Bankruptcy Reform

With more than 72% of the U.S. House of Representatives voting this week in favor of the Bankruptcy Reform Act of 1998, it seems inevitable that Congress will pass some kind of bankruptcy reform before the end of this year. The strong bipartisan support of H.R. 3150 in the House was applauded by the credit industry’s Bankruptcy Issues Council. BIC says reform will restore common sense, personal responsibility and fairness to our bankruptcy system. The group says it was particularly pleased that the House also approved the Boucher/Gekas amendment to elevate child support and alimony payments to number one on the priority list in a bankruptcy proceeding. It is likely the Senate will pass similar legislation by the end of the summer.


CUCC Selects EPS

Electronic Payment Services was selected by the Credit Union Consumers’ Cooperative (CUCC) as a preferred EFT vendor for its member credit unions.  EPS will provide electronic transaction processing services, including terminal driving for ATMs and advanced self-service terminals, processing for VISA and MasterCard debit cards, and gateway services. CUCC was organized in April of 1997 to acquire and distribute goods and services for the benefit of credit unions and their members throughout New Hampshire.


Bottom Fishing Bonanza

There continues to be no contraction in the secured and sub-prime credit card market. Indeed the growth in this segment is nearly four times the growth of the co-branded segment. According to the latest issue of Bankcard Barometer, the secured/subprime segment is growing 45% annually compared to 16% for the co-branded segment, based on 1Q-98 receivables. What was regarded just a few years ago as bottom fishing has turned into a real bonanza. Secured/sub-prime specialists are not only building balances they’re generating substantial fees. Average balances are well below the current average of $2,035 and YTD volume is significantly off the industry average of $1,084. However, balances have increased sharply over the past three years. First Premier Bank of Sioux Falls SD is perhaps the best example of the aggressive fee pricing. First Premier charges annual fees, monthly participation fees and monthly customer service fees. Many of First Premier’s sub-prime products assess first year fees in excess of $200, for a minimum $300 credit line.

                               SECURED/SUB-PRIME SEGMENT
ISSUER                1Q98vs1Q97        GWTH        BAL       VOL
Providian            $8.7b-$6.7b        +60%      $2486      $657
Direct Merchants     $3.6b-$1.8b       +100%      $1760      $387
First Consumers      $299m-$211m      +42%      $ 972      $456
Orchard Bank         $172m-$110m      +57%      $ 708      $298
First Premier        $ 62m-$ 32m       +94%      $ 251      $ 97
AVERAGES:                               +45%      $1235      $379

  1Q98vs1Q97- first quarter receivables;
GWTH- annual % of growth;
BAL- average balance per active account;
VOL- average YTD volume per active account
         SOURCE: Bankcard Barometer, May 98 issue


IDT Donates Phone Cards

The Veterans of Foreign Wars announced Wednesday that IDT Corporation, a New Jersey-based calling card company, has generously donated 15,000 pre-paid phone cards to Operation Uplink. The domestic phone cards will be given to active duty troops and hospitalized veterans in celebration of Independence Day.

“We are extremely grateful to IDT for their enthusiastic support of Operation Uplink,” shares Joanne Dickerson, Production Coordinator, VFW Marketing Services. “The donation will enable countless individuals to get in contact with their families.”

According to Dickerson, who worked with IDT in securing the gift, each phone card contains ten minutes long distance phone time. Together, the cards are valued at more than $37,000.

The gift was organized by Edward Miller, IDT Vice President – Corporate Sales. In announcing the gift, Miller commented on how appropriate a time Independence Day is for such a gift, expressing gratitude for the sacrifices veterans and active duty troops continue to make.

“Working with IDT, especially Mr. Miller, has been a wonderful experience,” says Dickerson. “His genuine concern for veterans and those serving our country is readily apparent.”

Through the generous donations of VFW members and supporters, Operation Uplink has already distributed more than 70,000 pre-paid phone cards in VA Medical Centers and military bases around the world. The program is funded by donations from members and friends of the VFW, including several corporations.

The VFW, founded in 1899, is America’s oldest major veterans organization. Its more than 2.1 million members served overseas during World Wars I and II, the Korean War, Vietnam, Panama, Grenada, Lebanon, the Persian Gulf War, Bosnia, Somalia and Haiti, as well as in many smaller occupation and expeditionary actions.

IDT is a leading emerging multinational carrier that combines its position as an international telecommunications operator, its experience as an Internet service provider and its leading position in Internet telephony to provide a broad range of telecommunications services to its wholesale and retail customers worldwide. The company provides its customers with integrated and competitively priced international and domestic long distance, Internet access and, through its Net2Phone product offerings, Internet telephony services including Net2Phone Direct and Net2Fax.

Except for historical information, all of the expectations and assumptions contained in the foregoing are forward-looking statements involving risks and uncertainties. Important factors that could cause actual results to differ materially from such forward-looking statements, include, but are not limited to, the competitive environment for Internet telephony, changes of rates of all related telco rates and services, legislation that may affect the Internet Telephony industry, IDT ‘s ability to operate the services described on a large scale commercial level. For additional information regarding these and other risks associated with the Company’s business refer to the Company’s reports filed with the SEC.


Amadeo Terminal

The ‘Amadeo’ POS smart card terminal, developed by NBS Technologies and Bull, received ‘Mondex Type Approval’ yesterday from Mondex International. ‘Amadeo’ now offers a platform that provides a Mondex solution for the standalone or integrated credit/debit card as well as for electronic purse markets. The Mondex application is resident on the Amadeo terminal, and may be integrated into the device’s credit/debit functionality. Mondex transaction information may be captured and integrated into merchant reports along with credit and debit. In addition to POS functions, ‘Amadeo’s’ integrated modem may also be used as a load value station or to upload value to a remote purse. ‘Amadeo’ was introduced in Europe last year and recently became available in North America.


FDC Chesapeake

First Data Resources is building a new $15 million operations center at Crossways Commerce Center in Chesapeake VA, it was announced this week. The facility will employ 120 initially and eventually will employ 500. Chesapeake received a $300,000 grant from the State of Virginia to help with FDR’s site preparation and the company will receive work force training services from the Virginia Department of Business Assistance. FDR plans to start operations during the fourth quarter. The company already has significant operations in Virginia.


Free NT Drivers from DataCard

DataCard Corporation announced this week that NT drivers for two of its most popular digital photo ID printers are available for free download from its Web site ().

The drivers offer compatibility with the WindowsÖ NT operating system version 3.51, and WindowsÖ NT version 4.0.  They are designed for the DataCardr ImageCardr II Plus and ImageCard III photo ID printers.

DataCard customers can use the drivers to produce full-color photo IDs on the robust and highly secure Windows NT platform for applications such as employee badges, student ID cards and driver’s licenses.

“Windows NT drivers for these DataCard printers allow customers to produce photo IDs from a familiar platform on their existing networks,” said Steve Blake, vice president for DataCard’s printer markets group.  “Since a large percentage of customers want to operate in a Windows NT environment especially within the government and post-secondary education sectors providing NT drivers on our Web site allows us to better respond to the needs of those customers.”

“Plus, many of our resellers develop their solutions on the NT platform, so it makes demonstrating the ImageCard printers easier for them,” Blake added.

Those without Internet access can order the free printer drivers on diskette by contacting their DataCard representative or Authorized Reseller.  A copy of the NT Printer Driver User’s Guide accompanies the diskettes.

DataCard Corporation, a privately held company based in Minneapolis, Minn., provides customers around the world with fully integrated solutions for a variety of financial, identification and healthcare applications.  In addition to turnkey solutions, the company offers complete lines of digital photo ID systems and printers, card personalization systems and transaction systems.  ()


Home Financial Y2K Compliant

Home Financial Network, Inc. announced that the Gold versions of its Home ATM Banking and Home ATM Bill Pay software products are fully Year 2000 compliant.  In testing performed with Integrion, HFN’s Internet and PC-based products successfully completed the Year 2000 century date conditions incorporated in Integrion’s Gold and ADMS validation program.

In a related statement, HFN announced that its Home ATM software is now fully compliant with CheckFree’s OFX specification for Y2K.  Certification testing to CheckFree’s Y2K standard is presently being conducted by HFN and CheckFree, and is anticipated to confirm full Y2K compatibility for Home ATM on CheckFree’s existing OFX and soon-to-be released Genesis platforms.

HFN’s Home ATM software now supports each of the leading Y2K date format standards as specified by Integrion (ADMS and Gold), CheckFree (OFX) and ISO. The enhancements were developed using development tools from Microsoft (Foundation Class 4.0; MFC 5.0) and Sun Microsystems (Sun Java date/time library).  Date formats supported include:


Financial institutions everywhere are grappling with the Y2K problem that stems from the inability of most computer systems to recognize dates beyond the year 1999.  Solving the Y2K problem has become the financial community’s equivalent of the “Manhattan Project.”  In addition to concerning themselves with the Y2K capabilities of their legacy systems and transaction processing capabilities, financial institutions must also be certain the home banking software provided to their customers is Y2K compliant.

Development by HFN

Recognizing the extent of the problem, HFN decided to take a pro-active approach by re-engineering its software to meet the exacting Y2K specifications established by Microsoft, Sun Microsystems and ISO, and supported by HFN’s partners, including Integrion and CheckFree.  Following completion of the enhancements to its software, HFN undertook the rigorous testing required to ensure validation with the Y2K specifications.

Commenting on HFN’s decision to enhance its software, Daniel M. Schley, chairman and CEO of Home Financial Network said, “Financial institutions and their customers certainly have a reason to be concerned about the year 2000. We would be remiss if we did not assume the obligation now of designing and delivering software fully capable of operating in the next century.  Heaven forbid it’s the third week of January, 2000, and home banking customers find they are unable to pay their bills.”

“Integrion applauds HFN in taking this decisive step in addressing Y2K issues for their Home ATM software products.  We are pleased that HFN has taken the more comprehensive approach to this problem and identified solutions for Gold, ADMS and OFX-based versions of their products,” said William M. Fenimore, Jr., CEO and Managing Director of Integrion.  “By successfully eliminating this potential risk, HFN continues to exhibit tremendous dedication and foresight that its products are meeting the needs of financial institutions and their customers.”

HFN to Include Y2K Language in All Bank Contracts To further reassure its partnering banks, HFN has modified its standard bank and processor agreements to incorporate affirmative covenants regarding Y2K certification of its software. The Y2K language, which now appears in all standard HFN agreements, is as follows:

Millennium Date Change.  HFN represents and warrants to Financial Institution that (Home ATM) will operate during the term of this Agreement and will continue to operate beyond December 31, 1999 (“Millennium Date Change”) to the same level of functionality as would otherwise be provided in the absence of a Millennium Date Change.

“We are appending this language to all of our standard bank contracts to give banks and processors alike the comfort that the Y2K compliance of our Home ATM Banking and Home ATM Bill Pay software is one thing they do not have to worry about,” said Schley.

About Home Financial Network, Inc. ()

Home Financial Network, Inc. develops and markets Internet-based home banking software that enables financial institutions to deliver private-branded electronic financial services to their mass market customers. The company’s products are written in C++ and 100% Pure Java, are designed to communicate via TCP/IP and X.25, and are compliant with each of the major home banking protocols, including ADMS, OFX and Gold.  HFN has long-term agreements in place with each of the major home banking processors, including CheckFree, Integrion and First Data Corp.

About Integrion ()

Owned by 17 banks, IBM and Visa USA, Integrion Financial Network provides interactive banking and electronic commerce services to financial institutions.  Through the Interactive Financial Services (IFS) platform, Integrion offers financial institutions a scalable, reliable and secure network through which electronic transactions flow from multiple consumer access points to a bank’s host system and/or processor.  Technology partnerships with IBM and CheckFree Corporation allow for the delivery of flexible, high utility applications that can be employed at a financial institution for the benefit of end customers.

Integrion’s operating philosophy allows banks to determine the manner and format in which home banking and electronic commerce services are offered, ensuring consistency with the bank’s full range of services, effective branding by the bank and maximum customer benefit.

About CheckFree ()

Founded in 1981, CheckFree Corporation is the leading provider of electronic commerce services, software and related products for over 1.5 million consumers, 1,000 businesses and 850 financial institutions. CheckFree designs, develops and markets services that enable its customers to make electronic payments and collections, automate paper-based recurring financial transactions and make secure purchases on the Internet.


New AirTouch Cards

AirTouch of Southern California unveiled new prepaid cellular calling card denominations yesterday. AirTouch ‘Prepaid Cellular’ calling cards are now available in $30, $50 and $100 denominations, with per-minute rates of $0.75, $0.625 and $0.50, respectively. There are no extra charges for long distance calls. The home calling area encompasses the entire AirTouch-Southern California service area, from Ventura to the Mexican border. AirTouch is also offering, while supplies last, a commemorative $30 prepaid card for the 1998 World Cup Soccer tournament.


VISA Clicks

San Francisco-based Netcentives and VISA unveiled an incentive program for online shoppers yesterday. The ‘VISA Online Shopping Bonus’ rewards consumers for using their VISA card to make purchases at select Web sites in the one-year-old ‘ClickRewards’ network. ‘ClickPoints’ are redeemable for airline miles and awards from major hotels and rental car agencies, and other merchandise. ‘ClickPoints’ can be redeemed 1:1 for airline miles, or for hotel or car rental awards. Beginning in July, ‘ClickRewards’ members will earn up to 500 ‘ClickPoints’ when using their VISA cards at selected ‘ClickRewards’ sites.