Fair, Isaac and Company, Inc. this week said that London-based HSBC Holdings
plc, one of the world’s largest banking and financial organizations, has
the first global agreement to purchase Fair, Isaac’s Credit Line Strategy
Optimization service to manage its credit card portfolios across its
worldwide network.

This agreement marks the most extensive deployment of Fair, Isaac’s new CLSO
service to date. Since its introduction four months ago, CLSO has been adopted
by three of the top 20 card issuers in the United States, including Fleet
Credit Card Services, First USA and People’s Bank in Connecticut.
HSBC will begin immediate deployment of CLSO in the U.K. within its Personal
Banking division to increase profitability of its credit card portfolio.

Deployment will follow in the U.S. and then in other parts of the Group. A
timeframe for these additional rollouts has not yet been established.
CLSO helps credit card issuers improve account profitability through optimal
credit line assignments. It automates this complex process for the first time
and optimizes the results down to the individual customer’s account. CLSO is
the first application of Fair, Isaac’s breakthrough Strategy Science — termed
the “Third Revolution” in decision analytics because it enables customers to
model the decision itself. Through CLSO, strategic options are clearly and
concisely defined and openly identified. As a result, portfolio managers can
fully understand how their choice of a particular strategy will play out
against the business objective they seek to optimize. By using CLSO, a lender
can experiment with any number of “what if” scenarios before settling on
precisely the right strategy to meet the stated business objective.
“HSBC is at the leading edge in the use of advanced technologies to link its
global network,” said Tom Grudnowski, Fair, Isaac’s CEO. “CLSO is a perfect
complement to HSBC, both in terms of their understanding of how technology can
drive smart, bottom-line strategies as well as how the service supports a
diverse, global portfolio. We are delighted to have HSBC as our first global
customer,” Grudnowski said today.

Brendan Cook, head of HSBC Group’s Card division, said, “CLSO is the ideal
solution to take HSBC’s strategic use of technology in managing and linking
global business units to the next level. CLSO’s advanced analytical techniques
will enable us to better anticipate our customers’ requirements and needs.”

About Fair Isaac

Fair, Isaac and Company is a global provider of customer analytics and
technology. Widely recognized for its pioneering work in credit scoring, Fair,
Isaac revolutionized the way lending decisions are made. Today the company
helps clients in multiple industries increase the value of customer
relationships. Fair, Isaac has made the Forbes list of the top 200 U.S. small
companies nine times in the last ten years. Headquartered in San Rafael,
California, the company reported revenues of $298 million for fiscal 2000. For
more information, visit

About HSBC Group

Headquartered in London, HSBC Holdings plc is one of the largest banking and
financial services organizations in the world. The HSBC Group’s international
network comprises some 6,500 offices in 78 countries and territories in
the Asia-Pacific region, the Americas, the Middle East and Africa. With
listings on the London, Hong Kong, New York and Paris stock exchanges, shares
in HSBC Holdings plc are held by around 200,000 shareholders in some 100
countries and territories. The shares are traded on the New York Stock
in the form of American Depositary Receipts.

Certegy 3Q/01

Certegy, formerly Equifax Card Services, reported third quarter net income of $24 million on revenue of $218 million. Card Services generated revenue of $146.6 million in the third quarter, an increase of 11.4%, over the prior-year quarter. Volume decline attributed to the terrorist attacks reduced Card Services’ revenue by an estimated $0.7 million and operating income by $0.3 million. Check Services generated revenue of $71.4 million for 3Q/01, an increase of 13.2% over 3Q/00. Volume decline in Check Services, attributed to the terrorist attacks, reduced third quarter revenue by an estimated $1.6 million and operating profit by $0.8 million. For complete details on Certegy’s current quarterly performance visit CardData ([][1]).



Customers of the GSM wireless
network operator ENTEL PCS can now pay for subway tickets with a cell phone.
The solution was implemented on the basis of wIQ (wireless Information Query)
from ORGA Card Systems, Inc.

To purchase a ticket, the customer first chooses one of four fare types. Each
fare is identified by a three-digit number. To pay for the ticket, users just
key in this number and the number of the ticket machine on their cell phone.
The ticket is issued in seconds and is charged to the customer’s telephone
bill. “Other wIQ options include billing the purchase directly to an
e-Purse or
credit card,” said Frank Barbalace, Senior Business Development Manager, ORGA
ENTEL PCS, based in Santiago de Chile, developed this solution itself in a
short time on the basis of wIQ. Thanks to wIQ’s use of standard Internet
technologies such as HTML, Entel was quickly able to bring their solution to
the wireless market. Standard interfaces such as CGI or PHP can be used for
online access to a very wide range of background systems.

Customer acceptance depends to a great degree on the speed at which tickets
be purchased. wIQ uses the USSD channel (Unstructured Supplementary Services
Data), which is available in all GSM networks and permits interactive
information exchange with average response times of between two and four

This means that customers spend no more time paying by cell phone than when
buying tickets in the normal way. “The goal is to beat `cash transactions’ or
the time required to use technology instead of cash, while adding a level of
personal security which wIQ offers. ” said Frank Barbalace.

Unlike WAP (Wireless Application Protocol) technology, users do not need a
specially equipped handset for USSD. “Most GSM hansdsets (USSD Phase II
compliance required) currently in the field could be immediate customers
and no
special SIM card is required,” said Frank Barbalace. As a result, services
as buying a subway ticket are available to all the network operator’s
right away. Time to market is minimized, and every customer benefits
immediately from the new possibilities. “wIQ is a great solution to either
complement WAP or stand alone. It’s fast, 2-4 second responses when used in
local network and 5-6 seconds when roaming nationally or internationally.
Supports location based services, including advertising, info services and
m-Commerce. You can even have a conversation while surfing on wIQ. We are in
discussions with content providers who really like wIQ because they want a
fast, cheap and immediate mCommerce solution.”

ORGA Card Systems, Inc, part of the authentos group of companies, is one of
market leaders in the smart card industry. ORGA offers a full range of smart
cards, hardware, software, systems, system integration and solutions for the
telecommunications, banking, retail, healthcare and Internet sectors. ORGA is
headquartered in Paderborn, Germany, and operates its Smart Card Center in
Flintbek, in one of the world’s most modern production facilities for smart

ORGA is jointly held by Bundesdruckerei GmbH (89.96%), which in turn is fully
owned by APAX Fonds, and DETECON GmbH (10.04%). With a workforce currently
numbering over 1,600 employees worldwide, the ORGA Group posted record
sales of
EURO282 million in fiscal 2000. Subsidiaries, sales offices and joint ventures
give ORGA a strong presence in Great Britain, the U.S., France, Singapore,
Russia, South Africa, the United Arab Emirates, Denmark, China, Brazil, Hong
Kong, Italy, Portugal, Austria and Lithuania.

People’s 3Q/01 Losses

Bridgeport, CT-based People’s Bank reported yesterday that its Credit Card Services division realized a net loss of approximately $11 million for the third quarter due to higher charge-offs and the impact of the recession. Charge-offs have soared by 60% over the past twelve months, rising from 4.77% for 3Q/00 to 7.58% for 3Q/01. Delinquencies rose from 3.12% to 4.19% over the same period. U.S. receivables have declined $541 million since last year dropping from $3.1 billion to $2.5 billion. People’s yield on managed U.S. credit card receivables decreased 40 basis points compared to 3Q00. People’s noted yesterday it realized a $17 million pre-tax gain on the sale of its interest in the NYCE ATM network. People’s has scheduled an analyst conference this morning. For complete details on People’s current and prior quarterly performance visit CardData ([][1]).



Datacard Group introduced a scripting process that makes issuance of
Visa branded smart cards faster, easier and less costly for Visa member
banks in Latin America.

The new version of the Datacard Script Builder is based on GlobalPlatform
standards and is used to generate data and personalize TIBC-III, Visa’s new
smart card designed exclusively for the Latin American market. The issuer,
without the need to buy anything new, can also use this scripting process when
moving to GlobalPlatform multi-application smart cards.

Datacard Script Builder includes a script interpreter (or script
framework), as
well as the scripts required for secure data generation and high-speed card
personalization. Member banks can use the process to issue Visa
TIBC-III-based smart cards that store applications such as Visa EMV
credit/debit, Visa Cash and a range of loyalty applications.

“Without the GlobalPlatform scripting process, card issuers would have to
create unique personalization applications for each smart card application.
This would pose significant obstacles in terms of both cost and production
time,” according to Bob Beer, vice president of smart card solutions for

“We worked closely with Visa and leading card issuers in Latin America to make
smart card issuance fast, easy and cost-effective,” Beer said. “Script Builder
achieves this by making the process generic. Card issuers can use a single,
easy-to-manage process to issue all Visa-branded smart cards.”
Visa International has been actively promoting its branded smart card products
in most major Latin American markets. Member banks are being encouraged to
issue EMV credit/debit and Visa Cash cards because smart cards offer a strong
line of defense against fraudulent activities such as “skimming,” which
involves the theft and duplication of magnetic stripe data. The smart cards
also increase consumer demand for flexible, powerful and highly personalized
financial cards.

“Smart card issuance represents a tremendous opportunity for Visa member banks
in Latin America,” Beer said. “Datacard’s goal was to create a simple, turnkey
personalization process that allows them to capitalize on it quickly and

In addition to the new Script Builder, Datacard provides all the software,
systems and services card issuers need to issue smart card products. The
Datacard Smart Card Personalization Manager, the Datacard
Personalization Preparation Process, an integrated solution from
Thales e-Security, and Datacard’s family of desktop and high-volume card
issuance systems can be configured to meet the specific needs of any card

“Our software and systems have been proven in the world’s most demanding smart
card programs. The reliability and simplicity of our solutions allows card
issuers to move quickly and with confidence,” Beer said. “Also, many card
issuers already use Datacard card personalization systems in their operations.
In most cases, they can simply add smart card modules to their existing
systems, which helps minimize their capital investment.”

Datacard Group provides financial institutions, corporations, consumer
marketers, governments, schools, healthcare providers, service bureaus and
other enterprises with the software, systems and professional services they
need to build successful card programs. The company’s portfolio includes the
world’s best-selling smart card solutions and card issuance systems, as
well as
a complete line of digital identity systems. Consultative services include a
smart card security laboratory that serves the world’s leading smart card
issuers. DataCard Corporation, doing business as Datacard Group, is privately
held and based in Minnetonka, Minn. Datacard Group serves customers in more
than 200 countries.

Vcom Expands

7-Eleven, Inc. has added automated check-cashing capability to its Vcom financial kiosks in 36 stores in Fort Myers/Naples, Fla., following an initial launch in 58 Texas stores. This 94-store pilot test of the service includes an aggressive marketing effort and in-store greeters to promote customer awareness and trial of the service.

Vcom is 7-Eleven stores’ web-enabled, integrated financial services kiosk that merges ATM capabilities with the flexibility of Internet-based applications and 24-hour, touch-screen convenience. The current capabilities of the kiosks include ATM transactions, Western Union money orders and money transfers and check cashing through Certegy Check Services(SM), a division of Certegy Inc.. Future services may include telecommunications products and services, bill payment, event ticketing, travel directions and road maps.

During the pilot, 7-Eleven is offering free check-cashing membership enrollment and promoting the new service through advertising, in-store signs and special events … all aimed at consumers who use a check-cashing service. Also during the test period, a new customer’s first two payroll checks will be cashed free. According to recent industry publications, 30 million people cash 180 million checks valued in excess of $55 billion at check-cashing establishments.

“Self-service check cashing on Vcom is another innovation in 7-Eleven’s 75-year history of defining convenience,” said John Harris, vice president of 7-Eleven stores’ Florida division. “At the same convenient location where they stop for gasoline, milk or other convenience items, our customers can have immediate access to their cash, 24 hours a day, seven days a week, in a safe, secure neighborhood environment.

“We know thousands of our customers cash checks somewhere else but shop at 7-Eleven for basic purchases,” Harris said. “By offering check cashing on Vcom, we’re saving them time and an additional stop. This is a good customer value, and it just makes sense. We invite consumers to come in and see how fast and easy check cashing can be.”

To use the Vcom check-cashing service, a customer applies for membership and is immediately issued a Vcom card. Thereafter, the member can access the fully automated check-cashing service simply by inserting the card and check into the Vcom kiosk, then entering their PIN and pertinent information about the check via the touch screen. In moments the check is verified, authorized and, if approved, the customer receives the cash, minus a transaction fee. The membership requirements and transactions fees are comparable to other check-cashing establishments, but the typical Vcom self-service transaction takes less than two minutes.

About 7-Eleven, Inc.:

7-Eleven, Inc. is the premier name and largest chain in the convenience retailing industry. Headquartered in Dallas, Texas, 7-Eleven, Inc. operates or franchises approximately 5,800 7-Eleven stores in the United States and Canada and licenses approximately 16,000 7-Eleven stores in 17 other countries and territories throughout the world. During 2000, 7-Eleven(R) stores worldwide generated total sales of more than $29 billion. Find out more about 7-Eleven, Inc. on the World Wide Web at [][1].



Scotiabank announced a Canadian first – one card that allows Canadians to
access debit, credit, electronic purse,
loyalty programs and other services.

“Scotiabank is the first Canadian bank to deliver on the promise of a one-
card debit and credit solution for our customers,” says Albert Wahbe, CEO of
e-Scotia, and Executive Vice-President, Electronic Banking, Scotiabank. “We
are putting debit, credit, micropayments, and loyalty programs on one card to
give Scotiabank customers the most convenient banking and payment solutions

Customers will now have all functions on a single plastic card. Debit
card functions, such as ATM access and Interac direct payment, will be
accessed on the magnetic stripe. Functions, such as Visa credit, micropayments
and loyalty programs will be available on the microprocessor chip. Customers
will be able to add or delete chip applications at their discretion.

This week’s announcement builds on a pilot program for credit cards with
microprocessor chips announced earlier this year. The pilot will take place in
the region around Barrie, Ontario. It is expected that more than 12,000
Scotiabank customers will participate in the pilot. Current Scotiabank
customers will be able to sign up for the pilot by contacting their local
branch in Barrie or Angus.

“Customers are demanding ‘smart’ cards that are capable of meeting many
of their lifestyle needs,” adds Wahbe. “The choice and flexibility offered to
customers will be backed up with the highest levels of security and
authentication capabilities.”

Scotiabank is one of North America’s premier financial institutions, with
more than $271 billion in assets and approximately 51,000 employees worldwide,
including affiliates. It is also Canada’s most international bank with more
than 2,000 branches and offices in more than 50 countries. Scotiabank is on
the world wide web at

Simmons 3Q/01

Simmons First National Corporation announced earnings of $12,577,000, or $1.76 per diluted share for the nine-month period ended September 30, 2001. The diluted earnings per share reflect a decrease of 6.9% when compared to September 30, 2000 diluted earnings per share of $1.89. Earnings for the third quarter were $3,536,000, or $0.49 diluted earnings per share. These earnings are down $1,429,000, or $0.18 per share when compared to the same period of the previous year. The decrease in third quarter earnings was primarily attributable to continued pressure on net interest margin and a special $1.25 million provision to the loan loss reserve. According to J. Thomas May, Chairman and Chief Executive Officer, “The banking industry has had margin pressures most of the year due to the rapid decrease in interest rates. Simmons First has been impacted to a greater degree due to our usury law, which is tied to the Federal Reserve’s discount rate. Since December, the discount rate has dropped by 4.25%, thus we have been forced to decrease the rates in our credit card portfolio to a level significantly below the market.”

May also commented, “The third quarter earnings were impacted due to a special provision to the loan loss reserve for some problem credits identified at one of Simmons First’s affiliates.” May further stated, “The recent court ruling on the Gramm-Leach-Bliley Act amendment to the Arkansas usury law will give Arkansas banks greater flexibility to deal with interest rate movements like we’ve had this past year. Since rates will no longer be tied to the Federal Discount Rate, banks can control the pricing of their loans based on market verses an arbitrary formula. We estimate this will have a positive impact on earnings during 2002.”

Because of the Corporation’s cash acquisitions, cash operating earnings (net income excluding amortization of intangibles) are an integral component of earnings. Year-to-date diluted cash earnings, on a per share basis, as of September 30, 2001 were $1.97. Cash return on average assets was 0.99% and cash return on average stockholders’ equity was 10.66% for the nine-month period ended September 30, 2001. Diluted cash earnings for the third quarter of 2001 were $0.56 per share.

Total assets for the Corporation at September 30, 2001, were $2.0 billion, an increase of $167 million, or 8.9%, over the same figure at September 30, 2000.

Stockholders’ equity at the end of the third quarter of 2001 was $181.2 million, an $11.6 million, or 6.8%, increase from September 30, 2000. The allowance for loan losses as a percent of total loans equaled 1.64% as of September 30, 2001, compared to 1.63% for December 31, 2000. As of September 30, 2001, non-performing loans equaled 1.22% of total loans and the allowance for loan losses equaled 135% of non-performing loans.

Simmons First National Corporation is a financial holding company, with community banks in Pine Bluff, Jonesboro, Lake Village, Dumas, Rogers, Russellville, Searcy and El Dorado, Arkansas. The Company’s eight banks are conducting financial operations from 65 offices in 33 communities.

For complete details on Simmons 3Q/01 data visit CardData ([][1])


Direct Mail & Anthrax

The threat of bioterrorism may further depress the lackluster response rates of direct mail credit card solicitations. However, the anthrax scare may prove to be a boon to the electronic marketing of credit cards. According to CardWatch (, e-mail solicitations for credit cards are up 200% since the events of September 11th. Internet banner advertising, which has been in slump since early this year, has been slowly rebounding as response rates remain stable. During the second quarter, nearly one billion direct mail card solicitations were mailed in the U.S., but the nationwide response rate fell to a dismal 0.4%. Marketers are expecting many direct marketers to shift to postcards during the upcoming holiday season.

Providian’s 3Q/01 Woes

As expected, Providian reported a huge decline in profits for the third quarter, from $200 million for 3Q/00, to $57 million for 3Q/01. As a result, Providian’s top executive is stepping down, and the issuer is launching an action plan that includes a shift away from sub-prime cards. The company’s stock sank to a new 52-week low of $12.30 per share ahead of the earnings release and was trading around $8.50 per share in pre-market trading this morning. In response to the financial challenges ahead, Shailesh Mehta announced Thursday afternoon he is stepping down as Chairman and CEO. David Grissom, a current member of Providian’s Board, has been named the new Chairman and the Company has launched a search for a new CEO. The managed net credit loss rate for the third quarter was 10.33%, versus 7.61% for the third quarter of 2000. The 30+ day delinquency rate increased to 8.66% from 6.71% one year ago. The Company added more than 800,000 net new accounts during 3Q, bringing total accounts to 18.5 million, a 23% increase over the end of the third quarter of 2000. Managed loans increased by $1.8 billion during the quarter bringing total managed credit card loans to $32.2 billion, a 31% increase over 3Q/00. The managed net interest margin on loans was 12.94% in the third quarter, compared to 13.13% in the prior quarter. Providian’s action plan includes the suspension of lending to the highest risk segments and selectively re-pricing loans that exhibit increased risk levels. The Company has reduced line of credit increase programs in higher loss segments by tightening eligibility criteria. Providian will also focus marketing dollars toward the middle market segment of 60 million consumers and will initiate an expense reduction review program. For complete details on Providian’s current and prior quarterly performance visit CardData ([][1]).


Deluxe 3Q/01

Deluxe Corporation (NYSE: DLX), the nation’s leading check printing company, reported record third quarter net income and diluted earnings per share today that exceeded consensus estimates.

Compared to 2000, net income for the quarter increased 8.7 percent and earnings per share increased 15.4 percent, on a revenue increase of 2.3 percent.

“Our third quarter results were very strong,” said Lawrence J. Mosner, Chairman and CEO of Deluxe Corporation. “All three of our business units performed well and were very successful with a number of cost management initiatives.”

Third Quarter Performance

Deluxe’s third quarter 2001 net income was $51.1 million, or $.75 diluted per share, compared with income from continuing operations of $47.0 million, or $.65 diluted per share in 2000.

Revenue was $323.5 million in the third quarter, compared to $316.1 million during the same quarter a year ago. The 2.3 percent increase in revenue was due to an increase in units of 3.9 percent. Partially offsetting this volume increase was a 1.5 percent decrease in revenue per unit. While revenue in the Financial Services segment declined 1.1 percent, the Direct Checks and Business Services segments recorded revenue growth of 8.4 percent and 7.8 percent, respectively.

Gross margin was 65.7 percent of revenue for the quarter, compared to 64.2 percent in 2000. The improvement was due primarily to productivity improvements and other cost management efforts.

Selling, general and administrative expense (SG&A) was 39.9 percent of revenue, compared to 41.1 percent in 2000. The improvement was due primarily to cost management efforts and moving projects and their expenses from the third to the fourth quarter.

As a result, operating margin improved in the third quarter to 25.8 percent of revenue, compared to 23.1 percent of revenue in the year-earlier period.

Nine-month Performance

Through nine months, diluted earnings per share were up 8.2 percent. Deluxe’s net income was $137.9 million, or $1.97 diluted per share in 2001, compared with net income from continuing operations of $131.6 million, or $1.82 diluted per share in 2000.

Revenue was $957.1 million for the first nine months of the year, compared to $959.9 million for the same period a year ago. The 0.3 percent decline in revenue was due to a decline in units of 1.0 percent, partially offset by an increase in revenue per unit of 0.7 percent. For the nine-month period, Financial Services’ revenue declined 5.4 percent and was partially offset by revenue growth of 9.3 percent in Direct Checks and 7.7 percent in Business Services.

Gross margin was 64.5 percent of revenue for the first nine months of 2001, compared to 64.4 percent in 2000. The productivity improvements seen in the third quarter were offset by lower volume and pricing pressures on a year-to-date basis.

SG&A expense for the first nine months of 2001 was 41.1 percent of revenue, compared to 42.1 percent in 2000. The improvement primarily reflects cost management efforts.

As a result, operating margin was 23.4 percent of revenue in the first nine months of 2001, compared to 22.3 percent a year ago.

Business Outlook

“Although we had an excellent third quarter, we are cautious about being overly optimistic about the fourth quarter and 2002,” said Mosner. “It is still too early to predict how last month’s terrorist attacks will impact Deluxe.”

Mosner added, “Given what we know about today’s economic conditions, we’re holding to the fourth quarter diluted earnings per share target, which is in the range of $.65 to $.68 that we established last July. Before making any projections about the Company’s performance in 2002, we want to see how consumer confidence translates to spending in the fourth quarter. Regardless of what develops in the U.S. and world economies, our plan is to manage expenses, continue to invest in our business and make capital expenditures that increase productivity or profitably increase revenue.”

Share Repurchase Program

On January 29, 2001, Deluxe announced that its board of directors had authorized a 14 million share repurchase program. Through September 30, 2001, approximately 8.3 million shares had been repurchased. Repurchase activity resulted in a $.07 increase in diluted earnings per share for the third quarter and a $.10 increase for the first nine months of 2001.

Segment Reporting

Deluxe operates three business segments: Financial Services, which sells checks and related products and services through financial institutions; Direct Checks, which sells checks and related products directly to consumers through direct mail and the Internet; and Business Services, which sells checks, forms and related products to small businesses through financial institutions and directly to customers via direct mail and the Internet. Financial Services’ revenue was down 1.1 percent to $197.3 million in the third quarter of 2001, compared to $199.4 million in 2000. Operating income increased 20.3 percent to $48.5 million from $40.3 million in 2000. Unit volume for this business increased in the third quarter, although the segment continued to realize the effects of pricing pressures. Cost management efforts and productivity improvements contributed to the increase in operating income.

Direct Checks’ revenue was up 8.4 percent to $74.8 million in the third quarter of 2001, compared to $69.0 million in 2000. Operating income was up 2.3 percent to $17.5 million, from $17.1 million in the third quarter of 2000.

Increased unit volume, partially offset by higher new customer acquisition costs, contributed to these results.

Business Services’ revenue was up 7.8 percent to $51.4 million in the third quarter of 2001, from $47.7 million in 2000. Operating income was up 12.9 percent to $17.5 million, from $15.5 million in the third quarter of 2000. An increase in revenue per unit and success in acquiring new customers were the primary factors contributing to these results.

About Deluxe

Deluxe Corporation’s business units provide personal and business checks, business forms, labels, self-inking stamps, fraud prevention services and customer retention programs to banks, credit unions, financial services companies, consumers and small businesses. The Deluxe group of businesses reaches clients and customers through a number of distribution channels — the Internet, direct mail, the telephone, and a nationwide sales force. Since its beginning in 1915, Deluxe Corporation has been instrumental in shaping the U.S. payments industry.

More information about Deluxe 3Q/01 results can be found at CardData ([][1]).