MBNA 2Q/00

MBNA Corp. reported yesterday that it signed 212 affinity credit card deals in the first six months of this year. MBNA says net income for the second quarter of 2000 rose to $285.4 million, compared with $227.2 million for the second quarter of 1999. Total managed loans at June 30 were $76.3 billion, a $3.3 billion increase over first quarter 2000 and an $11.8 billion increase over second quarter 1999. During the first six months of 2000, MBNA also added 6.8 million new cardholders or 5.3 million new accounts. Delinquency on total managed loans was 4.44% at June 30. Managed loan losses for the second quarter of 2000 were 3.95%. In the first half of 2000, MBNA added 500,000 new accounts via the Internet and expects 1 million new accounts to be added through this source in 2000. For complete details on MBNA’s 2Q/00 performance visit CardData ([www.carddata.com][1]).

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

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Offer Zone

American Express introduced ‘Offer Zone’ this week. The new online destination provides AmEx cardholders and small business cardholders with access to hundreds of national online and local offline values. The offers will range from free shipping and handling and savings of up to 20%, to gifts with purchase and bonus ‘Membership Rewards’ points. Participating merchants include Barnes & Noble, Dell, FTD, Gap, OfficeDepot, and priceline.com. ‘Offer Zone’ also integrates ‘Gold Card Events’ and ‘Platinum Card By Invitation Only’.

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Aspire Makeover

AspireCard.com, Inc., the online marketer of the Aspire VISA credit card, announced it has re-launched its highly successful interactive web site, [www.aspirecard.com][1]. While consumers can continue to enjoy the benefits of applying for an Aspire Visa online and receiving an answer within seconds, enhancements to the web site include the addition of an affiliate marketing program as well as an entirely different look that features the new Aspire logo.

![][2] ‘As the number of customers acquired online and those requiring account access and service on-line continues to increase, we find it necessary to continuously update and enhance the site consistent with our customers’ expectations,’ said Richard House, president of AspireCard.com, Inc. and chief marketing and credit officer of its parent, CompuCredit Corporation (NASDAQ: CCRT). ‘Simultaneously, we have been working with our creative partners to reposition the Aspire brand, resulting in a re-designed Aspire logo. While the original logo has served us well, we feel that the new logo has greater appeal to our consumer audience ­ creditworthy individuals who may be overlooked by other credit providers ­ both online and offline.’

The new logo art is the work of Atlanta-based advertising agency Black Sheep, the cultural marketing and advertising division of WestWayne, Inc., an integrated marketing agency with offices in Atlanta, Tampa and Miami. According to House ‘the logo design is the result of several months of consumer testing and focus group assessment and represents the key values held by Aspire Visa customers ­ opportunity, empowerment and customer satisfaction.’ House also noted that the new card logo would be incorporated in all consumer marketing materials across all channels utilized by AspireCard.com, Inc. and its parent, CompuCredit Corporation.

iXL Enterprises Inc. ([www.ixl.com][3]), an Atlanta-based Internet development firm, provided expertise in creative design and systems engineering to design, develop and deploy the new aspirecard.com web site. Mr. House said that the company will continue to add features to [www.aspirecard.com][4]. Some that are expected to come online later in the year include customer utilization features such as bill presentment and payment and account maintenance for all Aspire Visa cardholders.

AspireCard.com, Inc. has selected LinkShare Corporation ([www.linkshare.com][5]) to manage its Internet affiliate marketing program. LinkShare created and launched the first affiliate network in 1996 which now includes tens of thousands of affiliate sites and more than 350 leading merchants. House noted, ‘Partnering with LinkShare to develop the AspireCard.com affiliate program allows us to expand our marketing efforts and service more customers.’

As of March 31, 2000, there were approximately 1.4 million Aspire Visa cardholders, and CompuCredit reports continued growth of approximately 100,000 new cardholders per month.

AspireCard.com, Inc., a wholly owned subsidiary of CompuCredit Corporation (Nasdaq: CCRT), promotes the Aspire® Visa® credit card on the Internet at [www.aspirecard.com][6]. Consumers can apply online and receive a credit decision within seconds. CompuCredit Corporation is a credit card company that uses analytical techniques, including sophisticated computer models, to identify consumers who it believes are credit-worthy and are overlooked by more traditional consumer credit providers. CompuCredit markets unsecured Aspire(R) Visa(R) credit cards through direct mail, telemarketing and the Internet. CompuCredit also markets credit life insurance, card registration, buying club memberships and travel services to its cardholders. Aspire Visa cards are issued by Columbus Bank and Trust Company under an agreement with CompuCredit. CompuCredit completed its initial public offering in April of 1999 and was included in the Russell 2000® Index in July 1999 and the NASDAQ FIN-100 Index in May 2000. AspireCard.com, Inc. was launched in July of 1999.

[1]: http://www.aspirecard.com/
[2]: /graphic/aspire/aspire.gif
[3]: http://www.ixl.com/
[4]: http://www.aspirecard.com/
[5]: http://www.linkshare.com/
[6]: http://www.aspirecard.com/

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CEPSCO Expands

Groupement des Cartes Bancaires and Proton World have joined CEPSCO, LLC, the organization formed to manage the on- going development and administration of the Common Electronic Purse Specifications (CEPS). The specifications provide for the interoperability of electronic purse schemes worldwide and are supported by the issuers of over 90 per cent of all current electronic purse cards.

The two organizations join the existing CEPSCO members: CEPSCO Espanola A.I.E., EURO Kartensysteme, Europay International, and Visa International.

“Groupement des Cartes Bancaires “CB” has long held the belief that in order to achieve widespread adoption of electronic purse programs, we need to move toward systems that are highly interoperable,” said Yves Randoux, CEO of Groupement des Cartes Bancaires “CB”. “We look forward to working with the other CEPSCO members to bring the benefits of the e- purse to banks, merchants and individuals.”

Armand Linkens, CEO and managing director of Proton World, said: “From the moment CEPS were made publicly available, we have been committed to incorporating the specifications into the Proton technology and advancing the commercial availability of CEPS-based smart card solutions. We are pleased to join CEPSCO to work with other leaders in the smart card industry to ensure that internationally-accepted electronic purse cards can become a reality.”

The formation of CEPSCO was announced in October 1999. It is responsible for managing and licensing the specifications, determining certification requirements, establishing a CEPS approval authority, promoting CEPS as a worldwide open electronic purse standard, and establishing working groups to integrate enhancements.

CEPS define requirements for all components needed by an organization to implement a globally interoperable electronic purse program, while maintaining full accountability and auditability. CEPS outline overall system security, certification and migration. The specifications are available to all interested parties but, to protect intellectual property rights, a license agreement has to be signed to receive the specifications. There are no license fees or royalties and the specifications can be downloaded by visiting the CEPSCO web site at [www.cepsco.com][1].

Since CEPS were made publicly available in March 1999, more than 300 requests have been received for the specifications. The first implementation of CEPS, planned for early 2001, is likely to be in Europe where the introduction of the euro has created added impetus to agree on a common specification.

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

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For The Defense

Another nonprofit, nonpartisan citizen group has joined the support of VISA and MasterCard in its antitrust defense. The VA-based 300,000-member National Taxpayers Union issued a press release Wednesday calling for federal officials to stop “mauling the marketplace” by ending involvement in the ongoing feud among credit card companies. The NTU says “The government’s case against VISA and MasterCard has the same troubling signs for taxpayers as the ill-founded foray against Microsoft.” NTU also maintains that American Express worked closely with federal prosecutors in bringing this case in order to avoid expensive private litigation.

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Korea Money Tx

MoneyGram International and Hanvit Bank have signed an agreement to provide international money transfer service to Korea, marking the first time a money transfer company has been introduced to millions of South Koreans.

South Koreans can receive funds with the well-known MoneyGram money transfer service at all 791 Hanvit Bank branches located in major cities all over the country. In addition, the agreement lets customers transfer money within 10 minutes to virtually anywhere in the world from 25 bank branches.

According to Iain Blackwood, CEO of MoneyGram International, the new service is an immediate benefit for many South Koreans.

“Now those people living and working in other countries such as the U.S., China and India can remit funds back to their families quickly, conveniently and safely,” he said.

Blackwood said other customers expected to use the service are students living abroad, foreign travelers in need of emergency funds and South Koreans who need to transfer funds domestically.

The announcement was made at the Radisson Seoul Plaza Hotel by both companies’ key officers — Jin-Man Kim, CEO of Hanvit Bank and Iain Blackwood of MoneyGram International. Also present at the announcement were Mohit Davar, COO and CFO of MoneyGram International and Andrew Tse, managing director Asia Pacific of Thomas Cook Group.

As South Korea’s largest financial institution and one of the top 100 banks in the world, Hanvit Bank has total assets of more than 100 trillion won and offers a full range of banking services and products for both individuals and corporations. Hanvit Bank was created from the merger of The Commercial Bank of Korea and Hanil Bank on January 4, 1999.

MoneyGram Payment Systems, Inc., a subsidiary of Viad Corp (NYSE:VVI), is a leading money transfer services company with more than 30,000 locations in more than 130 countries around the world.

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Fenimore on Pedestal

Pedestal Inc., the leading Internet-based secondary mortgage marketplace, announced that Philip Wood and William M. Fenimore, Jr. have been elected to the Board of Directors.

Mr. Wood, 45, is Managing Director, Business Development for Reuters Trading Solutions. Reuters recently made a $35 million investment in Pedestal as part of a $45 million round of funding. The two firms have also entered into a global marketing and product development agreement.

Previously, Mr. Wood was Deputy CFO of the Reuters Group PLC. A graduate of Balliol College, Oxford University, he is also a non-executive director of TIBCO Software Inc., and until this year was a director of Instinet Corporation. Mr. Wood is a fellow of the U.K. Institute of Chartered Accountants.

Mr. Fenimore, 56, is currently a strategic advisor to Internet companies on technology issues. Previously, he was CEO of Integrion Financial Network, a start up company owned by 16 large financial institutions, VISA and IBM established to build and operate a common Internet technology infrastructure to serve the e-commerce needs of financial services companies. Prior to Integrion, Mr. Fenimore served as Group Executive Vice President, Chief Technology Officer and Strategic Planning Officer for Meridian Bancorp. He holds a Bachelor of Arts in Business Administration from Lenoir Rhyne College and an MBA from Drexel University. Mr. Fenimore is also a member of the Board of Advisors of Future Technologies Venture Fund.

“We are delighted to welcome Philip and Bill to the Pedestal Board,” said Stuart A. McFarland, President and CEO of Pedestal Inc. “Their understanding of how innovative technology is transforming industries like the secondary mortgage market will significantly contribute to Pedestal’s expansion as the leading platform for trading mortgages and other financial assets. We welcome their experience as we continue to develop specialized value-added services for our customers through our alliances with Reuters, Deutsche Bank and other institutions.”

Other members of the Pedestal Board are: Chairman and Founder Yung Lim; Mr. McFarland; Michael Brown, Senior Associate, Battery Ventures; Joel Horne, Managing Director and Head of ABS/MBS e-Commerce at Deutsche Banc Alex. Brown; Desoto Jordan, private investor and co-founder Perot Systems Corporation; William H. Lacy, former Chairman and Chief Executive Officer of MGIC Investment Corp; Donald E. Lange, President and Chief Executive Officer of Pacific Financial Services, Inc.; and R. David Tabors, Principal, Battery Ventures.

About Pedestal

Through its neutral, proprietary Internet-based trading platform, pedestal.com, Pedestal provides enhanced liquidity, expanded market access, lower transaction costs, and integrated customer service to both buyers and sellers in the secondary mortgage marketplace, the largest financial market in the world in terms of trading volumes.

Pedestal currently offers online platforms in two markets: whole-loan one- to four-family residential mortgage loans and TBA-MBS (To-Be-Announced Mortgage-Backed Securities).

Pedestal’s experienced team of secondary mortgage market professionals is currently concentrating on the development of two additional target markets: commercial and multifamily mortgage loans and securities; and asset-backed securities (ABS) and CMOs (collateralized mortgage obligations and other derivative mortgage products).

Headquartered in Washington, DC, Pedestal has over 1,800 users representing approximately 1,000 institutions. For additional information, please visit their website at [http://www.pedestal.com][1].

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

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Debt Doubling

Revolving consumer credit continues to grow at about double the rate of one year ago. The month of May is historically a slower month for US revolving consumer credit, which includes mostly credit card debt. According to preliminary figures released this week by the Federal Reserve, Americans added nearly $4.6 billion in outstanding revolving credit during May. This translates into an 8.9% annual growth rate for May 2000. One year ago revolving consumer debt grew a mere 4.5%. Over the past twelve months consumers have added more than $54 billion to revolving credit. Overall consumer credit is now growing at a 9.8% rate, according to the FRB. At the end of May, American consumers were $1.450 trillion in debt, exclusive of home mortgages.

REVOLVING CREDIT HISTORICAL
May00 Apr00 Mar00 Feb 00 Jan00 Dec99 Nov99
%GRWTH: 8.9% 12.7% 13.8% 9.4% 18.5 12.5 10.2
$OWED: $626.6 622.0 615.5 608.5 605.0 595.8 589.8

Oct99 Sep 99 Aug99 Jul99 Jun99 May99
%GRWTH: -0.5 0.0 2.5 12.1 13.8 4.5
$OWED: 584.3 584.5 584.5 584.6 578.5 572.2

Source: Federal Reserve; revised figures as of 07/10/00; For
complete historical data visit www.carddata.com.

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FVS Register

Evolv Adaptive Technology, providers of the Skipjack Internet payment gateway, announced its strategic alliance with FleetBoston Financial Corporation, the nation’s eighth largest bank holding company, to offer merchants a Virtual Cash Register. The Fleet Virtual Cash Register (VCR)SM, secured by Skipjack, combines a private-label, secure Internet-based payment gateway from Evolv, with a merchant account package designed for fast and reliable payment processing. With the Fleet VCR, merchants can accept, authorize and process all major credit, debit and purchase cards directly from their website.

“We selected Evolv’s Skipjack Internet payment gateway because of its robust reporting features and high level of fraud detection and risk mitigation capabilities,” said Brian J. Connolly, Senior Vice President and Manager of Fleet Business Payment Solutions. “Together, we can provide merchants with a single solution to manage their transactions in a secure, online environment.”

Fleet will market the Skipjack-powered Virtual Cash Register to its customer base and will offer integration with its network of Preferred Web Site Developers. In addition, Evolv will be working with its other technology and service partners to assist Fleet in offering an entire suite of offerings, including an array of storebuilder, online mall, shopping cart, and other ancillary services.

“We are extremely pleased that Fleet has decided to work with us to bring this technology to their customers. We know that security always comes first with Fleet and we are proud to be the technology behind Fleet’s Virtual Cash Register,” said Brad Hoeweler, Evolv President and Chief Executive Officer. “Our alliance with Fleet further validates what we believe is the best payment processing technology in the marketplace.” Fleet’s Business Payment Solutions group provides merchant credit card processing and e-commerce payment processing services to businesses. Through its own capabilities, as well as its network of partners and strategic alliances, Fleet offers best-of-class solutions for its customers. For additional information, visit the Fleet web site at [www.fleet.com/buspppsso.html][1] or call Fleet Business Payment Solutions at 1-800-896-6512.

About Skipjack Merchant Services

A service of Evolv Adaptive Technology, Skipjack Merchant Services was created to address the needs of merchants, merchant acquiring organizations and financial institutions wanting to take advantage of the exceptional opportunities in ecommerce. An Internet payment gateway that performs the function of a standard credit card authorization terminal in a secure, real-time environment, Skipjack enables merchants to automatically accept, authorize and settle credit card payments on their Web site. Platform and browser independent, Skipjack features real-time authorization and settlement as well as e-mail receipts for customers and fulfillment entities. The service can be private-labeled for customized use by financial institutions, acquirers and third-party processors. Skipjack supports Visa, MasterCard, American Express, Discover card, Diners Club, JCB and debit cards. Bradley Madison Co. dba Evolv Adaptive Technology is headquartered in Cincinnati. For additional information, visit the Skipjack Web site at [www.skipjack.com][2].

About FleetBoston Financial

FleetBoston Financial is the eighth-largest bank holding company in the United States. An $187 billion diversified financial services company, it offers a comprehensive array of innovative financial solutions to 20 million customers in more than 20 countries and territories. Among the company’s key lines of business are: retail banking, with over 1,250 branches in the Northeast; commercial banking, including capital markets/investment banking and commercial finance; investment services, including discount brokerage; and full-service banking through more than 250 offices in Latin America. FleetBoston Financial is headquartered in Boston and listed on the New York Stock Exchange (NYSE: FBF).

[1]: http://www.fleet.com/buspppsso.html
[2]: http://www.skipjack.com/

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Sector Growth

Among bank credit card market segments, the sub-prime credit card segment continues to lead the pack. According to CardData (www.carddata.com), receivables growth in the sub-prime sector, which includes secured cards, hit 38% between the first quarter 1999 and first quarter 2000. Meanwhile issuers focused in the co-branded and affinity segments continued to fade, posting a 6% annual growth rate. Among high growth sub-prime issuers is SD-based First Premier Bank, which posted a 111% increase between 1Q/99 and 1Q/00. OR-based First Consumers Bank posted a 59% growth rate while Providian and Direct Merchants posted a 55% and 45% growth rate, respectively. Low rate issuers continued to struggle while credit unions posted an above average annual rate of receivables growth. Powerhouse MBNA continued to lead the industry with an average balance per active account of $3351.

SECTOR MONITOR
SECTOR GROWTH ADB 1Q-VOL
Co-Branded/Affinity 6% $2460 $1052
Secured/Sub-Prime 38% $1228 $ 390
Low Rate > $3B 3% $2275 $1024
Low Rate

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Powerpay PartnerAdvantage

Powerpay.com, a Ceridian company, has joined Visa Business’ PartnerAdvantage, a new program created exclusively for Visa Business’ over four million cardholders. With this agreement, Powerpay.com becomes one of eight leading companies to offer Visa Business cardholders ongoing benefits and savings on services and products that are key to the success of small businesses.

“We are excited to include Powerpay.com in the Visa Business PartnerAdvantage program,” said Michael Souza, vice president of small business products and services at Visa U.S.A. “In developing alliances, we look for industry leaders that offer solutions designed for the special needs and service requirements of small businesses.”

“PartnerAdvantage presents a great opportunity to team up with other companies that, like Powerpay.com, work with small and emerging businesses,” said Bob Kudla, director of marketing and business alliances at Powerpay.com. “The success of many small businesses depends on their ability to stay ahead of the marketplace by taking full advantage of products and services that have been designed for them.”

Powerpay is a Web-based solution that enables small businesses to complete payroll transactions via the Internet from anywhere, at any time. Designed specifically for companies that recognize the potential of the Web to streamline business processes, Powerpay enables those companies to transmit data to Powerpay.com via the Internet, making payroll processing easier and more convenient for small business owners. Powerpay also provides small businesses with access to services such as new hire reporting, tax filing, direct deposit, optional benefits programs, unemployment filing, and special reports, services that were previously enjoyed only by larger companies. Current and potential Visa Business cardholders can access additional information about Powerpay Internet payroll service by visiting ( [http://www.powerpay.com/visa_jp.html][1] ) or call 800-WE-PAY-YOU (800-937-2996).

Other companies participating in the Visa Business PartnerAdvantage program include Compaq; Maintenance Warehouse, a Home Depot Company; Choice Hotels International; Pep Boys; AAA (American Automobile Association); eWausau.com, a business unit of Wausau Insurance Companies; and PitneyWorks.com, a division of Pitney Bowes Inc. PartnerAdvantage offers Visa Business cardholders exclusive, ongoing benefits and savings on products and services from the most popular and respected companies in the world simply by owning and using a Visa Business card. To learn more about PartnerAdvantage, visit ( ).

Powerpay.com Inc., a Ceridian company, is a business unit of Ceridian Employer Services. Powerpay.com provides payroll and tax filing services to companies with up to 200 employees. For more information about Powerpay.com and Ceridian Powerpay Internet Payroll Service, visit [http://www.powerpay.com][2] or call 800-WE-PAY-YOU (800-937-2996). Ceridian Employer Services is a provider of HR/payroll and tax filing services and a business unit of Minneapolis-based Ceridian Corporation (NYSE: CEN), a leading information services company that serves the human resource, media and transportation markets. Ceridian’s human resources businesses offer HR/benefits solutions that support organizations’ complete employment life cycle and maximize their investment in people.

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 [http://www.visa.com][3]

[1]: http://www.powerpay.com/visa_jp.html
[2]: http://www.powerpay.com/
[3]: http://www.visa.com/

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