Kroger & SCAN

eFunds Corporation through its wholly-owned subsidiary Deposit Payment Protection Services, Inc., announced the renewal of its agreement to provide SCAN and SCAN Online risk management services to stores owned by The Kroger Co.. The contract renewal will provide Kroger-owned stores with continued point of sale access to the SCAN and SCAN Online services, the largest check verification services in the nation, helping them to reduce losses caused by consumer transactions that may be fraudulent or that have unacceptable payment risk.

SCAN and SCAN Online risk management services help retailers to significantly reduce costs caused by check fraud and transaction losses, and their associated payment processing and servicing costs by providing technology solutions that assist retailers in preventing bad checks from being accepted at the register.

“Kroger has a long history of providing superior value and service to their customers and eFunds is pleased to be a part of helping the company maintain their market leadership by providing the data and services they need to make informed choices about transaction risks,” said Rahul Gupta, senior vice president of eFunds Risk Management Solutions. “We look forward to a continued partnership with Kroger and are committed to supporting their business with industry-leading check authorization resources.”

About Kroger

Headquartered in Cincinnati, Ohio, Kroger is one of the nation’s largest retail grocery chains. At the end of fiscal 2002, the Company operated (either directly or through its subsidiaries) 2,488 supermarkets and multi- department stores in 32 states under approximately two dozen banners including Kroger, Ralphs, Fred Meyer, Food 4 Less, King Soopers, Smith’s, Fry’s and Fry’s Marketplace, Dillons, QFC and City Market. Kroger also operated (either directly or through its subsidiaries) 784 convenience stores, 441 fine jewelry stores, 376 supermarket fuel centers and 41 food processing plants. For more information about Kroger, please visit .

About eFunds

Headquartered in Scottsdale, Ariz., eFunds Corporation (Nasdaq: EFDS) is an industry leader with nearly 30 years of experience and expertise in electronic payments. eFunds provides electronic transaction processing, ATM solutions, risk management, professional and outsourcing services to financial institutions, electronic funds transfer networks, government agencies and retailers around the world.

Committed to providing excellent customer service and award-winning products, eFunds enables their clients to reduce transaction and infrastructure costs, detect potential fraud and enhance relationships with customers. eFunds is one of the largest third-party processors of EFT, is the largest non-bank deployer of ATMs in North America, and is the provider of the world’s largest debit database. .

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Direct Mail 1Q/03

Credit card direct mail volume in January dipped to 293 million pieces, the lowest in over two years. For the first quarter a total of 915 million credit card solicitations were mailed out, compared to 965 million for 1Q/02, and 883 million for 1Q/01. Mintel’s Comperemedia says over 90% now offer a 0% introductory rate, compared to 60% last year. The tracking firm says first quarter default rates ranged from 19 to 26%. Based on first quarter mailings, late fees ranged between $31 and $40 while over-limit fees ranged between $21 and $30.

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Incurrent Chairman

The Board of Directors of Incurrent, the leading provider of online account management solutions for the credit card industry, announces that Ross Longfield, who personally led Beneficial National Bank USA from a startup to a $4-billion credit card management enterprise in just seven years, has been chosen as Incurrent’s Chairman of the Board.

“This is an exciting time for everyone at Incurrent, as enrollment continues to grow at an unprecedented rate and we concentrate on expanding services,” Dave Hickey, CEO, said. “Ross has served on the board for the last two years and his contributions were instrumental to this success.” Hickey explained that during Longfield’s two year stint on Incurrent’s board, it became obvious that he was enthusiastic about the company’s leading-edge positioning.

“We were thrilled when Ross expressed interest in taking a more proactive part in the company’s future plans,” Hickey said. “With 40 years in retail credit card and financial services, first as the leading force at Beneficial, then as managing director and CEO of Household Retail Services USA, his wealth of knowledge and experience will help elevate the company to the next level.”

“I’ve watched the company grow from a little over 50,000 enrolled card members in June 2001 to more than four million last January,” Longfield said. “You just didn’t see many companies grow at 27% per month during that period.” Longfield added that Incurrent has enjoyed five years of success around self-service, statement presentment, and bill payment.

“Now we’re developing deeper capability in the use of web technologies to enhance the relationship between the card issuers and cardmembers,” he said. “The needs of issuers and cardmembers extend well beyond self-service and EBP&P and are now evolving into areas like legally-compliant e-statements, collections, promotions, product marketing, loyalty, and disputes.”

“There have not been fundamental changes in the way credit card relationships are managed in quite some time. I think these technologies are showing that potential and I’m extremely excited to be a part of it,” concluded Longfield.

Longfield served as Executive Vice President at Beneficial Management Company, where he oversaw all card programs in the US, as well as the UK, Germany and Canada. He then spearheaded the integration of Beneficial and Household International to form the second largest private-label credit card operation in the US, now valued at more than $11-billion. Under his tutelage, the new entity owned and operated retail credit card portfolios such as Best Buy, K-Mart, Comp USA, Levitz Furniture, and Costco Warehouse stores. He received his undergraduate degree from Farleigh Dickinson University, and has completed several graduate management programs, including Columbia University’s School for Consumer Credit Management.

Selected as New Jersey’s “Growth Company of the Year,” in 2002, and surpassing the four million-cardmember enrollment mark in January 2003, Incurrent continues to evolve and lead the industry in delivering innovative two-way communications capabilities between card issuers and cardmembers. Among Incurrent’s clientele are: MBNA Business Lending, Metris, Certegy, First USA, Fiserv, Sears, and Target.

About Incurrent

Incurrent develops, licenses and operates advanced customer self-service and electronic billing (EBPP) systems for financial institutions in the global payment card industry. Founded in 1997, the Company numbers among its clients leading institutions such as MBNA Business Lending, First USA, Certegy, Fiserv, Metris, Sears, and Target. With 4 million enrolled and active cardholders, Incurrent’s platform is among the most widely adopted electronic banking systems in use today. Incurrent clients are consistently placed in the top of industry rankings based on site performance, stability, features, and ease of use.

Distinguished by its rich data warehouse and leading edge self-service and billing features, Incurrent has set an industry standard, enabling client financial institutions to enroll and service more users, with greater levels of satisfaction than competing platforms or in-house solutions. Fully integrated with all leading back-office accounts receivable systems, including First Data, Total Systems, Certegy, and PaySys, Incurrent represents a fast, cost-effective and low-risk means of acquiring, servicing, cross-selling and billing cardmembers through multiple contact channels. This in turn drives customer adoption, leading to enhanced brand loyalty and service delivery cost reductions for Incurrent’s clients.

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Flex Convenience Card

mbi, the leading provider of health care debit cards for pre-tax benefits administration, announced it has received a $5 million financing commitment from private equity funds managed by Mesirow Financial, a Chicago-based diversified financial services firm. mbi will use the proceeds to further enhance its leadership position in the employee benefits marketplace. Terms of the financing were not disclosed.

“We are thrilled to have a leading institution like Mesirow Financial as a financial partner,” said Rob Butler, vice-president of sales and marketing for mbi. “We intend to direct the proceeds toward increasing sales, marketing and technology initiatives that will allow mbi to accelerate its growth rate and better serve its customers. As a result of the recent IRS ruling affirming debit cards for use with health reimbursement arrangements (HRAs), we have an even more compelling reason to further invest in and improve what is already a great tool.”

Health care debit cards, introduced to the marketplace by mbi in 1998, allow employees to pay for eligible health care expenses with a card that looks and acts like a debit card, rather than submitting claims and being reimbursed.

“We are excited to be partnering with mbi,” said Josh Daitch, vice president of Mesirow Financial. “By all measurements, they are clearly the market leader with the best technology platform and a highly skilled and seasoned team. In a high-potential market such as this for health care debit cards, it was important for us to invest in the leading company with the strongest upside. In mbi, we’ve done that.”

mbi has been funded to date with capital contributed from Wind Point Partners, a leading middle market private equity firm. Jim Forrest, Managing Director at Wind Point, states, “Mesirow Financial is a terrific partner to assist mbi in further enhancing its strong market leadership position. We look forward to great things ahead.”

About mbi ()

Founded in 1995, mbi introduced the first debit card to the healthcare industry for pre-tax benefit administration of FSAs, HRAs, Transit, Dependent Care and other defined contribution plans. The mbi Flex Convenience(R) Card enables employees using health reimbursement arrangements to pay for eligible healthcare expenses wherever MasterCard(R) is accepted, including physician and dental offices, pharmacies and vision service facilities. More than 200 Third-Party Administrators offer the mbi Flex Convenience(R) card to provide over 4000 employers, such as BellSouth, CompUSA, eBay and SC Johnson, and close to 300,000 employees enjoy the advantages of mbi’s system.

About Mesirow Financial ()

Mesirow Financial is a diversified financial services firm headquartered in Chicago. Founded in 1937, it is an employee-owned, private company with more than 700 employees in 12 offices across the country. The firm is well capitalized with more than $5 billion in assets under management and fiscal 2003 revenues over $200 million.

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CO-OP & UN FCU

United Nations Federal Credit Union, with a worldwide membership consisting of staff from the UN and its specialized agencies, UN retirees and their families, joined CO-OP Network, which offers access to more than 17,000 surcharge-free ATMs across the United States and Canada as well as linking to 800,000 ATMs globally.

“The UNFCU membership creates a unique challenge for their credit union — to provide product and service offerings that meet the special needs of more than 57,000 members spread across the globe,” says CO-OP Network CEO Robert Rose. “In fact, UNFCU and CO-OP Network share a common vision as cooperatives — we’re continually seeking new ways to serve our respective members. We’re proud UNFCU, whose guiding principle is ‘Serving the People Who Serve the World,’ recognizes the advantages of being a member of CO-OP Network.

“Back in February, Navy Federal Credit Union, the largest credit union in the world, became a CO-OP Network member. Now with UNFCU coming on board, it establishes an interesting trend whereby credit unions with members dotting the globe are looking to CO-OP Network to provide their ATM connection.”

UNFCU, founded in 1947 (the United Nations was founded 24 October 1945) and governed by a volunteer board comprised of current and former UN members, has two full-service branches in New York City as well as liaison offices in Geneva, Switzerland; Vienna, Austria, and, most recently, Nairobi, Kenya. With more than $1.7 billion in assets, UNFCU is ranked among the 30 largest credit unions in the United States.

“The alliance with CO-OP Network is part of our overall strategy to continually keep our members financially connected,” said Michael J. Connery, Jr., president and CEO of UNFCU. “We’re delighted to be partnering with an industry leader whose burgeoning ATM network will be meeting the needs of our own growing membership.”

CO-OP Network ([www.co-opnetwork.org][1]), established in 1981 and headquartered in Ontario, Calif., is wholly-owned by its credit union shareholders and provides volume discounts on products and services that include risk management as well as debit and deposit access. With 1,219 credit union members, more than 17,000 surcharge-free ATMs and 16 million cardholders, CO-OP Network is the No. 1 credit union ATM network in the U.S. financial services industry. CO-OP Network, whose membership has access to 800,000 ATMs worldwide through links to Star, Cirrus and Plus, also offers national shared branch services through its subsidiary, Service Centers Corporation, based in Southfield, Mich.

[1]: http://www.co-opnetwork.org

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NetBank and SkyMiles

NetBank, the country’s first commercially successful Internet bank, has partnered with Delta Air Lines to enable SkyMiles members an additional opportunity to earn miles for using various NetBank services. Members can now earn a one-time bonus of up to 7,000 miles when registering for NetBank services, such as online checking accounts, money market accounts, direct deposit and online bill payment services.

“NetBank’s services are designed to meet the needs of busy professionals, like business travelers, allowing them to bank when, where and how they like,” said Eve McDowell, chief sales & customer fulfillment executive for NetBank. “We encourage SkyMiles members to bank in the industry’s most convenient and versatile setting while earning a considerable amount of miles at the same time.”

SkyMiles can be earned with NetBank in the following ways:

— 2,500 miles for opening and funding a NetValue or SuperValue checking account;

— 2,500 miles for opening and funding a NetVantage Money Market(TM) Account;

— 1,500 miles for initiating direct deposit with NetBank; and

— 500 miles for enrolling in and using NetBank’s online bill payment service.

Members can learn more about earning miles through NetBank services by visiting [www.netbank.com/delta][1].

“We are excited to provide our SkyMiles members with yet another way to earn miles through services that fulfill everyday needs,” said Christine Pierce, Delta’s director of Partnership Marketing. “The flexibility of NetBank’s services and the generous mileage offer create a valuable opportunity for our members who are constantly on the go.”

All standard SkyMiles program rules and conditions apply. To join Delta’s SkyMiles program, visit [www.delta.com/skymiles][2].

About NetBank

NetBank(R) is the country’s first commercially successful Internet bank. NetBank currently has $2.4 billion in deposits and serves customers in all 50 states and more than 20 foreign countries. Its full line of financial services is designed around the needs and lifestyles of its customers. Through a branchless business model, NetBank operates at a fraction of the cost of a traditional bank. Since its start in 1996, NetBank has passed its cost savings to customers through more competitive deposit rates and free account services, such as online bill payment. Through its mortgage lending subsidiaries, Market Street Mortgage(R) and RBMG(R), NetBank ranks as a top 30 U.S. mortgage lender. NetBank, Equal Housing Lender and Member FDIC, is a primary operating subsidiary of NetBank, Inc. (Nasdaq: NTBK), a diversified financial services company. For more information on NetBank’s products and services, please visit [www.netbank.com][3].

About Delta SkyMiles

Delta SkyMiles members earn mileage by flying Delta, Delta Connection carriers, Delta Express, Delta Shuttle and Delta’s airline partners, including Delta’s SkyTeam partners. The Delta SkyMiles program offers many other mileage-building opportunities, including the Delta SkyMiles(R) Credit Card from American Express, AT&T telecommunication services, EarthLink(TM) Internet services, participating hotels, car rental companies, restaurants, home buying and selling, cruise line and flower purchases.

About Delta Air Lines

Delta Air Lines, the world’s second largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offers 5,386 flights each day to 435 destinations in 78 countries on Delta, Song, Delta Express, Delta Shuttle, Delta Connection and Delta’s worldwide partners. Delta is a founding member of SkyTeam, a global airline alliance that provides customers with extensive worldwide destinations, flights and services. For more information, please go to [www.delta.com][4].

[1]: http://www.netbank.com/delta
[2]: http://www.delta.com/skymiles
[3]: http://www.netbank.com
[4]: http://www.delta.com

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FOREX ACCOUNTS

The Reserve Bank of India has issued new rules permitting residents who maintain foreign currency accounts in India to obtain international credit cards issued by financial institutions outside the country. However, restrictions on the use of international credit cards by residents for the purchase of lottery tickets, banned magazines, participation in sweepstakes, and payment for call back services would continue to apply. In January, the RBI lifted its $10,000 annual limit on foreign credit card spending by consumers and its $25,000 for annual restriction on international business travel credit card spending as mandated by the Foreign Exchange Management Act. The RBA says credit card users will now be limited by their credit card credit lines and will no longer need special permission to exceed the annual RBA limits. Under the current RBA rules, the credit limit for a “Classic”/”Silver” credit card is between Rs 15,000-Rs 50,000 (apprx. $300 and $1000); “Gold” card credit limits are now between Rs 50,000-Rs 300,000 (apprx. $1000 and $6000); and, “Platinum” card credit limits begin at Rs 500,000 (apprx. $10,000). India has about six million credit cards and the average annual credit card volume per card of about Rs 17,000 ($350). There are less than 10,000 “Platinum” credit cards in the country.

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Smart Cards 2002

Brussels-based Eurosmart reported that banking/retail smart cards grew 16% last year worldwide, reaching 175 million units. The industry group predicts that smart cards in this category will grow 17.1% in 2003 to hit 205 million units. Overall, more than 700 million microprocesor-based smart cards were shipped last year, with telecom making up 430 million of the total shipments. Eurosmart also reported that shipments of smart cards containing a memory chip with read/write capability and in some cases hardwired security functions totalled more than 1 billion last year, with 95% used in telecom. Memory cards are not considered smart cards by many. Eurosmart is the main international smart card association, representing the “Voice of the Smart Card Industry” for multi-sector applications.

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RBA DEFENSE

The Federal Court hearing over credit card reforms entered its second week as attorneys representing The Reserve Bank of Australia insisted that a thorough review was conducted prior to the adoption of the new rules. RBA attorneys say that sufficient empirical evidence was gathered before they decided to cut interchange fees and permit retailers to surcharge customers for credit card transactions. Last week, VISA and MasterCard argued they are not payment systems under the definitions used in the “Payment Systems Act.” VISA and MasterCard also say the RBA rushed the reforms. The new RBA rule, cutting interchange from 95 bps to 55-60 bps per transaction, will cost bank credit card issuers about US$300 million per year. The Federal Court hearing is expected to last up to six weeks.

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Hudson’s Bay 1Q/03

Toronto-based Hudson’s Bay Company reported that its financial division posted a 22% gain in first quarter credit card outstandings to $478 million. HBC says the increase in credit card receivables reflects the higher credit card blend at the Bay and Zellers stores and additional third party volumes. As of April 30th, there were 1.4 million active Bay credit card accounts and 1.4 million active Zellers credit card accounts. The current and 30 days past due balance represented 94.5% of the receivable portfolio, compared to 94.9% at April 30, 2002. During the first quarter, the number of charge-off accounts decreased by 8%. Of the dollars charged-off, the value of bankrupt accounts increased from last year by $1.7 million. Net bad debt expense in 1Q/03 of $22.2 million was $4.6 million higher than 1Q/02. For complete details on HBC’s first quarter results visit CardData ([www.carddata.com][1]).

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

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LOYALTY PATENTS

VISA, Australia’s Catuity, and France’s Welcome Real-time have hammered-out a patent cross license agreement to increase the availability of interoperable systems for smart-card based loyalty rewards at the POS. Catuity and Welcome Real-Time had been embroiled in a patent dispute in 2001 over smart card loyalty software. The companies settled their disputes in April 2002. Under the “VISA Loyalty Program Patent Agreement,” announced this morning, the three companies will cross license existing and future patents for VISA smart loyalty programs. This cross license will be worldwide and royalty-free until the last patent expires. The cross license will extend to all Visa affiliates, members and merchants. Participants will develop and promote interoperable loyalty solutions by integrating the VISA interoperability toolkits within their platforms.

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Translucent Cards

Capital One has launched a new series of translucent credit cards promoted as “See-Through Designs.” The issuer, known for unique card designs, unveiled the new suite of “Platinum MasterCards” with May’s direct mailings. The new cards are available in seven see-through colors including amber, blue, gray, green, orange, purple, and red, according to CardWatch ([www.cardwatch.com][1]). American Express was the first major U.S. issuer to adopt the translucent card design with the 1999 introduction of its “Blue” smart card. MBNA followed with the launch of its translucent “Quantum VISA/MasterCard.” In September 2000, Providian introduced a translucent card with the introduction of the first ‘smart VISA’ cards in the USA. Other issuers have since followed the trend. Oberthur, Perfect Plastic Printing, and most card manufacturers now offer some version of translucent or clear payments cards. (CF Library 6/16/00; 7/7/00; 10/26/00; 4/30/01)

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

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