Charge-Off Sales

St. Louis-based National Loan Exchange reported Friday that it disposed of $309 million of charged-off accounts, mostly bank credit card accounts, during the fourth quarter for an average premium of 5.51%. The lowest premium of 1.00% came from a $3 million portfolio that was worked by at least two agencies and with only 50% of the accounts in-statute. The highest premium of 11.25% came from a $75 million portfolio of a leading card issuer with a three month forward flow of fresh charge-offs.

CHARGE-OFF PORTFOLIO  SALES  (4Q/98) —  SAMPLING
DESCRIPTION     AGENCIES   IN-STATUTE   PORTFOLIO     PRICE
Canadian Cards 2 100% $26M $988K
Dept. Store Cards 0 100% $1.4M $150K
Regional Cards 2 100% $4.0M $144K
Natl Cards 3 32% $110M $2.2M
Regional Cards 0 100% $500K $50K
           Source NLEX;  M-millions;  K-thousands;

Canadian Prepaid Card Deal

Vicorp, a Precision Systems, Inc. subsidiary, and Compaq Canada Inc. jointly announced Friday that they have sold a prepaid card service solution valued at (US) $1 million to one of Canada’s leading telecommunications carriers.

The solution consists of a Compaq S7000 fault-tolerant server and Vicorp’s Lydian enhanced software suite. Additionally, Vicorp will provide hardware in the form of voice response units (VRUs) for the system.

Vicorp’s Lydian suite of software applications includes prepaid calling cards, postpaid calling cards, and prepaid wireless. Lydian is a proven, network-grade solution designed to grow with its customers. The integrated graphical service creation environment, QuickScript, allows telecommunications carriers to build custom call dialogues and new enhanced services for target markets.

Precision Systems, Inc. is a global company that, together with its subsidiaries, Vicorp N.V. and BFD Productions, Inc. delivers telecommunications solutions to service providers and corporations. Vicorp’s software and hardware products support enhanced calling and prepaid services, toll-free services, and advanced call center applications. BFD Productions is a service bureau specializing in audiotext and Internet applications. Precision Systems meets the needs of its customers in more than 30 countries.

Compaq Canada Inc., a wholly-owned subsidiary of Compaq Computer Corporation of Houston, Texas, markets and services hardware, software, solutions and services, including industry-leading enterprise computing solutions, fault-tolerant, business-critical solutions, networking and communications products, commercial desktop and portable products, and consumer personal computers.

With headquarters and distribution facilities in Richmond Hill, Compaq Canada Inc. has 47 offices across Canada, including Vancouver, Edmonton, Calgary, Regina, Winnipeg, London, Mississauga, Markham, Ottawa, Montreal, Quebec City, Moncton and Halifax.

With the exception of its larger scale technologies and services, Compaq products and services are sold and supported through a network of more than 3,600 marketing partners across the country.

Cash Tech’s CFO

Cash Technologies, Inc. announced Friday the appointment of Robert M. Gielow as its Chief Financial Officer, replacing Richard Miller.  Mr. Miller, a Director and Founder of the Company, had been serving as interim CFO.

Mr. Gielow, 53, most recently was Vice President and General Manager of the Emerging Business Services division of ADP from July to December of 1998.

From 1991 until July 1998, Mr. Gielow served as VP Finance and later as CFO of Kinko’s, Inc. which operated approximately 850 domestic and 30 foreign branch offices.  While at Kinko’s, Mr. Gielow played a key role in the consolidation of 125 independent operating companies into the $1.6 billion Kinko’s Inc. entity.

Mr. Gielow started his career at Xerox Corporation, where he spent 15 years in a variety of financial and administrative assignments.

“We are fortunate to have found someone with the depth of experience and knowledge in finance, technology and operations that Bob Gielow possesses to serve as our CFO,” said Bruce Korman, Cash Technologies Chairman and CEO.

Cash Technologies’ wholly owned Austrian subsidiary, CoinBank Automation Handels GmbH, recently announced that it has reached an agreement with Bank Austria’s subsidiary, Creditanstalt AG, to install its CoinBank(R) advanced coin deposit machines on a trial basis.  With more than 200 branches, Bank Austria is Austria’s largest banking group with more than US$140 billion in assets, in addition to being Austria’s largest publicly traded corporation.

“The conversion of local currencies to the euro within the European Union (“EU”) will provide enormous opportunities for European cash handling equipment providers like CoinBank Automation,” said Korman.  “Bank Austria, a banking technology innovator, is one of the first of many European banks that we expect to embrace the electronic-commerce enabled CoinBank(R) machine.”

More than 70 billion coins need to be redeemed in Europe before July 2002, when local coin and currency denominations will become worthless for common use.  The CoinBank(R) self-service coin deposit machine is the ideal solution to help the EU cope with this problem.  It is entirely software driven, allowing coins in any country to be programmed for acceptance now and the new euro coins later.

Cash Technologies, Inc. develops and markets innovative e-commerce kiosks, including advanced self-service coin counters and the multifunction ATM-X(TM) automated teller machine.  The Company also provides computerized cash processing services to banks, armored carriers, rapid transit agencies and other cash-intensive businesses.

TU Becomes a CA

VeriSign, Inc., the world’s leading provider of Internet-based trust services, and Trans Union LLC, the nation’s leading consumer credit information company, Thursday announced that Trans Union has selected VeriSign’s Affiliate Services to establish itself as a Certificate Authority (CA) to enable secure Internet transactions between consumers and its Relying Partner Network.  Trans Union’s Relying Partner Network is a value-chain network that brings consumers and Web sites together in such applications as home banking, online auction houses, online brokerages, document delivery, online communities, Internet e-mail services, web retailers and lending services.  As a Certificate Authority, Trans Union will distribute digital certificates to consumers who are referred to the company from the Relying Partner Network, establishing a broad trusted infrastructure for secure e-commerce and communications.

Trans Union maintains one of the largest consumer-oriented databases in the world and is a primary source of credit information for companies that have risk management or portfolio evaluation needs.  The combination of Trans Union’s vast repository of consumer credit information and VeriSign’s expertise in online trust services delivers to the Relying Partner Network a trusted and authenticated population of users to whom they can confidently market their products and services.  With the Relying Partner Network, businesses will increase Web site security, establish broad digital certificate interoperability and reduce online fraud.

“We looked at all of the top providers to help us create a leading digital certificate solution for our partners and consumers and only VeriSign had the broad digital certificate expertise that we were looking for,” said James Randall, Director, Trans Union Internet Business Group.  “With VeriSign’s Affiliate Services, we’re able to offer Internet businesses the ability to verify consumers’ identities using our credit information and authentication infrastructure and enable secure and private Internet transactions.”

Trans Union is deploying its Relying Partner Program during the first quarter of 1999.  Through the use of digital certificates, Trans Union will enable consumers to manage online investments, conduct home banking and engage in secure communications with the confidence that their transactions are private and have not been tampered with in any way, a critical security component when using the Internet for the transfer of private information.

“Trans Union is the clear leader in offering superior, high-value credit information and its decision to secure its business with VeriSign’s Affiliate Services is a testament to the value it places on secure, private online transactions and communications,” said Richard Yanowitch, vice president of marketing at VeriSign.  “By leveraging the security of digital certificates, Trans Union is able to offer its Relying Partners and consumers the confidence that business and transactions conducted over the Internet will be private and secure.”

VeriSign Affiliate Services

VeriSign’s Affiliate Services have been designed to serve the needs of major service providers with extremely high volume digital certificate issuance requirements.  These include electronic commerce service providers who establish themselves as large-scale regional or multi-national Certificate Authorities (CAs); Internet Service Providers or Web hosting companies which deliver connectivity and other value added services to a range of business and consumer customers; and transaction processors, financial services companies, professional services firms, and other entities that operate Internet-based communities of interest (such as Web portals).  These Affiliates typically offer digital certificate services to their customers either under their own brand, the VeriSign brand, or within a co-branded certificate hierarchy.  In many cases, the certificate services are integrated with other value-added services offered by the provider.  Examples include an ISP which offers Web site digital certificates in conjunction with its Web site hosting services or a large e-commerce site which offers certificates to each member of its customer base to support secure user authentication and electronic messaging.

Trans Union LLC

Trans Union is the nation’s leading consumer credit information company, with owned and independent credit bureaus in all 50 states.  The company provides a broad range of industries with products and services that include credit reports, risk scoring models, target marketing systems, pre-employment evaluation reports, skip tracing and search tools, customized lists, transaction services; products that service both equity and first mortgage lenders; as well as other information-based products.  Trans Union also offers similar products through its international operations in Puerto Rico, the U.S. Virgin Islands, Canada, Italy, Mexico and South Africa.  Offices have also recently opened in Chile, Kenya and Peru.

VeriSign, Inc.

VeriSign, Inc. (Nasdaq VRSN) is the leading provider of Internet-based trust services and digital certificate solutions needed by Web sites, enterprises, electronic commerce service providers and individuals to conduct trusted and secure electronic commerce and communications over IP networks. VeriSign’s digital certificate services for Web sites and consumers are available through the company’s Web site at [http//www.verisign.com][1].  The company’s digital certificate services for enterprises and electronic commerce service providers are available through regional account representatives, resellers, and global affiliates.

VeriSign is a registered trademark exclusively licensed to VeriSign, Inc. VeriSign Global Trust Network, VeriSign Trust Network, Global Trust Network, and OnSite are service marks of VeriSign, Inc.  All other trademarks are properties of their respective owners.

[1]: http://www.verisign.com

Speedpass Hits Two Million

Mobil Corp. reported Thursday that over two million Americans are now using its ‘Mobil Speedpass’ technology that allows customers to fill up without ever opening wallets or purses for credit cards or cash. Mobil said it recognized a Ft. Myers, FL resident as the two millionth ‘Speedpass’ enrollee, with a special ceremony at a local Mobil station, $1000 to be used for gasoline purchases, and other gifts of appreciation from the company. The Speedpass program has now expanded to over 3,500 stations in  the U.S..

Gaining Strength

Improved quality in Sears’ credit card portfolio helped offset retail softness, the company said yesterday. The company also reported an 8.5% decrease in credit revenues during the fourth quarter. The decrease in credit revenues was attributable to reduced late fee income and a lower level of owned credit card receivables. Average managed domestic credit card receivables stood at $27.7 billion for 4Q/98 compared to $27.9 billion for 4Q/97. Sears reported Thursday that its domestic provision for uncollectible accounts for 4Q/98 was $245 million, a 60.7% decrease from $623 million in the fourth quarter of 1997.  The company says the decrease in the provision is due to favorable trends in delinquency rates, charge-off experience and bankruptcies and a decrease in credit card balances. For the full 4Q/98 earnings report for Sears please visit CardData ([www.carddata.com][1]).

SEARS   U.S.  CARD   PORTFOLIO   PERFORMANCE
4Q/98 4Q/97
Net Chargeoff 6.74% 7.76%
Delinquency 7.23% 7.03%
Net Interest Margin 14.25% 14.88%
Financing Rate 5.84% 6.14%
Portfolio Yield 20.09% 21.02%
Source CardData (www.carddata.com)

[1]: http://www.carddata.com

Transaction Systems Latest Q

Transaction Systems Architects, Inc., a leading global provider of application software for electronic payments reported record revenue of $86.1 million for the first quarter of fiscal year 1999, an increase of 25 percent over the same quarter last year. Pro forma net income for the quarter was $9.8 million and $.31 per share (diluted). The pro forma results exclude transaction expenses of $653 thousand related to the acquisition of Media Integration BV (MINT). The acquisition of MINT was completed in the first quarter and has been accounted for as a pooling of interest. Accordingly, TSAI’s financial statements have been restated to include the results of MINT for all periods presented. The acquisition of U.S. Processing, Inc. was also completed in the first quarter and was accounted for using the purchase method.

Operating income was $15.0 million for the quarter compared to operating income of $11.9 million for the same quarter last year, an increase of 26 percent. Excluding the aforementioned transaction related expenses, the company reported pro forma net income of $9.8 million, $.31 per share (diluted) compared to $7.7 million, $.25 per share (diluted) in the first quarter fiscal year 1998. Compared to net income and earnings per share for first quarter 1998, the current increase was 26 percent and 24 percent, respectively. Net income and earnings per share including the transaction related expenses was $9.4 million and $.30 per share (diluted), respectively.

The company completed the quarter with $198.9 million in backlog consisting of $67.7 million in non-recurring revenue and $131.2 million in recurring revenue. Backlog increased $49.4 million, a 33 percent increase compared to backlog for first quarter of fiscal year 1998. Non-recurring revenues are composed of fees specified in software and services contracts the company expects to recognize in the next 12 months. Recurring revenues include all monthly license fees, maintenance fees and facilities management fees that the company expects to recognize over the next 12 months.

Cash flow from operating activities was $9.0 million for the first quarter of fiscal year 1999. The combined cash and cash equivalent balance at December 31, 1998 was $62 million.

“We are pleased with our first quarter results of strong revenue and earnings growth as it provides a solid start for fiscal year 1999,” said William E. Fisher, chairman, chief executive officer and president of Transaction Systems Architects. “During the quarter our Americas channel and Europe, Middle East and Africa channel achieved revenue growth of 32 percent and 23 percent, respectively. The Asia/Pacific region which represents 8 percent of total revenue was down 10 percent as compared with the first quarter fiscal year 98.”

Transaction Systems Architects’ software facilitates electronic payments by providing consumers and companies access to their money. Its products are used to process transactions involving credit cards, debit cards, smart cards, home banking services, checks, wire transfers as well as automated clearing and settlement. Transaction Systems’ solutions are used on more than 3,300 product systems in 70 countries on six continents.

For the latest financials on TSAI please visit CardData ([www.carddata.com][1]).

[1]: http://www.carddata.com

Equifax Payment Services

Equifax reported yesterday that the strong performance of its Payment Services operations drove revenue growth for the fourth quarter. Payment Services, which operates through Card Services and Check Services, increased revenue 25.6% to $159.6 million in the fourth quarter. The revenue increase in Payment Services was led primarily by growth in Card Services, with an increase in card and merchant processing, as well as the acquisition of 59% of Unnisa, a card services business in Brazil. Operating income of $36.5 million increased 28.5% primarily as a result of the substantial operating leverage from the integration of the acquisition of CUNA Service Group, Inc. in late 1996, as well as continued growth of the Card Services business and strong performance of Check Services. For additional 4Q/98 earnings information for Equifax please visit CardData ([www.carddata.com][1]).

[1]: http://www.carddata.com

The MARK Cards

ORGA Card Systems said Thursday it has been chosen by The MARK of the Quad Cities to implement a chip-based, stored-value card for the 12,000-seat-capacity, all-purpose arena. The six-year-old facility serves the Quad Cities area in IL. With an initial delivery of pre-loaded $20 disposable cards available in four designs, the program will enable MARK customers to make cashless purchases along the building’s concessions concourse. The first series of new smart cards will be marketed to United Hockey League fans attending Quad City Mallard home games at the arena.

Checkmate Order

IVI Checkmate Corp. said Thursday it has received a $2.5 Million order for the ‘eN-Crypt 2100’ customer activated debit/credit terminal from Fred Meyer Inc. for its Fred Meyer Stores and Quality Food Centers. Smith’s Food & Drug Centers Inc., a subsidiary of Fred Meyer Inc., had previously installed 3,000 IVI Checkmate ‘eN-Crypt 2100’ payment terminals to complete a chain-wide rollout of Smith’s. OR-based Fred Meyer operates about 800 stores in a variety of food and drug and multi-department formats located in 12 western states from Alaska to Texas.

Ticket Transactions Up/Running

Ticketmaster, a USA company has begun its rollout of accepting MasterCard, Visa and Discover at retail Ticket Center locations throughout the U.S. and has selected Chase Merchant Services to provide credit card processing for all credit card transactions. Under the long-term agreement, Chase Merchant Services will provide card processing services for more than 15 million Ticketmaster credit card transactions annually via Ticketmaster’s Charge-By-Phone Network, retail Ticket Center locations, Internet site, and select venue box offices. Ticketmaster expects all 2,900 of its retail Ticket Center locations to be able to accept credit cards within the year.

“We selected Chase Merchant Services because of its state-of-the- art technology and its ability to handle the high volume processing of Ticketmaster’s Charge-By-Phone, retail, and Internet credit card sales,” said Eugene Cobuzzi, COO, Ticketmaster Group, Inc. “We look forward to working closely with Chase Merchant Services to continue to provide optimum ticketing services to our clients as well as to providing entertainment fans with fast and easy access to purchasing event tickets.”

“We are pleased to form a strategic partnership with a leader in the entertainment industry,” said Diane Vogt, chief executive officer of Chase Merchant Services. “This agreement reflects positively on our ability to provide the economies of scale and highest degree of innovation that service providers seek for payment processing.”

Ticketmaster, a USA company (NasdaqUSAI) is the world’s leading computerized ticketing service; selling 70 million tickets valued at more than two billion dollars, through more than 2,900 retail Ticket Center outlets; 29 worldwide telephone call centers; and its Internet site. Ticketmaster serves more than 3,750 clients in the U.S., South America, Canada, Mexico, Europe, and Australia. The company provides ticketing for 94 professional sports franchises and hundreds of leading arenas, stadiums, performing arts venues, and theaters including such prominent facilities as Madison Square Garden and Radio City Music Hall in New York, the Great Western Forum and the Hollywood Bowl in Los Angeles and the United Center in Chicago. Clients receive comprehensive ticket inventory control and management, broad distribution, and dedicated marketing and support services. Consumers receive convenient access to tickets for more than 150,000 events a year, including a broad range of concerts, sports, family entertainment, performing arts, and movies.

Chase Merchant Services is the nation’s largest merchant acquirer, processing nearly 2 billion transactions a year and more than $100 billion in annual credit and debit card sales volume. Chase Merchant Services is a joint venture between First Data Merchant Services Corporation, the world’s leading processor of Visa and MasterCard transactions, and The Chase Manhattan Bank (NYSECMB), the fourth largest bankcard issuer in the United States.

Maryland EBT

Citicorp Services confirmed yesterday it has been selected by the State of Maryland Department of Human Resources to provide EBT services in the state under a newly awarded contract. The state presently has an EBT system operated by another contractor, but re-bid the project in 1998 because the current contract expires in late 1999. Since the Maryland program is already operational, Citicorp Services will work on transferring the state’s EBT processing to its own system from the current contractor’s system. Over 40 states are involved in some stage of EBT.