Credit Store Buys Bad Debt

The Credit Store, Inc. said Friday that it had purchased at a substantial discount a new portfolio of charged-off consumer credit card debt. The $522 million gross principal portfolio was acquired from a major U.S financial institution within the last week, the Company said.

The transaction increases The Credit Store’s total inventory of non-performing consumer debt by more than 25 percent. The Company now has acquired approximately $2.5 billion total gross principal of non-performing consumer debt, the Company’s ‘raw material’, since its inception in October, 1996.

The Credit Store is a nationwide financial services company that markets credit cards to consumers who previously had an interruption in the repayment of their debts. The Company uses sophisticated methods to analyze, value and purchase portfolios of non-performing debt at substantial discounts. The Company then uses its direct marketing expertise to contact and negotiate settlements with consumers, most of the time placing the settlements on new unsecured credit cards offered through The Credit Store.



The number of banking institutions has dropped 21% over the past five years according to a study released this weekend by SNL Securities’ ‘BankINVESTOR’ service. ‘BankINVESTOR’ found that the number of banks, defined as top tier commercial banks and bank holding companies, fell to 7,233 from 8,868, while the number of thrifts, defined as top tier savings banks and savings institutions, fell to 1,665 from 2,368 in 1992. Meanwhile the industry’s aggregate assets jumped an astonishing 31.70% to $6.09 trillion. If this trend continues at its current pace, the number of banking institutions will shrink to approximately 5,900 in the next five years. This year, M&A activity remains strong with 209 whole bank and thrift deals announced thus far. However SNL says there are signs that the rate of consolidation may begin to slow due in part to the Year 2000 issue. Last year was a record year for consolidation in the bank credit card industry.


True Failure

American Express decision to pull the plug on its ‘Optima True Grace’ credit card was driven by low usage and the failure to attract enough balance revolvers, according to a new study by Atlanta-based Brittain Associates. Brittain found only 50% of ‘True Grace’ cardholders revolved balances and that cardholders averaged only 15 transactions per year. The study says 40% of ‘True Grace ‘ cardholders used the card in the month prior to the survey and only charged $119 on average. Brittain has been tracking all of AmEx’s co-branded and affinity cards for the past three years.


New Wachovia Card Center

Wachovia Bank Card Services will open its new credit card customer service center in Chesapeake, Va. this morning at 11 a.m. The recently renovated 50,000-square-foot building currently employs 75 customer service representatives. Among those participating in this morning’s ceremonies: Beverly Wells, executive vice president of consumer credit and emerging businesses, and Charles Hegarty, president of Wachovia Bank Card Services.


BT Joins GCA

The Global Chipcard Alliance (GCA)’s ranks have grown again with the announcement that global telecommunications provider, British Telecommunications plc., has become a member.  BT, the GCA’s 27th member, joins other smart card leaders from a diverse industry cross-section, to create an oif> infrastructure for chip cards and to create global if>interoperability for multiple application smart cards.![][1]

“BT’s decision to join the Global Chipcard Alliance again demonstrates the broad support for the GCA’s efforts to achieve worldwide smart card interoperability,” said David Anastasi, GCA President and Vice President and General Manager U S WEST Public Access Solutions & Smart Card Division.  “We depend on the diversity of our members to provide an open environment where smart/chip card advancement can flourish.  British Telecommunications plc. will be an asset to the existing body of dedicated industry players.”

BT has significant experience of the development of Eurochip Smartcards used in public payphones and will bring this world-renowned development expertise to the GCA.

“Companies like BT understand the importance for those heavily invested in the industry to join forces, and they recognize the value of the Global Chipcard Alliance,” added Gerard Ketelaar, Vice President of the GCA and Manager of the InterActive Services Group KPN (formerly PTT Telecom Netherlands).

“BT plans to be at the center of smart card developments in the UK and across the globe.  At the same time, we have a commitment to the evolution of global open systems and standards and this has made membership of the Global Chipcard Alliance a natural step forward,” said Jon Collinson, Head of SmartCard Business Development at BT.

“Smart cards are a key enabler for all kinds of exciting new applications which our customers will really value.  We fully share the GCA’s vision of a global compatibility in smart card technology, so that these customers can use their cards anywhere in the world.  We are currently putting plans in place to develop the infrastructure and secure processing platform required to handle this new generation of multi-application smart cards.  But, we can only make it happen if it is based on globally accepted standards,” Collinson emphasized.

Underlying the global acceptance efforts, the Global Chipcard Alliance is committed to making strides in interoperability.  In April, the Global Chipcard Alliance and the Smart Card Forum (SCF) agreed to create a joint interoperability program of panels to explore and seek solutions to the interoperability issue.  The panels are a first step in cooperative efforts, setting the pace for the importance of cross-industry cooperation in critical areas, not only for companies, but also for key industry bodies. The first panel will be delivered at the SCF Annual Meeting in September, the second at GCA’s Member Meeting in November.

About British Telecommunications plc

BT is one of the world’s leading providers of telecommunications services. Its principal activity is the supply of local, long distance and international telecommunications services and equipment in the UK, serving 27 million exchange lines.  International direct-dial telephone service is available to more than 200 countries and other overseas territories – covering 99 per cent of the world’s 800 million telephones.  BT is expanding its presence overseas rapidly and has operations in more than 30 countries worldwide, with joint ventures in France, Switzerland, Spain, Germany, Italy, the Netherlands, Sweden, South Africa, New Zealand, Japan and India. In addition, BT entered into a US$1 billion joint venture three years ago with MCI, the second largest carrier in the US, to form Concert and create a global network for multi- national companies; the Concert network currently has 6,000 access points round the world and provides managed network services to more than 800 cities in 50 countries.

About the Global Chipcard Alliance

The Global Chipcard Alliance (GCA) was established in 1996 and is now 27 member companies strong.  The GCA’s mission is to create an environment which accelerates the development of multi-functional smart/chip technology and related applications through business alliances that have a commitment to: 1) worldwide open interoperable networks, 2) public advocacy, 3) endorsing of standards and specifications, and 4) advancement of cross industry multiapplications and solutions, electronic commerce, and communications- enabled applications and solutions.  For more information on the Global Chipcard Alliance visit its Website at .

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Datastrip All-In-One ID Card System

ID cards based on Datastrip’s low-cost machine-readable 2D symbology can now be designed and produced using the all-in-one FreezeFrame system from ESP-Systex. This system combines all the elements needed to design and produce cards – PC, camera, card and code generation software, and colour printer – in one low-cost desktop unit which is similar in size to an office printer.  As standard it comes with a video camera for capturing facial images, but it may also be supplied with optional signature and/or fingerprint capture peripherals for biometric-based applications.

The FreezeFrame-Datastrip system provides a ready-to-use solution for ID card applications which is so convenient and simple to use, that organizations can design and start printing cards for their user base within one hour of installation!

The new system is ideal for Datastrip’s target customer base which ranges from secure ID cards for authorizing financial and banking transactions, to ID, access control and membership cards for commercial and government applications.  It also includes a switchable power supply which allows it to be used almost anywhere in the world, with 110, 220 or 240V mains electricity supplies.

FreezeFrame speeds the card generation process thanks to a unique design package called Gen-Frame which provides users with a WYSIWIG (what you see is what you get) function.  This allows users to position all the required elements – such as text, organisation logo, background patterns and the printed Datastrip – exactly where required on the card to create the custom ID token.  Once the layout is ready, card production can begin straight away.

The built-in computer handles all the data acquisition and code generation tasks needed to produce individual, personalized cards, presenting two simple on-screen forms to obtain the text for the individual’s text record, and any associated photo image or biometric data.  This process is so simple that an individual’s photo card can typically be produced in 45-60 seconds.  The built-in database provides local storage for around 200,000 ID records and associated photo images/templates, in an industry-standard xBase format which simplifies integration with other IT applications.

The key advantage of Datastrip’s card technology is its combination of storage capacity and low cost.  Datastrip’s printed symbology provides around an order of magnitude greater machine-readable storage capacity than the typical magnetic-stripe card – at the same kind of cost – or comparable memory to a smart card at perhaps a tenth of the price. This equates to around 1kbyte of capacity for a Datastrip which can be printed onto a typical plastic card format, enough for a photo and text, or a biometric template for a fingerprint or signature.

Additionally, unlike other 2D symbologies, Datastrip’s code system is proprietary and is not in the public domain.  Coupled with security features built into the code, this makes the system very secure.  Licenses to use the code are included with every FreezeFrame-Datastrip system, allowing unlimited card printing for each application.

A range of complementary card readers and peripherals are available for Datastrip-based ID systems, which allow users to perform automated or manual checks, or both.  The company  offers a unique product for manual verification applications called the DSView240T.  This automatic card reader has its own miniature LCD allowing data to be viewed manually, making is ideal for standalone ID applications.  At a bank teller’s desk for example, or a security gate, cards could utilize the Datastrip for storing a photo, confidential text and biometric data such as a signature, for secure verification without access to on-line resources.



Dale M. Gregory, a recognized pioneer in the telecommuni-cations industry with more than 25 years of telecommunications experience, has been elected President and Chief Executive Officer of iTELSA, Inc., a leading provider of telephone network and prepaid calling-card services.

A member of iTELSA’s board of directors since January 1998, Gregory served most recently as Senior Vice President of Corporate Development at Frontier Corporation. He previously was President and Chief Executive Officer of Microtel, Inc., and President and Chief Operating Officer of Advanced Telecommunications Corporation.

iTELSA Chairman Albert Weintraub expressed confidence in Gregory, commending him for his professional insight and leadership. Weintraub, who founded Microtel in 1981, said Gregory has demonstrated a talent for recognizing the direction and potential of newly emerging technologies.

“When we worked together at Microtel, Dale and I kept the company on the leading edge of the growing long-distance industry,” Weintraub said. “Now we face a similar challenge with iTELSA, as we blaze new trails in the international telephone calling-card industry.”

iTELSA is a premiere provider of prepaid calling-card solutions and resale of least-cost network services in the United States and internationally. Based in Miami, iTELSA is located on the World Wide Web at .


MasterCard’s Calling Card

Global One, a joint venture between Deutsche Telekom, France Telecom, and Sprint, has been selected by MasterCard as the global marketer and distributor for the ‘MasterCard World Cup ’98’ prepaid calling card. MasterCard had signed an agreement with France Telecom to handle marketing in France. However, Global One will now market and distribute the prepaid card through special programs in over 100 countries outside of France. The World Cup is the world’s largest single sporting event, with 32 competing teams, 2.5 million spectators, and a massive television audience.


FICI Signs De Bank Card

Columbia Capital Corp announced Thursday that it had signed an agreement with Delaware Bank Card to provide processing services for the Delaware-based card issuer.

CLCK’s wholly-owned subsidiary, First Independent Computers, Inc. (FICI) will be providing card embossing and encoding service, as well as statement processing.

Ken Klotz, President of Columbia stated, “There are many small to medium-sized institutions including independent sales organizations (ISO’s) that are looking to responsive organizations such as Columbia for their card production and statement processing services. FICI, with its state-of-the-art card production equipment, high speed laser printers, and mailing equipment is in an excellent position to take advantage of these lines of business.”

Hal Horton, CEO of Delaware Bank Card, stated, “We chose FICI for our outsourcing needs, because of their commitment, turnaround time and DataCard 9000 card production equipment.” President Klotz also stated, “Once Delaware Bank Card completes their testing and initial marketing activities, they will begin aggressively signing various financial institutions for the issuance of ATM and check cards.

Columbia Capital Corp. operates through its wholly-owned subsidiary, First Independent Computers, Inc., which is a multi-faceted information and transaction processing service organization. The services provided by the Company include credit and debit card processing, transaction processing for the health care industry, bank and financial services processing and document management and distribution services. The Company concentrates on a niche market, consisting of small to medium-sized financial institutions, and health care providers that have not achieved the economies of scale to operate their own in-house programs and systems.