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.


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.


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.


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.


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 .


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.


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 [][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 [][2].



Equifax Offers ProfitMax

Equifax Card Solutions and HNC Software Inc. have announced an agreement to make HNC’s ProfitMax cardholder profitability management system available to card issuers who process through Equifax.

![][1]     ProfitMax uses neural networks, expert rules bases and HNC’s cardholder behavior profiling technology to analyze each cardholder account and predict its future profit. Three neural network-based models — Credit Risk, Revenue Potential and Attrition Risk — are used along with historical data to give a well-rounded picture of the expected profitability of each account in an issuer’s portfolio on a transaction-by-transaction basis.

ProfitMax has a modular design that facilitates its use with the FBS Card Management system that ECS clients use to manage their cardholder accounts. Equifax clients will have the option of using ProfitMax with either custom or “consortium” models. A consortium model enables economies of scale by allowing issuers to share a model built on their combined data.

Larry Towe, senior vice president and general manager, Equifax Card Solutions, said, “Equifax Card Solutions is making ProfitMax available because clients have learned to expect innovative decision solutions from us. The power of ProfitMax to predict profitability opens new doors to how our clients can make decisions about their card portfolios.”

“In working with Equifax in our recently announced strategic alliance, I’ve grown to appreciate their serious commitment to the announced goal of being a company whose information, processing and knowledge-based solutions are increasingly instrumental in shaping global commerce,” said Allen Jost, vice president of business development at HNC. “HNC is pleased to be part of the Equifax solution.”

Equifax is a leading provider of information, processing, consulting and software solutions that facilitate and enhance buyer-seller transactions worldwide. The company serves businesses in the banking, finance, retail, credit card, telecommunications and utilities, and health care administration industries.

Equifax is changing the shape of global commerce through growth and innovation, driven by technology and people. It operates globally in 17 countries, with sales in 40 countries. Founded in 1899 in Atlanta, Equifax (NYSE:EFX) today has 10,000 employees around the world. Revenues for the 12 months ended Sept. 30, 1997, exceeded $1.3 billion.

With headquarters in San Diego, HNC Software Inc. (NASDAQ:HNCS) is a world leader in the development and delivery of predictive software solutions in client/server environments. HNC provides innovative predictive software systems in the financial services, retail, insurance information and electronic commerce markets.

[1]: /graphic/hnc/hnc.gif


TSYS Dividend

Total System Services, Inc. , announced that the Board of Directors declared a quarterly cash dividend of $.01125 per share. The cash dividend is payable on January 2, 1998, to shareholders of record as of the close of business on December 19, 1997.

Headquartered in Columbus, Ga., TSYS is one of the world’s largest credit, debit, commercial and private-label card processing companies, serving card issuing institutions located throughout the United States, Puerto Rico, Canada and Mexico, representing more than 91 million cardholder accounts. TSYS provides a comprehensive on-line system of data processing services marketed as THE TOTAL SYSTEM(R). In 1996, TSYS formed a joint venture with Visa(R) U.S.A. to create Vital Processing Services L.L.C. (), a leading full-service merchant processing company. TSYS’ 1996 revenues totaled $311.6 million; the company is an 80.7 percent owned subsidiary of Synovus Financial Corp. (NYSE: SNV) (), a $9.0 billion asset, multi- financial services company and component of the Standard and Poors 500 Index. Synovus includes 34 banking affiliates in four Southeastern states, a full- service brokerage firm, a comprehensive trust services provider and a mortgage services company. TSYS’ Internet address is .


CyberCash & Pandesic

CyberCash, Inc., the leading enabler of financial transactions over the Internet, announced Monday it will deliver the payment options for Pandesic LLC, the Internet company from Intel and SAP. The partnership provides users of Pandesic with a complete end-to-end Internet payment solution that offers proven, secure, real-time transaction processing. This solution allows merchants to quickly and easily add end-to-end capabilities for selling and delivering goods and services, as well as receiving payment over the Internet.

CyberCash meets the needs of Pandesic’s merchant customers who are looking for a proven, leading payment service, offering a secure credit card transaction processing. It also allows merchants the ability to continue existing banking relationships due to CyberCash’s extensive banking relationships.

“Pandesic and CyberCash have created the perfect launching pad for merchants who are interested in setting up a complete Web store, or any business for that matter, using the best specialty vendors, in one place,” said Denis Yaro, executive vice president, development for CyberCash. “Our payment solution integrates with their business package to deliver the tools and security they need.”

The Pandesic e-business solution allows merchant customers to manage their business in real-time using integrated business processes. A complete end-to-end solution, which bundles, software, services and hardware, Pandesic LLC seamlessly handles all marketing, order processing and fulfillment, inventory pricing, materials management, tax handling, payment processing, shipping and handling logistics, financial reporting, and vendor-payment processes associated with electronic commerce transactions.

“By packaging a highly scaleable, turnkey e-business solution, we’ve created an environment where merchants can be sure they’re getting all the tools they need to run successful businesses on the Internet,” said Bryan Plug, president and CEO of Pandesic LLC. “CyberCash affords our merchants the most proven and complete payment suite on the Internet.”

Web merchants like Quokka Sports, one of the Internet’s leading sports marketing and production companies, are experiencing the benefits of the Pandesic e-business solution. “We’re all about total sports immersion — making the online coverage of sporting events as real as possible,” said Steve Nelson, senior vice president and general manager of Quokka. “The Pandesic offering with CyberCash is all about total business solutions for the Internet — with seamless integration for our audience from seeing merchandise on the site to purchasing it as if they were actually at the event.

About CyberCash

CyberCash, Inc., headquartered in Reston, Virginia, USA, provides enabling technology and services that allow secure financial transactions on the Internet worldwide. The Company offers a complete suite of Internet payment services including a credit card service which handles payments using major debit and credit cards, an innovative micropayment service which enables cash transactions and a secure electronic check service which allows consumer-to-business and business-to-business payments from a bank account. CyberCash is traded on the Nasdaq Stock Market, under the symbol CYCH. CyberCash’s Web address is .

About Pandesic LLC

Pandesic LLC develops innovative, end-to-end electronic business solutions that make companies more competitive by providing real-time access to business information, leveraging proven best-business practices and using highly integrated systems. Formed in 1997, Pandesic LLC is a limited-liability company founded jointly by Intel Corp. and SAP America, Inc. and is headquartered in Sunnyvale, Calif.


Revolving Credit Off 38%

Consumer revolving debt continues with a much lower rate of expansion than last year, according to preliminary figures for October, released by the Federal Reserve Friday. Revolving credit is growing at an annual rate of 8.1% versus 13.1% one year ago or about 38% less. In terms of actual dollars, total revolving credit has risen only 8% during the past twelve months, from $490.6 billion to $529.7 billion. The restrained growth in revolving credit appears to be carrying over into the holiday season as early data reveals charge volume is off 66% to 76% this year. According to figures for the Thanksgiving shopping weekend, released last week, VISA card volume only increased 12% this year compared to about 20% last year and TeleCheck’s same-store sales were only up 1.0% compared to 4.3% a year ago. Meanwhile the Federal Reserve numbers released Friday shows significant acceleration in auto lending from a 4.5% growth rate last year to 12.5% this year. Overall total consumer credit (short-term and intermediate-term credit extended to individuals exclusive of loans secured by real estate) is growing 10.5% annually, logging in at $1.233 trillion for October. The Federal Reserve also announced Friday it has made technical changes in its estimation procedures to reflect more complete information and to adjust for new seasonal factors. For an expanded data series on FRB consumer data visit www.

Oct97 Sep97 Aug97 Jul97 Jun97 May97 Apr97 Mar97 Feb97 Jan97 Oct96
%GRWTH: 8.1 5.8 7.9 9.3 4.2 4.6 6.9 0.5 9.4 14.7 13.1
$OWED: 529.7 526.2 523.6 520.2 516.2 514.3 512.4 509.5 509.3 505.3 490.6
Source: Federal Reserve; revised figures as of 12/05/97


Sears Credit Head Departs

The president of Sears, Roebuck & Co.’s credit division, Steven Goldstein, resigned Friday to form a privately-held electronic commerce investment firm. Goldstein, who came to Sears during the summer of 1996 after thirteen years at American Express, introduced a number of major changes to Sears credit business, growing the private-label portfolio from $23 billion to $27 billion. Sears immediately announced that CFO Alan Lacy will replace Goldstein as president and that Gary Crittenden will succeed Lacy as CFO.