Whoops – they did it again and for the 19th consecutive time. Discover agains shared the top spot in the credit card category this year in customer brand loyalty. Discover has held or shared the top Brand Keys ranking in its category for the past 19 consecutive years.
Discover is launching a new sweepstakes this weekend, “Fasttrack to Cashback,” offering cardholders a chance to win one of 54,000 prizes, ranging from $5 to $1,000. Winners of $25 or more will be notified by phone. The remainder will receive an announcement via direct mail. Discover Card will support the sweepstakes with national television spots, as well as print advertisements in publications such as US Weekly, Entertainment Weekly and People. Discover Financial Services, a business unit of Morgan Stanley, operates the Discover Card brands and the Discover Novus Network for more than 50 million Cardmembers.
MBNA has snagged an affinity card deal with the Smithsonian Institution. In 1997, the Smithsonian first inked a deal with Dean Witter, Discover & Co’s NOVUS Services business unit to issue the “Smithsonian Card.” The NOVUS/Smithsonian card offered cardholders the opportunity to earn a $50 Savings Bonds for each $5,000 charged to the card. NOVUS Services also made a contribution to the Smithsonian for every card issued or renewed. The new MBNA version does not offer a cardholder rebate, but does offer a free “2003 Smithsonian Treasures Calendar” after the account is activated and the first transaction is made. MBNA will continue to deliver a percentage of each purchase to the Smithsonian, under the typical affinity card contract. MBNA is offering a 1.7% six-month intro rate on balance transfers and cash advance checks, followed by a fixed 12.99% APR, according to CardWatch ([www.cardwatch.com][1]). The Smithsonian has more than two million members and nearly 30 million annual visitors to its museum and research complex.
[1]: http://www.cardwatch.com
After recently losing the Shell MasterCard co-brand program to Citibank, Chase has rebounded by nailing the Universal co-brand program from Discover/NOVUS. The new “Universal Entertainment MasterCard from Chase” will offer a wide range of rewards linked to Universal’s movies, television, music, theme parks and interactive games. Under terms of the deal, Chase will become the “Official Bank” for all of the Universal branded theme parks in the USA and Universal will be promoted throughout Chase’s branch network. Cardholders will earn one point per dollar on all everyday purchases and two points per dollar spent at select Universal Parks & Resorts retail locations. Points can be redeemed for movie and concert tickets, DVDs, CDs, advance movie screenings, and cardholders will have the opportunity to redeem reward points for unique Hollywood experiences, including tickets to celebrity events, spending a day on a television or movie set, backstage concert passes, and walking the red carpet at a movie premiere. Other card benefits include: complimentary Emusic downloads; invitations to advance movie screenings; 10% off select Universal Parks & Resorts tickets purchased online; and, discounts on select purchases at Universal Parks & Resorts. In March 1997, Universal signed a five-year agreement with NOVUS Services that included the “Universal Studios Card.” (CF Library 10/24/97)
Shift4 Corp. announced its latest application interface certification AbleCommerce, a subsidiary of Able Solutions Inc.
AbleCommerce, a leader in e-commerce software solutions, such as shopping cart applications, utilizes Shift4’s free plug-in for ColdFusion environments. This plug-in allows operators and developers of e-commerce Web stores and auction sites to quickly integrate high-speed, secure e-payment acceptance and management functionality through Shift4’s $$$ ON THE NET(R)(TM).
$$$ ON THE NET is an Internet payment gateway and application service that allows brick & mortar and e-commerce businesses to securely process real-time electronic payments, such as credit, debit and private label cards, utilizing the Internet in place of dial-up lines.
$$$ ON THE NET utilizes high-bandwidth connectivity to major bank processing hosts, which delivers sub-5-second authorizations to Web, POS, PMS, kiosk and wireless order processing applications, eliminating the need for dedicated leased lines.
$$$ ON THE NET is enhanced by a browser-based application service called NetAudit(TM), which allows management to view individual or batched transactions, generate printer-friendly .PDF reports, make deposits and access archived data for charge-back defense for all company locations.
Shift4 provides 24/7 technical support for this comprehensive e-payment solution, and data security is provided by Shift4’s NetAPI(TM) software module, utilizing a patent pending encryption algorithm called DUKPT w/MTE(TM) (derived unique key per transaction with moving target encryption).
“We are very excited about integrating $$$ ON THE NET with AbleCommerce,” stated Keven Newling, vice president of AbleCommerce. “Merchants who implement $$$ ON THE NET as their e-payment solution will be impressed with its secure high-speed authorization and settlement service, fraud control, and browser-based management capabilities.”
“AbleCommerce has been very helpful in the development process of the $$$ ON THE NET(TM) credit card gateway interface and since AbleCommerce is written in ColdFusion (Allaire), as is the user interface side of $$$ ON THE NET(TM), it was a natural fit,” stated Steven M. Sommers, vice president Applications Development for Shift4.
“The interface between Shift4 and AbleCommerce has created the unique capability to automatically flag invoices for settlement once the order ships, while other interfaces require either manually flagging invoices or setting up the merchant as host capture, which, in many cases, can cause regulatory issues with the various card associations and increased credit card transaction fees.
“We see the interface between Shift4 and AbleCommerce as a unique benefit to merchants and as a true win/win situation,” Sommers concluded.
About AbleCommerce
AbleCommerce, a division of Able Solutions Corp., is located in Vancouver, Wash., and was founded in February of 1995. AbleCommerce is the premier electronic commerce solution provider. Internationally, AbleCommerce has established sales and marketing operations in The Benelux, Chile, France, Greece, Hungary, Japan, Malaysia, Mexico, Singapore, South Africa, Turkey, the United Arab Emirates and the United Kingdom.
With an international network of partners, AbleCommerce aims to provide comprehensive solutions for all nationalities of the Internet. For more information on Able Solutions, call 360/253-4142, send e-mail to [email protected], or visit its Web site at [www.ablesolutions.com][1].
About Shift4
Shift4 is a privately held corporation based in Las Vegas, and is a leading provider of enterprise electronic payment technology for merchants, application developers and merchant service providers in various industries, including e-commerce, hospitality, direct/catalog sales and retail.
Shift4 solutions provide connectivity to leading third-party payment processors including First Data Corp. (FDC), Paymentech, Visanet (Vital), NDC eCommerce, First Tennessee Bank (First Horizon), Chase Merchant Services, Nova Information Systems, Alliance Data Systems, Novus (Discover Card), American Express and TeleCheck.
More than 2,500 merchants process more than 100 million electronic payment transactions annually via Shift4-powered systems. For more information, visit Shift4’s Web site at [www.shift4.com][2].
[1]: http://www.ablesolutions.com/
[2]: http://www.shift4.com/
Electronic Clearing House Inc. announced that Novus Network Services, the service that promotes and supports the Discover Card credit card, has recognized ECHO with its annual Quality Service Award in honor of achieving the highest ranking in Processor Category C for 1999.
The award was based upon statistical data collected throughout the year by Novus relating to such criteria as reliable file transmissions, submission timeliness, number of processing rejects, number of balancing errors, etc. The award will be presented to ECHO at a special Awards Dinner on March 14, 2000.
“This award can be credited to the performance quality of ECHO’s Data Center Operations and Data Management departments. If either of these two departments had not maintained the highest commitment to merchant service, ECHO would not have out-performed some very capable and quality competitors to receive this distinction,” stated Joel M. Barry, CEO of ECHO. “We think Novus is unique among card organizations in the way they track, highlight and honor their processors and we greatly appreciate their commitment to acknowledging quality.”
ECHO previously won the top processor award in 1996.
About ECHO: Electronic Clearing House Inc. provides credit card processing, cash advance services, check guarantee, check verification, check conversion, inventory tracking and/or various Internet services to over 41,000 retail merchants, U-Haul dealers and casinos across the nation. ECHO also designs, develops and integrates software and point-of-sale hardware that is utilized as credit card processing terminals, automated money order dispensers, inventory tracking devices, and casino cash advance systems.
Morgan Stanley Dean Witter’s Credit Services Division, which includes Discover Financial Services, reported net income of $202 million for the fiscal third quarter ending August 31, a 10% increase over last year. MSDW says the credit division has finally been re-energized after the sell-off of the ‘Bravo’ and ‘Prime Option’ credit cards as well as the unloading of SPS to Associates. Credit quality improved substantially over the past twelve months as the net charge-off rate declined to 5.29% from 6.56%. The over-30-day delinquency rate also declined to 6.34% compared to 7.19% a year ago. Transaction volume also increased 24% to a record $18.3 billion driven by increased sales volume and balance transfers. Managed consumer loans ended the quarter at $34.4 billion. However, marketing and business development expenses continue to increase. For the third quarter Credit Services spent $253 million, primarily as a result of the continued promotion of ‘Discover Platinum’ and a higher level of cardmember rewards due to increased transaction volume. The Discover/ NOVUS Network added 117,000 new merchant locations during the quarter. The division says the next quarter should show results from the new ‘Morgan Stanley Dean Witter’ credit card which was launched in the United Kingdom during August. For more 3Q/99 details on MSDW/Discover Financial Services visit CardData ([www.carddata.com][1]).
[1]: http://www.carddata.com
CitiGroup’s threatened migration to MasterCard from VISA appears to center more on association fees than the branding issue. As profit margins dwindle amid rising marketing costs and shifting cardholder behavior, CitiGroup, like its competitors, is seeking to lower all costs and spend more efficiently. VISA reportedly said CitiGroup paid $78 million in annual association fees to VISA during 1998. CitiGroup has made it clear it would rather fund the marketing of its own brand than subside, through VISA, marketing for its competitors. Even if CitiGroup gets what it wants from MasterCard, CitiGroup’s strategy is risky. To enter another card brand into the marketplace at this point in time comes with a very high price tag. Brand awareness is not something that is achieved overnight and consumers may ultimately find it confusing. Furthermore CitiGroup has a bad track record with brand building. Its efforts in the mid-80s to launch the Choice card was a disaster and it has only recently made any headway building the Diners Club brand. Discover, a branding success, also found out the hard way that cluttering the market with new brands and sub-brands does not work. Discover is now in the process of re-focusing on its Discover brand, shedding the sub-brand Bravo and pulling back on the Novus brand. American Express has also indicated that its Optima brand has really never connected with American consumers.
Discover Financial Services, formerly known as NOVUS Services, reported yesterday that delinquency and chargeoffs continued to improve during the fiscal fourth quarter. For the quarter ending Nov. 30, Discover’s net chargeoff rate stood at 6.94% compared to 7.21% one year ago. Delinquency (30+ days) also dropped from 6.98% for the fourth quarter 1997 to 6.53% for fourth quarter 1998. While Discover’s interest spread increased from 8.58% last year to 8.71% this year, the interest yield for the fourth quarter declined from 14.79% in 1997 to 14.72% for 1998. Due to the sale of Bravo receivables and other adjustments, Discover’s overall card portfolio size declined about 10% during 1998 from $36.0 billion on Nov. 30, 1997 to $32.5 billion on Nov. 30, 1998. At the end of its fiscal year Discover captured $58 billion in transaction volume. For full 4Q stats on Discover visit CardData (www.carddata.com). CardData’s year-end and fourth quarter stats for more than 350 issuers will be available beginning Monday, Jan. 11.
DISCOVER’S PULSE
11/30/98 11/30/97
Gross Accounts: 38,000,000 40,000,000
Active Accounts: 22,000,000 23,000,000
Avg Recv Per Act Acct: $1,486 $1,382
Atevo Travel () and Discover Card () announced the addition of Atevo Travel’s top-notch products and services to Discover ShopCenter, the successful Internet shopping gateway.
Discover Cardmembers have easy access to all of Atevo Travel’s robust reservations services, which include airlines, hotels, rental cars, and complete vacation and cruise packages. They also have convenient access to Atevo Travel’s award-winning destination information, feature and news articles, maps, photos, community forums, and more.
Plus, now through Dec. 31, 1998, Discover Cardmembers receive extra savings whenever they purchase an Atevo Travel vacation or cruise package totaling at least $500 before taxes. Specifically, Cardmembers receive:
— A $25 discount on a vacation package or cruise totaling $500 to $999 per booking before taxes.
— A $50 discount on a vacation package or cruise totaling $1,000 to $1,999 per booking before taxes.
— A $100 discount on a vacation package or cruise totaling more than $2,000 per booking before taxes.
Certain restrictions apply.
“For shoppers dreading holiday crowds and traffic, Atevo Travel’s special savings offer on Discover ShopCenter comes at the ideal time,” observed Hyun Shin, president and CEO of Atevo, Inc. “With over 600 vacation packages and over 100 cruises to choose from, all in the convenience of one’s home or office, shoppers are bound to find the right gift for the holidays and beyond.”
“Discover ShopCenter provides our Cardmembers with a convenient way to obtain meaningful product discounts online from some of their favorite retailers,” said Joe Bonefas, vice president of technology products, Discover Financial Services, NOVUS Services, Inc. “In research we conducted earlier this year, Cardmembers told us that discounts are important to them. Discover ShopCenter responds to their requests, and brings added value to our relationship with Cardmembers.”
The Atevo Travel page on Discover ShopCenter can be found at .
About Atevo, Inc.
Atevo, Inc. was founded in 1996 as a full-service online travel company dedicated to delivering to consumers a complete, user-friendly travel solution that integrates content, community, and commerce. Atevo Travel, the company’s Web site (http://www.atevo.com), was recognized as a “Best of the Web” travel site by PC Magazine and as the Editor’s Choice for a general travel resource by U.S. News and World Report Online.
The site offers easy-to-use online travel reservations and comprehensive practical travel information, including original, changing travel articles. In addition, it fosters positive participation of travelers through innovative features such as Your Travel Page, a free personal travel page, and Travelers’ Exchange, an extensive set of message boards.
The Discover card has filed suit against American Express over its use of the “cash back” phrase for promoting AmEx cards. Novus Credit Services filed the suit in New York City just before the Thanksgiving Day holiday break. The suit stems from an AmEx recent promotion of a ‘Cash Back Card’ offering up to 2% back. Discover has offered 1% cash back to its cardholders since 1986. In court papers filed, Novus alleges American Express acted in a “willful, wanton and egregious way”.
Among credit card solicitations hitting mailboxes this week is the new ‘NOVUS ‘Prime Option Platinum Card’. According to CardWeb’s ‘CardWatch’ service the new solicitation offers consumers a 4.9% intro APR until April 1999 followed by a long-term fixed rate of 14.9%. Similar to other ‘Platinum’ offers, NOVUS is dressing-up the card with a purchase protection, extended warranty, collision damage insurance, year-end account summary, choice of billing date, and $1 million of travel accident insurance. The offer also promotes a $25,000 credit limit. The card employs Discover’s typical two-cycle ADB balance calculation method, charges an $18 late fee/overlimit fee and an option prime +12.9% punitive APR. Discover tried unsuccessfully to launch a ‘Prime Option VISA’ card eight years ago which ended up as the subject of an antitrust trial with VISA. Later NationsBank agreed to issue a cobranded card with Discover under the ‘Prime Option’ name. CardWatch, launched in August, is a real-time monitor of credit card marketing featuring hundreds of credit card direct mail solicitations, 174 hotlinks to credit cards offered via the World Wide Web, 42 current print ads, 24 current TV commercials and 38 recent Internet banner ads. For demo and more info: [www.cardwatch.com][1]
[1]: http://www.cardwatch.com