Fee Income

The fee income component of the bank credit card revenue stream continues to grow on a percentage basis. According to new data released this morning by CA-based R.K. Hammer, fee income now represents 25% of total bank credit card income. CardData (www.carddata.com) also released new figures this week that shows interest income topped $21 billion last year.

FEE INCOME/TOTAL INCOME (Bank Total vs. Credit Card)
2000: 48%/25% 1997: 38%/21%
1999: 45%/24% 1996: 36%/19%
1998: 41%/23% 1995: 35%/18%
Source: R.K. Hammer Investment Bankers

1999: $21.4B (+13.0%) 1999: $60.2B (+4.0%)
1998: $18.9B (+28.0%) 1998: $58.1B (+9.4%)
1997: $14.8B (+48.0%) 1997: $53.1B (+1.5%)
1996: $10.0B (+20.5%) 1996: $52.3B (+23.9%)
1995: $ 8.3B (+13.7%) 1995: $42.2B (+21.3%)
Source: CardData (www.carddata.com)


Tidel 2Q ATM Record

Tidel Technologies, Inc. announced a new quarterly record for ATM shipments with 3,419 units shipped during the three-month period ended June 30, 2000 — a 77% increase from the 1,937 units shipped in the same quarter of 1999 and a 12% increase from the 3,055 units shipped in the previous quarter ended March 31, 2000. For the first nine months of fiscal 2000, the company shipped 8,687 ATMs, a 101% increase from the 4,319 units shipped in the same period a year ago.

James T. Rash, Chairman and CEO, said, “We are very pleased that the pace of our business continues to be at record levels. We expect this momentum to carry forward into the next quarter.”

Full financial results for the quarter ended June 30, 2000 will be released on or about July 26, 2000.

Tidel is a Texas-based manufacturer of automated teller machines and cash security equipment. The company pioneered the dial-up ATM in 1992 and was recently selected by BusinessWeek as one of its Top 100 Hot Growth Companies for 2000. Tidel’s common stock is traded on the Nasdaq Stock Market(R) under the symbol “ATMS”.



Canada’s Royal Bank rolled out the ‘Royal Bank VISA AVION Gold’ card Wednesday. The new VISA card will replace Royal Bank’s ‘Canadian Plus VISA’ card. The launch of ‘Royal Bank VISA AVION Gold’ follows the announcement of the merger of Canadian Airlines’ ‘Canadian Plus’ frequent flyer program with Air Canada’s ‘Aeroplan’ program, effective Jan. 1, 2001. Royal Bank said it is mailing the new ‘AVION’ card to existing clients starting this week to replace all ‘Canadian Plus VISA’ cards. Until the December statement, cardholders will continue to earn ‘Canadian Plus’ points toward award travel. Cardholders will earn one ‘AVION’ point for every one-dollar purchase charged to their ‘Royal Bank VISA AVION Gold’ card account. ‘AVION’ points will be automatically converted to ‘Canadian Plus’ points, one-to-one, until the December statement. The new ‘AVION Gold’ cards include a $5,000 minimum line of credit, as well as instant discounts of up to 25% at over 3,500 Royal Bank ‘VISA Partner’ retail locations. The card requires an annual fee of $120.


AmEx & Small Banks

American Express’ chairman sought yesterday to debunk the perception that his company is only interested in working with larger banks. Harvey Golub took the stand Wednesday in the government’s antitrust trial and said AmEx is interested in working with any bank that has the skill and market base that’s relevant to AmEx’s goals. Golub also spent time defending his company’s higher merchant fees, arguing that such fees are not universally higher than VISA or MasterCards. He also testified about the potential merger with Citibank indicating that one of the reasons the deal came apart was because Citibank wanted to acquire AmEx rather than merge.


SiVault Licenses MONAD

ACI Worldwide and SiVault, the premier provider of smart card service bureau processing in the U.S., announce that SiVault has licensed ACI’s MONAD product suite to offer complete Card Life Cycle Management for smart card programs.

![][1] The MONAD product suite enables SiVault to provide full-service Card Life Cycle Management to its customers on an “outsourced” basis. Operating as a trusted third party service bureau, SiVault offers an alternative for customers that do not wish to perform Card Life Cycle Management in-house. Card Life Cycle Management includes the dynamic loading, updating and deleting of applications to smart cards.

“We are excited about working with ACI because of the depth and quality of their organization,” said Mr. Keith Manning, president and COO of SiVault. “We look forward to a long and mutually prosperous relationship.”

“We have a tremendous opportunity to work together in building business relationships throughout the smart card industry,” said Karen Williams, executive vice president of Business Development for SiVault. “Working together to offer customers a choice in how they want these services creates a win-win for all parties involved, including SiVault, ACI and our customers. We are extremely pleased we have engaged ACI as a strategic partner in this endeavor.”

ACI’s MONAD product suite supports and manages the full life cycle of smart cards and smart card applications including full enrollment, application management, card issuing, personalization, post-issuance of multi-application smart cards, and more specific content related to the handling of purse, certificate or ticketing transactions.

“For banks and other issuers, multifunction smart cards are key to enhancing customer relationships,” said Mark Vipond, president of ACI Worldwide. “That’s why we provide a suite of products and services that promote the use of multi-application smart cards into new market areas and delivery channels. We believe that the ability of our customers to provide the smart card services they want, delivered in the way they want them delivered–securely and certainly–is another major step forward in the evolution of e-commerce.”

About ACI Worldwide

ACI Worldwide (Nasdaq: TSAI) is helping customers change the way the world works with solutions designed to improve the way we live, work and shop. Every minute of every day, financial institutions, retailers and networking industries rely on ACI solutions and services to smoothly move money and information. As a leading international provider of solutions for e-payments, ACI maintains operations in the Americas, Europe/Middle East/Africa and Asia/Pacific. More than 2,300 customers in 79 countries use ACI distributed solutions. Visit ACI Worldwide on the Internet at [www.aciworldwide.com][2].

About SiVault

SiVault is a network based Service Bureau providing secure loading and dynamic management of applications to smart cards using intelligent devices. SiVault works seamlessly with card issuers and application providers to create the infrastructure that allows businesses to focus on providing a proliferation of Internet enabled products and services to their customers. SiVault’s trusted third party service bureau market approach brings a critical component to the smart card value chain. SiVault works in alliance with Genuity (formerly GTE Internetworking) and Hewlett Packard/Verifone. ([http://www.sivault.com][3])

[1]: /graphic/sivault/sivault.gif
[2]: http://www.aciworldwide.com/
[3]: http://www.sivault.com/


First Ecom Pilots

First Ecom.com announced that two Taiwanese banks and one Hong Kong bank have successfully completed their User Acceptance Testing, and have migrated to the full-production platform where they are conducting a live pilot run of the their systems with selected merchants.

“This is a milestone in e-commerce payment processing for these three banks,” said Harold Hutton, president and CEO of First Ecom.com. “This is the start of First Ecom enabling banks in Asia. In the coming months, we plan to aggressively rollout our universal, secure, cost efficient electronic payment solutions to banks throughout Asia.”

The banks’ merchants that are participating in the launch of the pilot program include e-retailers selling books, jewelry, toys, health food and investment information. During the pilot program, the merchants will conduct real-time, online credit card transactions using First Ecom’s payment processing solutions.

About First Ecom.com

As a global provider of electronic payment processing, First Ecom.com 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 Ecom.com will process credit card transactions made over the Internet in multiple currencies, either domestically or offshore in a tax-neutral jurisdiction.


CEPS Downloads

The Common Electronic Purse Specifications can now be downloaded from a new web site created by CEPSCO, LLC, the organisation that officially manages the development of the specifications.

The web site, [www.cepsco.com][1], allows visitors to view all CEPS documents, including business, functional, and technical specifications. It also provides information on certification, future enhancements, industry updates as well as general information about CEPS and CEPSCO.

CEPS define requirements for all components needed by an organisation to implement a globally interoperable electronic purse programme, while maintaining full accountability and auditability. The specifications outline overall system security, certification and migration and are supported by organisations from over 30 countries, representing over 90 per cent of all electronic purse cards.

Gaylon Howe, Chairman of the CEPSCO Board of Directors, said: “CEPSCO has received well over 300 requests for the specifications and there is an ever increasing number of inquiries for further information. This new web site will help to deliver this information in a quicker, more efficient manner and allow instant access to any interested party. We hope it will also help expand industry awareness about the need for global interoperability between electronic purse programs.”

CEPSCO, LLC was created in October 1999 to manage and license the specifications, determine specification requirements and promote CEPS as a worldwide open electronic purse standard. The original shareholders of CEPSCO include: CEPSCO Espanola A.I.E, EURO Kartensysteme, Europay International, and Visa International.

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


Trading Halt

Nasdaq halted trading in Creditrust Corp yesterday following the company’s decision to file Chapter 11. The Baltimore Md-based sub-prime VISA and MasterCard issuer said it is doubtful that Nasdaq trading will resume anytime soon. The NASD indicated that its concerns in the matter related mostly to the interests of future shareholders. Creditrust says it plans to respond to the NASD this morning with all relevant information currently available. The firm also announced that the annual stockholder’s meeting scheduled for today will be postponed until further notice. The company said the annual meeting should be delayed for a brief period of time until the Chapter 11 reorganization process has progressed beyond the initial weeks of hearings.


Conseco Exits

Conseco, Inc. announced that its Conseco Finance Corp. subsidiary sold substantially all of its bankcard portfolio to Wells Fargo Financial Bank, the credit card subsidiary of Norwest Financial, part of Wells Fargo & Company.

The size of the portfolio sold was approximately $400 million. The sale of this noncore business provides additional liquidity to Conseco Finance and is not expected to result in a material gain or loss.

Conseco Finance, with nationwide operations and managed finance receivables of nearly $46 billion at December 31, 1999, is one of America’s largest of nearly $46 billion at December 31, 1999, is one of America’s largest consumer finance companies, with leading market positions in retail home equity mortgages, home improvement mortgages and consumer and floorplan loans for manufactured housing. Based in St. Paul, Minn., Conseco Finance had 9,600 employees at year-end 1999.


TSYS 2Q Expectations

Total System Services, Inc. announced that it expects its 2000 net income to exceed its 1999 net income by 25%, outperforming its previous forecast and the current analysts consensus estimate of a 20% increase in 2000 over 1999. Earnings per share is expected to be $.44, outpacing the current analysts consensus estimate of $.42.

Chairman and CEO Richard W. Ussery said, “We are excited about our new higher earnings projections for 2000. Our strong net income increase is a direct result of the better than expected internal growth rate of our client base, expanded product offerings and the commitment of our team members to focus on expense controls. We anticipate that 2000 will be another record year.”

With more than 180 million accounts on file, TSYS facilitates the electronic payment link between buyers and sellers for more than 250 million consumers. TSYS and its family of companies offer a full range of turnkey cardholder processing services, from credit application to collections, allowing our clients to focus on building their brands and managing their portfolios. Based in Columbus, Ga., TSYS ([http://www.totalsystem.com][1]) is an 80.8-percent-owned subsidiary of Synovus Financial Corp. (NYSE: SNV) ([http://www.synovus.com][2]).

[1]: http://www.totalsystem.com/
[2]: http://www.synovus.com/