Biometrics Coming

IFS International announced Wednesday a non-exclusive joint development project with Biometric Access Corp,  for payment card transaction processing at POS and home banking stations utilizing ‘TPII’ and ‘SecureTouch’ products.  The joint activities will lead to the marketing of a complete Biometric, or fingerprint recognition payment solution to financial institutions, retailers, regional and national banks throughout U.S. and International markets.


Integrion Infrastructure

Visa U.S.A. and CheckFree announced plans Wednesday to form a joint venture that will create the next generation electronic bill payment and remittance infrastructure for the nation’s financial institutions and billers.  Combining the funds transfer services of Visa’s ‘ePay’ electronic debit and settlement product with CheckFree’s remittance data services, the new joint venture will enable financial institutions to offer their customers an end-to-end, fully electronic billing and payment capability. Integrion played a key role in bringing together Visa (an owner of Integrion) and CheckFree (Integrion’s strategic partner for bill presentment and payment processing). Access to the new joint venture infrastructure is expected to be available to financial institutions and billers by December.


Brite Voice Expands

In a contract valued at over $800,000, Brite Voice Systems  is expanding the prepaid wireless service offered by Celulares Telefonica to its customers throughout Puerto Rico.  Celulares Telefonica is the wireless service division of Puerto Rico Telephone Company.

The expansion of the prepaid service was prompted by a higher than expected rate of growth in the number of prepaid subscribers since the service was launched late last year.

“The prepaid wireless service has been tremendously successful in just the short time it has been available,” said PRTC’s President & CEO, Carmen A. Culpeper.

Brite also provides additional services to PRTC on a managed service basis.  Under this unique service, called BriteCare, Brite manages databases, produces cards, and monitors the system operation for PRTC.  BriteCare can be expanded to eliminate the need for carriers to purchase additional equipment for enhanced services, although PRTC has chosen to purchase their equipment.

Brite’s prepaid service is easy to use.  It operates like a traditional, debit-based wireless account in that subscribers are not required to call an access numbers or enter personal identification numbers.  Prepaid customers maintain a balance on their accounts via cash, prepaid air time cards, or credit cards.  Whispered reminders tell subscribers the remaining prepaid account balance and remind them when it approaches zero.

Brite’s prepaid service expands PRTC’s enhanced services portfolio.  The company currently offers Brite’s voice dialing product, allowing PRTC cellular users to dial by speaking the number they want, or by saying a name from a personalized directory in either Spanish or English.  As part of the overall agreement, Brite will also be updating PRTC’s voice dialing service.

“We are extremely pleased to be expanding our relationship with a prestigious carrier like PRTC,” said David Gillaranz, Brite’s Director of Latin America Sales.  “It exemplifies Brite’s strategy to focus on rapidly growing global markets, and shows our product applicability in the international market.”

Since its organization in 1914, the Puerto Rico Telephone Company has broken the ground and set the standards for telecommunication service in Puerto Rico.  As of 1997, PRTC has the most complete and comprehensive telephone network and greater variety of services on the island to satisfy every telecommunication need.

Brite is certified ISO 9001/TickIT, a globally accepted quality management recognition.  Brite’s certification includes the design, development, manufacture, installation and support of computer-based voice and multimedia systems.  The certification also includes the company’s associated managed services, information services and training services.

Brite is a world leader in providing enhanced telecommunications systems and interactive information systems.  Brite’s products include prepaid and enhanced calling card systems for wireless and wireline communications companies, and IVR-CTI for service companies.  The company also provides managed service capabilities for these products as well as telecommunications management services. Brite’s world headquarters are located in Heathrow, Florida, a suburb of Orlando.  The company has offices and facilities worldwide.


PayPoint Hires Coblentz

PayPoint Electronic Payment Systems, Inc. is pleased to announce the appointment of Fred C. Coblentz to the position of Vice President, Sales and Business Development.  Coblentz began his career with PayPoint in 1984. In his most recent assignment, Coblentz was the manager of Quality Assurance and Deployment for PayPoint.

PayPoint, a wholly-owned subsidiary of ARCO, is a processor of electronic payments based in Los Angeles.  PayPoint provides innovative payment solutions for debit, credit, electronic benefits transfer, check authorization and stored-value cards and is the leading provider of on-line debit card processing.


Crestar’s Super Account

Crestar Investment Group has introduced a new Asset Management Account that combines a Crestar Securities Corporation Brokerage account, a Crestar Bank checking account and various credit alternatives in a single package.  The Crestar Asset Management Account simplifies financial management for depositors and investors by meeting their primary financial needs with a single account that reports all account activity in one comprehensive monthly statement.

With a Crestar Securities Corporation brokerage account, customers can buy, sell or hold a wide variety of investments including stocks, bonds, mutual funds, unit investment trusts and options.  Customers may also establish a margin account enabling them to borrow against the value of their securities.  The Crestar Bank checking account automatically invests idle cash into the customer’s choice of one of three money market mutual funds offered through Crestar Securities Corp. — CrestFunds Cash Reserve Fund, CrestFunds U.S. Treasury Money Fund, CrestFunds Tax Free Money Fund — or into an FDIC- insured interest-bearing Crestar deposit account.  The checking account allows unlimited check writing and provides a Crestar ATM card or Crestar CheckCard and a no-fee Crestar Platinum Visa credit card.

“The Crestar Asset Management Account extends to Crestar customers the investment expertise of Crestar Investment Group combined with the convenience and flexibility of Crestar’s  branch network and electronic delivery channels,” said Thomas D. Hogan, Group Executive Vice President and head of Crestar Investment Group.  “The introduction of this new account clearly underscores Crestar’s commitment to respond to our customers’ preferences and is a welcome addition to Crestar Investment Group’s comprehensive array of investment products and services,” Mr. Hogan said, noting that demand for this type of combined account has been growing steadily.

Initially, the Crestar Asset Management Account will be offered by Crestar Investment Group Financial Consultants.  Financial Consultants are registered representatives who help investors determine their goals and assist in refining a long-term investment strategy.  The Asset Management Account is priced competitively; it requires a balance of $15,000 in cash or investment securities and carries a $75 annual fee.  The annual fee will be waived for customers opening Crestar Asset Management Accounts by July 31, 1998.

Crestar Bank is a unit of the $26.1 billion-asset Crestar Financial Corporation, based in Richmond, Virginia.  Crestar Investment Group is a service mark of Crestar Financial Corporation and consists of units of Crestar Bank, Crestar Asset Management Company, a registered investment advisor, and Crestar Securities Corporation, a registered broker-dealer. Broker-dealer services are offered through Crestar Securities Corporation, a member of the NASD and SIPC.  Deposit account services are offered through Crestar Bank, a member of the FDIC.  Crestar Investment Group Financial Consultants are registered representatives of Crestar Securities Corporation.  Investment products, including the CrestFunds, offered through Crestar Securities Corporation are not FDIC insured, not bank guaranteed and may lose value.

Crestar Bank offers a broad range of financial services to consumers, businesses, institutions and governmental customers in Virginia, Maryland and Washington, D.C. and in selected markets nationally.  Crestar’s multi-channel distribution system includes 609 banking locations and a complete range of 24- hour electronic banking alternatives such as telephone, PC and Internet banking.  Crestar’s main Web site address, [][1], includes a direct link to the bank’s specialized student loan site.  Other Crestar subsidiaries provide insurance, mortgage banking, and equipment leasing.



Bailey Joins CMC

James C. Bailey has joined Card Management Corporation (CMC) as Chief of Operations.  His responsibilities include management of all CMC operations units encompassing more than 150 employees who provide customer service and other backroom service functions for the company’s clients.

Bailey has over thirty years’ experience in the financial services industry.  Prior to joining CMC he was Senior Vice President for First Data Resources (FDR), where he managed FDR’s  BPS operations center in Tulsa. This included responsibility for the customer service call center, credit underwriting, and operations support for the bankcard operations of more than forty large banks.

Before moving to FDR, Bailey was Senior Vice President of American General Finance.  There he was responsible for operations of the company’s $1.5 billion bank card/private label portfolio as well as banking operations for American General Finance’s Utah-based industrial loan company.  He has also held management positions in the credit and collections divisions of Comerica, Citibank, and Sears Roebuck and Company, and has served as credit and teleservices  consultant for a host of  other companies.

“We are very excited about the opportunity to have Jim on our management team,” said CMC Executive Vice President and Partner Dan Aiken.  “I’ve known and worked with Jim for a number of years and respect him not just for his operational and management expertise, but also for his integrity and human relations skills.”

CMC is in the electronic payments transactions business, serving credit, debit, and merchant portfolios.  Its clients include financial institutions and retail merchants coast-to-coast.  The company is headquartered in the Hilliard Lyons Building in Evansville and is in the process of relocating to One Riverfront.  It also has a sales office in Omaha.


GlobeSet Set

GlobeSet Inc. announced Tuesday it has achieved interoperability between its payment server SET application and Visa’s SET financial-processing gateway at San Mateo, CA. GlobeSet becomes the first and only vendor to be able to offer SET solutions as a part of Visa SET pilots worldwide. Previous tests by other SET vendors have covered only a limited number of transaction messages. However, the GlobeSet testing involved the same Visa SET gateway version that will be released for SET pilots in the field. Reflecting stringent, real world transaction requirements, the GlobeSet/Visa testing covers a full spectrum of merchant-to-gateway options, including credit messages and payment reversals.


Gemplus Brasil

Gemplus announced Tuesday that it is providing 2 million smart cards for the Smart Club to Brasil loyalty program that will be rolled out in August of this year starting in the city of Rio de Janeiro.

Companies partnering to issue the loyalty card are Banco Bradesco, Brazil’s largest bank; Shell Brasil, with more than 4,000 service stations in the country; TAM, a Brazilian airline; Lojas Americanas, one of the largest Brazilian retailers; and Rede Globo, the largest telecommunications company in Brazil. RDS, a Rede Globo partner in southern Brazil, is also participating.

The loyalty solution will enable consumers to earn points for purchases made at participating companies, which can then be redeemed for gifts, discounts, and other special privileges.

The loyalty application, which uses a Gemplus GPM896 memory card, was developed by Gemenos, a Gemplus value-added reseller.

In the third quarter of 1998, the loyalty solution will be rolled out to other cities in Brazil. Gemplus expects to deliver 5 million smart cards in 1998 in conjunction with the project.

“We are pleased to be participating in this important loyalty program in Brazil,” said Donna Jeker, vice president of strategic marketing and partnerships for North and Latin America. “Our third-party partners are key to implementing our strategy of providing smart card solutions that will make a difference in how people live and work.”

About Gemplus

Gemplus() is the world’s leading provider of conventional and smart card-based solutions. Gemplus sells magnetic stripe cards, memory and microprocessor-based smart cards, smart contactless cards, electronic tags and smart objects. The company designs and markets software, development tools and readers. Gemplus also provides consulting, training and personalization services to deliver the industry’s most comprehensive and flexible card-based solutions to its developers, distributors, partners, and customers.

With sales of over US$585 million in 1997, Gemplus employs more than 4,100 people, in ten manufacturing facilities, five R&D centers and 41 sales and marketing offices located in 27 countries around the world. Founded in 1988, Gemplus has successfully implemented portable and secure smart card-based solutions to simplify applications such as public and wireless communications, financial transactions, loyalty, transportation, education, healthcare, identity, access control, pay TV, electronic commerce, Internet security, and information technology.


Ad Awards

Advertising Age revealed the winners of this year’s prestigious ‘THE BEST AWARDS’ for advertising and American Express has come up a winner. The awards recognize creative excellence in 21 categories of advertising media produced during 1997. In the financial services category Ogilvy & Mather’s American Express “London” ad won first place. VISA’s BBDO NY-produced “Bob Dole” ad came in second. The best TV commercial of the year was Volkswagen’s “Da Da Da”.


Sears Card Bonds Rated

Standard & Poor’s affirmed Tuesday its ratings on the outstanding series of Sears Credit Account Master Trust II investor certificates (see list below). This rating action follows a proactive move by Sears to alleviate investor concerns of rising loss rates by raising credit enhancement levels on all of its publicly-rated credit card-backed securities issued out of Sears Credit Account Master Trust II.

This increase in enhancement across all series illustrates Sears’ commitment to protecting investors. Sears has boosted enhancement for its publicly-rated, fixed-rate deals by increasing the size of each seller-retained C class by 400 basis points (Standard & Poor’s does not rate seller-retained C classes). As a result, total credit enhancement to the triple-‘A’ certificates increased from 11% to 15%. The credit enhancement associated with series 1998-1 will reflect these new levels.

Reported gross charge-offs increased steadily during 1997 but have leveled off during the first quarter of 1998 at about 9.5%. As of the April 1998 reporting period, the three-month average charge-off rate was 37% higher than the 6.7% charge-off rate recorded in April 1997 period. The increase in gross charge-off rates during 1997 has raised significant credit quality concerns. As part of its routine surveillance process, Standard & Poor’s has maintained an ongoing dialogue with Sears’ management and has been closely monitoring portfolio performance trends.

Partially offsetting the rise in charge-off rates, in January 1998, Sears began including recoveries from charged-off accounts in finance charge collections available to certificateholders. The inclusion of recoveries has boosted portfolio yield by 160 to 200 basis points. This increase is due to the fact that certificateholders receive 100% of the recovery stream, while the seller retained certificates receive no benefit. The inclusion of recoveries, along with the recent stabilization of losses, has had a positive impact on excess spread. In the last four months, three-month-average excess spread in the trust has improved steadily, moving to 4.88% in April from 3.37% in January. Separately, On May 14 Sears announced that the company had entered into an long-term agreement with Total Systems Inc. to provide certain computer processing services. Sears expects the system conversion to enhance its ability to effectively manage its Sears credit card accounts. The conversion will be the largest in the history of the credit card industry, affecting 60 million accounts. The conversion is expected to temporarily cause an increase in charge-offs since it will change the methodology used to age delinquent accounts. Currently, delinquencies are calculated based on the scheduled monthly payment and the amount past due. The new aging methodology determines delinquency levels based on the number of billing cycles that have elapsed since the customer’s last payment, a practice common in the bankcard industry.

To measure the impact of the new methodology on delinquency statistics, Sears used historic account activity from a 10% random sample of accounts to simulate the difference between the current and new methodologies. The simulation showed that charge-offs increased by 75 to 100 basis points following the conversion and declined close to original levels 12 months after the conversion. We expect excess spread to be negatively impacted due to the conversion, however its effects should be mitigated since the conversion is expected to take place in three phases with an expected completion date sometime in the second quarter of 1999, Standard & Poor’s said. — CreditWire


            Rating  Original Initial     Revised Initial
Certificate Balance  Certificate Balance

Series 1994-1

  Class A      AAA        $750,000,000  $750,000,000
  Class B      A           $33,500,000   $33,500,000
  Class C                  $59,197,000   $98,857,000

Series 1995-2

  Class A      AAA        $600,000,000  $600,000,000
  Class B      A           $26,970,000   $26,970,000
  Class C                  $47,192,000   $78,917,000

Series 1995-3

  Class A      AAA        $500,000,000  $500,000,000
  Class B      A           $22,500,000   $22,500,000
  Class C                  $39,330,000   $65,740,000

Series 1995-4 (Note A)

  Class A       AAA       $500,000,000  $500,000,000
  Class B       A          $22,500,000   $22,500,000
  Class C                  $37,180,000   $61,330,000

Series 1995-5

  Class A       AAA       $500,000,000  $500,000,000
  Class B       A          $22,730,000   $22,730,000
  Class C                  $45,520,000   $65,520,000

Series 1996-1

  Class A       AAA       $500,000,000  $500,000,000
  Class B       A          $22,500,000   $22,500,000
  Class C                  $39,330,000   $65,740,000

Series 1996-2

  Class A      AAA        $500,000,000  $500,000,000
  Class B      A           $22,500,000   $22,500,000
  Class C                  $39,330,000   $65,740,000

Series 1996-3

  Class A      AAA        $500,000,000  $500,000,000
  Class B      A           $22,500,000   $22,500,000
  Class C                  $39,330,000   $65,740,000

Series 1996-4

  Class A      AAA        $500,000,000  $500,000,000
  Class B      A           $22,500,000   $22,500,000
  Class C                  $39,330,000   $65,740,000

Series 1997-1

  Class A      AAA        $500,000,000  $500,000,000
  Class B      A           $22,500,000   $22,500,000
  Class C                  $39,330,000   $65,740,000

Note A: As a result of scheduled amortization, the present amount of Class A equals $375,000,000 and Class C equals $55,169,551


Palumbo Joins Paymentech

Michael P. Duffy, chief operating officer of Paymentech, Inc., Tuesday announced that Michael J. Palumbo has joined Paymentech as group manager responsible for business operations at the company’s Merchant-Link (MLI) unit in Bethesda, Md.  He will manage major cross-functional projects, support long-term initiatives and develop a strategy to align MLI with Paymentech’s other business operations.

Paymentech, the nation’s third largest credit card and electronic payment processor, acquired Merchant-Link, Inc. in January 1997.  MLI provides high- end, one-call support for merchants that use the Micros restaurant management system and the Fidelio hotel property management system.  These integrated POS (point-of-sale) systems manage entire business operations, including inventory, accounting, and POS cash and credit card sales.

“Merchant-Link bridges the customer service gap between the integrated POS system provider, the payment processor and the bank.  This ensures hospitality merchants streamlined problem resolution that supports the integration of credit card sales into their POS system,” said Palumbo.  “As more middle-tier restaurants and hotels integrate credit card processing, the demand increases for coordination of customer support among the various solution providers.”

Palumbo has over 16 years experience in large scale multi-task project management, strategic planning and program evaluation.  He holds a BA degree in Economics from Bucknell University and a MBA in Strategic Planning and Economics from the George Washington University.

Palumbo recently served as the Baltimore Development Corporation’s project director of the Fairfield Ecological Industrial Park.  In this capacity he implemented investment and redevelopment strategies, integrated information and environmental technology initiatives, and oversaw employment generation/community revitalization activities.  Palumbo has also worked as a management consultant for Booz Allen & Hamilton and DPRA, Incorporated, both located in Washington D.C.

“Mike is a significant addition to a management team that is already one of the more experienced in the processing business,” said Duffy.  “He brings tremendous program management and planning expertise.  He will significantly contribute to realizing a strategy to leverage MLI services with our overall POS processing capabilities in the hospitality market.”

“Paymentech presents an opportunity for me to be involved with an industry leader,” said Palumbo.  “Our task now is to expand upon the existing integrated point-of-sale VAR (value-added reseller) relationships to diversify our customer base and ensure quality, cohesive technological support for clients.”

Paymentech, Inc., founded in 1985, provides full-service electronic payment solutions in merchant acquiring, third-party transaction processing and commercial card payment and information programs.  The company processed approximately 1.6 billion total transactions and approximately $46 billion in sales volume during calendar 1997.