Friday Chase Manhattan and Foote Cone & Belding announced the launch of a new global brand campaign. The campaign notes the brand difference of Chase using the tagline: ‘The Right Relationship is Everything’. The campaign began Sunday and appears in various newspapers and magazines today. All the ads will look similar and will convey the theme that relationships between people are the same throughout the world.
The National Advertising Review Board announced Monday it concurs with the decision of the National Advertising Division of the Council of Better Business Bureaus regarding the truth and accuracy of VISA USA’s credit card advertising pertaining to use of the tag line, “The Preferred Lodging Card”. In Dec., the NAD determined that VISA’s tag line is an objectively provable claim, not mere puffery, and all reasonable interpretations must therefore be substantiated. While VISA did provide data to show more consumers use VISA than all other cards, the NARB insisted that overall sales volume is not sufficient evidence of consumer preference and that the other evidence in the record also did not establish preference. The NAD says since VISA failed to provide the substantiation that it should discontinue the tag line. In light of the NARB’s and NAD’s opinion, VISA announced Monday it will voluntarily cease distribution of the advertising and marketing at issue. American Express led the challenge.
San Francisco-based Providian is launching its new online credit card brand this morning that will directly compete with San Francisco-based NextCard. The new suite of ‘Aria’ VISA cards features online instant approvals, a rewards program, online balance transfers, online account access and upgraded perks. The four ‘Aria’ VISA cards include ‘Aria VISA Platinum Premium’, ‘VISA Platinum’, and two subprime card programs, ‘VISA Portrait’ and ‘VISA Persona’. ‘The instant rewards feature for ‘Aria’ is the ‘MyPoints’ program which offers 5 points for every purchase dollar, a 500 point bonus for opening an account, and a 2,500 point bonus for a balance transfer. Providian says the addition of ‘Aria’ aggressively positions Providian in the e-commerce segment. However, it is unclear this morning how Providian will promote its new product among the dozens of card products it currently offers, under contract, from competitors, via GetSmart.com. Last February, Providian acquired WebCard, GetSmart.com and created its new E-Commerce Division. NextCard’s CEO/founder, Jeremy Lent, is a former Providian CFO/SVP. Other NextCard officers/directors who formerly worked for Providian include: Timothy Coltrell and John Hashman.
PROVIDIAN’S ARIA PORTFOLIO
VISA Product INTRO PURCH BAL TXFR CASH ADV
Platinum Premium 0%/3mo 7.99% 12.99%-21.99% 21.99%
Platinum 0%/3mo 12.99% 12.99%-21.99% 21.99%
Portrait 0%/2mo 19.99%* 21.99% 21.99%
Persona 0%/2mo 23.99%* 23.99% 23.99%
all cards no-annual-fee except Persona; * no grace period
The Electronic Funds Transfer Association announced this morning the new officers of its Independent ATM Services Council. Steven Wright, EVP/COO of Card Capture Services was elected Council Chairman. Neil Johnson, president of International Merchant Services will serve as first vice chairman, and Charles Fote, EVP of First Data will serve as second vice chairman. Bob Cannon, president of Momentum Cash Systems was elected secretary of the Council.
NY-based 24/7 Media, Inc. signed a multi-year strategic agreement yesterday afternoon with Fleet Credit Card Services to market Fleet VISA and MasterCard brand credit cards across ‘The 24/7 Network’. The agreement has the potential to generate up to $32 million over the course of the agreement for 24/7 Media. The initial phase includes a targeted banner campaign across the network which claims to reach more than half of the online users in the U.S..
The U.S. House of Representatives passed H.R. 833, the ‘Bankruptcy Reform Act of 1999’, by a vote of 313-108 yesterday. The U.S. Senate is expected to vote on its version of the legislation by the end of this month. The White House has indicated it will not automatically veto the House bill, however the administration has objected to the use of a means test to force some debtors into a Chapter 13 repayment plan instead of permitting them to erase their debts entirely through a Chapter 7 filing. The House Judiciary Committee tried to lessen the impact of the means test provision, through an amendment, but the it was turned down by a 184-238 vote. However House lawmakers did adopt an amendment requiring credit card issuers to clearly disclose fees, teaser rate/go-to interest rates and how long it takes cardholders to pay off balances by making minimum monthly payments. The amendment also requires issuers marketing credit cards on the Internet to fully disclose terms and conditions of their offers. Lobbying for bankruptcy reform has been “awesome” according to one House member. Public records indicate VISA and MasterCard jointly spent $5.4 million lobbying for bankruptcy reform last year. Meanwhile the White House issued a laundry list of proposed new consumer protection issues yesterday. The list covered consumer financial privacy, improving financial literacy, and expanding access to financial services.
The Smart Card Forum announced yesterday the next program for ‘The Smart Card Forum Educational Institute, a non-profit educational organization designed to help accelerate the widespread acceptance of smart card technology. Scheduled for June 14-15 in Toronto, the Educational Institute’s “Introduction to Smart Cards” course is staffed by a faculty of world-leading industry experts.
This week both a Senate and House committee approved bankruptcy reform legislation that would limit the use of Chapter 7 by consumers with certain income levels. The Senate Judiciary Committee voted 14-4 yesterday to approve its version of the legislation. The House Judiciary Committee voted 22-13 on Tuesday to approve its version. The reform legislation stalled last year without a compromise between the House and Senate versions. There are differences between the Senate and House bills again this year. The House version requires debtors to file a Chapter 13 bankruptcy if they can pay at least $100 per month toward old debts. The Senate version includes the same requirement if the debtor can repay at least $250 per month. The House version also includes a number of additional disclosure requirements for creditors. A full House vote on ‘The Bankruptcy Reform Act of 1999’ is scheduled for next week. A full Senate vote on bankruptcy reform has not been scheduled yet but is expected before the Memorial Day break.
VISA announced yesterday it is taking its ‘VISA Business’ credit and debit cards to the ‘Platinum’ level on May 15. The new ‘VISA Business Platinum’ credit card or check card offers, among other typical ‘Platinum’ features, a 24/7 concierge service. Both new cards also offer, for an additional fee, a 24/7 small business help line and 24/7 access to a PC help desk. VISA’s announcement follows on the heels of MasterCard’s official unveiling yesterday of the ‘Business Bonuses’ program for small business cardholders. Under MasterCard’s program, ‘Business’ cardholders earn air miles for each purchase, and may redeem the points for free travel on any airline, with no black-out periods. (See CF 4/27 for details on the new MasterCard program.)
MasterCard said yesterday that counterfeit and mail/telephone order fraud remain the major areas of focus this year in its fight against card fraud. MasterCard reported total dollar fraud losses worldwide of $526 million, a 13.7% increase over 1997’s $462 million. As a percentage of sales volume, this computes to 8.1 basis points, or 8.1 cents per $100 in transaction volume, compared to 7.1 basis points in 1997. MasterCard said the increases last year were largely the result of skimming activity and the proliferation of technologies such as account generation programs.
Proton World announced it has acquired a Java applet for the Proton smart card that supports the ‘Java Card API’. The applet enables smart cards to accommodate several different applications. Proton investor Banksys SA launched a Proton card program for Belgian’s national health service. The Proton Belgian EBT program processed 3.3 million transactions last month. Proton World has also become a partner in the launch of ‘Smart Axis’, a new multi-currency e-commerce payment system.
Maryland-based Cendant Business Services announced Thursday it will offer rebates of up to 8% on vehicle maintenance purchases made with the MasterCard-branded ‘Cendant Card’. The rebates will be available to clients who use the ‘Cendant Card’ to manage Travel & Entertainment, purchasing and fleet expenses. ‘Cendant Card’ clients will receive a rebate up to 8% of the purchase price for every vehicle maintenance purchase made at preferred network suppliers,such as Jiffy Lube, Firestone, Penske Auto Centers, Pep Boys, and Safelite AutoGlass. A number of these suppliers also provide detailed, line-item information on maintenance transactions.