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.

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MBNA Card Bond

MBNA Corporation announced Wednesday that MBNA America Bank, N.A., its wholly owned subsidiary, priced $750 million of five-year credit card asset backed securities.  The securitization from the MBNA Master Credit Card Trust II featured two classes of publicly traded securities (Class A and Class B).

The transaction, Series 1998-C, included $637.5 million of Class A (Senior) floating rate asset backed certificates and $56.25 million of Class B (Subordinate) floating rate asset backed certificates. The 5.0 year Class A certificates accrue interest at 8 basis points over the one month London Interbank Offered Rate (“LIBOR”).  The 5.0 year Class B certificates accrue interest at 25 basis points over the one month LIBOR.  Both the Class A and Class B certificates were priced at par.  The transaction, which is scheduled to close June 24, 1998, was lead managed by Salomon Smith Barney and co-managed by Bear, Stearns & Co. Inc., Credit Suisse First Boston, First Chicago Capital Markets, Inc., Lehman Brothers, and Merrill Lynch & Co.

MBNA Corporation, a bank holding company and parent of MBNA America Bank, N.A., a national bank, has $50.2 billion in managed loans. MBNA, the largest independent credit card lender in the world, also provides retail deposit, consumer loan, and insurance products.

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SwapSmart Approved

CA-based SCM Microsystems announced Wednesday that its ‘SwapSmart’ PC card/smart card reader/writer has been approved by Netrust, the first smart card certificate authority in south-east Asia. SCM says yesterday’s announcement is significant because of Netrust’s leading position in Singapore. The Singapore government is getting ready to mandate smart cards for a number of applications with the goal of one million active smart card users by the year 2000. Programs have already been launched to use smart cards in retail outlets, as a part of an electronic roadway toll system, and in the Ministry of Defense for identification and access control.

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InfoBridge for TRIAD

Fair, Isaac unveiled ‘InfoBridge’ during the third day of the ‘InterACT 98’ conference. ‘InfoBridge’ combines data warehousing services and analytic tools to enable banks to interactively analyze portfolio data managed by Fair, Isaac’s ‘TRIAD’ adaptive control systems. ‘InfoBridge’ also allows financial institutions to use OLAP technology in a multi-dimensional data space, enabling them to dig deeper and faster into their TRIAD adaptive control software data from a variety of perspectives. The use of OLAP, will enable users to analyze a wide range of portfolio data to gain answers as to how their account management strategies are performing. Account level data can be instantly transformed into charts and graphs to better visualize and identify new strategy performance trends. Using a PC-based tool users can recreate TRIAD-style reports and develop custom ad-hoc reports. Using OLAP users can also create exception reports and distribute the alerts immediately via email. ‘InfoBridge’ is in beta testing now and will be available later this year.

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New Profit Tool

Fair, Isaac introduced ‘OpporTune’ Tuesday at InterACT ’98’. ‘OpporTune’ is an open architecture account management product that performs advanced profitability assessment at the account level.OpporTune calculates profit forecasts based on the most predictive information available to a financial institution. It can analyze transaction data, master file data and credit bureau data — or any combination of these data sources — in order to calculate a readily understandable profit metric. OpporTune will also feature intuitive profit profiles, which provide specific reasons for the account’s anticipated level of profitability. OpporTune enables banks to improve account and portfolio strategies through a more complete picture of future account profitability, based on multiple data sources.

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Running Out of Rope

Over the past two years more than four million American households have shifted $26 billion in credit card debt to home equity loans, according to a new survey by Atlanta-based Brittain Associates. Based on a May survey of 6,000 households, about three million households totally paid off their credit card debt using home equity loans with nearly 1.5 million remaining credit card debt-free months later. The explosion in home equity lending has been fueled, in part, by the wide gap between card rates (18%) and home equity loan rates (9%). Consumers are also attracted to the tax deductibility of home equity loans and the highly leveraged home equity loans of up to 135% of market value. Brittain says it’s a double whammy for card issuers: not only do they lose interest accruing balances but they may also face higher losses down the road as some consumers pile up card debt shortly after consolidating into a home equity loan. After high LTV loans there is little rope left except bankruptcy.

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Enhancing RADAR

Fair, Isaac and Company, Inc. announced Tuesday at its InterACT ’98 conference that its Risk Management Technologies (RMT) subsidiary has extended its advanced financial analytics software to the planning and budgeting process of complex financial institutions with RADAR Planning and Budgeting.

RADAR Planning and Budgeting is the latest addition to RMT’s RADAR product line, which also includes RADAR RiskManager, RADAR ProfitBuilder and RADAR Transfer Pricing. Taken together, these products comprise a complete risk management and performance measurement solution.

RADAR Planning and Budgeting allows managers to integrate top-down strategic financial planning with bottom-up expense budgeting in a single process that uses common enterprise-wide data. This will enable managers to compare not only budgets and actuals throughout the year, but the strategic outlook as well. In addition, RADAR Planning and Budgeting includes budget workflow tools to facilitate the enterprise-wide planning and budgeting process.

“Traditionally, bank planning and budgeting has been a cumbersome manual process involving numerous rounds of discussion and negotiation,” explained Alan Tobey, product manager for RADAR Planning and Budgeting at RMT. RADAR Planning and Budgeting replaces this process with an automated process that enables managers to create high-level strategic plans based on RADAR’s financial projections, and then use that information in creating business unit expense budgets that reflect net interest margin, yields, and spreads as well as revenue. Traditional bank budgets, based simply on revenue, do not provide sufficiently complete or accurate information to effectively manage for maximum profitability.

The bank planning and budgeting process historically has required two separate, though related, processes. For strategic planning, managers use analytical and forecasting tools such as RADAR to develop business outlooks for the coming year. In the budgeting process, managers of business units determine an appropriate budget based on simple revenue and expense projections on spreadsheets. However, it is rare that proposed revenues and expenses at the department level, when rolled up, actually agree with the strategic goal numbers descending from above. As a result, a great deal of negotiation must take place.

RADAR Planning and Budgeting, created expressly for the complex planning and budgeting of financial institutions, brings both processes together, allowing managers to use common enterprise-wide data and assumptions, such as revenue information and cost forecasts. RADAR also gives managers insight into such measurements as expected net interest margins to better refine the budgeting process. This allows managers to base budgets on more precise measurements of income and profit rather than gross revenue.

“RADAR Planning and Budgeting allows bank managers to finally get beyond the last-year-plus-10% planning approach. It also enables three-way comparisons of budget, actuals, and outlook,” noted Tobey. In addition, the system provides versioning, which enables organizations to simultaneously create multiple budget cases, such as best and worst cases, as managers explore key alternatives.

Since 1956, Fair, Isaac has helped businesses maximize the value of data for strategic decision making. The company pioneered the use of credit scoring in consumer and commercial lending. Today, Fair, Isaac provides data-driven decision-making solutions including data management, analytics, software and consulting to businesses in financial services, direct marketing, personal lines insurance, retail, and healthcare. Headquartered in San Rafael, Calif., Fair, Isaac employs more than 1300 people in 16 offices worldwide. For the fiscal year ended September 30, 1997, the company reported revenues of $199 million, a 28 percent increase over the prior year.     For more information, call Fair, Isaac at 800-999-2955.

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MBNA Signs CMI

Complete Management, Inc. announced Tuesday that its 60% owned financial services subsidiary, CMI Capital Corporation has entered into an agreement with MBNA America Bank N.A. of Wilmington, Delaware.  Under the terms of this agreement, MBNA America, an industry leader in credit card and financial services, will provide credit card and other financial services under the CMI Capital banner to select clients of CMI Capital.

Steven Rabinovici, Chairman and Chief Executive Officer of CMI, stated, “The agreement with MBNA America to market their financial products under CMI Capital’s logo further enhances our overall efforts to support the growing network of services.  CMI provides these services through its preferred provider organization, owned by its Consumer Health Network subsidiary, which includes over 34,000 members.  In addition, CMI Capital will utilize this strategic alliance with MBNA America to help reach their target market for accounts receivable financing on a nationwide basis.”

Complete Management, Inc. provides physician practice management services to medical practices and hospitals located in the New York metropolitan area, particularly New York City, Long Island, the Hudson Valley region, and portions of New Jersey and Connecticut.  The Company also owns Consumer Health Network, a preferred provider organization operating in New Jersey and, to a more limited extent, New York and Connecticut.  Consumer Health Network is the largest PPO in New Jersey.  CMI Capital Corporation, purchases and finances medical accounts receivables to third party medical providers on a nationwide basis.

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Currency Conversion Service Expands

In order to meet the ever-growing demands of business travelers Global Network Architects (GNA), the architect, builder and implementer of broadband virtual communities, finalized an agreement yesterday with OANDA for the provision of the world’s most popular currency conversion service to users of GNA’s highly advanced hospitality system.

Under the terms of the agreement, GNA will introduce into its virtual communities OANDA’s () customized currency converter service and its companion customizable cheat sheet service, an interactive currency conversion tool which creates printable, wallet-sized conversion tables for foreign travelers.

OANDA’s 164 Currency Converter, the most complete service of its kind, offers current and historical exchange rates from 1990 to the present in 164 different currencies. Aside from English, it is available in French, German and Italian.

The agreement with OANDA comes on the heels of GNA’s landmark agreement with the online travel service, Biztravel.com (a href=http://www.biztravel.com>http://www.biztravel.com), the Internet company for frequent business travelers. The two companies inked an exclusive agreement, which will extend Biztravel’s reach overseas, via the GNA Hospitality Community and other GNA virtual communities, such as the small office and a proposed road warrior community.

Deployment of OANDA’s services by GNA will begin with GNA Hospitality Community, a personalized in-room communications service soon to be deployed in hotels and resorts worldwide. GNA Hospitality Community will make interactive information and entertainment — as well as powerful computing applications — available via televisions in the comfort of a guest’s hotel room. Aside from GNA Hospitality Community, GNA will also bring OANDA services to GNA’s other communities to be deployed, including those aimed at road warriors, networked learning professionals and students and business and residential communities. GNA’s solution of delivering broadband, streaming video is deployable to many different types of end-users.

“We are extremely pleased to be partnering with OANDA to deliver this much needed service. In today’s globalized economy, timely and ubiquitous access to currency information is absolutely essential — as important as stock market information,” said GNA chief executive officer Raymond Cheng.

“Seamlessly integrating OANDA’s currency conversion service into the GNA Hospitality Community and other virtual communities is one of the most effective and elegant ways to bring the right content to the right audience,” said OANDA chief operating officer Jenny Zhan Sidler. “Combining OANDA’s superior data service with GNA’s virtual communities, this partnership is a first step to unlock the tremendous market potential for personalized currency information delivered with guaranteed quality and reliability,” added Sidler.

Announced in November 1997, the GNA Hospitality Community brings together several strong interests: Microsoft Corp.; Global Network Architects; Compaq/Tandem, and 3Com. GNA Hospitality Community dramatically redefines what hotel guests can expect in their hotel rooms by delivering a personalized office away from the office and a home away from home. After a trial period, GNA Hospitality Community will be swiftly deployed to hospitality properties worldwide. In addition to video-on-demand, games and shopping services, the new service will allow travelers to utilize Microsoft Office products from a central source, as well as to receive personalized, private and secure e-mail, faxes and voice mails from the comfort of their hotel rooms through in-room televisions.

ABOUT GNA

Known as the global architect, builder and implementer of broadband virtual communities, GNA has an impressive track record dating back three years. It is best known for its innovative approach to constructing virtual communities for companies and organizations. In its early years, GNA established a reputation in Southeast Asia for developing hardware and software tools for medium to large-scale communities, for virtually every type of network. Some of GNA’s landmark achievements include pioneering the world’s first high-speed, interactive community networks and hosting the first interactive, online discussion between Southeast Asian leaders.

With offices in the United States, Malaysia, Hong Kong, Australia and the United Kingdom, GNA has a truly global reach, and one which will allow it to further extend the services of its content providers. GNA derives much of its strength from its ability to bring together the best expertise in technologies, design, content and management. End users range from academics and business travelers to consumers and connected professionals.

ABOUT OANDA

The Currency Site by OANDA is best known for its easy-to-use Currency Converter for more than 164 currencies and innovative currency information services on the Internet. Established in late 1996, as the Internet subsidiary of the Zurich-based leading financial technology firm, Olsen & Associates, OANDA develops and markets a full spectrum of quality FX services with a strong focus on customizability.

OANDA’s popular products also include the practical wallet-sized currency “cheat sheet”, historical graphs and tables, bid/ask details, and advanced forecasts for the currency markets.

OANDA is committed to making the essential currency information easily accessible to anyone including currency investors and traders, professionals in corporate procurement, business and private individuals who buy and sell globally, or the peripatetic road warrior. Actively providing currency conversion services for the Internet users of CNN, Pathfinder, Swissair, Mastercard, among others, OANDA has won wide acclaim as the best source for foreign exchange rates.

Strongly backing OANDA’s superior services is the advanced predictive technology and the high frequency financial data collection of Olsen & Associates. O&A offers products and services to major financial institutions worldwide including FX forecasts, trading models, volatility services, price validation, risk management, and portfolio analysis.

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Raising the Curtain

The League of American Theatres and Producers, a 500-member national trade organization for the Broadway industry, and First USA raised the curtain yesterday on the new ‘Live Broadway VISA’ card. Under the new program cardholders will earn points redeemable for a variety of premium Broadway items, including theatre tickets, backstage tours and limited-edition memorabilia. ‘Live Broadway VISA’ cardholders will also receive a complimentary annual membership in the ‘Live Broadway Transmedia Dining program’, and advanced notification of special Broadway events and promotions. After the first purchase or balance transfer, cardholders will also receive a limited-edition framed poster from one of several current Broadway hits, including “Chicago” and “Rent”. First USA is offering a fixed 4.9% teaser rate and its standard go-to rate of 13.99%. The trade group says it reaches 30 million consumers annually.

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Top Ten Account Analysis

First Chicago NBD bumped Citibank Universal for the highest volume per active account according to the latest numbers compiled by CardData. Citibank’s acquisition of AT&T Universal has impacted its per account averages. Meanwhile MBNA leads the top ten with the largest active balances per account.

                                ACTIVE  ACCOUNT  ANALYSIS
                                (for period ending 4-30-98)
        ISSUER                     AA              AAB             AAV
        1. Citibank Universal     28.5            $2158           $1407
        2. MBNA America           17.5            $2731           $1371
        3. Banc One FUSA         17.8            $2208           $ 792
        4. Discover               22.5            $1684           $ 707
        5. Chase Manhattan        13.3            $2429           $1045
        6. Household Bank          8.0            $2175           $1363
        7. First Chicago NBD       9.5            $1789           $1663
        8. Capital One             9.3            $1441           $ 667
        9. Fleet                   5.7            $2316           $1053
        10. Bank of America        7.2            $1417           $ 764
                TOT/AVGS         139.3           $2035           $1084

AA- number of active accounts in millions; AAB- average balance per active account; AAV-average YTD volume per active account         Source: CardWeb’s forthcoming CardData service

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Smart Card Forum Approaches 200 Members

The Smart Card Forum (SCF), a multi-industry organization working to accelerate the widespread acceptance of smart card technology, announced Tuesday that seven new corporate and government members have joined the organization. This brings total Forum membership to 192.

The new members are:

Atmel Corporation

Chevron Corporation

ID Technologies, Inc.

Mosel Vitelic

Polaroid Corporation

Smart Cards Solutions, LLC.

University of Michigan

“We welcome our new members, who have joined us at a very exciting time in the life of both the Forum and our industry,” says SCF President Bill Barr. “As the potential of smart cards multiplies over time, so does the interest of organizations such as these who want to be on the cutting edge of this industry of the future, and that is exactly where the Forum is located. By becoming an important part of the Forum family, these members now have access to a unique blend of valuable benefits available nowhere else.”

“We at Polaroid know it is time to turn on the smart card switch,” says Martha Gilbertson, worldwide marketing director for Polaroid’s Identification Systems business. “As a member of the Smart Card Forum, we will be on the front lines of information regarding this technology. As a result, we effectively will build our business to the point where we can offer complete smart card products, services and capabilities to our client base. We’re jumping in now to stay ahead of the future for our clients.”

The Forum also announced that two of its current members – Certicom Corp. and Food Marketing Institute (FMI) — have upgraded their participation in the organization, and now serve as principal members. By becoming principal members, both are voting members of the organization and have access to a full spectrum of Forum privileges.

— Atmel Corporation designs, develops, manufactures and markets a broad line of technically advanced integrated circuits (ICs).

— Certicom Corp. is the leading provider of cryptographic technologies for computing and communications companies.

— Chevron Corporation is a Fortune 20 company and one of the world’s largest energy companies.

— Food Marketing Institute (FMI) is a non-profit association conducting programs in research, education, industry relations and public affairs on behalf of its 1500 members, including their subsidiaries.

— ID Technologies, Inc. is a quality manufacturer of high-technology auto ID products.

— Mosel Vitelic designs, manufactures and markets dynamic RAMs (DRAMs) and high-speed static RAMs (SRAMs) for the worldwide     markets.

— Polaroid Corporation designs, manufactures and markets worldwide a variety of imaging products.

— Smart Card Solutions, LLC. is a leader of software development and system integration for the financial payment industry.

— University of Michigan’s Mcard is the university’s single-card program combining such features as ID, library privileges, building access, meal plans and stored value.

All of these members have joined the Forum since its joint work group meetings in February 1998. The Forum’s work groups focus on various aspects of smart card technology, including: interoperability, legal and public policy issues, technology, telephony, multi-applications and network applications. Sectors examined in the work groups include: retail, education, transportation, health care and travel and entertainment.

The Smart Card Forum ([www.smartcardforum.org][1]) is a non-profit, multi-industry organization of 192 members working to accelerate the widespread acceptance of multiple application smart card technology by bringing together, in an open forum, leading users and technologists from both the public and private sectors.

[1]: http://www.smartcardforum.org

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