The San Diego-based Institute for Consumer Financial Education launched a new initiative this month to help consumers control credit card usage. The ICFE is offering ‘Credit Card Warnings Labels’. There are three versions of the labels: “Can I Afford It?”; “Should I Charge It?”; and “If You Can Eat It, Drink It, or Wear It . . . It is NOT an EMERGENCY”. Consumers may order an assortment of ten labels for $2. The nonprofit ICFE is the successor to the National Center for Financial Education. Ten years ago the NCFE offered ‘Credit Card Condoms’ (small, credit card size, spun-bonded olefin envelopes) to consumers “afflicted with unsafe spending habits”, according to CardTrak (www.cardtrak.com). The “Credit Card Condom” came with “Instructions for Use and Preventing Debt.” The ‘Credit Card Condoms’ were part of NCFE’s ‘Safe Charge Kit’.
American Express has introduced a new pricing structure that reduces discount fees on larger transactions for most merchants. The new ‘$10,000 Threshold Pricing’ shaves 50 basis points off all individual transactions that are $10,000 or larger. Most retail merchants pay 3.00% to accept AmEx while ‘Corporate Purchasing Card’ suppliers generally pay a base rate of 2.50%. The average discount rate for American Express at the end of the first quarter was 2.68%, compared to 2.72% one year ago. AmEx says under the new policy, large ticket transactions will automatically be priced at the lower discount rate.
A new “Chameleon Contactless Smart Card Upgrade System” introduced by SuperCom Smart Cards, Inc., converts any conventional card into a contactless smart card in less than one-minute, it was announced by Danny Gilboa, CEO, here.
The new system employs a desktop press that inserts and securely seals a contactless microchip into any magnetic stripe card, contact card, or “dumb” graphics-only card, which is then personalized with up to 2Kilo Bits of secure data using a contactless smart card reader/writer.
“Any user can now boost the capabilities of his or her conventional cards more than 1000-fold, and benefit from the same secured memory and functionality offered by manufactured contactless smart cards, minus the initial production delays and card printing costs,” said Gilboa, adding, “The Chameleon system can also serve as a stepping stone to custom manufactured contactless smart cards, making the transition to a new generation of technology simple, fast and affordable, as well as seamless to the cardholder.”
He says the entire conversion process is easily accomplished in less than one minute by personnel having no technical background or training.
The Chameleon conversion system is comprised of the desktop press, secured memory chips, chip capsules and contactless smart card reader/writer.
SuperCom Smart Cards Inc., a Subsidiary of SuperCom Ltd., markets contactless smart cards, readers/writers, interface software and contactless smart card manufacturing equipment for commercial and governmental uses including: time and attendence, access control, personal identification, electronic purse, e-commerce security, ticketing, medical status, loyalty, licenses, maintenance records, etc.
NextCard released the April eCommerce Index, the premier metric of monthly online consumer spending. The NextCard eCommerce Index is the only resource that reflects actual consumer e-commerce spending based on online credit card transactions.
“We continue to see more traditional retailers replace Internet startups in consumers’ online spending habits,” said Scott Lascelles, group vice president of marketing at NextCard. “Michigan Bulbs, a traditional catalog retailer, increased transaction volume 886 percent, benefiting from consumers’ preference for established offline brands. By contrast last spring, Internet start-up MySeasons.com was among the top movers,” said Lascelles.
“Traditional brands such as Sharper Image, FTD, 1-800-Flowers, Gap and Old Navy continue to increase transaction volume as consumers turn to those trusted offline brands,” he said. “While traditional retailers are gaining popularity online, Amazon is still the premier online retailer,” said Lascelles. “Since we launched the Index in May 1999, Amazon has been the top retailer, generating the largest number of transactions by NextCard cardholders.”
“As we saw last year, sites such as TurboTax experience a surge in transaction volume during the spring tax season, as evidenced by its increase of five spots on the Index last month,” he said. “Similarly, Priceline.com rose four spots to No. 7 and Travelocity.com transaction volume rose 269 percent in April, ushering in the beginning of the summer vacation travel period.”
Top 30 Online Merchants in April 2001
The NextCard eCommerce Index is a monthly listing of the top Web sites based on the number of online transactions by more than 880,000 NextCard cardholders.
Rank Change Merchant Rank Change Merchant
1. — Amazon.com 16. +8 HomeShoppingNetwork.com
2. +1 EBay.com 17. — AOL Long Distance
3. -1 Half.com 18. — Egghead.com
4. — Ubid.com 19. — Keen.com
5. +1 Netflix.com 20. +2 Vistaprint.com
6. -1 BarnesandNoble.com 21. -7 BigZoo.com
7. +4 Priceline.com 22. +17 FTD.com
8. -1 Stamps.com 23. -8 AOL Shopping
9. -1 CyberRebate.com 24. +12 Gap.com
10. +3 1-800-Flowers.com 25. +42 FreeCDSoftware.com
11. +5 TurboTax.com 26. +3 Classmates.com
12. -3 Buy.com 27. +39 Proflowers.com
13. +15 Equifax.com 28. -1 Snapfish.com
14. -4 CDNow.com 29. -3 eDiets.com
15. -3 Drugstore.com 30. +11 OldNavy.com
April eCommerce Movers
The NextCard eCommerce Movers(SM) is a monthly listing of the top online
merchants that experience the largest percentage change in transaction
volume from the previous month.
10 Biggest Gainers 5 Biggest Losers
1. MichiganBulb.com 886% 1. MusicToday.com -83%
2. Travelocity.com 269% 2. Cityspree.com -69%
3. Essential.com 252% 3. Kozmo.com -66%
4. SharperImage.com 248% 4. NetJewels.com -56%
5. Vitacost.com 216% 5. Textileshop.com -54%
6. Cooking.com 204%
7. Reflect.com 188%
8. FreeCDSoftware.com 157%
9. Bluefly.com 152%
10. Proflowers.com 135%
About The NextCard eCommerce Index
The NextCard eCommerce Index is a monthly listing of the top 30 online merchants, top 10 gainers and top five losers based on the number of online purchase transactions by approximately 880,000 NextCard cardholders. The NextCard eCommerce Index combines two critical components to accurately reflect online transaction activity: 1) a large cardholder base of active online purchasers and 2) data-mining technology that tracks online credit card transactions. NextCard customers are some of the most sophisticated online consumers and make online purchases approximately five times more often than the average online credit card user. As a result, the NextCard eCommerce Index not only provides valuable information about where online consumers are actually buying, but it also reflects the ability of merchants to convert Web visitors to buyers, and buyers to repeat customers. The Index can be found on the Internet at www.nextcard.com/indexes/indexes_frame.html.
NextCard, Inc. (www.nextcard.com) is considered the leading issuer of consumer credit on the Internet. Launched in 1997, the Company was the first to offer instant online credit card approval, a choice of customized credit card offers, and exceptional online customer service. NextCard is committed to providing the most robust consumer shopping experience on the Internet and has continued to innovate with its NextCard Concierge(SM) online shopping service, online bill payment services, and comprehensive rewards program. NextCard is also one of the leading direct marketers on the Internet, operates a network of more than 90,000 online affiliates, and has exclusive card relationships with leading online brands, including Amazon.com and MyPoints.com. The Company also owns minority stakes in Flooz.com, the premier online gift currency and Paytrust.com, the leader in online bill payment.
NextCard was named the No. 1 Internet credit card by Gomez. According to the 2001 Brittain Associates “Credit Cards on the Net” study, NextCard leads the online credit card market with a 26 percent share. NextCard was nominated for a 2000 Webby Award in the finance category. NextCard, Inc. issues credit cards through NextBank N.A., a wholly owned subsidiary.
MBNA has boosted its cap on cash advance fees and is gearing up to extend such fees to balance transfers and person-to-person money transfers. MBNA recently increased its $30 maximum cash advance fee to $40, according to CardWatch (www.cardwatch.com). Effective July 1, MBNA will extend its 3% cash advance fee to balance transfers. MBNA will also treat person-to-person money transfers, such as Paypal, as a cash equivalent and subject the transactions to the cash advance fee. The revised pricing has already been incorporated in new card offers. Most of the nation’s top issuers have removed caps on cash advance fees, charge 3%+, and have boosted the minimum CAF. MBNA, a leader in higher credit limit accounts, is one of few major issuers retaining limits on cash advance fees. Most major issuers also charge a higher interest rate for cash advances than for purchases. For example, the popular ‘American Express Blue Card’ charges interest rates ranging from 10.99% to 14.99% for purchases, while the interest rate for cash advances is 20.99%.
RANK MOST COMMON
ISSUER CASH ADVANCE FEE
1. Citibank 3% with $5 minimum
2. MBNA 3% with $5 minimum, $40 maximum
3. First USA 2% with $10 minimum
4. Discover 3% with $5 minimum
5. Chase 3% with $5 minimum
6. Providian 5% with $3 minimum
7. Bank of America 3%-4% with $5.00 minimum and $20 maximum
8. Capital One 3% with $5 minimum
9. Household 4% with $5 minimum; GM Card- 3% with $15 minimum
10.Fleet 4% with $5 minimum
Source: CardData (www.carddata.com )
National Processing Company announced today that Trader’s Joes has renewed its agreement with NPC and signed a multi-year contract for merchant processing services. Under the terms of the agreement, NPC will provide settlement for all Trader Joe’s VISA and MasterCard transactions.
Trader Joe’s owns and operates 156 stores in fourteen states providing a different approach to grocery store shopping — products are unique, many exclusively designed for Trader Joe’s. Trader Joe’s currently offers more than 800 private label grocery items confirming their mission to bring the best food and beverage values anywhere to their customers and to provide the information necessary to make informed buying decisions.
“NPC is pleased to renew its relationship with Trader Joe’s,” said Mark Pyke, executive vice president of Merchant Services for NPC. “Like Trader Joe’s, NPC strives to offer superior products and outstanding service to our customers. We do this by leveraging our economies-of-scale, coupled with our economies-of-skill; i.e. having one of the most experienced groups of industry professionals on staff. This formula translates to a win-win relationship for NPC, and our clients.”
! About Trader Joe’s
Trader Joe’s began in 1958 as a chain of convenience stores in the Los Angeles area, and has grown to become a prestigious retailer offering over 800 unique grocery items, as well as hard-to-find boutique (domestic and imported) wines and gourmet food items, at outstanding prices. Still privately held and company-operated, Trader Joe’s operates 156 stores in fourteen states. Customers enjoy the combination of great prices, intriguing food and friendly service – creating a fun place to shop. Additional information regarding Trader Joe’s can be obtained at [www.traderjoes.com] .
About National Processing, Inc.
National Processing, Inc. through its wholly owned operating subsidiary, National Processing Company (NPC(R)) is a leading provider of merchant credit card processing. National Processing is 87 percent owned by National City Corporation (NYSE: NCC) ( http://www.nationalcity.com ), a Cleveland based $91 billion financial holding company. NPC supports over 500,000 merchant locations, representing nearly one out of every five Visa(R) and MasterCard(R) transactions processed nationally. NPC’s card processing solutions offer superior levels of service and performance and assist merchants in lowering their total cost of card acceptance through our world-class people, technology and service. Additional information regarding National Processing can be obtained at [www.npc.net] .
Newtek Capital, Inc., a specialist in acquiring, developing and operating early stage high growth businesses, announced a major investment in Universal Processing Services, a full service integrator of electronic processing systems and solutions.
The $3.6 million investment was made through Newtek’s New York-based certified capital company. UPS offers credit card processing, debit and check card processing, smart card acceptance, customized gift card programs, electronic benefits transfers, check guarantee and conversion and automated teller machines. Ken Baldo, President of UPS, stated: “We make it our business to consult with every merchant to understand their needs and to demonstrate how our services can support their daily business critical operational requirements. As our industry changes, technology advances and competition increases, UPS and our processing specialists remain committed to offering the highest caliber of personalized services utilizing our state-of-the-art True Price Processing system.” Universal, headquartered in New York City, recently signed a contract to acquire a portfolio of high-end retail and restaurant accounts and expects to close in June. The funding by Newtek is expected to support the expansion of Universal’s marketing programs, corporate infrastructure and the hiring of key employees. Newtek received a 60% ownership interest along with 3 of 5 board seats for its investment.
About Newtek Capital
Newtek Capital, Inc. (www.newtekcapital.com) creates significant non-dilutive capital through the operation of seven CAPCOs in four states. Since 1998, Newtek has raised more than $119 million of certified capital and has made investments in 25 companies, 11 majority-owned or primarily controlled partner companies and investments in 14 other businesses. It operates as a holding company for a network of partner companies in a collaborative and coordinated effort to develop successful businesses in a number of emerging and technological areas.
Vital Processing Services, a leader in technology-based commerce enabling services, announced the appointments of two individuals to new leadership roles. Keith Smith was named executive vice president of sales and marketing and Denise Lewis was named executive vice president of product development.
Smith, formerly president and CEO of Vital Merchant Services, a wholly owned subsidiary of Vital Processing Services, will lead sales and marketing for both Vital Processing Services and Vital Merchant Services. Vital Merchant Services is an industry leading terminal management and point of sale support services company. Smith will continue to serve on Vital’s Management Committee and report to Jonathan Palmer, president and CEO of Vital Processing Services.
“Integrating sales and marketing in this way will help Vital focus on our clients. Under Keith’s leadership, our sales consultants will bring the full benefit of every Vital offering to every one of our clients,” said Palmer.
“I look forward to the opportunity to coordinate and lead Vital’s sales and marketing functions. Vital is client focused and market-driven; our success is measured by our clients’ success. I am more excited than ever about Vital’s future,” added Smith.
Denise Lewis has been named executive vice president of product development. In this role, Denise will be responsible for Vital’s product development and product management functions. Additionally, Denise will serve as a member of Vital’s Management Committee and will report to Palmer.
“Vital is committed to excellence in the breadth and strength of the products and services we deliver to our clients. I look forward to Denise providing dynamic leadership to our very capable Product Team,” said Palmer.
Lewis joins Vital with more than 20 years of diversified financial services industry experience, largely focused in retail delivery and payments.
Most recently, Lewis served as executive vice president and chief information and technology officer at Electronic Payment Services, Inc. (EPS), which is now part of Concord EFS. Before her stint at EPS, Lewis spent several years at BP, one of the largest oil companies in the world. Her last position at BP was general manager, National Credit Card Center, where she was responsible for all of the company’s credit card marketing, processing and collections activities.
Lewis commented, “I am eager to share my expertise and experience with the talented team at Vital. My objective is to help Vital differentiate itself in the market on the strength of its products. We aim to help our clients, the country’s leading merchant acquirers, win!”
About Vital Processing Services (http://www.vitalps.com )
Arizona-based Vital Processing Services(R) (Vital(R)) is a leader in technology-based commerce enabling services. Vital’s clients include acquirers and merchant service providers that offer electronic payment processing services to merchants, such as POS products, electronic authorization and data capture; VirtualNet(TM) Internet-commerce services; clearing, settlement and exception processing; accounting, billing and reporting; risk management; and customer service. Vital is a merchant processing joint venture of Visa(R) USA and TSYS(R) (NYSE: TSS). For more information, contact Vital Processing Services’ Sales Department at (480) 333-7799.
About Vital Merchant Services
Headquartered in Sacramento, Calif., Vital Merchant Services is a leader in terminal management and point of sale support services. The variety of POS support services includes terminal equipment procurement and deployment, inventory management, replacement and repair services, merchant training and installation, merchant supplies replenishment and world-class help desk support. The company is a wholly owned subsidiary of Vital Processing Services. For more information, contact Vital Merchant Services’ Sales Department at (800) 686-1999.
CA-based Next Estate Communications and GA-based Synovus’ pointpathbank have teamed to unveil this week the ‘iGEN MasterCard’ for the teen retail market. The new prepaid teen card will initially be available in about 100 Rite-Aid stores in the metropolitan Washington, D.C. area. The card is expected to be available at more than 3,700 Rite-Aid stores in 30 states by the end of summer. The card is available in any denomination between $20 and $500 for a convenience fee of $3.95 per card. ‘iGEN MasterCard’ accounts can be “reloaded” at participating Rite-Aid stores, with a toll-free phone call or on the iGEN Web site. (CF Library 8/3/00)
HNC Software Inc. announced that Visa Desjardins, a subsidiary of the Mouvement des caisses Desjardins and the primary issuer of Visa cards in Quebec, will implement Falcon, HNC’s industry-leading payment card fraud detection system, to enhance the fraud detection capabilities for its credit card portfolios. “We look forward to enjoying the reduced fraud rates that other Canadian card issuers are seeing with Falcon,” said Louise Paquette, chief security officer at Visa Desjardins. “We’ve always provided the highest level of fraud detection for our merchants and cardholders, and augmenting our systems with Falcon is the logical next step to match our aggressive portfolio growth strategy over the next few years.” After years of 40 percent annual card fraud growth during the latter part of the 1990’s, Canadian credit card issuers are starting to see a decline in fraud rates due to their increased use of neural network fraud detection solutions. According to the Canadian Bankers Association, credit card fraud cost Canadian financial institutions and card issuers nearly $227 million (Canadian) (approximately $156 million US) in 1999. This figure dropped to $203 (Canadian) million for the 12-month period ending June 30, 2000, indicating that best practice fraud detection solutions such as Falcon are gaining traction in the war against card fraud. Verifying this trend, Visa Canada reported 1999 credit card losses at $150 million (Canadian), and had projected losses in 2000 to top the $200 million mark. Instead, losses from card fraud dropped approximately 40 percent for the year. HNC’s list of Canadian Falcon customers includes major institutions such as CIBC, Toronto Dominion, and Canada Trust.
! “We’re glad that Falcon is helping stem the tide of payment card fraud in Canada, as it has done in the United States and overall in North America,” said Michael Chiappetta, vice president of customer analytics for HNC Software. “We’re confident that Visa Desjardins will gain the reduced credit and debit card fraud rates with Falcon with which our other Canadian customers have benefited.” Falcon, a neural network-based predictive software system that examines transaction, cardholder, and merchant data to detect a wide range of payment card fraud, currently protects more than 400 million payment card accounts worldwide.
About Mouvement des caisses Desjardins
With more than 36,000 employees and overall assets reaching $80 billion, the Mouvement des caisses Desjardins is the top financial institution and the largest private employer in Quebec. It is the only institution to offer a full range of financial products and services through its network of caisses (ATM’s) located throughout Quebec. In addition, Desjardins is a leader in Quebec in terms of e-commerce with more than 1.5 million visits per month. It’s Web site, www.desjardins.com, is the most frequented financial site in Quebec and second overall in Canada. 28,000 companies are already using its AccesD Affaires business service. The Mouvement Desjardins’ mission is to contribute to the economic and social well being of individuals and communities.
About HNC Software Inc.
HNC Software is a leading provider of Customer Insight solutions including intelligent response, decision management, and customer analytics software that enables companies in the financial, telecommunications, e-commerce and insurance industries to acquire, manage and retain customers. For more information, visit www.hnc.com or contact Rob Jensen at 858/799-8122.
Another ATM investment scam was shut down this weekend. The California Corporations Commissioner and the Riverside County District Attorney’s office arrested a Newport Beach man for offering fraudulent investments in ATMs. Philip Gardner was charged with twenty-one counts of illegally and fraudulently selling securities as a result of selling over $1 million in investments through The ATM Store. Senior citizens were solicited through investment opportunity shows and newspaper ads promising returns of 40-100%. Investor funds were then diverted for personal use. ATM machines were not purchased or placed as promised and most investors lost their entire investment. Gardner has a history of securities law violations extending nearly 30 years. In February a Maryland firm offering investments in ATM machines was shut down by state government officials. Largo, MD-based Bankcard Group, Inc. allegedly bilked more than $3 million from 130 investors over the past two and a half years. According to the Maryland Attorney General’s office, the company offered investors a choice between buying an interest in an ATM machine or purchasing the machine outright. The Maryland Attorney General’s office says Bankcard Group sold 200 ATMs but only 44 were delivered and installed. (CF Library 2/1/01)
The average Canadian charged $6,010 on all credit cards in 2000, up from $5,040 in 1999. Currently, 77% of Canadians 18 and older hold at least one credit card issued by a financial institution, retailer or gas company, up from 73% a year ago. The annual ‘Credit Card Tracking Study’ conducted by CF Group also found that 45% of Canadians use their cards at least once a week, up from 41% a year ago. CF also found that 43% of Canadians report using a credit card to accumulate rewards, up from 34% last year. When it comes to debit cards, 69% of Canadian adults claim to have made a debit card payment in the month prior to the survey, up from 66% one year ago and 61% in January, 1999.