First SET Marks Granted

The SET race narrowed yesterday as SET Secure Electronic Transaction LLC (or SETCo) announced the awarding of the right to use the SET trademark to the first four vendors of  SET-compliant software. The four winners: GlobeSet Inc., Spyrus/Terisa Systems, Trintech, and VeriFone, Inc.. Each of the four companies were the first to successfully complete a series of SET compliance tests for their respective wallet software. The SET compliance testing, which is conducted by Tenth Mountain Systems, comprises a series of tests for four SET applications:  the wallet software, which performs both the authentication and execution of secure payment and also holds the cardholder’s digital certificate and credit/debit or charge card information; the merchant payment acceptance software, which implements SET at merchant Web sites and enables the authentication of the merchant; the acquirers’ payment gateway software, which allows transactions to flow securely from the Internet to the payment networks; and the certificate authority software used in issuing digital certificates.  The SET spec was originally developed by Visa and MasterCard in Feb 1996 and SETCo was established by both associations in Dec 1997.


AmEx Hungary

The fourth largest card issuer in Hungary, K&H Bank, signed with American Express yesterday as an independent operator. K&H will issue American Express Cards in Hungary, in Forint, the local currency.  Current AmEx cardholders will have the option of converting their card to the new product, retaining their dollar-denominated card, or carrying both cards.   K&H is among the largest financial institutions in Hungary.  It has a country-wide network of 137 bank branches and 148 ATM machines.


Y2K Pain

IDG unveiled its ‘Y2K Pain Index’ in Nebraska yesterday at the ‘Year 2000 Global Forecast’ seminar, sponsored by the First National Bank of Omaha. The index is a chart of Year 2000 probabilities and predictions based on a formula developed by CIO magazine. The calculations show the ripple effect of being connected to external organizations, such as suppliers, customers, banks and other business partners. The probability of experiencing a Year 2000 problem is broken down into four degrees of severity:  Annoying; Disruptive; Business Critical and Catastrophic. A company with 500 connected applications could face a 5.4% probability of a catastrophy.

Connections       Catastrophic    Critical       Disruptive       Annoying
     5               0.1%           1.0%            3.7%            7.4%
    10               0.1%           2.1%            7.3%           14.3%
    20               0.2%           4.1%          14.0%           26.5%
    50               0.5%          10.0%          31.4%           53.7%
   100               1.1%          19.0%          52.9%           78.6%
   500               5.4%          65.0%          97.7%          100.0%
  1000             10.4%          87.8%          99.9%          100.0%


PFWYG Marketing Data

Deluxe Direct Response rolled out a new, flexible ‘NetMatch’ file enhancement service offering a pay-for-what-you-get pricing strategy.  Card issuers using Deluxe Data Resources will only be charged for the requested data elements that match each individual file. File enhancement services are typically priced on a package basis. Deluxe Data Resources provides access to the most in-depth data integral to predicting customer profitability based on its database that stores lifestyle, housing and purchase behavior from more than 100 million households.


Hamburger Helper

The hunt for the killer smart payment card application may become more focused after Wednesday’s announcement that Burger King and Mondex USA will launch a pilot to test smart payment cards in the fast food industry. Thus far, U.S. consumer acceptance of smart payment cards has been anything but enthusiastic. However, yesterday’s development could excite U.S. consumers. The Burger King/Mondex smart card will combine an electronic cash function and a loyalty program. Cardholders will earn points toward free food items by using a single, reloadable Mondex smart card featuring the Burger King logo. This is the first time in the U.S. that Mondex cards can be obtained and reloaded directly at a merchant’s store location. This is also the first time that Mondex USA is testing an on-chip loyalty program. The test is being conducted in four NY Long Island-area Burger King restaurants and will last approximately six months. Card-dispensing devices inside the Burger Kings will offer pre-loaded Burger King Mondex cards with $10 or $20 of Mondex value. Customers receive one loyalty point for every dollar spent. Points are stored on the chip automatically at the time of purchase. Loyalty points can be redeemed as follows: 10 points — free breakfast value meal; 15 points — free WHOPPER sandwich value meal; and 20 points — free value meal of the customer’s choice. De La Rue will provide the smart card POS terminals for the test. Gemplus will manufacture, personalize, and customize the Burger King Mondex cards being used. Giesecke & Devrient America Inc. will supply the smart card dispensing machines. Chase Manhattan Bank will process the Mondex transactions.


Pump Up The Volume

Excluding debit and charge cards, bank credit card volume is growing a tad faster in 98 than 97. According to figures released yesterday by Bankcard Barometer, card volume, including cash advances and purchases, is growing about 13% annually compared to 11% last year. First quarter data, based on issuer reported figures, shows cardholders racked up $195.6 billion among the four major credit card brands. If American Express charge cards are added the number would compute to $229.2 billion. Based on historical trends bank credit card volume should exceed $850 billion this year. Debit and charge cards should drive total volume over the $1 trillion mark for the U.S. Among major players: MBNA’s volume is soaring 30% annually, from $13,401,664,000 for 1Q-97 to $17,344,275,000 for 1Q-98;  NationsBank’s volume is 22% from $5,308,273,000 for 1Q-97 to $6,462,881,000 for 1Q-98.

First Quarter 1998 YTD
VISA $112.2 billion
MASTERCARD $ 64.6 billion
DISCOVER $ 13.9 billion
AMERICAN EXPRESS: $  4.9 billion
TOTAL         $195.6 billion

*excludes debit & charge cards    * includes cash advance & purchases including charge cards AmEx first quarter volume was $38.5 billion Source: Card Management Information Services’ Bankcard Barometer 301-695-4897


Canadian Debit

Interac Direct Payment says Canadians, for the third straight year, prefer debit cards over credit cards and cheques. In 1995, 58% of cardholders said they use cash most often compared with 10 per cent who said they use IDP. This year, the percentage of  people who state cash is their primary payment method dropped to 45 per cent while IDP climbed to 31%. The 1998 IDP study shows 79% of women cardholders have used debit payment and 54% are very frequent users. This is a jump from 1996 when use among women was 68%. In the age demographic, 18-24 year-olds continue to be the group who have most likely tried IDP at 96%, up 11% from two years ago.


VeriSign MCSP

VeriSign, Inc. announced Wednesday its participation in the Microsoft Certified Solution Provider (MCSP) Alliance. The MCSP Alliance, introduced in April, brings together leading providers of products and services who are extending specialized and discounted offers to MCSPs. With VeriSign’s participation, MCSPs will now receive discounts and greater access to VeriSign’s value-added digital certificate solutions for secure electronic commerce.

As part of their participation in the MCSP Alliance, VeriSign has developed two special programs for MCSPs — a quick start training and evaluation program and reseller program including 15 percent discounts on VeriSign’s Secure Server IDs. VeriSign has also established a VeriSign/MCSP support Web site () to give MCSPs access to key educational resources.

“As Microsoft’s Global Prime Integrator for Windows NT Solutions, Digital is pleased to see the addition of Verisign for the MCSP Alliance. We can now respond to customers’ e-commerce needs with the most complete, secure and reliable solutions and facilitate the widespread implementation of trusted electronic commerce,” said Laura Farnham, vice president Internet Commerce Solutions Marketing.

VeriSign’s Secure Server IDs enable SSL technology, which ensure both authentication and encryption at the browser-to-server level. Secure Server IDs are used by over 50,000 Web sites to provide site visitors with the confidence that the Web site they are visiting is authentic and that their private data and payment information (such as credit card numbers), are being transmitted securely over the Internet via a secure encrypted channel. VeriSign Secure Server IDs will provide MCSP customers with many key benefits, including the ability to establish secure communications with site visitors using SSL, proof-of-identity, recognition by all major browsers, protection from Internet fraud, $100,000 of protection under the NetSure Protection Plan and the ability to participate in VeriSign’s Authentic Site program.

“The MCSP Alliance was created to help MCSPs maximize their relationships with other leading software, hardware and services companies,” said Juan Vegarra, director of the worldwide MCSP program at Microsoft Corp. “VeriSign’s digital certificate products and services will enhance the security offerings readily available to the MCSP channel. We are pleased to have VeriSign onboard as a participant of the MCSP Alliance.”

“VeriSign is committed to enabling MCSP participants to capitalize on growing revenue opportunities in the enterprise security market,” said Richard Yanowitch, vice president of marketing at VeriSign. “The inclusion of VeriSign’s Secure Server IDs in the MCSP Alliance program will allow us to further integrate our certificate services with Microsoft and its key distribution channel, in order to effectively service the needs of enterprises worldwide.”

There are over 14,000 MCSPs worldwide, including systems integrators, custom application developers, installation and deployment service providers, business consultants and training organizations. MCSPs add value to their customers by offering their customers a full range of services for private IP networks and the Internet, line-of-business applications and client-server implementations. For more information on the MCSP program, visit .

VeriSign will also be exhibiting at the sold-out Microsoft Fusion 98 and Tech Ed conferences in New Orleans on May 31st – June 3rd, 1998. VeriSign will be located at booth # 1430 and will be demonstrating VeriSign OnSite, its enterprise certificate authority offering and Secure Server IDs for Web sites and content publishers. For more information about these conferences, visit .

VeriSign, Inc.

VeriSign, Inc. is the leading provider of digital certificate solutions used by enterprises, Web sites and consumers to conduct secure communications and transactions over the Internet and private networks. VeriSign’s Digital IDs and Secure Server IDs are available through the company’s Web site at . VeriSign’s E-Commerce Solutions are used by enterprises to deploy complete Public Key Infrastructure (PKI) solutions for intranets, extranets, and large-scale electronic commerce applications, and are available through VeriSign regional account representatives or through VeriSign resellers. For more information visit VeriSign’s Web site at .


openMEDIA Card

Glenayre’s Integrated Network Group introduced Wednesday the latest version of Glenayre’s postpaid calling card product, openMEDIA Enhanced Calling Card version 4.0. A key part of the Intelligis product line, Glenayre’s postpaid product offers exciting customer- and user-driven features, allowing operators to maintain their strategic advantage in the highly-competitive postpaid market.

“This latest version of openMEDIA Enhanced Calling Card extends the product’s superior feature set, placing emphasis on features that make the product simpler for our customers to configure,” said Thomas Allen, vice president and general manager of Open Development Corporation, a Glenayre Technologies company. “Plus, the features make it even easier for their subscribers to use.”

The new features introduced in openMEDIA Enhanced Calling Card version 4.0 include:

* Account On-Demand, which enables the card provider to immediately process new account requests.  Now, subscribers do not have to wait for their new calling card to arrive before they can use the service. With the Account On-Demand feature, the card provider can instantly supply an active account ID and Personal Identification Number (PIN) to the subscriber so they can begin making calls right away.

* Real Time Fraud Limits, which significantly reduce exposure to expenses and lost revenues associated with fraudulent activities. Card providers can limit the number of minutes, number of calls and the duration of individual calls – both domestically and internationally – for a configurable time period.

Automatic Fraud Transfer to Customer Service Representative (CSR) improves customer service, decreases the card provider’s costs associated with fraud, and can increase the conviction rate for telephone fraud. This feature enables card providers to choose between routing a call to a CSR, playing a prompt and disconnecting the call, or completing the call whenever a specific PIN is:

– Suspected of calling from ANI/CLIs identified as a source of repeated PIN validation failures.

– Suspected of velocity control fraud, which determines whether a caller could have traveled between the ANI/CLI of the last call placed, and the ANI/CLI of the current call. The system performs calculations based upon a pre-determined rate of speed and the location of the last call to the platform.

– Locked, preventing multiple callers from accessing the platform with the same PIN, at the same time.

If a call falls under any of the above criteria, a record is written to a table, allowing card providers to track and analyze potential fraud.

* Information Digit Processing, which captures information digits and stores them. Information digits are two-digit numbers that identify individual phone line types and categorize them by location or type, including residence, business, hospital, prison or pay phone. This feature enables card providers to target programs to specific categories.

Additional features of openMEDIA Enhanced Calling Card version 4.0 include Access Number-Based Scripting, Account Code Enhancements, Terminate Account (Account Recycling), ANI/CLI Pass Through and Transaction Scope.

The openMEDIA Enhanced Calling Card product features comprehensive call scripting capabilities, corporate calling card functionality, extensive fraud controls, integrated customer care, flexible billing utilities and an advanced subscriber feature set.

“The U.S. market has readily accepted postpaid calling cards, and in the world market, postpaid calling card products with enhanced features and services are becoming a very attractive and lucrative solution. The acceptance of postpaid cards with enhanced features and services can be tied directly to the strong financial returns, expanded customer base and brand recognition that providers and carriers who adopt these solutions enjoy,” said Dan Case, president and general manager of Glenayre’s Integrated Network Group. “As the market’s preferred postpaid calling card product, openMEDIA Enhanced Calling Card enables providers to maintain their leverage in a very tough, competitive market.”

Designed with an open architecture allowing for scalability, adaptability and reliability, the Glenayre openMEDIA platform and applications afford service providers and carriers the performance needed to deliver fast, reliable, high-volume transaction processing. The configuration of the Glenayre openMEDIA platform offers carriers many advantages, including the ability to provide their customers with reliable, high-volume enhanced phone services, support for operation of multiple applications simultaneously, and a platform that can adapt existing applications and create new products.

The Glenayre openMEDIA platform and applications also provide an array of revenue-generating enhanced card and wireless services, such as prepaid wireless, prepaid calling card and enhanced postpaid calling card applications.

The Glenayre Intelligis product family provides enhanced service systems and network management, and operational support systems to leading mobile and fixed network operators worldwide. The products enable operators to increase revenue and improve network reliability and efficiency.

Glenayre Technologies Inc. is a leader in developing, manufacturing and marketing innovative personal telecommunications products and systems. With over 2,000 employees and offices on six continents, Glenayre’s net sales were over $451 million in 1997. Additional information about Glenayre is available on the company’s Web site at: .


Strange Bedfellows

The rocky relationship between American Express and credit card registry service developer Peter Halmos took a strange turn yesterday as AmEx entered into a strategic alliance with Peter Halmos & Sons, Inc., a new venture capital firm. American Express is funding a contribution to the venture in return for the exclusive opportunity to market products and services developed by Halmos’ firm.  Mr. Halmos founded SafeCard Services and CreditLine Corporation. Halmos was consumed by litigation with SafeCard after his departure as chairman in 1990.