Valu-Net Snags Phone Card Deal

Mr. David Lucatch, President and CEO of Vau-net Corporation announced Monday that Valu-net’s subsidiary – Valu-net Telecommunications Inc. has been granted the exclusive rights to produce Prepaid Phone Cards for the 1998 Team Canada Men’s and Women’s Olympic Hockey Teams.

Valcom has concluded licensing agreements with the National Hockey League Players’ Association , Canadian Hockey and the Stentor Alliance (BCTEL, Bell Canada, Island Tel, Manitoba Telecom Services, Maritime Tel & Tel, NBTel, NewTel Communications, NorthwesTel, QuebecTel, SaskTel and TELUS), a licensee of the Canadian Olympic Association. Valcom will produce, market and sell, on an exclusive basis, Prepaid Phone Cards bearing the images and autographs of Canada Men’s and Women’s Olympic Hockey Teams representing Canada at the 1998 Olympic Winter Games in Nagano, Japan. The cards will also bear the Canadian Olympic Association Logo.

This will be the first time in Olympic history that professional hockey players from the National Hockey League will have the opportunity to represent their respective countries at the Olympic Winter Games. No other Team Canada Olympic Hockey phone cards bearing the images and signatures of Canadian Hockey and NHLPA members will be available in Canada. Valcom, with the CHA, will also produce a limited edition of phone cards of the World Champion Canadian Women’s Hockey Team.

Commencing the second week of December, 1997, Shoppers Drug Mart will distribute the retail version of the phone cards in more than 725 of their stores across Canada. Valcom is also negotiating similar distribution arrangements with other retailers. Exclusive Limited Edition Collector Sets will be available through sports memorabilia stores across Canada, as well as through direct marketing in all Canadian sports and hockey magazines and beginning December 1, 1997, over the Valu-net Hockey Internet site at

Valcom has arranged Internet links with the National Hockey League (NHL), The Hockey News, Canadian Hockey, The NHLPA and other high profile sports sites in order to increase the number of visitors to , and will be deploying Valu-net’s Electronic Commerce Solutions to facilitate Internet based sales. Valcom is also negotiating to have an ongoing sports feed available to visitors. Beginning in January, visitors to the site will be able to chat over the Internet with professional hockey players and play custom, built, interactive games.

“Valu-net is pleased to be part of this historic event and will actively promote Electronic Commerce over the Internet with this product group”, said David Lucatch, President & CEO, Valu-net Corporation.

“The NHLPA is proud to be part of this exciting program,” commented Ken Kim, Marketing Manager, NHLPA.

“Canadian Hockey is excited about this historical launch of the 1998 Team Canada Olympic Hockey phone card series,” comments Bob Nicholson, Vice President, CHA. “This is one of the excellent Team Canada ’98 promotional programs that Canadian Hockey is a partner in.”

“As an Official Sponsor of the Canadian Olympic Team, we are extreme pleased that Valu-net has developed this project,” said Andre Jerome, Strategist for Stentor’s Prepaid Long Distance. “Combining the technology of Stentor’s prepaid phone cards with a project as worthwhile as supporting Canada’s Olympic athletes is a great initiative.”

Valu-net Corporation, with operations in Canada, Australia, New Zealand and Malaysia, is a marketing and technology company specializing in Electronic Marketing Solutions, Integrated Retail and Business strategies and Electronic Commerce and Transaction technologies. Valu-net provides complete turnkey, proprietary cybersolutions for business. Valu-net’s strategic partners provide complete hardware, custom technology, software and fulfilment services.

For more information on Valu-net Corporation, please visit

For more information on Valu-net’s Hockey Program, please visit


Who Be Numero Uno?

If MBNA snags the AT&T portfolio it will clearly surpass Citibank as the nation’s number one issuer by year’s end, however a potential merger with First Chicago could also catapult Banc One into the number one position. Based on third quarter data collected by Bankcard Update/CardData the Banc One/First USA portfolio added 1.3 million accounts during the third quarter and more than $2.8 billion in receivables. Totally Banc One/First USA has 30,481,600 VISA/MasterCards and 9,889,900 private label cards.

Banc One/First USA 3Q/97 Stats
V/MC $36,719,900,000 $11,200,700,000 23,524,500
PRV-LAB $ 2,196,000,000 $ 538,100,000 6,593,300


Xmas Sales Up 2.2%

The Christmas spirit was dampened somewhat Friday by poor weather conditions as retail sales increased a modest 2.2% over the same day last year. First Data’s TeleCheck Services say this morning it still anticipates a 3%-4% same-store sales gain this year for the 27-day Xmas shopping season. Indeed most analysts are projecting a 3% to 7% gain this year. The day after Thanksgiving is traditionally not the biggest shopping day of the year, but does provide a reliable indicator of holiday spending. Last year the day after Thanksgiving was the fourth highest volume day while the heaviest days occurred during the final week before Christmas. TeleCheck says the Southeast lead the nation with a 3.4% increase while the Mid-Atlantic area posted a mere 0.5% gain for Friday sales.


International Counterfeiters

U.S. Secret Service agents and Philippine police arrested several individuals north of Manila yesterday who were associated with two international syndicates involved in producing counterfeit credit cards. At least one American was arrested. Reportedly the two groups were responsible for about $15 million per year in fraud losses over a period of several years, mostly from U.S. and European issuers.


AmEx – Chicago

American Express is signing up new merchants at the rate of one merchant every two minutes and is now accepted at 92% of the merchants AmEx cardholders do business with. Last week American Express announced its card will now be accepted by the City of Chicago for property taxes, business license fees, utility payments, airport parking and at many other agencies and offices of the City. Other government signings by AmEx include Los Angeles and New York.


AT&T Disposal

AT&T’s effort to exit the card issuing business by selling off its portfolio by year’s end is apparently entering the final phase. Despite weak profits and overall credit quality issues associated with the portfolio, AT&T may end up netting a premium substantially exceeding the $2 billion or 14% AT&T expected. Rumors surfaced last week the premium could exceed 25%. The driving factor is the value of the AT&T brand and the potential of exclusively tapping into AT&T’s massive customer base. MBNA is widely rumored to be the leading contender. Other seriously interested issuers include Household, Chase and Associates.


The Neuristics Edge

Neuristics Corporation, providers of intelligent decision-support tools for consumer lenders, today announced the general availability of The Neuristics Edge(TM), a credit score for identifying low-risk prospects for pre-approved credit card solicitations among groups below traditional credit risk score cut-off levels. The score is available as a service provided by Neuristics or as a software tool for implementation by issuers, said Neuristics CEO Richard B. Leavy in making today’s announcement.

“Credit card issuers targeting traditional populations are experiencing declining response rates and increased charge-offs, due to fierce competition and adverse selection,” said Leavy. “At the same time, there are millions of credit-worthy individuals excluded from credit card solicitations by lenders, because they have been mis-classified by conventional credit scores. The Neuristics Edge expands the universe of prospects for card issuers by correctly re-classifying these low-risk candidates.”

The Need for New Prospects

The Neuristics Edge offers a solution to the difficulty faced by issuers in identifying creditworthy and profitable new candidates for credit cards. “Saturation of the prime market has thinned margins and has made it harder to apply risk-based pricing. In addition, changing demographic and socioeconomic patterns, such as the growing numbers of mobile professionals working on contract basis, create behaviors that aren’t addressed by traditional scoring methods,” said Merrill Ross, financial services analyst with investment bankers Friedman, Billings, Ramsey & Co., Inc., ofArlington, VA.

“For a while cards lost their allure because of narrowing margins, but issuers are beginning to discover that they have more tools to acquire and manage these relationships,” she added. “To the extent that they can discover a new population that had been mis-scored and therefore denied credit, they are likely to find a more loyal customer set who value the extension of credit, who are not as adverse to risk-based pricing, and who generate more fees because they have more needs.”

Benefits of The Neuristics Edge

The intelligent predictive technology in The Neuristics Edge is designed to evaluate credit-card candidates who score below traditional credit risk criteria. Usage of the Neuristics Edge has indicated that the population of creditworthy individuals is 20 percent of the so-called sub-prime group, or approximately 10 million individuals. With average balances conservatively estimated at $1,000, this group represents a virtually untapped market of at least $10 billion in receivables.

The Neuristics Edge, like other Neuristics predictive tools, incorporates multiple analytical techniques for credit-risk prediction. “While most scoring models rely largely on statistical techniques, Neuristics’ approach is hybrid modeling that combines neural networks and other intelligent technologies with statistical analysis,” said Barbara Smiley, a director of Meridien Research, a financial technology research firm based in Needham, MA. “The problem of identifying pockets of creditworthy borrowers among the population characterized as sub-prime is very responsive to such techniques. Such models are often able to uncover subtle predictive patterns that can be missed with more linear approaches.”

The Neuristics Edge score offers a simple-to-understand percentage probability of an individual meeting payment commitments for 18 months after scoring. For example, a Neuristics Edge score of 94 indicates that an individual has a 94% probability of remaining good for 18 months. Lenders thus have the information required to solicit new customers based on their internal credit-risk criteria and use actual probabilities for risk-based pricing. In addition, the Neuristics Edge can be “tuned”, based on an issuer’s results, to target the most attractive candidate groups in subsequent acquisition campaigns. Availability

Neuristics Edge risk scores are available as a service from Neuristics Corporation with volume-based pricing. The scoring process requires only credit bureau data. The Neuristics Edge is being tested or used by five major credit card banks.

The analytic engine of The Neuristics Edge is also offered as a highly customizable software module for installation by lenders with high-volume scoring requirements. Neuristics consultants offer model adaptation for special target markets, different types of credit products (such as mortgage or auto finance), or behavioral risk scoring of existing clients. The Neuristics Edge can also be integrated with other Neuristics decision-support tools for predictive modeling of loyalty/profitability and collections optimization. About Neuristics

Neuristics Corporation develops and markets intelligent decision-support tools that enable financial services providers to uncover new opportunities for profit and to reduce risk and overhead in acquisitions and relationship management in consumer credit and payment systems. Neuristics clients include major banks, financial transaction processors, and a third of the top 25 credit card issuers. Founded in 1993, Neuristics is a privately held firm based in Baltimore, Maryland.


Intrapay – Bill Collect

CitX Corporation of Quakertown PA, and Priority One Electronic Commerce Corp of Akron, PA, today reported the successful introduction of Intrapay – Bill Collect(TM), their new Electronic Commerce service that lets businesses collect their receivables automatically via the Internet using a proprietary transaction processing system called SETX.

Any business that has a computer with Internet access and a web browser can utilize the SETX system and Intrapay to collect credit card or EFT payments for less then the price of a postage stamp.

There is no software to purchase or install, and no special training required to utilize the Intrapay – Bill Collect(TM) service. Analysis shows that by using the Intrapay – Bill Collect(TM) service businesses can reduce their payment collection cost by over 75% while gaining weeks of accelerated cash flow.

CitX and Priority One jointly developed the SETX System and have formed a strategic partnership to be world leaders in providing effective Internet and Intranet Electronic Commerce solutions.

The Intrapay – Bill Collect(TM) service enables businesses to automatically collect all their customer receivables on the due dates, regardless of the payment method used by the customer. By using a special interactive Web Site Platform, hosted by CitX, businesses can automatically collect their receivables by charging a customer’s credit card or debiting a customers bank account for the required amount via Electronic Funds Transfer, (EFT).

Clients use the CITX Intrapay platform to interactively sign up new customers onto the Intrapay – Bill Collect(TM) service; review processing status of current transactions in real-time; and submit single or batch payment files directly to Priority One Corp., for processing and collection.

“This gives businesses a simple way to collect their receivables and membership dues, without the need of additional hardware or software,” says Bernie Roemmele, CEO of CitX Corporation. “Unlike other electronic payment services, Intrapay – Bill Collect(TM) allows the vendor to control the payment collection date, not the customer. Intrapay – Bill Collect(TM) is designed solely for business to business and business to consumer transactions, not consumer to business transactions.”

Sid Lieberman, founder of Priority, said that only the Intrapay – Bill Collect(TM) service gives these advantages:

1. Low cost, easy to setup, no special training or knowledge required. Eliminates staff labor to collect receivables the traditional manual way.

2. Accessible 24 hours a day using any computer system equipped with a web browser and Internet access. No additional software or hardware required.

3. Password protected transaction processing journal automatically records information about daily processing activity. This journal can be viewed privately online or downloaded for integration into the businesses accounting system.

4. Ability to process manual or automated batched payment transactions at a click of a mouse button.

5. Accepts and process both credit cards and EFT’s in same transmission file.

6. Collects all accounts on the due date, which improves cash-flow and reduces the cost of managing receivables.

Clients who start with the basic PRIORITY INTRAPAY platform pay a setup fee $295 and monthly maintenance fee of $95.00 plus an average transaction fee of $0.30. Other enhanced features can be activated as needed for an additional fee.

Priority One of Akron, Pa. is a cash flow solutions company that provides real-time electronic processing of credit card and electronic funds transfer transactions.

Priority’s newsletter on Electronic Payments is available free on request to

CitX is a developer of Internet & Intranet communication technology, interactive mind-set marketing services and secure Electronic Commerce transaction processing systems.

In addition, CITX designs and operates community networks and specialized Intranets for businesses, education and the healthcare industry.


Holiday Sales to be Up 4.5%

Holiday sales are expected to increase 4.5 percent over last year, according to a survey of two dozen retail industry analysts conducted by the International Council of Shopping Centers (ICSC) for the fourth consecutive year.

The analysts’ estimates ranged from +2.5 percent to +7.0 percent, although more than two thirds estimated a year-over-year increase of 4 or 5 percent, or the range of 4 to 5 percent.

“The analysts confirm what we’ve been hearing from shopping center executives over the past few weeks: that it’s going to be a very good holiday season,” said John Konarski, vice president of research for ICSC. “The economy is still strong and consumer confidence remains high.”

In addition to a seasonal prediction, the analysts were asked to identify the most popular merchandise categories, the type of retailer that will capture the most sales, and factors most likely to restrain consumer spending. Questions included:

1. How popular do you believe the following merchandise categories will be in terms of gift giving this season?

Extremely Moderately Not
Popular Popular Popular

Clothing, shoes and
accessories 27% 64% 9%
Jewelry 64% 32% 4%
Household items, such as
glassware, linens, appliances 9% 82% 9%
Furniture 5% 33% 62%
Computers, computer-related
products 23% 68% 9%
Other electronic items, such
as TVs, stereos 5% 59% 36%
Entertainment products, such
as CDs, videos,
video games 45.5% 45.5% 9%
Books, magazines 32% 59% 9%
Recreation items, such as
camping gear and sports
equipment 27% 64% 9%
Toys 77% 18% 5%

Toys and jewelry are expected to be the most popular gift items this season, with toys selected by 77% of the analysts, and jewelry selected by 64%. The analysts were split on whether entertainment products such as CDs, videos and video games will be extremely or moderately popular this season, with each option selected by nearly half (45.5% each) of the respondents. However, a majority of analysts (62%) agree that furniture will not be a popular gift item this season.

Household items, such as glassware, linens and appliances (82%), computers, computer-related products (68%), clothing, shoes and accessories, as well as recreation items, such as camping gear and sports equipment (64% each) should be moderately popular, reported a majority of analysts. In addition, books and magazines and electronic items such as TVs and stereos (59% each) were rated moderately popular by the analysts.

2. How much share of total holiday sales will each of the following retail formats likely capture?

Large Share Moderate Share Small Share

Department stores 52% 38% 10%
Discount stores 95% 5% 0%
Specialty stores 30% 50% 20%
Factory outlets 10% 38% 52%
Warehouse clubs 0% 48% 52%
On-line (Web-based) 5% 24% 71%
Mail order catalogs, 33% 48% 19%
TV shopping channels

This year, a staggering 95% of analysts expect discount stores (meaning discount department stores, off-price merchants and close-out stores) to capture a large share of holiday sales, while 52% expect department stores to gain a major share.

In response to which particular retailers within each category are expected to capture a major share of holiday sales, analysts were most optimistic about Wal-Mart and Target, which were mentioned seven times and five times, respectively. Next came Federated and Gap, with four mentions each, and Sears and Costco, with three. While the majority of analysts (71%) do not expect on-line retailing to account for a large share of holiday sales, three analysts mentioned as a company likely to capture a major share of sales. Retailers mentioned by two analysts include J.C. Penney, Abercrombie & Fitch, and L.L. Bean.

3. How do you expect shoppers to pay for the holiday purchases compared to last year?

More than About the same Less than
last year as last year last year

Cash/check/debit cards 32% 45% 23%
Major credit cards 59% 32% 9%
Store issued credit
cards 33% 33% 33%

The majority of analysts (59%) expect consumers to use major credit cards more than they did last year to fund their holiday purchases this season.

4. Do you believe that one or more of the following will restrain consumer spending this holiday season?

Consumer debt 68%
Concerns about financial market volatility 41%
Desire to put money in savings 36%
Other (Describe) See below

Additional factors that could restrain holiday spending, according to the analysts, are: a Mid-East standoff with Iraq, weather conditons, consumer confidence, secularization of Christmas, early holiday shoppers, who have completed their purchases before Thanksgiving when seasonal sales are usually tallied, and sales that take place post-holiday.

The International Council of Shopping Centers ([][1]) is the not-for-profit trade association of the shopping center industry, representing more than 35,000 members in U.S., Canada, and over 70 other countries.



Unifi PRO Consumer

Fiserv UniFi Products has announced the release of two new consumer lending solutions, Unifi PRO Consumer and UniFi Express Consumer.

Windows(TM)-compliant and client/server, these high volume, direct and indirect loan delivery systems will be unveiled at the BAI Retail Delivery Show in New Orleans Dec. 2 to 4. The primary difference between the products is the ability for the end user to customize the application. UniFi PRO is equipped with PowerTools(TM) for a customized user setup, whereas UniFi Express comes ready-to-use.

“We’re excited about the potential that UniFi will give consumer lenders,” said John F. Saelens, Fiserv UniFi Products SVP of Business Development. “The combination of UniFi’s state-of-the-art technology and robust feature/functionality gives financial organizations the ability to strategically position themselves to take advantage of the consumer lending market.”

Among the business benefits UniFi PRO Consumer and UniFi Express Consumer provide are:

Sound Technological Investment. UniFi is a Windows-compliant, client/server solution. The system is scalable on multiple platforms, ensuring performance regardless of changes in number of users or configuration. The solid architecture of the system — a fourth generation, object-oriented programming language: a robust relational database management system — allows for easy integration of new technology.

Ease of use. A GUI application, UniFi utilizes pull-down menus, icons, pick lists, lookup tables and online help. The system’s workflows guide users through the application process, while work queues alert users to the work they have waiting. The system’s notepad allows users to store comments and notes with the application, and its built-in income calculator lets users solve for gross income.

Complete business solution. UniFi supports the complete range of consumer loan products, including auto, motorcycle, RV, home improvement, home equity, second mortgages, Section 32 loans, mobile home, credit card, lines-of-credit, deposit-secured, boat loans and more. A flexible, advanced, risk-based pricing component allows product-based lending rates to be applied at the application level. These components supply the base structure lenders need to support their business.

Enhancing the product support are user-defined parameters that reduce data entry and expedite the application process, along with fast and efficient links to business partners. At the same time, features like system calculations and automatic document production, where the system analyzes the application to determine what documents to produce, transfer the decision process from the operator to the system. This increases speed, gives the client organization more control, ensures accuracy and reduces the learning curve. Other efficiency tools, such as workflows, work queues and event tracking, move the application through the origination process, ensuring that the application gets the appropriate operator attention.

Flexible standard document coding is packaged with the base system and the capability for creating custom documents is also featured. In addition, a graphical report generator, Crystal Reports, is utilized to allow user-generated custom reports. With the open architecture of the database, these documents and reports can pull data from any field the client chooses.

Screen, menu and workflow control. UniFi PRO Consumer includes the PowerTools package, which gives organizations powerful customization tools to adapt the system so that it works the way that is most effective for them. Utilizing UniFi’s menu and screen editors, users can create new workflows and screens with simple point, click, drop and drag design. Event tracking, work queues and fields can also be customized.

The ability to “upsell” the loan. UniFi Consumer allows the lender to approve the loan for the maximum amount, regardless of the original amount requested. For example, if an individual requests a $5,000 loan for a used car but the collateral data shows that the user has equity for up to $25,000, Unifi will approve up to $25,000. This allows the loan officer to upsell the loan, cross-sell other loan products and proceed with the requested $5,000 loan.

Risk Based Pricing. UniFi advances risk based pricing beyond accepting or declining an application; it also allows organizations to accept and compensate to adjust for risk. This is accomplished through the system’s open architecture, which gives clients the flexibility to adjust loan pricing for any characteristic of the applicant or loan. Lenders can access credit bureaus, download the data they choose and store it. The data, combined with borrower and collateral data collected from the customer, is used to assign individual pricing. UniFi’s risk based pricing system allows lenders to adjust their pricing to accept B and C credit applications while compensating the organization for its increased risk exposure.

Performance controls. At the executive level, UniFi stores a comprehensive library of credit risk results, allowing client organizations to analyze and adjust credit quality to improve performance. At the management level, work prioritization tools and work queuing statistics allow managers to monitor and track performance.

A single vendor solution for loan delivery. In addition to the UniFi Consumer products, Fiserv UniFi Products offers UniFi Express Mortgage and UniFi PRO Mortgage, the leading client/server solutions for mortgage originations. By utilizing a single UniFi solution, organizations can cross-train their mortgage and consumer personnel to leverage staffing resources and consolidate support areas.

Already in use by more than 1,000 professionals at one of the nation’s largest B&C home equity lenders, UniFi PRO Consumer has been tested and proven in even the largest of workplaces. Its sister product, UniFi PRO Mortgage, is currently implemented at more than 40 client sites with more than 14,000 user seats sold nationwide. It is the leading client/server solution for mortgage originations.

UniFi PRO is sold through the direct sales force of Fiserv UniFi Products. UniFi Express is sold through a network of value added resellers, including First American Title/Lenders Advantage and EDS.

Fiserv Inc. is a full-service provider of data processing systems and information management services and products to over 5,000 banks, credit unions, mortgage firms and savings institutions worldwide. A publicly held company headquartered in Brookfield, Wis., Fiserv Inc. stock is traded on the NASDAQ over-the-counter market under the symbol FISV.