JCB & ICE

JCB has certified the EMV kernel for Hypercom’s “ICE” card payment terminals for use worldwide with JCB’s “J/Smart” credit cards. This is the first time JCB has certified any payment terminal manufacturer for “J/Smart” outside of Japan, and the first time they have given anyone a global certification. The EMV kernel is certified for use with all of Hypercom’s “ICE” terminals including the “ICE 5500, 4000, 6500 and 6000” models. The “J/Smart” certified EMV kernel is immediately available, and the first “J/Smart” installations outside Japan were made earlier this year in the U.K. using the Hypercom “ICE 5500” terminals. Hypercom also announced a worldwide joint marketing arrangement with JCB to promote the acceptance of “J/Smart” cards and the sale of “J/Smart”-enabled Hypercom payment terminals worldwide.

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Payment Manager with EDD

Wells Fargo has launched “Payment Manager with EDD” for its corporate customers enabling them to electronically initiate payments and remittance via the ACH, wires, and checks with the remittance information provided via email attachment, data transmission or fax. Wells Fargo currently conducts business with 30 percent of the Fortune 500 companies, and is the second largest originator of automated clearing house (ACH) transactions in the United States.

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JCB & ICE

JCB has certified the EMV kernel for Hypercom’s “ICE” card payment terminals for use worldwide with JCB’s “J/Smart” credit cards. This is the first time JCB has certified any payment terminal manufacturer for “J/Smart” outside of Japan, and the first time they have given anyone a global certification. The EMV kernel is certified for use with all of Hypercom’s “ICE” terminals including the “ICE 5500, 4000, 6500 and 6000” models. The “J/Smart” certified EMV kernel is immediately available, and the first “J/Smart” installations outside Japan were made earlier this year in the U.K. using the Hypercom “ICE 5500” terminals. Hypercom also announced a worldwide joint marketing arrangement with JCB to promote the acceptance of “J/Smart” cards and the sale of “J/Smart”-enabled Hypercom payment terminals worldwide.

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GEMPLUS & IN-Q-TEL

Facing concern among board members, the new Gemplus CEO announced he has severed ties with a venture capital technology firm created by the U.S. Central Intelligence Agency. Alex Mandl said he has resigned from the board of CIA-funded In-Q-Tel. Gemplus International named Mandl as its new CEO, effective September 9th. Mandl was the former Chairman/CEO of Teligent between 1996 and 2001. He was also the former President/COO of AT&T. There was some controversy between Gemplus board members over the selection of Mandl, specifically his connections with the CIA. Some board members were concerned that Mandl’s CIA ties could affect its ability to sell its product and services to some countries. In December, Gemplus CEO Antonio Perez decided to resign his posts as Chief Executive Officer and director to pursue other interests. Marc Lassus, founder and one of the largest shareholders of Gemplus, also agreed in December to cease his office as chairman. Earlier this month, Gemplus announced that its interim CEO, Ron Mackintosh, has decided to step down as of August 15th.

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VIRGIN & AMEX

Virgin Atlantic Airways has joined the American Express “International Airline Program,” which offers “Centurion” and “Platinum” cardholders complimentary companion tickets on 20 international airlines with the purchase of first or business class tickets. Other carriers in the program include: Delta, Aero Mexico, Aer Lingus, Air New Zealand, Air France, Alitalia, Asiana Airlines, Austrian Airlines, Cathay Pacific Airways, China Airlines, Continental Airlines, Japan Airlines, LanChile, Lan Peru, Lufthansa, Malaysia Airlines, SAS, South African Airways and Swiss International. AmEx launched the program in 1993 for “Platinum” cardholders and later extended it to the “Centurion” card when it was launched in 1999.

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GEMPLUS CEO

Gemplus International has hired Alex Mandl as Chief Executive Officer. Mandl was the former Chairman/CEO of Teligent between 1996 and 2001, following a four stint at AT&T, where worked his way up to President/COO. Gemplus said Mandl will take over as its top executive on September 9th. Reportedly there was some controversy between Gemplus board members over the selection of Mandl. The debate centered on Mandl’s previous ties with the Central Intelligence Agency. According to the Dow Jones news service, Mandl belonged to the board of trustees of In-Q-Tel, a nonprofit organization set up by the CIA in late 1999. In-Q-Tel’s purpose was to keep track of Internet technology on behalf of the CIA. Some board members were concerned that Mandl’s CIA ties could affect its ability to sell its product and services to some countries. Mandl currently serves as a director on a number of corporate and not-for-profit boards, including those of Dell Computers and Pfizer. In December, CEO Antonio Perez decided to resign his posts as Chief Executive Officer and director to pursue other interests. Marc Lassus, founder and one of the largest shareholders of Gemplus, also agreed in December to cease his office as chairman. Earlier this month, Gemplus announced that its interim CEO, Ron Mackintosh, has decided to step down as of August 15th.

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AAA Processing

CyberSource has inked a deal with AAA to provide electronic payment processing services. The CyberSource payment solution, which enables real-time payments via credit and debit card and/or electronic check, can be used by all 80 AAA clubs to process payments accepted over the Internet or via call center for registration, membership renewal and service payments, among others. AAA has 1,100 local offices and more than 45 million members. Earlier this month, CyberSource released “Payment Manager v4.4,” which now supports corporate purchasing cards with level III line-item detail for customers processing through FDC South. (CF Library 8/20/02).

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2Q/02 Bank Profits

The FDIC reported yesterday that continued strength in consumer loan demand, plus a favorable interest-rate environment outweighed the negative effects of weakness in commercial loans for banks in the second quarter of 2002. Higher securitization income at credit-card lenders, continued growth in service charges on deposit accounts, and increased income from trading activities were the main areas of strength. The FDIC said credit card charge-offs were $894 million (31.6%) above the level of a year ago, and charge-offs on other consumer loans were $256 million (24.7%) higher. Higher net interest income (up $5.6 billion, or 10.5%) was partly the result of wider net interest margins in a more favorable interest-rate environment. The overall low level of interest rates contributed to loan growth, while the steep yield curve helped net interest margins. The industry’s net interest margin of 4.11% was 8 basis points lower than in the first quarter, but was 21 basis points above the level of 2001’s second quarter. After four successive quarters of no improvement, average margins at commercial banks with less than $100 million in assets rose for the first time in two years, increasing by 14 basis points, to 4.40%, from 4.26% in both the first quarter and in the second quarter of 2001.

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Mid-Year Volume

While bank credit card outstandings, among the nation’s top issuers, are growing at an 8% annual, charge volume is only growing about half as much. Charge volume handled by the twelve largest issuers, for the first two quarters of 2002, hit $549.2 billion compared to $529.0 billion for same period one year ago, for an annual growth rate of 3.8%. American Express and Discover reported slight declines in charge volume for the first half of this year. Among VISA and MasterCard issuers, sub-prime specialists Providian and Metris posted lower charge activity this year. The biggest gainer is Capital One, posting a 42% rise in volume for 2002 versus 2001. For complete details on 2Q/02 performance on the nation’s top 250 issuers visit CardData ([www.carddata.com][1]).

Top Bank Credit Card Issuers in the U.S.
(based on outstandings but ranked by YTD volume)
ISSUER 2Q/02 2Q/01 CHNG
1. AmEx $113.0b $114.4b – 1.2%
2. Citibank* $108.5b $ 106.8 + 1.6%
3. MBNA $ 74.4b $ 67.1b +10.9%
4. Bank One $ 68.4b $66.9b +2.2%
5. Discover $ 47.6b $47.9b – 0.6%
6. Chase $ 39.7b $33.8b +17.5%
7. Cap One* $ 32.5b $22.8b +42.5%
8. BofA $ 23.4b $23.4b NC
9. Household $ 17.1b $16.7b +2.4%
10. Fleet $ 11.4b $ 9.8b +16.3%
11. Providian $ 8.9b $14.9b -40.3%
12. Metris $ 4.3b $ 4.5b -4.4%
TOTAL: $549.2b $529.0b +3.8%

*Citibank includes Canada and Mexico as the company no longer discloses
its domestic portfolio; Cap One may include some international accounts
as the company no longer discloses its domestic portfolio
Source: CardData (www.carddata.com)

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

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GCOM & VisaNet Project

Savoy, IL-based GCOM said it has recently completed a three-year project for VISA International to develop platform-independent technology to legacy access points for VisaNet in Asia Pacific, Canada, the European Union, Central Europe, the Middle East, Africa, Latin America and the Caribbean. Bringing platform- independent technology to legacy access points outside of the United States, GCOM technology played a central role in improving hardware flexibility, technical support, and problem resolution for member connectivity to VisaNet.

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