Community Biz Card

American Express yesterday unveiled the ‘Community Business Credit Card’ for very small businesses. Designed for business owners interested in advancing the growth of small businesses, the new card contributes one percent of spending to select microenterprise development organizations that provide loans and technical assistance to microbusinesses. “Microenterprises” are businesses with fewer than five employees and capital needs of less than $35,000 a year. The new AmEx credit card has no annual fee and a 3.9% six-month intro rate followed by a prime +5.99% APR. (However, according to CardWatch [], the AmEx Web site lists a prime +3.99% go-to APR for the “Community Business Credit Card”.) AmEx has signed agreements with 11 organizations to market the new card to their members and to raise the awareness of microenterprise development. AmEx has also engaged three non-profit, national organizations as partners in the ‘Community Business’ program including: ACCION, Association for Enterprise Opportunity, and Count-Me-In for Women’s Economic Independence.


TU Ruling Upheld

The US Court of Appeals for the District of Columbia Circuit has upheld a FTC decision ordering Trans Union to stop selling consumer reports in the form of target marketing lists to marketers who lack an authorized purpose for receiving them under the FCRA. Last February, the FTC unanimously upheld an administrative judge’s opinion that Trans Union’s target marketing lists are “consumer reports” as defined by the FCRA. The case was argued this February and the court’s opinion was issued last week. As part of its argument in the case, Trans Union contended that neither the FCRA nor the FTC Order demonstrated a substantial government interest in protecting consumers’ privacy and, therefore, violated the Company’s right to free speech under the First Amendment. The case began in 1992, when the FTC filed an administrative complaint alleging that TU violated Sections 604 and 607(a) of the FCRA. Trans Union must halt the illegal sales within ten days of the Court’s ruling, or by April 23, 2001. (CF Library 3/2/00) ![][1]

[1]: /graphic/federaltrade/ftclogo.gif


Hypercom Canada

Hypercom Corporation announced the opening of its first sales, service and support office in Canada. Based in Toronto, Hypercom’s new office will build awareness and expedite the delivery of high-performance, high-speed card payment terminals that deliver value-added features to the merchant countertop.

“Canada is an exciting, robust and vibrant market. We are eager to demonstrate how our products can help the country’s important financial institutions and merchants save time and money, while simultaneously enhancing the consumers’ shopping experience,” said Jairo E. Gonzalez, president, Hypercom Transaction Systems Group. “We are delighted to be here, we are eager to introduce our products, and we are proud to announce this first Hypercom office in Canada.”

The introduction of Hypercom’s popular consumer interactive, touch screen-based, EMV-compliant ICE card payment terminals in Canada is already underway. . In the last three months alone, orders from Canada for the company’s ICE terminals have topped 10,000 as compared to 1,200 the prior year. The company has joined with Soft Tracks Enterprises to deploy Hypercom’s wireless ICE 4000 terminal to merchants and service providers. Hypercom has announced the availability of a certified payment application developed by TCS (Canada) Limited. Hypercom’s robust epic (ePOS-infocommerce) ICE touch screen card payment and web-enabled terminals are powerful, multi-function touch screen-based payment devices incorporating high-speed thermal printers, paper cutters, and Hypercom’s 9600 bps (bits per second) FastPOS modem technology lets merchants complete transactions in under six seconds. Together with Hypercom’s Term-Master Suite software application and networking products, the high-speed, easy-to-use ICE terminals allow processors to provide merchants with an array of value-added, revenue-generating services. These include electronic receipt capture (ERC), which virtually eliminates chargebacks; sales receipts customized with merchant logos which increase subsequent sales; and, on-screen advertising at the point-of-sale.

Coupled with these customer-directed features, Hypercom’s solutions enable processors to provide terminal-to-terminal e-mail, which improves communication, electronic bank statements, parcel tracking, and more. Completely customized high-speed networks are made possible with Hypercom’s award-winning and widely-used IEN (Integrated Enterprise Network) line of IADs (Integrated Access Devices).

Additionally, Hypercom has introduced a number of groundbreaking products and services in recent months. The company’s IEN View Security Manager, a new module for Hypercom’s full-coverage custom network management solution, allows network managers to set access permissions, and control from remote locations any changes made by network management clients. Another new Hypercom solution, called, allows network designers to create customized network blueprints tailored to their unique system requirements within minutes. Hypercom has also introduced Visual HDT (VHDT), a C-based package that gives software developers the ability to quickly and cost-effectively develop value-added applications for Hypercom’s ICE card payment terminals using Microsoft’s popular Visual Studio platform.

“We have the products, the software, and the networking to help processors and merchants compete in today’s increasingly competitive times, and we will be demonstrating all of these value-added, time-saving products and applications in the weeks and months ahead,” Mr. Gonzalez said. Hypercom Canada is located at 161 Bay Street, Toronto. Telephone: 416.572.2003. Facsimile: 416.572.2212.

Hypercom Corporation (NYSE: HYC) is a leading global provider of electronic payment solutions that add value at the point-of-sale for consumers, merchants and acquirers. Hypercom’s products include secure card payment terminals and web appliances, networking equipment and software applications for e-commerce, m-commerce, smart cards and traditional payment applications. Headquartered in Phoenix, Arizona, Hypercom maintains an installed base of more than 4 million card payment terminals which operate in over 100 countries and conduct more than 2.85 billion transactions annually.


ECHO Delisting

Electronic Clearing House Inc. Tuesday announced, as required by applicable Nasdaq regulation, that it received a Nasdaq Staff Determination on April 10, 2001, indicating that the company fails to comply with the minimum bid price requirement for continued listing on the Nasdaq SmallCap Market, as set forth in Market Place Rule 4310 (c)(4), and that its securities are, therefore, subject to delisting.

The company has requested a hearing before a Nasdaq Listing Qualifications Panel to review the Nasdaq Staff Determination which stays any delisting action. The hearing is expected to occur within the next 45 days.

The company stock’s closing bid price maintained a price of $1.00 or more for 10 consecutive trading days between the period March 23, 2001, to April 5, 2001, which the company believes satisfied Nasdaq Market Place Rule 4310 (c)(4) for continued listing. The company’s stock bid price closed slightly below the $1.00 level for three days following the April 5 date and the staff of Nasdaq subsequently advised the company of its intent to initiate a delisting action. The company disagrees with the position taken by the Nasdaq staff and has appealed the staff determination to the Hearing Panel but there can be no assurance the panel will grant the company’s request for continued listing. “We feel the company complied with the 10-day minimum bid price requirement and do not feel the staff’s subsequent notice is appropriate,” stated Joel M. Barry, chairman and chief executive officer of ECHO, “but, ignoring this point, we feel confident that ECHO will resolve the minimum bid price issue as well and will remain listed on the Nasdaq SmallCap Market.” In case there are questions, shareholders are encouraged to call the company at 800/262-3246, ext. 3033.

Electronic Clearing House, with headquarters in Agoura Hills, provides debit and credit card processing, check guarantee, check verification, check conversion, check re-presentment, check collection and inventory tracking to more than 58,000 retail merchants and U-Haul dealers across the nation.


1Q/01 Results

As more results trickle into CardData’s first quarter portfolio survey, the seasonal contraction appears to be less severe for issuers with $100+ million in receivables. BB&T posted a slight gain while UT-based Zions took a solid hit in 1Q/01 outstandings. The historical first quarter contraction ranges between 1% and 3%.

BB&T $669.3m $666.0m +0.5%
First Premier $373.3m $380.0m -1.8%
FirstMerit $117.4m $119.9m -2.1%
Amer Frst CU $108.1m $111.2m -2.8%
Zions $104.2m $113.0m -7.8%
Total $1372.3m $1390.1m -1.3%
m-millions Source: CardData (


Equifax 1Q/01

Equifax reported this morning that its Payment Services division increased to $194.6 million, a 9.7% increase, and increased operating income 10.6% to $28.7 million during the first quarter. Card Solutions generated revenue of $130.9 million in the first quarter, a 9.8% increase, driven by merchant and card processing in the USA, which grew 12.2%, and growth in the international card processing operations in Brazil and United Kingdom. Check Solutions reported first quarter revenue of $63.7 million, a 9.3% increase over 2000, as this business continues to grow both domestically and internationally. The U.S. check operation experienced 12.3% revenue growth in the quarter. In the U.K., revenue grew 9.7% in local currency; however, unfavorable exchange rates resulted in a 0.5% decline in U.S. dollars. For more details on Equifax’s 1Q/01 results visit CardData ([][1]).




OTI announced that it will provide the first contactless smart card supporting public-key infrastructure encryption, used for digital certificates in such secure environments as Internet transactions and in government agencies, under a reseller agreement with Algorithmic Research, a subsidiary of Cylink Corporation. OTI, a global provider of contactless smart card technology and product solutions, thus becomes the first company to offer a complete security solution utilizing contactless technology in both the physical and virtual worlds.

“By offering the first contactless PKI solution, OTI has strengthened the link between the virtual and physical world, offering all levels of security to meet customer requirements,” said Oded Bashan, President and CEO of OTI. “Providing Algorithmic Research’s PKI technology on OTI’s field-tested contactless smart cards further enhances our strategy to provide complete, reliable, secure solutions.”

Most digital certificates are stored on a computer hard drive, vulnerable to attack by unauthorized users. Incorporating Algorithmic Research’s PKI technology onto OTI’s EYECON product platform of contactless smart cards provides a secure, portable solution, as the user’s private key will reside on the smart card. Users can then encrypt and sign data from any location — crucial in shared-computer environments.

Encryption technology provided by Algorithmic Research adheres to PKCS#11 and CAPI standards, enabling users to secure standard Microsoft applications such as Outlook and Explorer, as well as work with standard PKCS-11 certificate vendors including VeriSign and Entrust. OTI’s patented contactless system uses 3DES and RSA encryption to communicate between card and reader, thus maintaining security levels throughout the encryption and transmission process.

“We are excited about working with OTI. Contactless smart card technology opens up a whole new set of applications for AR’s PKI technology. PKI is the one technology that offers a truly distributed security solution for the physical, as well as the virtual worlds,” said Nir Naaman, CISSP, V.P. Product Strategy of Algorithm Research.

PKI combines software and encryption technology to protect the security of communication and transactions across public networks, private intranet and extranet sites, and the Internet. Digital certificates issued to individual users in a PKI system are used to encrypt information to protect it from interception during transmission and to verify the sender’s identity to the recipient.

Since the Electronic Signatures in Global & National Commerce Act went into effect in the United States in October 2000, digital signatures are now accepted as legally binding and have been implemented by the US Government.

About Algorithm Research

Algorithmic Research Ltd., a wholly-owned subsidiary of Cylink Corporation (Nasdaq: CYLK), is a leading global supplier of cryptographic data security solutions for financial, commercial, industrial and government applications. AR specializes in implementing advanced PKI security solutions in large distributed computing environments and open networks like the Internet, allowing transparent integration of smart cards, readers and cryptographic processors that ensure high-level security for the most demanding and highly sensitive mission critical applications. AR products feature a Java applet client, security enhancements and support for SSL and WAP, implementation of highly secure digital signatures, user ID/password, RADIUS authentication, and more. For further information about the company, products and latest announcements, please visit the AR website at

About OTI

Established in 1990, OTI (On Track Innovations) designs and develops contactless microprocessor-based smart card technology to address the needs of a wide variety of markets. Applications developed by OTI include product solutions for mass transit, parking, gas management systems, loyalty schemes, ID and secure campuses. OTI has regional offices in the US, Europe, Asia Pacific, and Africa to market and support its products. The company was awarded the prestigious ESCAT Award for smart card innovation in both 1998 and 2000. Visit OTI on the Internet at .


Tax Payments

The convenience fee paid by taxpayers charging income taxes to credit cards is not tax deductible. A newly released IRS memorandum states that such fees should be considered as a nondeductible personal expense. Last year Americans paid approximately $13 million in convenience fees to charge federal income taxes. The figure may be double this year. Two companies are now authorized by the IRS to accept credit card payments for income taxes, including Official Payments Corporation and PhoneCharge, Inc. The service charge averages between 2.00% to 2.50%. Discover is offering a special, low, processing fee of 1.85% +$1.00 under a special deal with Quicken. Taxes may be charged to MasterCards, American Express cards, and Discover cards. (CF Library 2/13/01; 3/20/01)


Citibank Credit-ED

Citibank, the largest issuer of credit cards to college students, joins the Jump$tart Coalition and its partners to honor Fincial Literacy for Youth Month, April 2001, with an initiative that will advance responsible money management to young adults.

Teaming with EdVenture Partners, Citibank is taking its Credit-ED program into college classrooms across the nation, where 125 marketing students from schools around the country will promote responsible credit card use to their fellow students on campus. This innovative industry-education Citibank Credit-ED course provides students with the rare opportunity to apply classroom teachings to real-world business practices. Students at each of the participating schools form a “marketing agency” to design and implement an on-campus marketing campaign aimed at educating college students about the importance of fiscal responsibility.

The schools participating in the Citibank Credit-ED pilot program are: Northeastern University; Boston University; Arizona State University, University of California, Berkely; and the State University of New York, Binghamton.

“The earlier young people learn the value of money and how to manage it, the better,” says Gina Doynow, Citibank’s Vice President of College Marketing. “We are pround to be part of an effort to draw national attention to the need for young adults — in particular college students — to acquire such personal finance basics as money management and proper use of credit. These are essential life skills that young people must learn before entering the workplace.”

In addition to individual activities planned by its partners, the Jump$tart Coalition launched its Financial Literacy for Youth month with an awards luncheon recognizing students, educators and others who have made outstanding contributions to personal finance education.


First USA 1Q/01

First USA reported this morning first quarter net income of $148 million, up 10% from the fourth quarter. First quarter results represented a 1.46% pretax return on outstandings, up from 0.63% in the year-ago and 1.28% in the 2000 fourth quarter. Net interest income was $1.391 billion, down $134 million, or 9%, from the year-ago quarter, reflecting lower fee revenue, a decline in average outstandings and a narrower spread. While attrition improved, customer card usage and related balances have declined, reflecting current economic conditions. End-of-period managed loans declined to $64.0 billion, compared to $67.0 billion for 4Q/00 and $66.5 billion for 1Q/00. Charge volume was $32.5 billion compared to $37.1 billion for the prior quarter and $34.0 billion one year ago. Chargeoffs edged up while delinquency edged down during the first quarter. Chargeoffs were 5.81% compared to 5.41% for 4Q/00 and 5.78% for 1Q/00. Delinquency (30+ days) stood at 4.33% for 1Q/01 compared to 4.51% for the fourth quarter and 4.08% for the first quarter of 2000. First USA opened 775,000 new accounts during the quarter, and had 50.6 million cards issued at quarter end. For complete details on Bank One/First USA’s 1Q/01 results visit CardData ([][1]).



Household HP Card

Household International, Inc.’s private label credit card unit has signed an agreement with Hewlett-Packard Company’s award-winning direct-to-consumer e-commerce subsidiary, Household will manage’s private label credit card program — referred to as “hpshopping efinance” on the Web site — to’s U.S. customer base.

“We are proud to work with on this customized financing program,” said Sandy Derickson, managing director and CEO, Household Retail Services. “ joins a number of smart, innovative e-retailers that have selected Household to manage their private label credit cards.”

“ is committed to providing its customers with a world-class online shopping experience,” said Mike Bridge, chief marketing officer, “With Household’s private label solution, we can offer our customers online credit approval, flexible payment plans and access to attractive financing promotions.”

![][1] Household offers private label credit cards and sales finance products for several other online retailers in addition to, as well as other national and regional merchants in industries such as furniture, department stores, specialty discount and apparel. Household also provides financing for dealers in motorcycles, ATVs, personal watercrafts and snowmobiles.

Launched in May 1998, is a leading e-tailer of personal digital solutions, featuring a complete selection of trusted HP home and home office products. is a key element of HP’s goal to reach U.S. customers anytime, anywhere with personalized product features, end-to-end purchase convenience and excellent customer service. is headquartered in Santa Clara, Calif., and is a wholly owned subsidiary of HP.

Founded in 1878, Household’s businesses are leading providers of consumer finance, credit cards, non-prime auto finance and credit insurance products in the United States, United Kingdom and Canada. In the United States, Household’s largest business operates under the two oldest and most widely recognized names in consumer finance — HFC and Beneficial. Household is also one of the nation’s largest issuers of private-label and general purpose credit cards, including the GM Card and the AFL-CIO’s Union Privilege card. For more information, visit the company’s website at [][2].

[1]: /graphic/hewlettpackard/hewlett.gif


Citibank 1Q/01

Citigroup’s ‘Global Cards’ business grew to over 104 million card accounts in 46 countries, generating income of $598 million in the first quarter, up 25%. The ‘North American Cards’ business produced first quarter income of $469 million, up 23%, driven by an expansion in the net interest margin of 77 basis points from the prior quarter, and receivables growth of 17% over the prior year. However, Citi’s North American delinquency and chargeoffs figures were up sharply for 1Q/01. Delinquency (90+ days) jumped from 1.54% for 4Q/00 and 1.65% for 1Q/00 to 2.00% for 1Q/01. Chargeoffs for the first quarter hit 4.84% compared to 4.22% for the prior quarter and 4.65% on year ago. First quarter volume was $51.2 billion for North American cards with EOP receivables of $100.5 billion. On an annual basis, volume was up 6% and receivables up 17%. For complete details on Citi’s 1Q/01 results visit CardData ([][1]).