AZ-based Sears National Bank indicated this weekend it has converted 12 million of Sears’ 60 million retail cardholders to the ‘Sears Gold MasterCard’. At year end 2000, Sears had approximately 9 million cardholders for its bank credit card program, according to CardData. Sears launched the co-branded bank credit card one year ago, targeting inactive and non-revolving cardholders. Sears has been plagued by declining credit revenue due to lower average balances on the private-label Sears cards. At the end of 2000, there were approximately $1.4 billion in Sears/MasterCard receivables. At the end of the first quarter 2001, Sears had U.S. total managed card receivables of $25.7 billion compared to $25.5 billion for 1Q/00. Sears/MasterCard receivables are estimated at $1.8 billion as of March 31. While average and ending managed credit card receivable balances were slightly higher than last year, overall portfolio yield declined. Portfolio yield for 1Q/01 was 19.13% compared to 20.29% one year ago. The net charge-off rate for the managed portfolio declined to 5.07% from 5.69% a year ago. Delinquency, at the end of 1Q stood at 7.50% compared to 7.56% for 4Q and 7.20% for 1Q/00.
S2 Systems, a global provider of integrated e-business solutions for the banking and financial services market, announced that People’s Bank will deploy the company’s leading-edge OpeN/2 solutions for high-volume card activity management and transaction processing. People’s Bank is the largest independent bank in Connecticut and one of the nation’s leading international credit card issuers.
People’s Bank implementation will include OpeN/2:ATM-IN-A-BOX and OpeN/2:CAMS (Card Activity Management). ATM-IN-A-BOX is a flexible and reliable transaction engine capable of handling high volumes and supporting diverse applications; CAMS is a multiple institution, multiple account system that handles all aspects of card activity management. Bundled together, S2’s solution enables People’s Bank to strengthen its competitive advantage by enabling increased customer loyalty, revenue growth and extended service offerings.
“S2’s progressive transaction processing and card activity management solutions are designed to help card-issuers achieve sustainable growth and profit margins in today’s fiercely competitive market,” said Jeff Chick, S2 Systems vice president and general manager, the Americas. “People’s Bank is a long-standing S2 customer, and we look forward to helping this leading institution with its new e-business initiatives.”
“It’s important to have the right technology for our organization,” said Kate Gloss, People’s Bank VP of Corporate Services. “And it is equally important to work with a technology partner who has the domain knowledge and experience to serve our immediate as well as future needs. Our relationship with S2, and its strong heritage in the banking and financial services industries, strongly influenced our decision to deploy the company’s ATM-IN-A-BOX and CAMS product solutions.”
In the financial services industry, ATMs and cards play an increasingly powerful role by enabling banks and other card-issuers to favorably balance fee income against the escalating cost of support services and customer acquisition. ATMs fuel a broad array of value-added services, while an assorted range of debit, credit, customer loyalty, stored-value, and reward cards combine to satisfy customer needs and drive down costs for the financial institution.
About People’s Bank
People’s Bank is a diversified financial services company providing commercial, consumer, insurance and investment services. Founded in 1842, it is the largest independent bank in Connecticut with managed assets of $14 billion, 146 branches and 220 ATMs. People’s is a leader in commercial banking, residential lending, insurance sales and supermarket banking. An international credit card issuer, it ranks 16th nationally as an issuer of MasterCard and Visa cards. People’s subsidiaries offer brokerage services, asset management, equipment financing and leasing, and insurance services.
About S2 Systems
S2 Systems, Inc. is a leading global provider of e-business solutions for the banking, financial services, retail and travel and hospitality industries. For more than 15 years, some of the world’s largest organizations have relied on S2 products to drive their high-volume e-commerce transactions. Today, our leading technology enables business worldwide to implement Web-based initiatives that improve operational efficiency, enhance customer service and generate new revenue streams. S2 Systems has 350 banking customers worldwide including six of the world’s top banks. Headquartered in Plano, Texas, S2 Systems has offices in Atlanta, London, Paris, Maarssen, Stockholm, Dubai, Riyadh, Hong Kong, Beijing, Melbourne and Sydney. For more information about S2 Systems, visit its Web site at [www.s2systems.com].
Chargeoffs, among bank credit card issuers, continued their march upward in April. For the March collection, ending in mid-April, chargeoffs hit 4.83% according to CardData, the highest level since February of last year but well below 1999 and 1998 levels.
Apr 01: 4.83% Apr 00: 4.81% Apr 99: 5.27% Apr 98: 5.51%
Mar 01: 4.74% Mar 00: 4.86% Mar 99: 5.32% Mar 98: 5.54%
Feb 01: 4.70% Feb 00: 4.94% Feb 99: 5.37% Feb 98: 5.61%
Jan 01: 4.65% Jan 00: 4.97% Jan 99: 5.46% Jan 98: 5.66%
Source: CardData (www.carddata.com)
Sungold Entertainment Corp. announces that an agreement has been completed for the acquisition of the entire world wide right, title and interest to the internet payment system technology of SafeSpending Services Inc. The internet payment system business is a growing multi billion dollar market.
The acquisition agreement with SafeSpending includes all copyrights, trademarks, source codes and SafeSpendings’ intellectual property. Under the terms of the agreement Sungold has agreed to pay a 7.5 percent royalty of net revenue relating to the technology and 330,000 common shares in the capital of Sungold Entertainment Corp. upon Sungold or it’s subsidiary Horsepower Broadcasting Network Inc. receiving $1,000,000 in net revenue from the sale or license of the technology. The SafeSpending internet payment system is a pre-paid spending system that uses cards with a unique PIN number which can be used to make purchases online from merchants or individuals.
A survey by Odyssey Online found that 83 percent of respondents said that payment security concerns prevented them from shopping online. The alternatives to credit and debit cards being offered as more secure alternatives, such as Smart Cards, fail to address consumer concerns about privacy.
SafeSpending has developed a system which allows consumers to pre- purchase spending cards of a certain value that will enable the consumer to purchase online without divulging any personal, confidential information as would be necessary if one used a credit card or any other traceable transaction service.
The pre-paid cards will be of a certain value (e.g. the cards value will come in $25.00, $50.00, $75.00 and $100.00 increments), allowing the consumer to choose which card best suits their purchasing needs. The cards will be available behind the counter at most major retailers. Online merchants can be assured of almost immediate payment, and pay a smaller fee to the Company for use of the SafeSpending payment system than they would usually pay to a credit card company. Merchants accepting prepaid spending cards would be immune from fraud. Music and media outlets, looking for ways to tap into the vast teen market online, may find prepaid spending cards a solution to their current marketing dilemma. Individuals selling on auction sites could receive payment from bidders by providing SafeSpending with an account number. Conversely, auction sites are looking for solutions to the fraud for which their sites are becoming infamous. Online gamblers can monitor their wagering by using age restricted SafeSpending cards instead of credit cards.
Hong Kong payments startup First Ecom.com, Inc. announced this weekend it is merging with Gasco Energy, Inc. to shore up its market capitalization. First Ecom processes credit card transactions made over the Internet in multiple currencies, either domestically or offshore in a tax-neutral jurisdiction. The company has not released first quarter results, but for year 2000 the firm reported revenues of US$854,871 and a net loss of $ 17,809,461. First Ecom trades on both the NASDAQ and BSX. Under terms of the deal with Gasco, First Ecom will own all of Gasco outstanding shares then transfer all of its e-commerce assets to a separate company. At the conclusion the transactions, the survivor of the First Ecom – Gasco merger would have no interest in the new E-commerce company. The former shareholders of Gasco would own a majority of the merged company’s shares and the shareholders of First Ecom would have shares in both the merged company and the new E-commerce company.
Hypercom Corporation appointed Scott Tsujita to the newly-created position of Senior Executive Officer, Golden Eagle Leasing, Inc., a wholly-owned Hypercom subsidiary and micro-ticket leasing organization for point-of-sale card payment terminals. As senior executive officer of the company, Mr. Tsujita will be directly responsible for overseeing day-to-day operations and long term strategic planning. Tsujita will report directly to Chris Alexander, President and CEO, Hypercom Corporation. He will also continue to serve as Vice President of Finance, Hypercom Corporation.
“Scott Tsujita is a savvy, seasoned and highly respected professional in the electronic payments industry. His appointment and expanded responsibilities are directly in line with Hypercom’s sharp focus on delivering value to our stakeholders,” said Alexander.
Mr. Tsujita is a 15-year veteran of the electronic payment and financial service industries. Prior to joining Hypercom in 1992, Tsujita served with KPMG Peat Marwick in Vancouver and subsequently as Senior Manager with Phoenix-based Zolondek, Blumenthal, Green, Freed & Strassels. Golden Eagle Leasing, based in Ridgefield, Connecticut, operates as a standalone business unit responsible for providing the ISO/bank processor market with a comprehensive, all inclusive equipment acquisition/deployment program encompassing purchase, rental or lease options for point-of-sale equipment.
Hypercom Corporation (NYSE:HYC) is a leading global provider of electronic payment solutions that add value at the point-of-sale for consumers, merchants, and acquirers. Hypercom’s products include secure card payment terminals and web appliances, networking equipment, and software applications for e-commerce, m-commerce, smart cards, and traditional payment applications. Headquartered in Phoenix, Arizona, Hypercom maintains an installed base of more than 4 million card payment terminals, which operate seamlessly with the products of its Network Systems Division. These solutions are installed in over 100 countries and conduct more than 2.85 billion transactions annually. Hypercom’s Internet address is [www.hypercom.com].
CA-based i PIN launched its ‘Stored Value Module for M-Commerce’last week. The new feature will enable mobile operators worldwide to offer their subscribers prepaid accounts to purchase goods anytime, anywhere within the wireless merchant community. The prepaid option enables mobile subscribers to load their stored value accounts using credit cards, debit cards, cash or electronic checks. Purchases are then debited from these accounts in real time. Should users have insufficient funds, they will be prompted to reload their accounts at the point of sale in order to complete the transaction. The subscribers’ stored value accounts can be accessed via any Internet enabled device. iPIN is launching a customized stored value solutions with France Telecom’s mobile property, known as Orange, and British Telecom’s Openworld division.
U.S. Bancorp announced this morning the signing of a definitive agreement to acquire NOVA in a stock and cash transaction valued at approximately $2.1 billion. Following the acquisition, the combined companies will have more than $100 billion in payment processing volume in 2001. NOVA has a client base of 560,000 small-to-medium sized businesses and U.S. Bancorp’s base of 90,000 customers includes larger merchants and airlines. U.S. Bancorp provides services to 2,900 financial institutions and agent banks. NOVA provides payment servicing to over 1,800 banks, 30 trade associations and 150 Member Services Providers. Under terms of the agreement, NOVA will retain the NOVA Information Systems name and will become a wholly owned subsidiary of U.S. Bancorp, led by Edward Grzedzinski who currently serves as NOVA’s chairman, president and CEO. NOVA reported first quarter total revenue of $370.1 million and EBITDA of $51.5 million, according to CardData.
The Belgian Football League is switching to advanced smart cards for ticketing and to keep troublemakers away. The new ‘Football Fan Card’ will be valid for three years and will be required for stadium admittance on game days. The cards may also include biometric data such as fingerprints. MA-based Keyware has signed a US $1 million contract to embed its software onto the league’s new personalized smart cards, which will be introduced for the 2001 – 2002 football season. More than 300,000 cards have been prepared for the new season. Keyware also recently partnered with Bull Hungary to develop a smart card system for the Hungarian Football League.