sales while this report is in circulation.  BancBoston Robertson Stephens International Ltd. is regulated by the Securities and Futures Authority in the United Kingdom.  This publication is not meant for private customers.  The securities discussed herein are not FDIC insured, are not deposits or other obligations or guarantees of BankBoston N.A., and are subject to investment risk, including possible loss of any principal amount invested.


Betting Inc. Comes Out

Betting Inc. has announced that the company has generated first revenues by acting as a gaming transaction facilitator for Goldmine Casino.

Using their credit cards and freely located terminal kiosks, consumers have opened gaming accounts with Goldmine Casino, an Internet casino ([www.goldmine.com][1]). The Betting Inc. service provides the player with a secure transaction bypass of the Internet with both credit card information and personal address information.

Betting Inc. has generated service fees for facilitating this transaction between the players who are opening gaming accounts though the usage of the publicly placed terminals, and Goldmine Casino. No actual gaming is occurring.

Betting Inc. is focused on updating its service to accept same-as-cash ATM cards with PIN for online debit by early 1999.

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


Credit Ed

United College Marketing Services announced Friday it will donate $6 million to be spent on credit educating young adults between 18 to 24. UCMS says it hopes to reach 25 million young adults through the program. As part of its ‘Credit Education Plan for 1999’ UCMS will produce live campus credit seminars to student groups such as fraternities, sororities, resume related activities, dorm housing, and pre-professional organizations. Students will also be given a year’s supply of transaction recorders.  These recorders are made of Tyvek and slip on over a credit card.  Students record purchases and can keep track of balances so that overspending is minimized. UCMS holds the patent to the transaction recorder. UCMS says the $6 million charge will be in calendar year 1999 but split up between fiscal years 97, 98 and 99. Last year the firm had gross sales of about $14 million.


TV Cards

Cardholders using a VISA smart card could soon be able to access new interactive services over their cable television network. VISA and General Instrument have signed a memorandum of understanding which would enable GI’s broadband digital network system to accept VISA-branded multi-function smart cards.  Under a more definitive agreement, the ‘VISA Open Platform’ would be made available to broadband network operators and integrated by GI for implementation on advanced interactive digital set- tops and systems. VISA cardholders will have potential access to a variety of interactive services, such as TV-shopping, pay-per-view using ‘VISA Cash’, home banking, loyalty and electronic coupons. VISA says one example would be to download special offers or coupons from a TV advertisement onto a VISA smart card.


TSYS Dividend

Total System Services, Inc., announced that the Board of Directors declared a quarterly cash dividend of $.01 per share.  The cash dividend is payable on January 2, 1999 to shareholders of record as of the close of business on December 22, 1998.

TSYS () is one of the world’s largest credit, debit, commercial and private-label card processing companies.  An 80.7% owned subsidiary of Synovus Financial Corp.(), TSYS serves card-issuing institutions throughout the United States, Puerto Rico, Canada and Mexico. Creating innovative processing solutions, TSYS makes it possible for more than 115 million cardholders to use their cards and enables card-issuing institutions to profitably compete and better serve their customers through our world class people, technology and service.


Louisiana Online Banking

With a virtual click or two of the mouse, Bank One, Louisiana customers now have access to one of the hottest and most useful financial services tools — online banking.

The service, called Bank One OnLine Banking, became available to former First Commerce Corporation customers following the conversion of First Commerce operating systems to common Bank One systems.

“Bank One offers its customers the most extensive online banking service in Louisiana,” said Emmett Vollenweider, Bank One’s Central and North Louisiana Manager of Retail Banking.

“Customers statewide now can bank at home in their bathrobe and pajamas, if they chose,” Vollenweider said. “All that’s needed for a customer to directly access most of his or her accounts is a PC and a modem — at any location with Internet access around the world. And there’s no additional cost to use Bank One’s OnLine Banking service through the Internet.”

With Bank One OnLine Banking, customers are able to:

— Access complete daily account information to check account balances

— Transfer funds between accounts

— Order checks online

— E-mail questions to a Bank One Customer Service Representative

— Download information to financial management software

Also available to Bank One, Louisiana customers is Bank One OnLine Bill Payment, an optional online banking service that lets customers set up an electronic system for paying bills from their PC. This service, currently free for the first month, is regularly $4.95 per month.

According to Robert Ryder, Bank One’s Manager of Retail Banking for South Louisiana, the OnLine Bill Payment process is simple: customers select the bills to be paid and the amount and due date of the payments.

“Bank One does the rest,” Ryder said. “Customers can fill out bill payments on-screen and review pending payments. We guarantee on-time payment when the payment is scheduled at least five days before the due date.”

To set up OnLine Banking, customers access Bank One’s web site – [www.bankone.com][1] – and enter their ATM card or THE ONE Card number with their personal identification number (PIN). Or, for more information, customers can call Bank One’s OnLine Banking customer service number at 800/482-3675.

Bank One is taking a leadership role in the growth and popularity of online banking. Already, the bank is:

— The fourth-largest provider of online banking services based on number of customers;

— The first to announce plans to fully integrate bill presentment into its online site; and

— The largest provider of credit cards online.

And last month, Bank One and Excite, Inc., a leading Internet portal, announced plans to create a full-service financial center for Excite users. The agreement gives Bank One exclusive rights to market its products and services on Excite’s start page at [www.excite.com][2].

The Bank One/Excite financial center, which is expected to launch in the first half of 1999, will offer personalized banking information far beyond what is available today. When an Excite user logs into his or her Bank One account, he or she will receive instantly updated personalized information. Plus, customers will be able to:

— Open checking and savings accounts

— Obtain credit cards

— Apply for home equity, car or home mortgage loans

— Buy insurance

— Invest funds

— Receive – as well as pay – bills

Initially, the service primarily will offer popular Bank One products and services — ranging from checking and savings accounts to investment products. Bank One also intends to offer products and services of other financial brands.

BANK ONE CORPORATION, headquartered in Chicago, is the nation’s fifth-largest bank holding company, with assets of more than $235 billion. BANK ONE offers a full range of financial services to commercial and business customers and consumers. It is one of the nation’s two largest credit card lenders, the second-largest consumer and commercial finance company, the third-largest bank lender to small businesses and the third-largest bank mutual fund company. It operates more than 2,000 offices and a nationwide network of ATMs. It is a major commercial bank in the United States and in selected international markets. Information about BANK ONE can be accessed at [www.bankone.com][3]; through InvestQuest at [www.investquest.com][4]; or through Fax-On-Demand at 614/844-3860.

[1]: http://www.bankone.com
[2]: http://www.excite.com
[3]: http://www.bankone.com
[4]: http://www.investquest.com


SignaSURE Order

Datakey, Inc., a Minneapolis-based provider of information security systems, announced it has received an order from Banka Celje of Slovenia for 1,000 of its SignaSURE systems.  The systems will be distributed to the corporate clients of Banka Celje, the fifth largest bank in Slovenia, and will be used for secure Internet and web access to an electronic banking server.

The smart cards, which support industry cryptographic standards such as PKCS #11 and Microsoft CryptoAPI, were personalized by Datakey with Banka Celje artwork and the Banka Celje logo.

Banka Celje, who has set goals to develop into a universal bank and maintain their leading position in the region, became an independent Slovenian bank in 1994.  It has since taken over Banka Noricum d.d. Ljubljana and Hmezad Banka. The bank offers their clients complete financial service in Slovenia as well as internationally.

Matevz Kovacic, advisor to the Banka Celje CIO, said, “This installation of smart card-based information security systems is the first of its kind in Slovenia.  Our plan is to be an industry leader in smart card technology within the Slovenian banking industry.”

“The use of smart cards to secure the transmission of information over networks is new to the European community even though they are far ahead of the United States in overall smart card use, particularly as monetary debit instruments,” said Carl Boecher, president and CEO of Datakey.  “We believe that banking pioneers like Banka Celje will help us launch this technology in Europe.”

Datakey, Inc. is an international supplier of electronic products and services.  The Company provides product, subsystem and system solutions to record, store, and transmit electronic information. Datakey provides products and systems directed to the information security markets that enable user authentication, secure data exchange, and information validation.  The Company also provides OEM products, consisting of proprietary memory keys, cards and other custom-shaped tokens, that serve as a convenient way to carry electronic information and are packaged to survive in portable environments.

Shares of Datakey’s common stock are traded on the Nasdaq/NNM under the symbol  DKEY.  Web address is .  Datakey press releases are available by fax through Company News On-Call at 800 758-5804, ext 231950


New Bull COO

Bull announced Friday in the United States that Don Zereski, senior executive vice president, Operations, has been appointed chief operating officer. Zereski is now in charge of the company’s worldwide product and services divisions in addition to his existing responsibilities as head of Bull’s sales networks and marketing. Based in Paris, he reports to Guy de Panafieu, Bull’s chairman and CEO.

Zereski was appointed senior executive VP, Operations in July, after two years as head of Bull’s North & South America sales networks.

Don Zereski is a graduate of Worcester Polytechnic Institute, in Massachusetts, and completed the Harvard Business School Program for Management Development. He acquired his management experience with Digital, as vice president of American operations, then with Data General, where from 1993 he was in charge of systems integration and services worldwide. Before joining Bull, he was president of Northcrest International Limited.

With a presence in more than 85 countries, more than 21,000 employees, and combined revenues in 1997 of $4.2 billion, Bull offers a wide range of systems, infrastructure software and IT services through focused innovation, alliances with the best partners, and its own integration expertise. Based in France, the company’s worldwide software division, BullSoft, and its North/South America operations are headquartered in Billerica, Mass. The company’s Web address is and, in the U.S., .


Bio MasterCard

Canada Trust has introduced the first biodegradable credit cards in Canada with the launch of the Canada Trust “Friends of the Environment Foundation” MasterCard. The biodegradable credit card is made of a plant-based substance called ‘Biopol’. ‘Biopol’ credit cards break down in the presence of soil, moisture or salt water in a few months. In addition to the use of a biodegradable card, the new MasterCard will generate funds for the non-profit group based on card transaction volume. The Canada Trust “Friends of the Environment Foundation”, established in 1990, provides funding support for initiatives that protect and preserve the Canadian environment. The regular and gold MasterCards have no annual fee. The annual interest rate is 17.9% and 15.9% respectively. A special offer this month features an intro rate of 7.9% for the first six months.


E-Bank Hits $1 Billion

TeleBank revealed Thursday that is has surpassed the threshold of 50,000 accounts and the $1 billion in deposits mark. TeleBank recently introduced ‘True Internet Checking’, which gives account holders the convenience of completing transactions, such as bill payments over the Internet, while yielding the premium rates of a money market account. TeleBank’s Internet checking account holders receive interest on account balances over $2,500, free printed checks, free unlimited bill payments, free Internet account access, a free ATM/Debit card; and they pay no monthly fees.


PNC to Metris

PNC Bank completed its sale of out-of-footprint, non-affinity credit card accounts to Metris’ Direct Merchants Credit Card Bank yesterday. The portfolio involved receivables of $821 million and nearly 500,000 accounts. PNC says the sale of the portfolio is part of a series of initiatives designed to improve the returns in PNC’s national consumer banking business.The sale of the credit card portfolio, which was announced in Sept. brings Metris’ credit card portfolio to over $5.0 billion in receivables and nearly 3.0 million accounts. At the end of the third quarter Direct Merchants held $4,242,768,000 in receivables and 2,300,000 active accounts according to CardData ([www.carddata.com][1]). CardData reports that PNC held $3,867,150,000 in receivables and 2,075,445 active accounts as of Sept. 30, 1998.

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