Paymentech Canada

Paymentech Canada announced the recent signing of direct marketers for electronic payment processing. The new clients include Lee Valley Tools and The Hampshire Collection. In addition, Paymentech announced an ongoing relationship with Universal TeleResponse in which the award-winning inbound call centre utilizes Paymentech as the preferred credit card processor for Universal’s customers.

“Paymentech’s seamless multi-currency credit card processing and timely funds delivery were attractive to Lee Valley Tools,” said Iain Campbell, executive vice president for the 20-year-old company. “Paymentech is very merchant focused and has exceeded our expectations for transaction processing and customer service.” Lee Valley markets woodworking and gardening tools and accessories.

“As a growing cataloguer, The Hampshire Collection wanted to address current as well as future payment processing needs,” said Barbara Canning Brown, president. “Our business is one of speedy response and specialized customer service and that is what a credit card processor also should deliver.”

Said Sue Farrel, director of sales and marketing for Universal TeleResponse, “Our relationship with Paymentech enables us to offer one-stop shopping and critical support services to our direct response clients.”

Paymentech is a leading electronic payment processor for non-face-to-face enviornments such as direct marketers, on-line services, and utility and cable companies. Said Hugh A. Ramolla, Paymentech Canada’s national sales director, “We are excited about the growth of our Canadian business. As a processor that focuses on the needs of direct marketers who sell to customers in Canada, the U.S. and other countries, we offer a number of unique payment services.”

Paymentech currently processes credit cards and other electronic payments for over 60 direct response merchants in Canada. Paymentech also offers electronic cheque processing (ECP) or a direct debit solution for recurring billing. Direct response merchants in Canada and the U.S. will be able to electronically debit a Canadian or U.S. consumer’s bank account for automatic payment. Paymentech is also one of the largest credit card processors for U.S. marketers.

Paymentech, Inc. (NYSE: PTI), founded in 1985, is a major third-party processor and the leading provider of full-service electronic payment solutions to the direct response industry. The company processed approximately 420 million total transactions in the September 1997 quarter and approximately $43.5 billion in sales volume during the last four quarters.

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GCA Expands to 17

The Global Chipcard Alliance (GCA) today announced that it has added a new member to its growing roster of global smart card industry leaders. NCR, a world leader in customer transactions, has joined the organization bringing the membership to 17, including major telecommunications, software and financial services companies and equipment manufacturers.

“Our vision is quite simple, within the next five years smart/chipcard consumers will be able to access their personalized applications anytime, anywhere and for many functions,” said David Anastasi, president and a member of the board of the GCA as well as vice president and general manager at U S WEST Public Services. “The Global Chipcard Alliance’s mission is to provide to consumers worldwide an easy way to identify the devices where their cards are accepted, serviced and protected. The GCA wants to ensure that a customer’s needs are met whether he/she is just around the block or in another part of the world,” he continued.

The goal of global smart card interoperability was furthered with the GCA’s recent announcement to institute a service mark plan which, when completed, will allow consumers to recognize “GCA approved” smart cards and terminals as products which fulfill strict global interoperability and consumer advocacy requirements set out by the GCA to ensure service and protection levels worldwide.

A certification process to review and validate products using the service mark and to then administer adherence to global interoperability specifications is also under evaluation.

“NCR is pleased to join the Global Chipcard Alliance to contribute to the further success and standardization of smart card solutions across the world,” said Clemens Sozef, Product Marketing Electronic Commerce, NCR. “NCR developed advanced solutions to support Electronic payment schemes such as Chipper, Proton, VISA cash and Mondex, in several countries. This includes multifunctional use of the smartcards. NCR is located in more than 130 countries and is committed to supporting the implementation of smart card solutions world-wide.”

NCR has become a world leader in customer transactions by providing businesses the ability to capture, process, and analyze data, so they can turn the resulting knowledge into actions that improve their relationship with their customers. NCR primarily concentrates in the retail, financial and telecommunication industry with products and services ranging from ATM, payment terminals, point-of-sale equipment, self service kiosk services, data warehousing, call centers, home devices and chipcard readers to system integration, constancy, project management, implementation/realization and installation and maintenance.

NCR has a 113 year heritage of enabling and analyzing transactions between businesses and their customers. At the customer interface, NCR is a world leader in Self Service and Point of Sale equipment. Behind the customer interface, NCR leads the scaleable data warehousing segment of the strategic business analysis market and the open, high-availability transactions processing market.

Established in 1996, the Global Chipcard Alliance’s members include: U S WEST Communications, PTT Telecom Netherlands, GTE Telephone Operations, Bell Canada, Telekom Malaysia, Deutsche Telekom, American Express, Microsoft, IBM, Telstra, Northern Telecom, Landis & Gyr, Oracle, NCR, GemPlus, SPT Telecom, and Elcotel. 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) promoting communications-enabled applications and solutions.

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Coming Calling Card Explosion

The passage of the Telecommunications Act of 1996 will result in service providers flooding into both the interchange and local exchange markets in the very near future. In preparation for this vast operator services and card calling market growth, both current and future market players must take proactive measures to retain their existing customers and to establish new customer bases within the market.

According to recent strategic research by Frost & Sullivan (), U.S. Operator Services and Card Calling Markets are expected to grow from $14.5 billion in 1996 to $22.7 in 2003, with a compound annual growth rate (CAGR) of 6.7 percent. This in-depth analysis of the market is divided into two segments: the interexchange carrier (IXC) operator services and card calling market and the local exchange carrier (LEC) operator services and card calling market. The IXC Segment is then further divided into domestic and international subsegments to ensure the closest possible examination of all aspects of the market.

The operator services and card calling market is currently being revitalized by prepaid calling cards which will later be joined by higher technology “smart cards.” Some major trends within the expanding market include continuing automation of the operator services industry leading to decreased labor and switching equipment costs for service providers, and the imposition of rate caps on operator services by state authorities preventing exorbitant fees and lowering revenues for the operator services market, according to Frost & Sullivan’s Telecommunications Industry Manager Larry Herman.

This research U.S. Operator Services and Card Calling Markets includes a representative sample of 136 companies currently in the U.S. operator services and card calling market, out of more than 1,000 companies currently competing in the market. Also included are ways competing market players can strategically, and wisely, adapt or redirect their present resources into these flourishing markets. In providing an objective overview of the entire operator services and card calling industry, four end-user categories are highlighted by industry: hospitality, institutional, pay phone, and residential and business customer.

AT&T, MCI, and Sprint dominate the IXC services market. Combined they hold more than 85 percent of the market for domestic interexchange services and over 95 percent of the market for international interexchange services. Thus leaving more than 1,000 competitors to compete and account for the remainder is the revenues in the market. So how will these companies succeed?

“It is clear that as a result of the passage of the Telecommunications Act of 1996, many providers in the interexchange and local exchange markets will enter both markets,” says Herman. “To compete effectively in this deregulated environment, service providers need to take proactive measures to retain their existing customers for operator and card calling services and establish new customer bases in markets that they are entering.”

This telecommunications industry research has integrated the Market Engineering consulting philosophy into the entire research process. Critical phases of this research included: identification of industry challenges, market engineering measurements, strategic recommendations, planning and market monitoring. All of the vital elements of this system help the market participants navigate successfully through the telecommunications market.

The technologies reviewed include signaling system #7, billing validation application (BVA), advanced intelligent network, automatic number identification (ANI), dedicated access, switched access, fiber optics, smart card technology, dialaround, voice activated calling cards, prepaid calling cards, and automated operator services

Market Participants include: Ace Telephone Association, Adams Telephone Co-Operative, Advanced Lightwave Communications, Inc., Albany Mutual Telephone Association, Aliant Communications Company, ALLTEL Corporation, Americall Enterprises, Inc., American Telesource International, Inc. (ATI), Ameritech Corporation, AMNEX, Inc., AT&T Corporation., Bell Atlantic Corporation, BellSouth Corporation, Benton Cooperative Telephone Company, Blackduck Telephone Company, Brooks Fiber Properties, C-TEC Corporation, Cable & Wireless, Inc., Cascade Operator Services, Inc. , Century Telephone Enterprises, Inc., Chautauqua Erie Telephone Corporation, Cincinnati Bell, Inc., Citizens Utilities Company., ClearTel Communications, Coastal Telephone Company, Coastal Utilities, Inc., Communications Services of Colorado, Concord Telephone Company, Consolidated Communications, Inc., ConQuest Telecommunications Services Corp., Crosslake Telephone and Cablevision Company, Davel Communications Group, Denver and Ephrata Telephone and Telegraph Company, East Otter Tail Telephone Company, Easton Telephone Company, Elcotel, Inc. , Equity Pay Telephone Company, Inc., Excel, Inc., Executive Telecard, Ltd., Fairbanks Municipal Utilities System, Farmers Telephone Company, Federated Telephone Cooperative, Fone America, Inc., Frontier Corporation., Garden Valley Telephone Company, GST Call America Business Communications, GST Telecommunications, Inc., GTE Corporation, Gulf Telephone Company, Hamilton Telecommunications Company, Hancock Rural Telephone Corporation, Hargray Telephone Company, Harmony Telephone Company, Horry Telephone Cooperative, Inc., Hospitality Communications Corporation, Hutchinson Telephone Company, ILD Teleservices, Interstate Telecommunications, Inc., ITC Holding Company., Johnson Telephone Company, Kasson and Mantorville Telephone Company, Lakedale Telephone Company, LCI International, Link USA, Inc., Madelia Telephone Company, Mankato Citizens Telephone Company, MCI Communications Corporation, Network Operator Services, New Hope Telephone Cooperative, Inc., NTS Communications, Inc., NYNEX Corporation, Oasis Communications, Inc., ONCOR Communications, Operator Service Company., Opticom Operator Services, Pacific Telecom, Inc., Pantel Communications, Inc., Park Region Mutual Telephone Company, Paul Bunyan Rural Telephone Cooperative, Peoples Telephone Company, Inc., Peoples Telephone Cooperative, Inc., Phoenix Network, Inc., Pine Belt Telephone Company, Inc., Polar Communications, Procom, Quest Group International, Inc., RL Telecommunications, Inc., Rock Hill Telephone Company, Roseville Communications Company, Runestone Telephone Association, SBC Communications, Inc. , Smart Choice Long Distance, Inc., SmarTalk Teleservices, Inc., SmarTel, Inc., Southern New England Telephone (SNET), Sprint Corporation, Standard Telephone Company, Start Technologies, Inc., TDS Telecom, Tel Advantage America, Inc., Tel Call Communications, Inc., TeleKey LLC, Telephone and Data Systems, Inc., Telephone Service Company, Teleport Communications Group., Teltrust, Inc., Toledo Telephone Company, TotalTel, Twin Valley-Ulen Telephone Company, U.S. Long Distance Corporation, U S WEST, Inc., Valley Telephone Company, Vartec Telecom, Inc., WATS International Corporation, WCS Long Distance, Westel Communications Services, Winthrop Telephone Company, Wolverton Telephone Company, World xChange Communications, World Telecom Group, Inc., and WorldCom, Inc.

Frost & Sullivan is an international marketing consulting company that monitors the environmental technologies industry for market trends, market measurements, and strategies. This ongoing research is utilized to update a series of research publications such as #2696-63, U.S. Call Center Service Markets, and to support industry participants with customized consulting needs.

Visit Frost & Sullivan’s web site at:

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Immediate Healthcare Payments

Health care claim processing is being taken to a new level this week as RealMed Corporation will announce this morning the launch of a new computerized claims resolution system that will provide on-the spot payment. The ‘RealMed’ network is the result of a joint effort between Gemplus, Digital Equipment and MCI. MCI will provide the communications network while Digital will be the hardware/software provider. Gemplus will provide smart cards for the network. RealMed’s smart cards will contain insurance and admissions information and will access the databases of insurers and banks to provide on-the-spot settlement. RealMed says the insurance industry spends $35 billion annually to process 3.7 billion health insurance claims and its new network will reduce costs by 30%-40%.

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Lackluster 4Q Volume

The unimpressive start of the holiday shopping season is apparently not deteriorating. VISA reported yesterday that retail purchase volume is holding steady through the first nine days of the Christmas season. VISA says card volume is up 12% and transaction volume is up 16% compared to the same period last year. If fourth quarter card volume for the industry ends with a 12% increase over last year this will be the first year since 1991 that fourth quarter volume failed to exceed the annual growth rate of the previous two quarters. Visa says the strongest performance this year is in the mail and phone order category, where consumers rang up nearly $1.7 billion in sales during the nine-day period, a 15 percent gain over the same period last year. The average Visa purchase in this category is $95 compared to an average of $66 for all holiday VISA transactions.

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NYCE & Wal-Mart

NYCE Corporation and Wal-Mart announced yesterday that consumers can now use ATM cards bearing the NYCE logo to make purchases at debit ready/equipped Wal-Mart stores nationwide.

Wal-Mart’s participation in the NYCE Network marks the continued expansion of NYCE point-of-sale (POS) services. Launched in 1990, NYCE POS service is currently offered at more than 115,000 merchant locations including national chains of general merchandise stores, drugstores, and convenience stores, as well as supermarket chains and petroleum retailers throughout the Northeast.

NYCE’s relationship with Wal-Mart will fuel the Network’s continually expanding POS transaction volume. Last month, NYCE set an all-time one-week record of two million on-line debit POS transactions.

“We believe on-line debit is a safer transaction for the customer, and it provides a service to them by allowing cash back on a purchase,” stated Katy Schimmel, manager of financial operations at Wal-Mart.

Added Dennis F. Lynch, president and CEO of NYCE Corporation, “At NYCE, we have seen exciting and consistent growth in our number of POS transactions, as more and more retailers come on board in order to meet consumers’ demands for convenient payment options. We are proud to partner with Wal-Mart to expand POS locations for NYCE cardholders.”

Wal-Mart operates in all fifty states, Argentina, Canada and Puerto Rico, and in Brazil, China, Indonesia and Mexico under joint venture or franchise agreements. As of October 31, 1997, the company has 1,904 Wal-Mart stores, 436 Supercenters and 444 Sam’s Clubs in the U.S.

Based in Woodcliff Lake, New Jersey, NYCE Corporation provides financial institutions with flexible, state-of-the-art processing services that include telephone- and PC-based banking and bill payment solutions, ATM terminal driving, card authorization, card management, and gateway access. The corporation also operates the NYCE Network, the largest shared regional electronic funds transfer (EFT) network in the Northeast.

As of October 31, 1997, more than 1,300 financial institutions participate in the NYCE Network, providing ATM and related payment services to more than 30.9 million cardholders through more than 18,600 ATMs and more than 115,000 POS merchant locations.

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New Rewards Card

Cobranded reward cards are alive as discount apparel retailer Loehmann’s and First USA rolled out a new ‘Platinum VISA’ Monday. The ‘Loehmann’s Insider Club Platinum Visa’ offers cardholders a 3% rebate on all Loehmann purchases and 1% rebate on all other purchases. Consumers applying before February also receive a $25 gift certificate. The new card also includes current ‘Insider Club’ benefits such as 10% off on the first Tuesday of every month and 15% off on the member’s birthday. First USA is offering its core pricing of a 5.9% five-month intro rate and a fixed 13.99% long term rate.

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Transmedia in France

Transmedia Europe, Inc announced yesterday that an agreement has been reached with the minority shareholders of Transmedia La Carte Restaurant SA, to acquire their holdings thereby raising its stake to 90%. This transaction which is valued at approximately $864,000.00 on current exchange rates, is expected to close by January 31st 1998. Societe Generale, one of Europe’s leading banks will retain its 10% stake and work in partnership with Transmedia Europe, Inc to develop the Transmedia business in France as well as the other major European markets granted to it in December 1996. These include Spain, Italy, Luxembourg, Belgium and French speaking Switzerland.

Transmedia La Carte Restaurant SA was required to obtain a banking license from the Bank of France because it issues a payment card and provides funding to participating restaurants through advance food and beverage purchases. After a full and lengthy review this was granted, and “Societe Financiere” status was accorded to the company. Management believes there is substantial value in holding the banking license which qualifies it throughout the rest of the EC.

In taking the additional country licenses (listed above), the Bank of France required an independent appraisal of their value be made by an expert, approved by them. This produced a valuation of $1.8m exclusive of France, for those yet undeveloped markets.

To date approximately $6.5m has been invested in Transmedia La Carte Restaurant SA.

Transmedia Europe, Inc intends to merge the operations of Transmedia UK PLC with those of Transmedia La Carte Restaurant SA, which management believe will produce significant operational cost savings. This process will be aided by the fact that the French operations are already fully electronic, with the card swipeable at point of sale.

“We are delighted to have been able to acquire the minority interests in our French operation, and strengthening our relationship with Societe Generale. As one of the largest credit card markets in Europe, and the largest tourist destination country in the world, we believe that the French market will be a powerful springboard for the development of the rest of Europe,” commented Ed Guinan, Chairman of Transmedia Europe, Inc.

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EDS-First Union

EDS has expanded its systems and technology services role with U.S. financial services leader First Union Corporation with a new five-year services agreement. Under the agreement, EDS will provide on-site systems engineering personnel at First Union to support significant ongoing technology projects.

A team of EDS systems engineers will take offices at First Union’s technology facility in Charlotte, N.C., in early 1998. Initially, EDS will participate in the conversion of Richmond, Va.-based Signet Banking Corporation and Haddonfield, N.J.-based Covenant Bank to First Union systems. Additionally, EDS will provide assistance with new systems development and may also support the servicing of various First Union systems later in the five- year period.

“With the continued rapid growth of First Union, it is critical that we have high-quality partners like EDS who can help with major initiatives,” said Austin Adams, First Union executive vice president of Automation and Operations. “We look forward to support from EDS in several areas, including development of systems in the areas of human resources, account analysis and capital management.”

EDS currently provides processing support for First Union’s credit card operations and provided systems integration services throughout First Union’s successful merger with Newark, Pa.-based First Fidelity Bancorporation last year.

“In today’s dynamic business environment, leaders in the financial services industry recognize the need for access to superior technical resources and industry expertise based on flexible service arrangements,” said Mike Littell, president of EDS’ U.S. Banking Services unit. “First Union is rightfully known as an innovator in both financial services and technology, and we are eager to continue our professional-services relationship with them.”

The new agreement between EDS and First Union supersedes the 1991 contract between EDS and Signet Banking Corporation. First Union completed its merger with Signet on November 28, 1997.

First Union is a leading provider of financial services to retail and corporate customers throughout the East Coast and the nation. It is the nation’s sixth-largest bank holding company, with assets of $144 billion as of September 30, 1997.

EDS, the official information technology services provider for World Cup 1998, is a leader in the global information services industry. The company’s approximately 100,000 employees specialize in applying a range of ideas and technologies to help business and government customers improve their economics, products, services and relationships. EDS, which serves customers in 42 countries, reported revenues of $14.4 billion in 1996. The company is independent and publicly owned, and its stock is traded on the New York Stock Exchange and the London Stock Exchange. EDS can be visited via the Internet at .

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Mellon – TYME

Mellon Network Services announced Monday the renewal of a five-year agreement to provide wholesale off-line debit processing services for TYME Corporation. TYME is the nation’s oldest statewide shared electronics funds transfer network and has more than 520 financial institution members throughout WI,IL,MI and MN. The “Take Your Money Everywhere” Card is currently accepted at more than 2,500 ATMs and nearly 2,500 merchant locations. Mellon processes 750 million transactions annually in both direct and wholesale markets.

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Chase – Dillard

Chase Merchant Services, L.L.C., a joint venture between The Chase Manhattan Bank and First Data Corporation, today announced an agreement to process Visa and MasterCard sales for Dillard Department Stores Inc. Little Rock-based Dillard’s is one of the top five department stores in the United States, with approximately $7 billion in annual sales volume.

The 5-year merchant processing agreement is effective immediately, and includes transaction authorization and processing, settlement and funding services. The financial terms of the agreement were not disclosed.

“This agreement provides Dillard’s with an opportunity to take advantage of the most innovative technologies available, align itself with a leader in the rapidly changing payment processing industry, and leverage the various marketing opportunities made available through the relationship,” said John Hawkins, vice president, treasurer of Dillard Department Stores.

“We’re pleased to be able to serve the payment processing needs and bring additional merchant servicing opportunities to a retail leader such as Dillard’s,” said Robert F. McNamara, chief executive officer of Chase Merchant Services, based in Melville, N.Y. “Dillard’s selection of Chase Merchant Services reflects positively on our ability to provide the economies of scale and highest degree of innovation that retailers seek for payment processing.”

Strategically positioned in the forefront of a rapidly emerging area of electronic commerce, Chase Merchant Services provides merchants, like Dillard’s, with state of the art technologies, by which they can take advantage of superior processing services and streamlined reporting functions. Through this relationship with Chase Merchant Services, Dillard’s also gains access to top quality customer service and relationship management, as well as valuable marketing opportunities.

Chase Merchant Services is the nation’s largest merchant acquirer, processing nearly 2 billion transactions a year and more than $100 billion in annual credit and debit card sales volume. Chase Merchant Services is a joint venture between First Data Corporation, one of the world’s leading processors of Visa and MasterCard transactions, and Chase, the largest banking company and fourth largest bankcard issuer in the United States.

Dillard’s, with an estimated 32 million bankcard transactions in 1997, currently operates 272 stores in 27 states, and features branded and private label goods in the upper-middle price range catering to a broad spectrum of the population.

The Chase Manhattan Corporation (NYSE: CMB) is the largest banking company in the United States, with over $366 billion in assets. With operations in 52 countries and clients in 180, it has top-tier positions in all important areas of global finance, trading, private banking and information and transaction services, and is the leading bank to corporate America. Domestically, Chase has offices in 39 states and relationships with more than 30 million households – coast-to-coast. Chase is a leader in all financial products and services for consumers, including mortgages, branch banking, credit cards, mutual funds and electronic commerce. Within the tri-state region of metropolitan New York and throughout the state of Texas, it is the leading banker to small business and middle market companies. Chase’s Internet site is [www.chase.com][1].

Hackensack, N.J. – based First Data Corporation (NYSE:FDC) 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 us on the Internet at [www.firstdatacorp.com][2].

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

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