New SCF Members

The Smart Card Forum, multi-industry organization working to accelerate the widespread acceptance and application of smart card technology, today announced that twelve new principal, auditing, government and university members have joined the growing ranks of the organization. The new members include:

Baltimore Technologies

Certco

KeyCorp

Los Angeles Metropolitan Transportation Authority (MTA)

New York City Transit Metrocard Operations

Philips Semiconductors

Port Authority of New York & New Jersey

Rainbow Technologies

San Diego Metropolitan Transit

US Department of Treasury

Virginia Tech Transportation Institute

Xcert

‘We are very excited to have these new members join the Smart Card Forum at this time,’ said SCF President & CEO Donna Farmer. ‘There are many activities for them to be involved in right now. Many of our new members are joining the forum to participate in our cutting edge programs and conferences. Due to the success of our recent ‘Cards on the Move’ event, we have 4 new members from the transportation sector. This arena is proving to be a key driver for the implementation of multi-application smart card technology in the United States We welcome these organizations to our growing membership base and look forward to a very exciting year!’

Baltimore Technologies, Certco and Xcert have joined the Forum as Principal Members. Rainbow Technologies and Philips Semiconductors have stepped up from Auditing to Principal Membership. Principal Members are entitled to serve as a voting member of the Board and Executive Committee, eligible to serve as a chairperson of any Work Group, free access to all working documents and complimentary registrations for general and special meetings. KeyCorp has joined as an Auditing Member and have access to copies of all working documents. They are entitled to one complimentary registration for meetings while other representatives attend at member fee.

The Los Angeles Metropolitan Transportation Authority, New York City Transit Metrocard Operations, Port Authority of New York and New Jersey, San Diego Metropolitan Transit and the US Department of Treasury have joined as Government Members. Virginia Tech has joined as a University Member. These new members are entitled to one complimentary registration for all general and special Forum meetings, and have access to copies of all working documents. These members are also eligible to chair any working group.

Baltimore specializes in the development and marketing of a complete family of products and services to secure business conducted via computer networks, whether for Internet, extranet or intranet applications. The Baltimore product range includes complete PKI Systems, cryptographic toolkits, security applications and security hardware.

CertCo is a leading on-line risk assurance authority, providing the world’s most secure e-business technology and systems. Our business solutions unleash the full potential of the Internet by enabling corporations and trust institutions with the capability to safely conduct global high value transactions over open networks. CertCo’s integrated product suites feature electronic authentication and assurance systems based on public key infrastructure (“PKI”) technologies.

Cleveland-based KeyCorp (NYSE: KEY) is one of the nation’s largest multiline financial services companies, with assets of approximately $83 billion. Key companies provide investment management, retail and commercial banking, consumer finance, and investment banking products and services to individuals and companies throughout the United States and, for certain businesses, internationally. The company’s businesses deliver their products and services through facilities located in 46 states; a network of 2,600 ATMs; a robust Web site and telephone banking centers that provide account access and financial products 24 hours a day.

The Los Angeles County Metropolitan Transportation Authority (MTA) is the primary provider of transit-related services for the Southern California region. The MTA is dedicated to providing Southern California residents and visitors transportation alternatives and solutions.

Philips Semiconductors is a product division of Philips Electronics N.V., headquartered in Eindhoven, The Netherlands, the world’s sixth largest electronics company. With sales in excess of US$ 4.3 billion in 1997, Philips Semiconductors is one of the top ten semiconductor suppliers in the world (source: Dataquest). Like our parent company, we’re a truly international concern. We have offices on every continent, in over 40 countries and we have 27,000 employees worldwide. We manufacture over 50 million integrated circuits (IC’s) and discrete devices every day for a huge diversity of markets and applications.

The Port Authority of New York & New Jersey’s mission is to identify and meet the critical transportation infrastructure needs of the bistate region’s businesses, residents, and visitors. By providing the highest quality, most efficient transportation and port commerce facilities and services that move people and goods within the region, the Port Authority of NY/NJ provides access to the rest of the nation and to the world, and strengthens the economic competitiveness of the New York-New Jersey metropolitan region.

Rainbow Technologies is a leading provider of security solutions for the Internet and eCommerce. Rainbow applies its core technology to a variety of Internet applications from securing software, to the acceleration of secure communication for eCommerce and Virtual Private Networks (VPNs). Rainbow’s products include secure Web server and VPN acceleration boards; USB-based authentication tokens; PKI-based security solutions; and voice, data and satellite security systems. Headquarters are located in Irvine, California, with offices located throughout the United States, United Kingdom, France, Germany, Australia, China, India, The Netherlands, Russia, and Taiwan. Nearly 50 authorized distributors sell Rainbow products worldwide. For more information, visit our Web site at .

San Diego Metropolitan Transportation Authority began on July 3, 1886 when San Diego’s first streetcar made its way up Fifth Avenue from the waterfront. Two years later, San Diego became the first Pacific Coast city (the second in the nation) to replace the horse with the electric streetcar. The San Diego Streetcar Company received a new name — the San Diego Electric Railway Company — in December 1896 when it was purchased by leading San Diego developer and entrepreneur John D. Spreckels. By 1949 buses comprised the entire San Diego fleet, replacing all of the remaining streetcars. In 1948, Jesse L. Haugh, who had been executive vice president of the Union Pacific Railroad and the originator of the line’s streamlined trains, bought the company from Spreckels with a group of investors. The privately owned transit system changed hands again in 1967 when it was purchased by the city of San Diego, and in 1985, the city of San Diego sold San Diego Transit to MTDB which serves as the policy-setting and overall coordinating agency for public transportation in the San Diego metropolitan area.

The Virginia Tech Transportation Institute (VTTI) has initiated research on the design, deployment and evaluation of electronic payment systems (EPSs) in transportation. This research focuses on toll road, parking, and rail and bus transit services. A special effort is being made to address the economic implications associated with EPSs in terms of their capital and operating costs and revenue streams. In addition, the usefulness of alternative business case strategies is being explored and the advantages and disadvantages of such strategies are being considered. This research is being conducted by Professor John Collura, Director of the Advanced Transportation Systems Program at Virginia Tech’s Northern Virginia Center and by Mr. Valeri Plotnikov, a VTTI Research Associate.

Xcert, International, Inc. is the leading provider of Internet based Public Key Infrastructure (PKI) solutions that meet the business requirements of the Application Service Provider (ASP), Healthcare, Telecommunications, and Financial Services industries in securing business to business communications for electronic commerce. Xcert’s PKI solutions use digital certificates and secure directory services to provide business organizations with a private and authenticated method of conducting communications and transactions over the Internet.

About the Smart Card Forum

The Smart Card Forum is a non-profit, multi-industry organization of nearly 200 members working to accelerate the widespread acceptance of multi-application smart card technology by bringing together, in an open forum, leading users and technologists from both the public and private sectors. Established in 1993, the Forum includes representatives from leading companies in the banking, financial services, telecommunications, computer, technology, healthcare, retail and entertainment industries as well as government agencies and prominent universities. The Smart Card Forum also operates the Smart Card Educational Institute, the industry leading course dedicated to providing smart card education that has set the standard in the industry. The curriculum is based on leading edge education models and methodologies utilizing experienced instructors who are experts in the smart card industry. The Smart Card Forum is the leading organization for education and awareness in the development of the smart card. For more information about The Smart Card Forum, log on to the organization’s Web site at [www.smartcardforum.org][1].

[1]: http://www.smartcardforum.org/

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Fraud Control

FDC’s TeleCheck Services and FL-based Internet Billing Co., Ltd. yesterday announced that they will combine their fraud control and billing expertise to provide products and services designed to help retailers reduce the risks of online credit card fraud. Under the terms of the agreement, TeleCheck and ibill will jointly develop and market an online credit card fraud control solution slated for release early next quarter. As a seamless part of online transaction processing, the solution will evaluate each transaction for evidence of fraud, enabling merchants to combat the direct costs of fraudulent purchases and reduce chargebacks.

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VISA Hospitality

VISA U.S.A. announced the addition of Jackie O’Dell as Visa’s first Hospitality Manager. O’Dell fills this new position in Visa’s Event and Sponsorship Marketing Group, created to streamline the property hospitality inventory and coordinate events with the Visa Sales Department.

O’Dell’s responsibilities include ensuring a premier hospitality experience for Visa’s Members and Merchants at each of Visa’s sponsorship properties. Visa’s Event and Sponsorship Marketing properties include the Olympics, NFL, NASCAR, Visa Triple Crown and Live Broadway.

“With Jackie joining our group, Visa will be able to improve the hospitality component of our many sponsorships,” said Michael Lynch, vice president, Event and Sponsorship Marketing, Visa U.S.A. “Having Jackie on-site will ensure that all marketing assets within the Event and Sponsorship Marketing Group are being efficiently and fully utilized.”

O’Dell’s responsibilities will include coordinating with Visa’s Sales and Integrated Solutions group. The SIS group is the direct link between Visa and its Member banks and merchants to promote maximum visibility and usage of Visa’s consumer products. O’Dell will also manage the on-site executions of the events on the properties.

O’Dell comes to Visa from the AmericaOne Foundation, where she served as the Director of Hospitality and Sponsorship Fulfillment. She brings to Visa a wealth of experience in VIP hospitality, travel, entertainment and media relations. O’Dell graduated with honors from the University of Rhode Island and studied in London.

About Visa U.S.A.

Visa U.S.A. is the leading payment brand and the largest payment system in the United States, with more volume than all other major payment cards combined. Visa plays a pivotal role in advancing new payment products and technologies to benefit its more than 14,000 U.S. member financial institutions and their cardholders. There are more than 330 million Visa credit, commercial and check cards, which generate more than $720 billion in annual transaction volume. Visa-branded cards are accepted at over 17 million locations worldwide, including some 625,000 ATMs in the Visa/PLUS Global ATM Network. Visa’s Internet address is .

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MLS MasterCard

Capital One and Major League Soccer yesterday unveiled the ‘MLS MasterCard’ and the ‘MLS Cup Sweepstakes’. Earlier this year, MLS named Cap One the exclusive credit card issuer of MLS and its 12 member teams. MLS fans can choose from five design images, including the logos of three different MLS teams (D.C. United, Tampa Bay Mutiny or Los Angeles Galaxy) or soccer designs. Additional card designs will be added to the roster next season. The grand prize winner of the ‘MLS MasterCard Sweepstakes’ will receive two tickets to the ‘2001 MLS Cup’, a stadium tour, an autographed team jersey and hospitality passes to post-game events as well as two tickets to the 2002 season. Other MLS sponsors include: Budweiser, Honda, Kellogg’s, MasterCard, New York Life, Pepsi, and Yahoo!.

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VISA Horizon

Standard Chartered Bank Ghana and VISA this weekend launched the first ‘VISA Horizon’ card program. The new card is a chip-based, pre-authorized, offline payment card. The program marks the first large scale roll out of ‘VISA Horizon’ with up to 100,000 cards being issued and over 300 participating merchants. The initial roll out takes place in the capital city, Accra, with the planned roll out and promotions expanding to other major Ghanaian cities, including Takoradi and Kumasi, in the near future. The launch of the new payment card by Standard Chartered Bank is being accompanied by a nationwide advertising campaign including radio and TV. Standard Chartered says ‘VISA Horizon’ benefits the cardholder by reducing the need to carry cash. In Ghana, where bulky notes have to be carried around to buy goods and services, this represents a significant benefit. Furthermore, the risk of losing cash is reduced since funds on the card are safe even if the card is lost.

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Creditrust Woes

The fallout of Creditrust’s bankrupcty continues. The Baltimore-based sub-prime credit card issuer was sued Friday for artificially inflating the price of Creditrust’s stock. The complaint claims that officers and directors caused Creditrust to overstate its earnings by deliberately inflating the estimated amounts that could be collected on bad debt receivables purchased by the company, thereby inflating revenue and pre-tax earnings by at least $4.9 million for the fiscal year 1999 alone. In addition, the suit alleges that Creditrust’s CEO sold more than 500,000 shares of his personal holdings in the company during the same period for a profit in excess of $18 million. The suit was filed by Philadelphia-based Berger & Montague and seeks class action status.

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Essentis

London-based Sema Group launched a new payment card issuing and merchant management system solution. ‘Essentis’ is compliant with all of the major international payment brands including: VISA, MasterCard, Europay and JCB and is capable of managing large portfolios of cards. ‘Essentis’ can also manage a wide variety of payment card products including credit cards, debit cards, multi-application cards, charge cards, loyalty cards, business cards, duality cards, private label cards, affinity cards, co-branded cards and purchasing cards and also fixed-term loan products. Alliance & Leicester, one of the UK’s largest card issuers, have chosen ‘Essentis’ for its one million+ card portfolio.

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Gravy Train

Credit card portfolios remain highly profitable for issuers even as cardholders repay outstanding balances at historically high rates. Also, seriously late payments on card portfolios have fallen to their lowest level in four years. According to data collected by Fitch IBCA on credit card-backed bonds, monthly payment rates and portfolio yields rebounded from their seasonal dips in May, with the MPR index gaining 118 bps to register 16.65%. The MPR index tracks total payments made by cardholders each month. Meanwhile, Fitch’s portfolio yield index rose 96 bps to 19.40%. Excess spread, a key measure of card portfolio health and credit card-backed security strength, widened to 5.84%* from 5.47% in May. The current level is the index’s highest since January, although slightly below June 1999’s 6.04%. Fitch notes that its June index has been adjusted in consideration of an accounting change at Banc One. The one-time accounting change was implemented to bring all of Banc One’s credit card portfolios into compliance with certain FFIEC guidelines regarding deceased and bankrupt cardholders and resulted in overstated chargeoffs and understated excess spread for each of its master trusts. Absent the adjustment, Fitch’s chargeoff index would have been 5.20% and the excess spread index would have been 5.84%.

CREDIT CARD SECURITIZATION PERFORMANCE

Period CO GY MP DL SP
Jun00 5.80%* 19.40% 16.65% 2.79% 5.24%*
May00 5.38% 18.44% 15.47% 2.89% 5.47%
Apr00 5.43% 19.72% 17.34% 3.01% 5.62%
Mar00 5.50% 19.30% 16.05% 3.21% 5.52%
Feb00 5.45% 18.48% 16.36% 3.06% 5.53%
Jan00 5.53% 19.36% 16.71% 3.17% 5.89%
Jun99 5.95% 19.71% 16.36% 3.03% 6.04%

CO-chargeoffs; GY-gross yield; MP-monthly payment rate;
DL- 60+ day delinquency rate; SP-3-month excess spread
* adjusted for Banc One’s FFIEC compliance, otherwise
5.20% and 5.84%
Source: Fitch IBCA Credit Card Index

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PNC-AmEx

While American Express is prohibited from doing credit card deals with VISA and MasterCard members, it is doing business in other ways with major U.S. banks. PNC Financial Services Group announced last week that PNC Bank has entered an agreement with American Express to be the exclusive provider of origination, processing and servicing for American Express’ home equity loans and lines of credit. PNC provides origination, processing, and servicing of home equity loans, whether they are requested by phone and via the Internet. PNC notes that its third-party loan servicing division, CLC Consumer Services Co., continues to grow by providing companies with e-commerce capabilities for new products and services.

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DataCard & GSA

Datacard Group announced it has been selected as a solutions partner to the prime contractors participating in the U.S. General Service Administration Smart Access Common ID Card program. The program, which is managed by the GSA Office of Smart Card Initiatives, is designed to establish interoperability standards and favorable pricing for all federal agencies looking to deploy multi-application smart cards for use in building access, logical access and biometric authentication.

Datacard Group will offer prime contractors a wide range of card personalization and management systems, including multi-application card life cycle management, cardholder enrollment systems, card personalization systems, photo ID printers, biometrics capture devices and onsite badging services. “We’re thrilled to be part of this program,” said Paula Varin, Vice President of Smart Card Marketing for Datacard Group. “We believe the work GSA is doing will pave the way for broad acceptance of smart card solutions at the state government level — and eventually the commercial level.”

Datacard Group is the world’s leading provider of high-volume card issuance systems, smart card personalization systems and digital photo ID systems. Many of the world’s financial cards, drivers licenses, national IDs, employee badges and student IDs are produced with Datacard systems.

“We’ve been a GSA provider for many years, in terms of card issuance systems, photo ID systems and smart card solutions,” Varin said. “But this is the first GSA exposure for our new Datacard Platform Seven card life cycle management systems. We believe our systems offer the most complete and effective solutions on the market. This gives us a great opportunity to prove it.” Card life cycle management systems enable card issuers to manage and update large populations of multi-application smart cards. Cardholders and card issuers can remotely add, upgrade, delete or block applications using Internet or wide area network (WAN) connections. Instead of re-issuing cards, card issuers can quickly and easily update existing cards. In addition, if a card is lost or stolen, card issuers can replace it with the exact same applications, even if they were added to the card via post issuance processes.

“It’s a powerful concept,” Varin said. “It provides the necessary infrastructure to enable the true benefits of dynamic, multi-application smart cards.” 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 card life cycle management software, smart card personalization systems and applications, custom solution development and products designed to enhance card issuing operations. Datacard Corporation, doing business as Datacard Group, is privately held and based in Minnetonka, Minn. Datacard Group serves customers in more than 120 countries.

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