Out Like a Lion

American Express ended 1997 with the company’s first $40 billion+ quarter in U.S. charge volume. For all of 1997 AmEx racked up $150.5 billion in total volume for a 14.9% increase over 1996. Card loans grew at an above average rate of 14.3% last year to end 1997 at $14.6 billion. However card fees have declined more than 7% and the provision for charge card losses increased about 12% last year. AmEx says rewards programs and expanded merchant coverage drove more volume to the brand last year than any previous year. AmEx’ Travel Related Services reported net income of $1.35 billion for 1997, an increase of 10%.

                                 AmEx  Yearend  U.S. Vitals
                                  1997          1996
       Delinquency                3.5%          3.3%
       Chargeoffs                 6.0%          5.2%         
       Net Int Margin             9.1%          8.8%         
       Avg Discount Rate          2.73%         2.75%
       Avg Fee Per Card           $39.00        $42.00
       Avg Acct Volume            $6,473        $6,074

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CreditDesk 2.3

Fair, Isaac announced Monday it will release a new version of ‘CreditDesk’ next month. The new version includes capabilities such as an optional Web-based front end and the ability to handle multiple scoring models for multiple portfolios within a single system. Fair, Isaac says institutions who purchase the software or renew their existing license prior to March 30 will receive the upgrade, ‘CreditDesk 2.3’, at a 15% discount.

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Share Group

A MA-based credit card marketing firm was dumped by the AFL- CIO on Friday because of the involvement of the company’s founder in funneling funds to Teamster’s president Ron Carey’s 1996 campaign. The Share Group was engaged in marketing the AFL-CIO’s ‘Union Privilege MasterCard’ to 13 million members and employed about 100 telemarketers. The company said it was losing money on the program and recently negotiated a higher commission. However attorneys for the AFL-CIO believed the increased payments could be misinterpreted by union members. Share Group’s founder pleaded guilty recently to conspiracy charges in the scandal which illegally funneled $700,000 to Carey’s campaign.

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Top 10 Scoreboard

TOP  TEN  YEAR-END  1997
      ISSUER           RECV               VOL         ACCTS
      pCitibank        $48.2             $102.8      24.8
      MBNA             $44.5             $ 63.4       28.1
      pBanc One/FUSA   $38.6             $ 40.0      25.9
      Discover         $36.0             $ 57.9      40.4
      Chase Man        $32.5             $ 39.8      21.5
      pFrst Chic       $17.7             $ 46.1      14.9
      Household        $17.3             $ 34.2      16.0
      AT&T Univ        $15.3             $ 27.7      19.7
      Cap One          $14.2             $ 14.0      11.7
      Advanta          $11.2             $  7.0       8.4 
      receivables and volume in $ billions; accounts in millions;
      Source Bankcard Barometer Jan 98/CardData; p-preliminary

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Consumer Protection Services

A Toronto-based credit card protection service was cited by the Pennsylvania Attorney General for misleading consumers regarding the benefits of its service and for not informing consumers of their right to cancel. The Tracker Corporation offered, for a $189 fee, protection for up to $10,000 in unauthorized credit card charges. The service was marketed under the trade name Consumer Protection Services. The PA Attorney General’s office also alleged the company did not truthfully identify itself, giving consumers the impression the solicitors were employees of the consumers’ credit card company. Under a new PA law consumers have the right to cancel any sale made over the telephone up to three days after the company mails the consumer a required notice of cancellation. Friday, Tracker signed an ‘Assurance of Voluntary Compliance’ agreement and agreed to paid restitution and the costs of the investigation.

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Advanta/FDR Sign

First Data Resources announced that it has signed a multi-year agreement to provide transaction processing services for Advanta Financial Corp., a leading issuer in the quickly growing small business commercial credit card market.  Under the new agreement, First Data will provide data processing and contingency services for Advanta’s entire commercial credit card account base.

“In three years, Advanta has become one of the largest issuers of commercial credit cards to small businesses, and First Data has been a strategic partner with us in our growth,” said Mike Noles, Senior Vice President, Advanta Financial.  “We’re confident that the collaboration of expertise and innovation between Advanta and First Data will enable us to achieve our growth and service objectives through the new millennium.”

“Advanta’s decision to solidify their relationship with First Data is evidence of our commitment to deliver the highest level of service and innovative technology to our commercial issuing clients,” said Sue Lamb, Vice President, Commercial Products Division, FDR.  “Advanta has realized significant growth in their commercial portfolio, and we are pleased to be a part of their proven success in the commercial marketplace.”

Advanta Financial supports Advanta Business Services, the provider of financial services to more than 250,000 small businesses nationwide.  Advanta Business Services is a subsidiary of Advanta Corporation (Nasdaq ADVNA), a financial services enterprise that serves consumers and small businesses through innovative offerings of mortgages, leases, insurance, business credit cards and deposit products.  Further information about Advanta can be found at .

Hackensack, N.J.-based First Data Corporation is a global leader in payment systems, electronic commerce and information management products and services.  First Data and its principal operating units process the information that allows millions of consumers to pay for goods and services by credit, debit or smart card at the point of sale or over the Internet, by check or wire money.  For further information about First Data, please visit the Internet at [http://www.firstdatacorp.com.][1]

[1]: http://www.firstdatacorp.com

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A-Net Card

Canadian-based Orion Technologies said it will launch a cobranded VISA or MasterCard in conjunction with its new global, private label ‘A-Net Card Program’. The ‘A-Net’ card was selected last week as the official ‘ATM/Debit Card’ for The Association of Development Financing Institutions in Asia and the Pacific. The group has 79 bank members in 33 Asian Pacific countries. The company was recently approved to be a blockholder of 94 ANSI ‘Issuer Identifier Numbers’.

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Paymentech’s Box Office Success

Paymentech, Inc. announced several new customers that expanded the credit card processor’s presence in the ticketing industry during 1997. The announcement was made during the International Ticketing Association’s (INTIX) 19th Annual Conference in Washington, DC.

The nation’s third largest electronic payment processor also showcased SE Workstation at the INTIX exhibition. SE Workstation is the first PC based application that enables merchants to electronically access both American Express and bankcard financial reporting.

Paymentech signed several prestigious organizations including The New York Philaharmonic at Lincoln Center and Disney’s New Amsterdam Theater in Times Square. Paymentech will provide credit card payment processing and settlement for the two organizations. With the addition of The New York Philaharmonic, Paymentech now processes credit card ticket sales for all regularly performing groups at Lincoln Center.

“Paymentech had the experience and familiarity with the box office ticketing environment that we desired in a credit card processor,” said Pamela Katz, controller for The New York Philaharmonic.

“We program a variety of dial-up terminal products to be compatible with the different ticketing systems,” said Gary T. Staub, group executive for business development at Paymentech. “This supports our strong customer base in the ticketing industry.” Staub cited such clients as the New York and Los Angeles Nederlander Theaters, Carnegie Hall, Dallas Symphony, Atlanta’s High Museum and Alliance Theatre, and the Tampa Bay Performing Arts Center.

Paymentech also introduced the enhanced version of SE Workstation to the ticketing industry, particularly appropriate for high volume sites such as stadiums and arenas. Developed by American Express and Paymentech, this Windows-based programs allows merchants to receive and respond on-line to cardholder inquiries.

SE Workstation is unique in that it allows box office administration to look up both American Express and bankcard transactions from the same program. “Adding bankcard data access will improve a merchant’s ability to quickly handle chargeback issues,” said Staub.

Paymentech, Inc. founded in 1985, provides full-service electronic payment solutions for direct merchant clients as well as third-party transaction processing. Paymentech also offers complete commercial card payment and information solutions. Paymentech is the third largest processor of bankcard transactions in the United States and a leading issuer of commercial cards.

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Integrion Gathers Steam

Three major banks have begun pilot programs using the Integrion Financial Network electronic banking platform via the Internet. PNC, First Chicago/NBD and Michigan National are conducting transactional tests of IFS this quarter with plans to expand to retail customers later this year. The three institutions join NationsBank and Banc One who already offer online banking via IFS. Integrion said yesterday that eight more banks are planning IFS implementations this year including Mellon and Royal Bank of Canada.

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PayMaster for Off Track Betting

Betting Inc. announced that it will purchase the Pay Master terminal from Shop While You Wait, the joint venture between Smoky Mountain Technologies Inc. and ET&T that was formed to market an electronic shopping service for retail and waiting room locations.

Betting Inc. will participate in the multimillion dollar venture between Smoky Mountain Technologies Inc., a UNICOMP subsidiary (Nasdaq UCMP), and Electronic Transactions and Technologies to pursue self service electronic commerce.

“Shop While You Wait (SWYW) is giving us an excellent price for the Pay Master,” stated Tom Hughes, Betting Inc. Chairman and CEO.  “We have had substantial interest from parties who presently receive legal home off track betting by credit card, and would like to replace that with same as cash, ATM cards with PIN transactions through the Pay Master calling out by modem not voice, over a regular phone line.  This is real money, the same as cash for the gaming service companies, and they can realize additional significant savings by processing electronic orders rather than voice calls.”

The Pay Master terminal includes a card reader for both mag strip and smart card, alpha numeric keypad, alpha numeric display and printer.  It is designed for self-service electronic orders not voice calls.

The business of Betting Inc. is to act as an interface between consumers using their ATM card and bank assigned PIN to send personal encrypted remote financial electronic transactions (PERFECT) to the gaming industry.

Betting Inc. processes these transactions and is also developing the Patented Second Line Computer Keyboard to bypass the Internet with PERFECT activity.

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Visa’s Golf School Tees Off

The renowned Nicklaus/Flick Golf School will launch its 1998 Touring Programs with three unique instructional programs for Atlanta-area golfers at the Cherokee Run Golf Club

— The Total Game Tour, a three-day program focusing on the areas of golf instruction, nutrition and mental and physical preparation. Classes will be April 17-19 and April 24-26.

— Faults & Cures presented by Visa, a one-day program designed to help cure the most common faults found in the full swing and short game. Daily sessions are scheduled for April 14-29.

— Faults & Cures For Women Only, a one-day program created to help eliminate the most common problems encountered by women golfers, to be held April 28-29.

“Our goal is to offer golfers of every ability the opportunity to take their game to the next level,” said Jim Flick, director of training and education for Nicklaus/Flick Golf School, a division of Golden Bear Golf, Inc. “Each of these programs is designed with that goal in mind, and offers instruction tailored to meet specific needs shared by a wide range of golfers.”

The Total Game Tour is an intensive, three-day instructional program focusing on Nicklaus/Flick’s unique anti-tension approach to improving the total game. Equal emphasis is given to the full swing, short game, course management and fitness and nutrition.

Widely-acclaimed golf instructor Jim Flick, who has taught more than 100 touring professionals including Jack Nicklaus and 1996 British Open champion Tom Lehman, will lead the instruction in seven of the ten cities hosting the Total Game Tour. Flick has hosted more golf schools than any other teacher in the profession. In 1988, he was named PGA of America Teacher of the Year and was the 1996 keynote speaker at the PGA of America Teaching and Coaching Summit.

Martin Hall and Mike Malaska, who together with Flick are members of Golf Magazine’s famed Top 100 Golf Instructors, will lead other sessions.

Enrollment is limited, with a student/teacher ratio of less than 5-to-1. Commuter rates for the Total Game Tour range from $1,875 to $2,275 per person.

Faults & Cures presented by Visa is a series of one-day instructional sessions aimed at curing the most common faults of golfers, such as incorrect grip pressure, bad posture, poor aim, body lunge, poor lower body support, and greenside play faults including the putting yips, the chili-dip and the skull.

Instructors from the Nicklaus/Flick Golf School will travel around the country to head the Faults & Cures program. Each instructor is hand-picked by Jack Nicklaus and Jim Flick based on understanding of the game and ability to teach students effectively in a personable, relaxed manner.

According to Charlie Ricks, vice president of the Nicklaus/Flick Golf School, this year’s Faults & Cures program features several enhancements.

“We’ve added a mobile video unit, which allows instant on-site video analysis of each student’s swing,” said Ricks. “We’ve also improved our student-teacher ratio from 8-to-1 to 6-to-1, to ensure each student has the optimum amount of personal, one-on-one instruction.”

Enrollment is limited. Cost is $350.

Faults & Cures For Women Only builds on the same principles as the Faults & Cures program, but focuses on the specific needs of women golfers.

“Last year, 22 percent of golfers enrolled in Nicklaus/Flick programs were women,” said Ricks. “A key objective for Nicklaus/Flick is to continue to be a leader in providing quality services and instructional products designed specifically for this growing market of golfers.”

Jackie Bertram Kaufman, who heads instruction for the Golf for Women Magazine Golf School by Nicklaus/Flick in Boca Raton, Fla., and Kathy Hart Wood, a member of the Nicklaus/Flick staff since 1994 and instructional editor for Golf For Women magazine, will be lead instructors for the For Women Only programs.

Other instructors include three-time U.S. Women’s Open champion Susie M. Berning and four-time LPGA Tour winner Janet Coles.

Enrollment is limited, with a student/teacher ratio of 6-to-1. Cost is $350.

The Faults & Cures program is presented by Visa, the world’s largest consumer payment system. Visa plays a pivotal role in advancing new payment products and technologies to benefit its 20,700 member financial institutions, their cardholders and the global economy. Visa’s 561 million cards are accepted at 13 million locations worldwide. The Visa Global ATM Network consists of more than 342,000 ATMs in 113 countries. For more information on Visa, visit Visa Expo at [www.visa.com][1].

The Nicklaus/Flick Golf School is a division of Golden Bear Golf, Inc. (NASDAQJACK). Golden Bear Golf is a diversified, international brand name golf products and services company engaged in the development, marketing and management of golf-related businesses including golf practice and instruction facilities, golf instructional schools, golf-related consumer products, and the construction of golf courses and resort-related facilities. For more information on Golden Bear Golf, please visit the website at [www.nicklaus.com][2].

To reserve a spot in any of these programs, call 1-800-642-5528.

[1]: http://www.visa.com
[2]: http://www.nicklaus.com

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Sears Card Losses

Discounting new accounting standards for credit card securitizations, Sears Roebuck and Co.’s fourth-quarter 1997 net income was $512 million, compared to $567 million last year. The income drop was attributed primarily to increasing bad credit card debt. Responding to rising credit card delinquencies and chargeoffs Sears’ beefed up its provision for U.S. credit losses by $244 million during the fourth quarter. During the fourth quarter Sears’ total domestic provision for uncollectible accounts was $688 million, a 110% increase over its fourth quarter 1996 provision. The blowout in credit losses was softened somewhat by rising credit revenues. Sears reported fourth quarter 97 credit revenue of $1,309,000,000 representing a 20.8% increase over fourth quarter 96. The increased credit revenues were driven by higher card balances and increased late payment fees. At year end Sears private label credit card outstandings logged in at $28,596,000,000.

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