Honolulu Showdown

VISA has launched a public attack on American Express in Hawaii, running full-page ads in the Honolulu Advertiser to emphasize the disparity in merchant acceptance between the two competing brands. The attack precedes the planned conversion of more than 200,000 Bank of Hawaii VISA/MasterCards to American Express cards. In late December, Bank of Hawaii agreed to sell its $226 million, 148,000 account, VISA credit card portfolio to American Express. It is the first purchase of a significant U.S. VISA/MasterCard portfolio by American Express. The deal is expected to close shortly with the brand conversion set for this summer. Pacific Century Financial, the parent company of Bank of Hawaii, has been selling off assets to strengthen its balance sheet. VISA began its attack in January by leaking two internal memos to the press which showed the Bankoh deal likely to be unprofitable for AmEx as the majority of Bankoh cardholders will opt not to use AmEx cards. According to yesterday’s Honolulu Advertiser, American Express said the reaction to the Bankoh deal is more evidence that VISA is truly on the defensive. (CF Library 2/9/01; 12/21/00)



Hitachi Cable Ltd. will begin to manufacture contactless smart cards this year.
The company recently opened a production plant in Hitachi, Ibaraki Prefecture.
The new plant which cost 200 million yen is capable of producing 50,000 smart
cards per month. The company indicated this week it plans to invest another 1
billion yen by the end of fiscal 2003 to increase capacity ten fold.
The smart cards will use a frequency of
125KHz and will operate up to 50cm from a terminal.


Ultimate Deal

TeleCheck Services, Inc., the world’s leading check acceptance company and a subsidiary of Atlanta-based First Data Corp. announced that it is providing Ultimate Electronics, Inc., a specialty retailer of home entertainment and consumer electronics, with the TeleCheck Electronic Check Acceptance service and its Eclipse payment terminal.

The TeleCheck Electronic Check Acceptance service converts a customer’s paper check into an electronic check at the point-of-sale and delivers funds directly to the merchant’s account, improving cash flow. Merchants benefit because they can consolidate bank accounts, streamline operations and reduce paper handling. Any check approved by TeleCheck is guaranteed for the full amount, allowing merchants the convenience and safety of accepting low-numbered, out-of-town, even out-of-state checks with confidence.

TeleCheck has settled more than 65 million electronic transactions since the nationwide introduction of ECA(R) in June 1998, and has electronically processed nearly 5 billion dollars. The company’s Eclipse(TM) integrated payment terminal processes all non-cash payment options including checks, credit cards and debit cards. TeleCheck’s ECA(R) service and Eclipse(TM) terminal automate the approval and processing functions, making it safer and more convenient for merchants and their customers to pay by check.

“Outsourcing check processing to TeleCheck allows Ultimate Electronics’ employees to spend more time taking care of customers rather than filling out deposit reports,” said Alan Kessock, Chief Financial Officer of Ultimate Electronics. “The ECA(R) service will reduce our bank, operating and check- handling costs, and it will save our managers time in processing deposits. The Eclipse(TM) terminal does most of the work for us, making processing a check fast and easy.”

“TeleCheck is pleased to bring its Electronic Check Acceptance(R) service to Ultimate Electronics,” said Randy Rutledge, chief marketing officer of TeleCheck. “Adding ECA(R) to over 30 Ultimate Electronics locations enhances TeleCheck’s presence as the foremost provider of electronic check commerce services, and helps Ultimate Electronics’ check approval service evolve into the digital age.”

About TeleCheck Services, Inc.

TeleCheck is the world’s leading provider of paper and electronic check services, helping over 228,000 retail, financial institution, grocery and other industry clients to increase their profitability, reduce risk and streamline operations. TeleCheck’s check acceptance and electronic commerce solutions help businesses safely and efficiently accept payment at the point of sale, by telephone, over the Internet, and through timed or recurring ACH payments. TeleCheck services are offered through a sales and service network in more than 90 cities in the United States and in Puerto Rico, Canada, Australia and New Zealand. In 1999, TeleCheck authorized more than $155 billion in checks, representing 3.1 billion transactions. For more information about TeleCheck, please visit the Internet site at [http://www.telecheck.com][1].

About Ultimate Electronics, Inc.

Ultimate Electronics, Inc. is a leading specialty retailer of home entertainment and consumer electronics in Arizona, Colorado, Idaho, Iowa, Minnesota, Nevada, New Mexico, Oklahoma, South Dakota and Utah. Ultimate Electronics, Inc. had sales of over $475 million in the year 2000. The Company operates thirty-six stores including eleven stores in Colorado under the trade name SoundTrack, seventeen stores in Arizona, Idaho, Iowa, Nevada, New Mexico, Oklahoma, South Dakota and Utah under the trade name Ultimate Electronics and eight stores in Minnesota under the trade name Audio King. For more information, please visit the company’s Web site at [http://www.ultimateelectronics.com][2].

About First Data Corp.

Atlanta-based First Data Corp. is a global leader in electronic commerce and payment services. Serving more than two million merchant locations, more than 1,400 card issuers and millions of consumers, First Data makes it easier, faster and more secure for people and businesses to buy goods and services, using virtually any form of payment: credit, debit, stored-value card or check at the point-of-sale, over the Internet or by money transfer. For more information, please visit the company’s Web site at [http://www.firstdata.com][3].

[1]: http://www.telecheck.com/
[2]: http://www.ultimateelectronics.com/
[3]: http://www.firstdata.com/



MasterCard pulled the plug at the last minute for a new ‘Priceless’ spot that was to air on this week’s Grammy Awards. The new spot was to show a young boy smashing a brand new guitar with the tag line “Rock and Roll: Priceless”. According to this morning’s Wall Street Journal, MasterCard pulled the ad because of technical issues after creating the commercial in less than two weeks. Ads for the Grammys run between $400,000 and $500,000 for 30 seconds and reach 27 million viewers. MasterCard launched its highly successful “Priceless’ campaign in 1997.


VIPdesk Execs

VIPdesk, the fast-growing Internet concierge and personal services provider, this week announced that Maria Izurieta joins VIPdesk as chief financial officer and Maureen Stevens as vice president of marketing.

VIPdesk also announced today the promotion of Sally Hurley as chief strategy officer, and Kelly Christiano as senior vice president of sales.

Maria Izurieta comes to VIPdesk after consulting to several early stage companies as the chief financial officer and from CyberCash, Inc. Izurieta assisted and directed the strategic and financial development of each start-up enterprise and will lead the implementation of internal financial structures for VIPdesk.

Izurieta has an impressive track record for achieving profitability and high growth in tech-related businesses.

“I am truly excited to be joining VIPdesk’s executive management team”, stated Izurieta. “In this company I see unique opportunities for innovation and explosive growth, as well as a high regard for teamwork. I am eager to direct and organize VIPdesk’s financial and strategic planning as well as to create new company efficiencies, tools and processes to drive revenue and increase profitability for VIPdesk.”

Maureen Stevens, formerly the vice president of marketing for YellowBrix and Infodata Systems, brings 16 years of experience in market research, marketing communications, product management and business development. Stevens excels in developing and executing strategic and tactical marketing plans in start-ups and high-growth environments much like VIPdesk.

“VIPdesk provides a personal assistant platform to complete daily tasks and manage the busy lives of client customers and employees,” stated Stevens. “I look forward to working alongside our blue-chip clients to promote this valuable time-saving service and help them build loyalty among their customers and employees.”

Sally Hurley, formerly vice president of strategic development, will now provide direction to VIPdesk in the areas of B2B marketing, partnerships, technological development and product evolution as the chief strategy officer. Kelly Christiano, now senior vice president of sales, will see that VIPdesk continues to grow exponentially in terms of sales and overall end-users.

About VIPdesk ([www.vipdesk.com][1])

VIPdesk is the leading provider of Web-enabled coordination of personal and convenience services to help busy people get things done. VIPdesk provides clients with a virtual personal assistant platform that offers live online concierge services for their employees and customers.

This innovative technology and centralized infrastructure of local concierges acts as a powerful retention and productivity tool that currently serves 5.8 million users.

Founded in 1997 by Mary Naylor, a 14-year veteran of the concierge industry, this personal assistant infrastructure platform serves clients including America Online’s Digital City, Freddie Mac, MasterCard, Citibank, e-Tenants.com and Diners Club.

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


ECHO Agent Bank

Electronic Clearing House, Inc. announced the signing of an agreement with Mesilla Valley Bank, Las Cruces, New Mexico, to provide credit card processing services for the Bank’s merchants under ECHO’s Agent Bank Program.

Mesilla Valley Bank, established in October, 2000, will market merchants for credit card processing in the greater Las Cruces area. “We believe local banks will continue to be desired over the large national banks by the communities they serve,” stated Jack Wilson, vice president of Bank Services at ECHO. “ECHO’s combined transaction services of credit, debit and check processing provide local banks with the ability to competitively price such services and effectively compete with the national banks in their area.”

Electronic Clearing House provides debit and credit card processing, check guarantee, check verification, check conversion, and inventory tracking to over 58,000 retail merchants and U-Haul dealers across the nation.


Java Card SIM

Three leaders in the smart card industry, Gemplus, Oberthur Card Systems and Schlumberger revealed this week that they have been working together in collaboration with Sun Microsystems to develop completely interoperable SIM cards based on the Java Card technology 2.1 specifications.

![][1] Since its inception, the Java platform has been adopted across the technology industry faster than any other new technology in history. Due to its flexibility, security, ease and increased speed of development, Java technology has been adopted as a leading open standard for the smart card industry particularly within the mobile communications sphere.

![][2] Java Card technology 2.1 is a readily available open platform card on the market today. Differences in SIM card implementations by the various hardware and software providers resulted in the need for common work between SIM card suppliers to realize complete interoperability.

Based upon the recent ETSI and Sun Microsystems specifications, Gemplus, Oberthur and Schlumberger have worked closely to reach a standard implementation for Java Card technology 2.1 on SIM cards, thereby realizing complete interoperability across all Java technology based cards produced for the wireless industry. A common standard based on Java Card technology 2.1 provides complete interoperability, while still allowing developers to provide operator-specific solutions.

Mobile operators need fully compliant and interoperable SIM cards based upon the Java Card technology 2.1. In a direct response to this the three most advanced Java Card technology 2.1 suppliers to the GSM market: Gemplus, Oberthur and Schlumberger took the lead to achieve this with the intention that the common work will be made available to the SIMalliance1.

This co-operation by Gemplus, Oberthur and Schlumberger in collaboration with Sun Microsystems ensures that operators can experience the benefits of Java technology’s Write Once, Run Anywhere(tm) promise.

Interoperability between cards from all three manufacturers is being demonstrated on Sun’s booths # D2, D4 & D6 in Hall 1, Gemplus’ booth #C49, Oberthur’s booth # E5-E7 and Schlumberger’s booth # A19.

“We view Java Card technology as a leading open technology for SIM Cards and expect tremendous growth in this segment in the coming years” comments Gemplus’ Michel Canitrot, Vice-President, GSM & Public Telephony, “Complete interoperability is a crucial goal to achieve and now the hard work has been carried out, our customers can roll out bigger, better services in record time. In turn, this strengthens the position of the SIM Card as the preferred platform for mobile services.”

“With the deployment of new technologies, mobile operators are searching to maximize on their heavy investments and launch a host of value-added services to gain competitive advantage, with this in mind the issue of interoperability becomes paramount, ” explains Stephane Mousse, Head of Marketing for Mobile Communications at Oberthur Card Systems. “For a long time, the smart card industry has sought after complete interoperability, this move to work together to reach a common interpretation of existing standards is the start of the dream becoming reality for both existing and new generation networks.”

“Schlumberger is pleased to demonstrate true interoperability of Java SIM cards, which is the result of our continuous efforts to make our vision of open operating systems for smart cards a reality” comments Xavier Chanay, Vice President Mobile Communications, Smart Cards Products at Schlumberger. “Mobile operators now have an open and secure SIM platform to deliver new services quicker, at a time when the data channel is contributing more and more to their profitability.”

About Gemplus

Gemplus ([www.gemplus.com][3]) is the world’s number one provider of smart card based solutions for security, wireless and e-business applications. Offering consulting services, design, software, hardware, personalization and full implementation, Gemplus works with its customers around the world to deliver comprehensive, integrated and tailor-made smart card based systems.

The Group’s customers use Gemplus memory and microprocessor smart cards, smart contactless cards, electronic tags, smart objects and magnetic stripe cards to simplify and secure a wide range of applications. From Web based and mobile commerce to financial transactions, loyalty, transportation, education healthcare, identity, pay TV and physical and logical access control, Gemplus provides intelligent end-to-end solutions that bring security, convenience and ease-of-use to millions of people worldwide.

Founded in 1988, Gemplus had sales of over 767 millions of Euro ($US 817 millions) in 1999, and employs almost 6,300 people in 17 manufacturing facilities, 7 R&D centers and 44 sales and marketing offices located in more than 37 countries.

[1]: /graphic/oberthur/oberthur.gif
[2]: /graphic/schlumberger/schlumberger.gif
[3]: http://www.gemplus.com/


Creditrust Returns

PA-based NCO Group and MD-based Creditrust Corporation have completed a merger to form NCO Portfolio Management Inc. CreditTrust is an information-based purchaser of delinquent VISA and MasterCard debt which filed for reorganization under the bankruptcy code. Approximately 63% of NCOP will be owned by NCOG and legacy shareholders of CRDT will own approximately 11%. Joseph K. Rensin, outgoing Chairman and CEO of CRDT, has purchased $1.0 million of common stock from NCOP. Mr. Rensin has also entered into a 3 year consulting agreement with NCOP. NCOP is expected to have an initial net book value of approximately $43.0 million consisting primarily of previously purchased portfolios of delinquent accounts receivable contributed by NCOPF and CRDT, as well as the proceeds from the sale of common stock.


Potholes 2001

The weak economic picture coupled with eroding consumer confidence may contribute to slight performance deterioration in credit quality and receivables growth for the credit card industry. Chargeoffs registered a big jump in December and personal bankruptcy filings are climbing. The Fitch ‘Credit Card Index’ reported its largest one-month increase since April 1997, increasing 28 bps to 5.40% during the December collection period. The monthly payment rates also dropped by 41 bps to 15.01% in December, its third consecutive month-to-month decline. Meanwhile personal bankruptcy filings totaled 1,212,006 for 2000, or 3.87% below 1999’s 1,260,796. For 2001, Fitch projects filings to increase 4.5% from the 2000 tally. Fitch noted that current evidence suggests that consumers have begun to curb their spending and lenders have tightened their underwriting standards. However the underlying trends in income and spending are pointing to a slower economy whereby consumers may need to finance their spending through credit cards.


Delayed Report

MerchantOnline.com said yesterday it is delaying the filing of its Annual Report on Form 10-KSB. The Company previously announced that revenues for the fourth fiscal quarter ended Oct 31, more than doubled from the third quarter, while general and administrative expenses increased as the Company ramped up operations towards widespread commercial distribution of ‘PC Pay’ and ‘NewCash’. The net loss is expected to increase slightly from the third quarter. Founded in December 1997, MerchantOnline provides a secure transaction network that enables business and consumers to use one payment system for both their real world and virtual world needs utilizing credit cards, ATM/debit cards and other payment programs.


Advanced Card Award

Schlumberger Test & Transactions, a business segment of Schlumberger Limited announced yesterday it has won the coveted Advanced Card Award for the “Best Loyalty Implementation” with its Advantage Card powered by Egg. Based on the Schlumberger EMV-compliant e-Galleon card, the Advantage Card combines loyalty points and credit capabilities on one secure smart card – turning the potential of multi-application card technology into practical reality.

The Advanced Card Awards, now in its third year, recognises excellence in smart card innovation and achievement, and has earned its place as the UK’s premier Award scheme in this dynamic and innovative arena.

Accepting the award, Bertrand Knopf, Schlumberger vice president e-Payment Europe said: “Great technology isn’t enough on its own, you have to be able to deliver it into the consumer’s pocket as a working solution. This Award recognises the achievement of everyone in Schlumberger who worked so hard all along the supply chain, to help our partners Egg and Boots the Chemist bring this innovative co-branding retail scheme to market.”

With the Advantage Card powered by Egg already in the pockets of consumers throughout the UK, Schlumberger has put the potential of multi-application smart cards into practice. This is Europe’s first live multi-application smart card-based service, supporting the innovative linking of the Internet bank Egg with the high street Boots the Chemist retailer.

The success of the project is not simply down to the quality of the cards, however. Schlumberger handles the whole supply chain – including data integration, personalisation and delivery services – required to turn an internet-entered request into the card in the customer’s hand. It’s a unique “from request to fulfilment” service.

About Schlumberger

Schlumberger Test & Transactions provides consulting, integration and products for smart card-based transactions; IP (Internet Protocol) network, security and wireless services; and testing and measurement of semiconductor devices. With 2000 revenue of $1.4 billion and over 8,000 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 [www.slb.com][1]

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



First Data Corp. announced its formation of Nihon Card Processing Co. Ltd., the
first company
in Japan to provide third-party credit card processing outsourcing services to
the world’s second largest credit card market.
The new company was formed by First Data and its joint venture partners,
NTT DATA, the data processing subsidiary of Japan’s leading telecommunications
company, NTT Corp.; DC Card, the fourth largest bankcard issuer and acquirer
in Japan and an affiliate of the Mitsubishi-Bank of Tokyo; and Diamond
Computer Service Co. (DCS), a large-scale information systems provider with
expertise in credit card and finance operations.

The Nihon Card Processing platform will use First Data’s advanced U.S.
credit card processing expertise, and the credit card processing systems and
information systems developed by DC Card and DCS combined with NTT Data’s
information technology to provide large-scale, low-cost credit card processing
outsourcing services.

Nihon’s first customer, DC Card, has a credit card portfolio of more than
8 million Visa(R) and MasterCard credit cards and initially provided the
processing infrastructure for the joint venture.

Leveraging First Data’s expertise in providing third-party outsourcing,
the new company will bring significant cost savings to Japanese card issuers
and the flexible functionality that today allows U.S. issuers to customize
credit card offerings according to customer need. Nihon Card Processing will
provide advanced services to accommodate the changing payments market,
including Internet and smart card technology.

“Working with our joint venture partners, we are bringing First Data’s
expertise to the Japanese card market as a way to decrease costs, increase
efficiencies and add flexibility for Japan’s card issuers,” said Ric Duques,
chairman and chief executive officer of First Data Corp.

As the company builds the next-generation outsourcing platform, Nihon will
invite all credit card companies in Japan to participate in a consortium to be
launched this summer.

“The consortium will help the joint venture ensure that the system
provides what Japanese card issuers need to produce the most cost savings and
best enhanced services,” Duques said.

About First Data

Atlanta-based First Data Corp. (NYSE FDC) helps move the world’s money.
As the leader in electronic commerce and payment services, First Data serves
more than two million merchant locations, 1,400 card issuers and millions of
consumers, making it easier, faster and more secure for people and businesses
to buy goods and services using virtually any form of payment. With more than
27,000 employees worldwide, the company provides credit, debit and stored-
value card issuing and merchant transaction processing services; Internet
commerce solutions; money transfers and money orders; and check processing and
verification services throughout the United States, United Kingdom, Australia,
Mexico, Spain and Germany. In addition, its Western Union(R) network includes
approximately 101,000 agent locations with operations in 186 countries and
territories. For more information, please visit the company’s Web site at
http//www.firstdata.com .


NTT DATA Corporation, headquartered in Tokyo, is Japan’s leading
information systems and computer networking company with $5.8 billion turnover
in 1999 fiscal year. NTT DATA has been offering large-scale IT services since
1967, when it was Data Communications Bureau in the nationally owned telephone
company (NTT). NTT DATA provides outsourcing services in various forms
strategic consulting, systems planning, systems design and development,
systems operation and management, and systems support. NTT DATA has a wide
range of expertise in IT, especially in data communications networking, large-
scale systems development, and computer systems management. NTT DATA also
runs CAFIS, Japan’s leading merchant authorization network. For more
information, visit http//www.nttdata.co.jp .

About DC Card
DC Card is a credi
t card business arm of the Bank of Tokyo-Mitsubishi. DC
Card has helped grow Japanese credit card business for the last 30 years, and
is now the fourth largest credit card company. It offers card issuing service
and serves more than 8.3 million cardholders. It also renders acquiring
service and has valued relationships with 1.3 million merchants. With 33
franchisees, many of which are credit card subsidiaries of major regional
banks, DC Card has the strongest business base in Japan. DC Card has been a
leader in the application of new technology to credit card business.
It took initiatives to conduct “IC Card” pilot project in Shibuya area in
Tokyo in 1997, and is active in using “Internet Commerce” for credit card
service both for issuing and acquiring business.

About DCS

DCS is a full service business solutions company listed on the Tokyo Stock
Exchange (Second Section). The company provides its clients with data
processing to computer system development, operation and maintenance, to
system integration, to network services. In addition, DCS’s technical
expertise is complemented with a wealth of practical know-how in a wide range
of business fields, most notably banking and finance, a legacy that dates back
to its former days as a division of Mitsubishi Bank (now Bank of Tokyo-
Mitsubishi). The benefit of state-of-the-art information infrastructure, the
core of which is the newly completed Chiba Computer Center, is also offered to
the clients. Whatever its client’s information processing needs, DCS has the