CardData 1Q/01

Early returns for the first quarter are showing a sharper decline in receivables than usual. Last year, first quarter outstandings were flat and in prior years, the 1Q contraction ranged from 1% to 3%. Among smaller issuers reporting thus far, the contraction has averaged about 6%, according to CardData ([][1]). A few of the top issuers have also indicated a sharp drop in 1Q/01 receivables on the heels of the sinking economy. 1Q/01 results for the top issuers will be released starting next week.

(Receivables in $Millions)
Baxter CU (IL) $85.2m $91.8m -7.2%
Trustmark Natl (MS) $61.5m $65.8m -6.5%
Pulaski Bank (AR) $46.0m $47.1m -2.3%
Pacific Service CU (CA) $39.1m $41.5m -5.8%
Provident Central CU (CA) $37.3m $40.1m -7.0%
Total $269.1m $286.3m -6.0%
Source: CardData (



Leadership Reclaimed

The acquisition of the Wachovia card portfolio should give Bank One/First USA a badly needed shot-in-the-arm. Since the third quarter of 1998, Bank One/First USA has lost more than ten million gross accounts (5.6 million active accounts) in the wake of aggressive pricing policies that produced a strong consumer backlash and a fair amount of litigation. Bank One/First USA’s image has also been badly tarnished over the past 18 months among shareholders, resulting in a massacre of management. Yesterday’s announced acquisition of Wachovia’s portfolio will add about 2.8 million active accounts to Bank One/First USA’s portfolio, effectively replacing half of the issuer’s recent losses in its account base. More importantly, Wachovia’s pristine portfolio will add more than $8 billion to Bank One/First USA’s outstandings and may immediately add as much as $100 million per year to Bank One’s aftertax earnings. Combined, Bank One/First USA’s new portfolio will exceed $75 billion, making it second only to Citibank. However MBNA, with about $71 billion in domestic outstandings, is not far behind. As the new top management for First USA continues to dig in, it appears the horse race among the top ten issuers is switching gears.


Cyberflex Palmera

Schlumberger Test & Transactions, a business segment of Schlumberger Limited announced the availability of its Cyberflex Palmera Java-based smart card in the US. Dramatically shortening time-to-market for secure financial applications and information technology, the new multi-application card builds on the proven security, functionality and performance of the Schlumberger Cyberflex smart card family.

Building on experience amassed by Schlumberger since introducing the world’s first Java-based smart card in 1997, the Cyberflex Palmera card is the cornerstone of a complete solution that includes a software development kit, applications, training, card and project management, consulting, technical support and integration services. It conforms to the full Java Card 2.1.1 and Visa Open Platform 2.0.1 standards, and is designed for today’s needs for high level of security.

“This new card redefines expectations for time-to-market for smart services,” said Francois Lasnier, field marketing director in North America for Schlumberger. “Going from service definition to prototype card could now take as little as a few months, compared to a year or more with non-Java solutions. This provides a real edge to our customers as they compete to be first to market with secure, standards-based services.”

Ready for innovative, next generation applications, the Cyberflex Palmera card is designed to complement any existing card infrastructure. The card enables card infrastructures to easily migrate to new smart applications, while providing continuity for current customers and preserving their investment in existing terminals, networks and other equipment.

Designed as a modular platform, parameters such as memory size, protocol-type and cryptographic services can be activated on demand, maximizing the card’s flexibility for the security and convenience for their customers. Post-issuance applications, the adding of applications while the smart cards are in the field – such as e-purse, loyalty and network access – can be added and deleted in the field to complement the bank’s marketing strategy to support the new generation of mobile commerce applications.

The Cyberflex Palmera card can be supplied with powerful, easy-to-use test and management tools for easy integration and rapid application development. Underpinning its advanced capabilities are exceptionally high levels of security, including powerful algorithms, unparalleled security know-how from Schlumberger experts, and the availability of the most advanced physical security for smart cards in the world.

About Schlumberger

Schlumberger Test & Transactions provides consulting, integration and products for smart card-based transactions, IP (Internet Protocol) network, security and wireless services, and for testing and measurement of semiconductor devices. With 2000 revenue of $1.4 billion and over 8000 employees in more than 40 countries, it is a business segment of Schlumberger Limited (NYSE: SLB), a global technology services company with 2000 revenue of $9.6 billion. More information is available at [][1].



GlobalPlatform Deal

Datacard Group announced it has been awarded a smart card management contract by GlobalPlatform, the cross-industry organization promoting a standardized framework for multi-application smart cards.

Under the agreement, Datacard will provide the software and services required to manage the smart cards GlobalPlatform plans to issue to its Member companies. Approximately 300 cards will be issued. Initially, Members will use the cards for logical access to secure areas of the GlobalPlatform web site. Eventually, the organization plans to offer a variety of applications to its Members that will be securely delivered using Open Platform technology. “This is a tremendous honor for Datacard and an important milestone for our Platform Management Architecture (pma),” said Martin Kearsley, senior vice president and managing director of Datacard’s software and solutions division. “We are delighted that the Business Committee of GlobalPlatform, one of the world’s leading smart card organizations, selected Datacard’s pma. This helps to confirm our view that pma is the most robust and versatile card life cycle management product available today.”

![][1] pma is a software solution that securely executes the remote loading, changing, blocking and deleting of applications across a distributed multi-application smart card base. The GlobalPlatform pma site will be housed in Datacard facilities where application additions, deletions, card replacements and similar cardholder services will be performed. “We’re looking forward to this program, because it provides an excellent opportunity to demonstrate the power and flexibility of the Datacard solution,” Kearsley said. ” Effective management of applications in a post-issuance environment is vital to any organization planning to issue multi-application smart cards. Our success with GlobalPlatform provides both organizations with an excellent opportunity to demonstrate effective solutions involving the management of a widely distributed and dynamic card population.”

Datacard Group is a world leader in innovative plastic card personalization and identity management solutions. The company provides its customers with integrated systems for a variety of financial, identification and healthcare applications. A diverse solutions portfolio features a broad range of card-related products and services, including the world’s best-selling card personalization and printing systems. Datacard Group also offers smart card life cycle management software, smart card personalization systems, smart card personalization applications and a variety of products and services designed to enhance card-issuing operations. Datacard Corporation, doing business as Datacard Group, is privately held and based in Minnetonka, Minn. The company serves customers in more than 200 countries worldwide. [][2]

[1]: /graphic/globalplatform/globalplatform1.gif


PSCU 2000

Payment Systems for Credit Unions, Inc., (PSCU), the nation’s largest Credit Union Service Organization (CUSO), today announced a record year-end cooperative dividend for its member-owners.

PSCU disclosed it is returning an aggregate dividend of $14.3 million to its credit union member-owners as a result of the PSCU operations during 2000. Since the cooperative’s inception in 1994, PSCU has returned in excess of $50 million in year-end patronage dividends to its member-owners.

Dave Serlo, PSCU’s president said, “Our return of dividends corresponds with growth and productivity gains achieved through PSCU’s commitment to deliver superior service and innovative technology solutions to our member-owners. This year’s record dividend can be attributed to increased operational efficiencies, strong account growth, and a rise in active accounts realized during the past year.” Serlo adds, “We are committed to our member-owners, and as the only credit and debit service provider dedicated to credit unions, we will continue to Partner for Success with our credit union member-owners to lead change within our industry.”

PSCU, founded in 1977, is owned by more than 500 member credit unions representing in excess of 6 million cardholder accounts across the nation. PSCU provides technology and cost-effective, high quality financial services and products solely to credit unions and their members. Additional information can be obtained by visiting PSCU’s web site at For information on ePSCU, a division of PSCU dedicated entirely to Internet product development and delivery, visit [][1].



Card Cramming

The Federal Trade Commission Friday announced a stipulated final judgment and order against an Ohio-based marketer of prepaid calling cards, settling charges that the company “crammed” recurring payments for the cards onto consumers’ telephone bills without their consent. Through the order, T2U Co., Inc. (“T2U,” formerly doing business as RCP Communications) and its principal Richard C. Peplin Jr. would be barred from a variety of deceptive “telephone billing” transactions, including making false representations about their authority to charge for — and consumer’s obligation to pay for — any product that consumers did not agree to purchase. The defendants also would be required to specify how consumers will be billed, what the service will cost, whether the billing will be recurrent and how any recurring charges can be cancelled. In addition, they would be subject to a suspended financial judgment of $3.2 million.

“Cramming is a pervasive problem,” said Jodie Bernstein, Director of FTC’s Bureau of Consumer Protection. “The best advice for consumers is to go over their phone bills with a fine-tooth comb before they pay, and challenge any charges they don’t recognize or understand.” According to the Commission’s complaint, T2U and Peplin violated the FTC Act through business practices associated with the marketing, sales and billing for prepaid calling cards. The FTC alleges that in many instances the defendants placed charges on consumers’ telephone bills for prepaid phone cards that consumers had not ordered or agreed to purchase. According to the FTC, the defendants also failed to mail consumers a phone card for several months, and when the card did arrive consumers discovered that while they had been billed for two or three months of service, the card had already expired and could not be used. Before the card arrived, many consumers had no idea they were being charged for its use.

The stipulated judgment and order covers the advertising and sale of prepaid phone cards – T2U’s principal business – as well as any other “telephone-billed” transaction. Under its terms, the defendants would be prohibited from making any misrepresentations regarding their business practices, including: 1) that consumers are obligated to pay for any product or service that they did not purchase; and 2) that the charges for such product or service have been authorized.

Further, the order would prevent the defendants from using solicitation materials in any telephone-billed transaction that fail to clearly and conspicuously disclose – before consumers are billed – the following material terms and conditions of a sale: 1) the cost of the product or service; 2) the amount of any recurring charge; 3) how a recurring charge will be billed; 4) any limitations on the use of a product or service, such as an expiration time for a prepaid phone card; and 5) how a consumer can cancel any recurring charge.

The defendants also would be barred from billing consumers before delivering any product or service whose time or value expires within the billing period. For any other product or service whose time or value does not expire within the billing period, the defendants would be enjoined from failing to disclose that the cost for such product or service will be billed to the consumer’s telephone number prior to delivery. In addition, the defendants would be required to get a consumer’s express authorization for any telephone-billed transactions.

The order also calls for a $3.2 million judgment against the defendants, which approximates the amount that they defrauded from consumers and have not paid back. However, the judgment would be suspended due to the defendants’ financial condition. If the Commission determines in the future, however, that any defendant made false statements or omissions concerning its financial condition, the FTC could seek to obtain the full amount of the judgment.

Finally, the order contains several record-keeping and monitoring provisions designed to ensure the defendants’ compliance with its terms.

The Commission vote to authorize staff to file the complaint and stipulated final judgment was 5-0. The complaint and stipulated final judgment were filed in the United States District Court for the Northern District of Ohio, Eastern Division on April 4, 2001.

NOTE: This stipulated final judgment is for settlement purposes only and does not constitute an admission by the defendants of a law violation. Consent judgments have the force of law when signed by the judge.

Copies of the complaint and stipulated final judgment are available from the FTC’s Web site at [][1] and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form. The FTC enters Internet, telemarketing and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies worldwide.



Card Debt Rebound

After a sluggish December and January, American consumers are racking up credit card debt at a record pace. During February, U.S. cardholders added $10.8 billion to outstanding balances representing an annual growth rate of 19.9%. According to preliminary figures released Friday afternoon by the Federal Reserve, revolving debt, mostly credit card debt, hit $680.9 billion in February, compared to $669.8 in January and $608.5 billion for February 2000. The growth in revolving credit was the biggest one month gain since September 1995. Overall, consumer credit is growing at a 10.5% rate. At the end of February, American consumers were $1.564 trillion in debt, exclusive of home mortgages. The latest FRB data shows the average annual interest rate charged on credit card accounts that revolve is 15.66%.


Feb01 Jan01 Dec00 Nov00 Oct00 Sep00 Aug00
%GRWTH: 19.9% 11.6 5.0 10.9 4.7 7.8 12.6
$OWED: $680.9 669.8 663.4 660.6 654.8 649.3 645.1

Jul00 Jun00 May00 Apr00 Mar00 Feb00 Jan00
%GRWTH: 6.7% 11.2 12.7 13.5 13.8 9.4 18.5
$OWED: $638.2 634.7 628.9 622.5 615.5 608.5 605.0

Source: Federal Reserve; revised figures as of 04/06/01;
For complete historical data visit


People’s Update

People’s Bank said Friday that the sale of its UK credit card portfolio to Citigroup will result in a pre-tax gain of approximately $70 million. Even though the UK operation was growing at a brisk 18% annual rate, People’s said the portfolio had reached a point where it needed significant, additional financial and management resources to support and grow the business. As reported in Friday morning’s CardFlash, People’s sold its $426 million UK portfolio to Citibank International PLC for approximately $526 million. People’s also indicated Friday that its first quarter earnings, to be released Apr 19, will be about half of analyst estimates. People’s said the reduced earnings for the first quarter reflect securities losses due to declines in market value of portions of the bank’s equities portfolio, an additional charge related to a single commercial loan previously classified as non-performing and increased charge-offs and reserves in the Credit Card Services division. The bank says increased credit card charge-offs, caused in part by a weakening economy and a rise in national bankruptcy filings, will likely limit the earnings progress of this division over the next several quarters. According to CardData ([][1]) People’s had $3,127,273,492 in outstandings and 1,368,399 active accounts at the end of 4Q/00.



Wachovia Deal

Two months after confirming its intention to unload its credit card portfolio, Wachovia will announce at 10am this morning the sale of its $8 billion portfolio to Bank One. Wachovia says it expects to report a pretax gain of approximately $1.4 billion when the deal closes this quarter. As part of the deal, Wachovia has signed a long-term agent bank relationship with First USA, Bank One’s credit card subsidiary. Bank One says it expects that the transaction, when completely integrated, will add $100 million per year to Bank One’s aftertax earnings, assuming current economic conditions. Following the transaction, Bank One/First USA, will reclaim its ranking as the second largest U.S. issuer with $75 billion in receivables. According to CardData ([][1]), Wachovia had $8,102,714,907 in outstandings and 2,768,887 active accounts as of Dec. 31. At year end 2000, Wachovia’s chargeoff rate was 4.83%. The 30+ day delinquency rate was 4.21%. (CF Library 2/7/01)



First 2000

First, Inc., a global provider of electronic payment processing solutions, announced the filing of its Form 10K and financial results for the year ended December 31, 2000 and for the fourth quarter of the same year. First Ecom, which is still in development stage, posted revenues for the fiscal year 2000 of US$ 854,871 as compared with revenues for 1999 of US$2,634. The increase is attributable to an increase in revenues from payment processing and systems integration revenue contributed by Asia Internet Limited, a business acquired on March 31,2000. Net loss for the year 2000 after amortization, depreciation and non-cash compensation associated with stock options was $ 17,809,461 as compared to the year 1999 operating loss of $ 6,788,885. The current year’s loss includes one time non-recurring losses totaling US$4,038,182 for the write down of certain assets to their net realizable value. The Company also recognized a new expense relating to an additional imputed interest charge of US $380,000 for warrants issued with debt in 1999 due to the implementation of the Emerging Issues Task Force pronouncement (EITF) 00-27. This is an accounting change that the Company was required to implement in the 2000 year.

Net loss per share for the year 2000 was US$ 0.98 per share as compared to the net loss per share of US$ 0.56 for the year 1999.

As at December 31, 2000 the company had in excess of US$ 31,000,000 cash on hand as compared to US $11,000,000 at December 31, 1999.

For the fourth quarter of 2000, the Company had revenues of $189,150 as compared to $2,634 in the fourth quarter of 1999 and a net loss of $7,227,060 as compared to $2,789,907 in 1999. The 2000 fourth quarter loss included $3,854,382 of one-time charges to write down assets to net realizable value and the accounting change charge of $380,000. The loss for the fourth quarter was $0.38 per share ($0.16 before the one-time write down and accounting change charge) as compared to $0.21 for the fourth quarter of 1999.

“Our second full year of operations saw a dramatic change in the business environment,” said Gregory Pek, president and Co-CEO of First “This change plus some internal issues resulted in First Ecom having to change its business approach. During the last quarter of 2000 the board and management started to restructure and re-focus the Company in addition to significantly reducing the burn rate. These changes should be completed and start to bear fruit within the first half of 2001. The major changes made included a reduction in staff levels, which included the closing of Asia Internet Limited and the withdrawal from the business of systems integration as well as moving to smaller premises. The Company also formed First Ecom Data Services Asia Limited (FEDS Asia), which is primarily responsible for the selling of the newly productized First Ecom gateway to banks in Asia.”

Pek also announced the appointment of Steve Corbin as President of FEDS Asia. Mr. Corbin will be responsible for the day-to-day operations of FEDS Asia and the carrying out of the Company’s new sales initiatives.

Pek announced that the Board of Directors and management were studying other opportunities for the Company and had retained Bain & Company to provide strategic advice.

Pek added, “With our new structure and focus plus our strong cash position the Company can build upon the successes it had during 2000. These included the raising and preserving of significant capital, listing on National Market of the NASDAQ in June, our listing on the Bermuda Stock Exchange, the bringing on line of two banks in Hong Kong during September and December and the formation and start of operations of First Ecommerce Data Services (FEDS) our joint venture with the Bank of Bermuda.

The Company’s financial results for the year ended December 31, 2000 accompanied the filing of its Form 10-K with the Securities & Exchange Commission on April 2, 2001, which is available on-line at the SEC’s Edgar database at [][1].

Financial Summary

Financial Highlights (Unaudited)
Year Ended Year Ended
December 31, 2000 December 31, 1999
Revenues $854,871 $2,634
Net (Loss) $(17,809,461) $(6,788,885)
Basic and diluted net loss
per share $(0.98) $(0.56)
Shares used to compute basic
and diluted net loss per share 18,064,980 12,043,662
Operating (loss) $(17,031,779) $(6,354,222)

Fourth quarter results for First Ecom were also announced:

Financial Summary

Financial Highlights (Unaudited)
Quarter Ended Quarter Ended
December 31, 2000 December 31, 1999
Revenues $189,150 $2,634
Net (Loss) $7,227,060 $2,789,907
Basic and diluted net loss
per share $(0.38) $(0.21)
Shares used to compute basic
and diluted net loss per share 19,210,037 13,220,254
Operating (loss) $(5,619,368) $(2,585,362)

About First

As a global provider of electronic payment processing, First provides secure, easy-to-implement and low-cost online payment processing services to banks and their merchants worldwide. Through strategic partnerships with banks, ISPs, e-commerce product suppliers, system integrators and storefront solution providers, First will process credit card transactions made over the Internet in multiple currencies, either domestically or offshore in a tax-neutral jurisdiction.

For more information, visit or contact First at +(852) 2801-5181 or by e-mail at



Greenland Acquisition

Greenland Corporation announced it has signed a Letter of Intent (LOI) for its first acquisition, a comparatively small, but fast growing company in the point-of-sale, check processing and merchant services business. The LOI was completed after meetings among the executives and various board members of both companies.

Greenland President and CEO, T. A. “Kip” Hyde, Jr. stated, “The company we are acquiring has an excellent reputation in the industry, with a strong management team that will add substantial depth to Greenland’s current organization. In addition, while this company has utilized internal cash flow to sustain its high rate of growth, Greenland as a public company brings significant added value to support their continued growth.”

“With our recently announced long-term equity funding agreement completed (pending an effective SEC registration statement), this acquisition positions the combined companies for accelerated internal growth, as Greenland continues to expand its presence in point-of-sale services.”

Hyde continued, “As indicated in my initial announcement, one of my first goals was to seek related corporate acquisitions that will provide immediate and sustainable revenue for Greenland Corporation. This transaction is the start of realizing that goal and one of several recent actions designed to increase Company and shareholder value.” The parties expect to close without material change to the current deal terms and conditions in the next sixty-to-ninety days.

About Greenland Corporation

Greenland Corporation is a holding company which operates a wholly owned subsidiary called Check Central that performs check cashing transaction processing and is a developer and manufacturer of the MaxCash(TM) Automated Banking Machine (ABM) providing self service check cashing, ATM functionality, phone card and money order dispensing, as well as other products and services. The Company’s common stock trades on the OTC Bulletin Board under the symbol “GLCP.” Visit Greenland Corporation on the Internet at [][1].



ATS 2000

ATS Money Systems, Inc. reported its results of operations for the year ended December 31, 2000. Revenues decreased 19% from 1999 to $11,378,772 and the Company incurred a net loss of $60,449 ($.01 per share) compared with net income of $1,316,128 ($.23 per share) in 1999.

In explaining the results for 2000, Gerard F. Murphy, the Company’s President and Chief Executive Officer stated that “the decrease in revenues resulted from significant sales in 1999 which were not repeated in 2000, and a drop-off in revenues from our wholly-owned IEI subsidiary. The net loss resulted from losses in IEI’s operations. IEI, before consolidation of its 2000 results, incurred a net loss of $1,144,404 on revenues of $283,675, which was attributed to the write-off of discontinued software projects and the costs associated with a major curtailment of its operations.”

On March 2, 2001, ATS announced that it had entered into an Agreement and Plan of Merger with a U.S. subsidiary of De La Rue plc, pursuant to which, and subject to stockholders’ approval, ATS will merge with such subsidiary and ATS stockholders will receive cash for their shares of ATS common stock. The negotiation of the price to be paid to ATS shareholders took into account the contemplated results of operations for ATS, without including IEI.

ATS expects to file preliminary proxy materials with the SEC in early April, for a Special Meeting of its stockholders to approve the proposed merger.

On March 9, 2001, ATS filed for de-certification of its common stock under the Securities Exchange Act of 1934. As a result, ATS is not required to comply with the SEC’s periodic reporting requirements and will not file an annual report to the SEC on Form 10-KSB for the year ended December 31, 2000.

ATS is engaged in the development, sales and service of currency counting systems running on DOS, UNIX and Windows NT platforms for department and chain store cash offices. IEI is a supplier to the retail marketplace, providing an end-to-end solution that integrates point-of-sale, in-store processing and host applications in a distributed computing network.


Year Ending December 31,

2000 1999
Equipment and systems sales $8,585,653 $11,272,566
Equipment maintenance and service revenue 2,793,119 2,856,203
Total revenue 11,378,772 14,128,769
Cost of goods sold and service expense:
Equipment and systems 4,643,359 5,463,334
Equipment maintenance and service 968,351 1,050,565
Selling, general and administrative expenses 5,809,502 5,339,809
Total costs and expenses 11,421,212 11,853,708

INCOME (LOSS) FROM OPERATIONS (42,440) 2,275,061
INCOME TAX EXPENSE 94,594 1,024,767

NET INCOME (LOSS) $(60,449) $1,316,128
Basic and diluted $(0.01) $0.23



December 31, December 31,
2000 1999

Cash and cash equivalents $609,560 $1,768,847
Other current assets 3,823,744 3,621,648
Total assets 5,892,963 7,441,248
Current liabilities 941,218 2,348,239
Total liabilities 1,239,859 2,736,733
Stockholders’ equity 4,653,104 4,704,515