Welcome & Catuity

Catuity this morning announced a settlement agreement with Welcome Real-Time which ends a patent dispute over smart card loyalty software. Last year, Welcome claimed in an Australian Court case that Catuity and its Australian subsidiaries had infringed its patent by operating the CiT Transcard system in Western Sydney from July 1997, and by offering to supply upgrades of the system since that time. Under terms of the settlement announced this morning, both parties have agreed to stop all legal action over current patent issues and seek compulsory mediation and binding arbitration for all future patent disputes. Catuity offers an integrated suite of applications that provide loyalty, ticketing, access control and membership. Welcome Real-Time, based in France, offers a smart card transaction platform that provides instantly awarded loyalty points, coupons, punch cards, vouchers, tickets, and cash back. (CF Library 5/18/01; 7/27/01)



The Moscow city government’s Social Card issued by Bank Moskvy will become a VISA Electron smart card this month. The Social Card program distributes state money to pensioners. Bank Moskvy has already signed up 26,000 new accounts for the new program. About 2.5 million pensioners are eligible to participate. The cards will be used to pay for utilities, metro, railway trips and food. The cards will also serve as an ID and an insurance policy according to The Russia Journal. Since last September, officials have been running the smart-card experiment on pensioners of three areas of Moscow: Chertanovo Tsentralynoe, Chertanovo Yuzh-noye and Biryuluovo Zapad-noye. The smart card EBT project might save as much as $7.5-8 million of the state-budget money, the Izvestia Daily reported on March 21.


CompuCredit 4Q/01

Atlanta-based CompuCredit, the issuer of the sub-prime Aspire VISA card series, yesterday released a final fourth quarter report showing a net loss of $33.2 million. Included in the final results is a loss of approximately $39 million related to CompuCredit’s sale during the fourth quarter of two interests in its securitizations and a corresponding revaluation of its retained interests in its securitizations as a result of the discount rate implicit in the sales. In January, CompuCredit released a preliminary earnings report that showed 4Q/01 net income of $5.6 million but with a note that it may have to decrease net income for the fourth quarter by $5.8 million, due to a loss on the sale of two securitizations. The company said it was in discussions with auditors over the treatment of the loss on sale. However, two weeks ago, CompuCredit reported that its independent auditors, Ernst & Young, quit after completing an audit for 2001. At year-end 2001, CompuCredit had $1.8 billion in average card loans and net charge-offs of 15.3%. For 4Q/00, net charge-offs were 13.3% and net income was $11.3 million. CompuCredit issues cards through Columbus Bank and Trust Company and has 2.1 million accounts. For complete details on CompuCredit’s final fourth quarter report visit CardData ([www.carddata.com][1]) (CF Library 1/30/02; 3/20/02)

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



U.S. Bank, a subsidiary of U.S. Bancorp, and Korean Air have teamed up to offer the SKYPASS Visa card, which rewards customers with SKYPASS miles toward free travel for purchases made with the card. The companies introduced the new program Tuesday at an inaugural event in Los Angeles.

Members of SKYPASS, Korean Air’s frequent flyer program, earn one mile for every dollar spent and they will receive SKYPASS bonus miles with their first purchase. The card functions like any other Visa card with worldwide acceptance at more than 23 million locations, and purchases are covered by Visa’s “Zero Liability” policy. The card may also be used for ATM transactions, however miles do not accrue on ATM balances.

“We are thrilled to partner with Korean Air, a vibrant company that offers great value to its customers who in turn convey tremendous loyalty to the company and its partners,” said Darla O’Donnell, senior vice president of Card Services at U.S. Bank. “The SKYPASS Visa card is an important addition to our cobrand portfolio, and we look forward to building a successful program.”

SKYPASS miles can be redeemed for travel on Korean Air, KAL airline partner Malaysia Airlines and SkyTeam partners including AeroMexico, AirFrance, Delta, Czech Airlines, and Alitalia. The miles are earned by flying SkyTeam partners, as well as by using other SKYPASS partners including hotels, car rental, telecommunications, and duty free shops.

“As the first Asian carrier to introduce a Visa credit card into the United States market, we are very proud and honored to partner with a reputable bank such as U.S. Bank, one of the largest credit card providers in the United states,” said K.S. Kim, general manager of passenger marketing at Korean Air. “This program is a very convenient way for our SKYPASS members to earn miles from everyday purchases.”

U.S. Bank will issue four versions of the SKYPASS Visa card: Secured, Classic, Platinum, and Business Platinum. The SKYPASS Visa Secured card helps customers build credit in the United States. A credit limit is established by the amount designated for a security savings account from $300 to $5,000. The SKYPASS Classic card offers a credit limit up to $5,000 and $250,000 in travel accident insurance. The SKYPASS Platinum card offers a credit limit up to $25,000 and $500,000 in travel accident insurance. The SKYPASS Visa Business Platinum card offers a credit limit designed for business needs up to $25,000, with $500,000 in Travel Accident Insurance, Visa Partner Advantage discounts, medical and legal assistance, and emergency translation services. Bilingual customer service is also available through U.S. Bank.

Customers will see and hear more about the SKYPASS Visa Card in newspaper advertisements, direct mail and e-mail announcements and on the Web site. There will also be brochures at major airports in cities including Los Angeles, New York, Washington D.C., San Francisco, Dallas and Atlanta as well as U.S. Bank branch locations including those in Los Angeles, San Francisco, and Chicago.

Anyone interested in applying for a SKYPASS Visa should call 1-866-SKYPASS or visit www.skypassvisa.com. Bi-lingual Customer Service Representatives can be reached at 1-866-286-VISA (for consumer cards) or 1-866-249-3790 (for business cards).

Korean Air, with a fleet of 119 aircraft, is one of the world’s top 20 airlines and operates almost 400 passenger flights per day to 82 cities in 30 countries. Korean Air is a founding member of SkyTeam, the global airlines alliance — partnering AeroMexico, Air France, CSA Czech Airlines, Alitalia and Delta Air Lines — that provides customers with extensive worldwide destinations, flights and services. More on Korean Air’s programs, routes, frequency and partners is available at www.koreanair.com.

Minneapolis-based U.S. Bancorp, with assets in excess of $171 billion, is the 8th largest financial services holding company in the United States. The company operates 2,147 banking offices and 4,904 ATMs, and provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses and institutions. U.S. Bancorp is home of the Five Star Service Guarantee which assures customers of certain key banking benefits and services or customers will be paid for their inconvenience. U.S. Bancorp is the parent company of Firstar Bank and U.S. Bank. Visit U.S. Bancorp on the web at www.usbank.com and Firstar Bank at www.firstar.com.



Catuity, Inc.announced a settlement agreement with Welcome Real-Time, of France, ending a patent dispute between the two loyalty software providers.

The agreement results in the following:

– The immediate settlement and cessation of all legal action in Australia with no material future financial consequences for either party;

– A prohibition on both Welcome Real-Time and Catuity from initiating any patent legal action between them anywhere in the world; and

– A commitment by both Welcome Real-Time and Catuity to compulsory mediation and compulsory binding arbitration for all future patent disputes wherever and whenever they occur.

Appropriate documents will be filed with the Federal Court of Australia as soon as possible.

Catuity also announced that it has filed its Form 10K for the year ending December 31, 2001. As expected, the company reported total operating revenue of $2.02 million, an increase of 169 percent over the year 2000. Catuity also reported a net loss of $3.88 million, compared to a net loss of $3.81 million in 2000. Increasing revenues resulted in a substantially reduced loss in the second half of 2001 ($1.24 million) compared to the first half of 2001 ($2.63 million).

Catuity, Inc. (www.catuity.com) is a leading provider of loyalty software systems. The Catuity software includes an integrated suite of applications that provide loyalty, ticketing, access control and membership. The Catuity Loyalty System is ubiquitous in that it can operate on any device, any card program, and with any payment process, including stored value, smart cards and wireless applications. Catuity unites the brick-and-mortar retailer with the Internet to enable cross-sell capabilities with consistent brand imaging across all channels.



Deutsche Telecom and Cubic’s T-Systems have teamed up to test an electronic ticketing system for Germany’s Rhein Main Verkehrsverbund and Hanau Strassenbahn. The pilot is the prototype for a ticketing system for the entire RMV region according to Smart Card News Ltd. The new system includes a contact-contactless smart card and check-in/check-out bus validators. The system also uses Cubic’s Tri-Reader which supports a variety of card technologies and applications.



The Japan Consumer Credit Industry Association reported this week that credit card fraud losses declined 10.7% last year. Total credit card fraud losses were 27.57 billion yen for 2001. However, losses due to forgery rose 4.4% last year to 14.6 billion yen. The Japan Consumer Credit Industry Association studied 49 domestic card-issuing firms.



A court in Beijing has ruled that China Telecom does not have to pay a customer compensation for phasing out its magnetic phone cards. China Telecom is replacing all its magnetic cards with smart cards by the end of this year.The Beijing No. 1 Intermediate People’s Court has denied a magnetic-card user’s appeal for 4.66 million yuan in compensation. The plaintiff, Qin Ting, had gathered together the magnetic cards of 85 users and filed the suit.



TrustAsia, a leading provider of digital trust services and an Asian affiliate of VeriSign, Inc., announced the launch of TrustAsia Payment Services (TAPS), a robust suite of payment products and services that enable secure online transactions through an automated process and open platform.

TAPS can handle secure multi-lingual and multi-currency transaction requests that are connected in real-time to financial institutions.

TAPS’ newest product offering features TAPS*POS, a high-speed business-to-consumer payment gateway that allows online merchants to process credit card payments quickly and reliably throughout Asia-Pacific. TAPS*POS integrates a unique system architecture that connects banks, credit card companies and online merchants in order to authorize secure online transactions in real-time.

The technology, capable of facilitating online and off-line payment requests, features secure multi-currency and multi-lingual functionality enabling merchants to handle as many currencies as they wish to transact.

“As e-commerce in Asia is expected to reach US $1.6 trillion by 2004, primarily by individuals making personal transactions, penetrating the B2C payment sector is a priority,” said Benjamin Lee, Vice President of TrustAsia Payment Services. “Providing secure payment gateways for such an exploding market will help continue to broaden our customer base and create additional growth opportunities for TrustAsia.”

TAPS*POS is connected to several major financial institutions and credit card companies like United Overseas Bank, American Express and Diners to provide secure credit card processing services for merchants.

TAPS*POS also supports Visa’s latest Authenticated Payment Program known as Verified by Visa. This technology enables both consumers and merchants to transact online with peace of mind.

TAPSconnect, TrustAsia’s business-to-business payment platform that was launched in December, has experienced a steady increase in monthly transactions conducted through its payment gateway. TrustAsia plans to increase the number of online financial services offered through TAPSconnect to include letter of credit (L/C), demand draft (D/D) and Telegraphic- Transfers (T/T).

“The widespread adoption of the Internet throughout Asia-Pacific has certainly provided new outlets for fulfilling daily responsibilities such as paying bills and purchasing goods and services,” said Seth Jutan, founder and CEO of TrustAsia. “TrustAsia is committed making payment procurement convenient and user-friendly for all users.”

TrustAsia Payment Services (TAPS)

TAPS is the cornerstone of TrustAsia’s vision to be the leading payment services provider throughout Asia-Pacific.

Built on industry leading technology from VeriSign, a core group of leading financial networks, and the strategic acquisitions of VCHEQ, CC Merchant Services and Centripetal, TAPS will lead the industry in offering a flexible, integrated payment services platform that securely processes multi-lingual, multi-currency and multi-payment types from disparate platforms.

TAPS works closely with banks and financial services providers in Asia-Pacific.

About TrustAsia

TrustAsia is a leading digital trust services provider that helps businesses and consumers establish an Internet presence while safeguarding its online transactions and communications.

With an unbeatable combination of knowledge and experience, TrustAsia has built its brand by providing a solid foundation that support the explosion of e-commerce and m-commerce in China and Southeast Asia’s growing markets. TrustAsia’s product offering includes public key infrastructure (PKI) capabilities, online payment solutions, and wireless domain name services.

TrustAsia is a VeriSign affiliate in China, Singapore, Thailand, Indonesia and Vietnam, and also offers VeriSign products and services in Malaysia, the Philippines, Myanmar, Brunei, Cambodia and Laos. TrustAsia also provides its innovative TrustAsia Payment Services (TAPS) offering in the additional territories of Hong Kong and Taiwan. For more information, visit http://www.trustasia.com.


Tax Miles

As the annual tax reporting season draws to a close, a battle has erupted among issuers and networks to capture tax payments on credit cards. This morning, First USA and United Airlines announced they will award a 5,000 air mile bonus to cardholders using the United Mileage Plus VISA to pay taxes through May 30. The bonus is in addition to the one-mile-per-dollar earned under the program. Mileage Plus has more than 40 million enrolled members and approximately 4 million United Mileage Plus VISA cardholders. One week ago, VISA USA reached an agreement with Official Payments Corporation to permit VISA cards to be used for payment of federal and state income taxes. VISA had been a holdout in the tax payments via credit card market due to its regulations which prohibit merchants from charging a fee to cardholders for acceptance. OPC has been offering its tax payment service on MasterCard, Discover, and American Express cards since 1998. OPC generally charges consumers a fee of approximately 2.5% for each transaction, since most government entities cannot legally pay a merchant or discount fee for such transactions. Following VISA’s announcement to join the program, American Express and Citibank issued press releases to encourage consumers to use their card products for tax payments. Citibank encouraged taxpayers to use its American Airlines AAdvantage Program to earn one AAdvantage mile for every dollar of income tax paid. American Express said it will award double SkyMiles when cardholders pay federal taxes, or one SkyMile when paying state taxes, on their Delta SkyMiles Credit Card, between now and April 16, 2002. Other American Express cardholders can earn points through the Membership Rewards program. Currently, OPC has agreements to collect and process credit card payments with the IRS, 21 state governments, and more than 1,200 counties and municipalities. In 2001, OPC collected and processed more than one million transactions totaling $1.2 billion in federal, state, and local government payments. According to the IRS, as of mid-March, the agency had received more than 20,000 credit card payments, up 13% from nearly 18,000 for the same period last year. OPC was formerly known as U.S. Audiotex Corp. and went public in 1999. (CF Library 10/29/99; 11/23/99)



The People’s Bank of China said this week that its unified payment system for bank cards has made considerable progress and is ready to compete with foreign banks. China UnionPay is a network which links banks within the country to each other and handled 8.43 trillion yuan in transactions during 2001, an 86% increase over the previous year. The PBOC said glitches in the system will take about one year to iron out. The interbank linking system will serve 383 million bank cards currently in circulation in China.