E-Projections

The worldwide e-commerce market is expected to grow to annual volume of $4.3 trillion by 2004 or at an annual growth rate of 82%. Business Communications Co. also projects that e-commerce in the U.S. alone will grow to $3.2 trillion by 2004. Consumer expenditures in the U.S. are expected to grow from $22 billion last year to $157.4 billion by 2004, or at an annual rate of 48.2%. BBC also expects the number of households with Internet access to grow from 27.4 million in 1999 to 44 million in 2004. The average annual expenditure per household is expected to increase from $801 last year to $3,577 in 2004. The projections are part of a new e-commerce study to be released by BCC during July.

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Strange Bedfellows

Testimony heard last week in the antitrust trial of VISA and MasterCard identified some of the bank credit card issuers who expressed an interest in issuing American Express cards. Among the three dozen prospects American Express attracted: MBNA, First USA, KeyCorp and Advanta. In May 1996, the head of American Express made a sales call on credit card issuers via the podium at Faulkner & Gray’s annual ‘Credit Card Forum’ in Atlanta. Harvey Golub, AmEx CEO, had invited bankers to personally call him to discuss the possibility of issuing American Express cards. Golub also used that opportunity to attack VISA for what it considers anti-competitive practices. To date, AmEx has formed more than 60 card issuing partnerships internationally, but has found no takers within the US.

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Q1 MULTOS Deal

QI Technologies Corp. announced that the Company has been retained by CALE Parking Equipment Inc. of Saint-Lambert, Quebec, to design and develop a MULTOS based cash card payment system for use with their CALE MP-102 Pay and Display Ticketing Machine.

The CALE ticketing machine, installed with the QI SmartKit reader was successfully demonstrated at the IPI Exhibition Show in Fort Lauderdale, Florida for three days last month. Mr. Pierre Barre, the President of CALE Parking Equipment stated: “The show was an outstanding success with the MP-102 generating a great deal of interest from the international community.”

Mr. Pierre Barre advised that they have a working relationship with CALE Access, a Swedish company, in business since 1955 with products installed in around 35 countries. CALE Access is part of the Bewator Group, a company that deals with electronic access control and is one of the world’s leading suppliers of Pay and Display ticketing machines.

QI Technologies designs, manufactures and markets Electronic-Cash Systems and components that allow the use of e-cash payment systems including those of Visa Cash and Mondex, support for Multos cards, Visa Open Platform cards, private label cards and for loyalty applications.

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De Novo Expands

Nicole Drennan, formerly Operations Assistant at First Union Corporation, has been hired as Administrative Coordinator for Stratcom, a market intelligence firm with the De Novo family of companies. As an Administrative Coordinator, her responsibilities involve assisting with market research projects using various media, including the Internet, and preparing marketing presentations.

Nicole Drennan brings with her four years of working experience with large organizations, such as First Union Corporation and CoreStates Bank. During her time at First Union, she was responsible for assisting management with the development and delegation of administrative functions, assisting the technical support group, and identifying problems in several new systems rollout pilots. She also developed training curriculum and conducted training sessions for all newly hired personal service representatives.

“This is an exceptional opportunity to utilize my prior experience to assist Stratcom, as well as the other De Novo companies, in managing their extraordinary growth,” said Ms. Drennan.

About De Novo Corporation:

De Novo Corporation is an Online and Offline marketing communications holding company, consisting of Creative Solutions International, an integrated direct response advertising agency; Convergence Group, an international management consultancy; Owen/Holloway Group, a brand development and corporation communications advertising agency; and Stratcom, a business and consumer intelligence company.

De Novo Corporation offers a broad range of integrated marketing communications services to Fortune 1000 companies throughout the world. It currently has offices in Arizona, Canada, Delaware, Florida, Georgia, and New York. Currently a private company, De Novo Corporation is intending to conduct an initial public offering in early 2002.

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Legal Club for Cardholders

Legal Club of America and Randolph and Associates have signed an agreement through which Legal Club’s Family and Small Business plans will be marketed to R&A’s client base of millions of credit card holders for whom they currently provide discounted health benefits.

R&A operates an extensive telemarketing center and works with many of the nation’s largest call centers to solicit sales of their discount health services programs, averaging as many as 50,000 plans per week. R&A will seek to achieve similar sales levels for Legal Club’s plans over the next few months.

Last month, during the training and modeling stages of the national rollout, R&A generated over $75,000 in revenues for Legal Club. If R&A succeeded in selling 50,000 plans per week, this would represent as much as twenty times that monthly revenue figure.

Chris Randolph, R&A chairman and chief executive officer, stated, “My industry has never marketed free Internet access and a legal plan in tandem. The combination should appeal to our credit card bases and allow our call centers to achieve greater penetration percentages. In addition, the quality of the legal plan coupled with free Internet access should help increase retention rates, which are currently 75%.

“Brett Merl, chairman and CEO of Legal Club of America, stated, “R&A is a leader in its industry, and we are pleased to finalize a mutually beneficial arrangement with them. R&A has quickly become an integral part of our accelerated revenue growth, which presently runs at about 30% per month.”

About R&A:

Randolph & Associates has been a nationwide leader in the direct marketing industry, selling millions of discounted health plans through sophisticated telemarketing, order processing and fulfillment call centers. R&A offers two legal plans sponsored and administered by Legal Club of America.

About Legal Club of America:

Legal Club of America Corp. is a nationwide leader in marketing products and services to consumers in the workplace. Legal Club of America has been successfully marketing a nationwide discount legal referral program for over four years through a network of over 20,000 independent and captured insurance agents and approximately 30 of the nations largest insurance companies such as Transamerica Assurance and Aon Corp.

The program provides individuals and small business owners with a variety of free and deeply discounted legal services from a network of over 11,000 qualified attorneys throughout all 50 states, Puerto Rico, the US Virgin Islands and Singapore. The Company markets its products through a combination of work-site enrollments, infomercials, direct marketing and Internet marketing through its Web site: [www.legalclub.com][1].

Legal Club of America has strategic marketing arrangements with NetZero.com (NASDAQ:NZRO), Priceline.com (NASDAQ:PCLN), and EmployeeSavings.com and is currently providing its plans to the employees of companies such as 3M, Cendant Corp., Boeing, Tower Records and Honeywell. The Company is headquartered in Ft. Lauderdale, Florida and has regional sales offices in Tampa, Chicago, and New York. Institutional investors include SF Sentry Fund and Edelson Technologies and Bulldog Investments.

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

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Hawkins Heads FDC UK

FDR Limited, the United Kingdom-based subsidiary of electronic payments leader First Data Corp., today announced that Gerald E. R. Hawkins has been named chief executive.

In his new role, Hawkins will oversee First Data’s card processing operations in Europe, including locations in the United Kingdom, Germany and Spain. He will report to Eula Adams, executive vice president of First Data Corp.

“With both extensive payment services and international marketing experience, Gerald will add a new dimension to our existing card business. Under his leadership, I am confident that First Data Resources will continue to enhance and expand our presence in Europe,” said Adams.

Hawkins most recently served as senior executive for Lloyds TSP Group PLC, the United Kingdom’s largest retail bank. He managed Lloyds TSB’s card business, the number two card issuer in the United Kingdom. He is also a director of VISA Europe and VISA International. Prior to the merger of Lloyds and TSP, he was general manager of Lloyds Bank payments business – cards, sterling and foreign payment activities. Hawkins will be located in Basildon, England.

FDR Limited is Europe’s leading independent third party processor, whose services include card transaction processing and related information services. FDRL has approximately 2,500 employees servicing $25 million cardholder accounts on behalf of 50 clients who include major high street banks, building societies and other financial institutions in the United Kingdom and mainland Europe.

Atlanta-based First Data Corp. 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 buisnesses to buy goods and services using virtually any form of payment. With more than 30,000 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 network includes approximatedly 86,000 agent locations with operations in 178 countries and territories. For more information, please visit the company’s website at [www.firstdatacorp.com][1].

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

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e-SELECT

Royal Bank announced the launch of e- SELECT, a virtual point-of-sale terminal that provides on-line businesses of all sizes with a new, real-time Internet payment service.

Royal Bank’s e-SELECT may be easily integrated with most leading on-line shopping carts and order forms and can process virtually any volume of transactions. In addition, it enables merchants to accept most major credit cards.

Merchants can choose to use e-SELECT on its own, as it is not part of a package of e-commerce products. This Internet payment solution allows merchants and Web developers flexibility and choice as it can be easily integrated into any Web site whether the site is existing or being developed. Web developers will not have to create their own payment “plug” when designing sites for merchants.

“e-SELECT is just one example of Royal Bank’s focus on creating value- added solutions for our customers on their terms,” said Frank Moore, vice- president, merchant services and point-of-sales at Royal Bank. “e-SELECT provides our on-line merchants with the choice and flexibility needed to succeed in the world of e-commerce.”

e-SELECT is a secure and convenient real-time payment solution for both merchants and consumers. All it takes is one click on the “pay” button and within seconds the consumer has their on-line transaction receipt. In addition, the transaction is approved and completed instantly, reducing errors and lost revenue for merchants by eliminating the need to input transactions manually.

Both the consumer and merchant are ensured secure transmission and storage of data with e-SELECT through Secure Socket Layer (SSL) technology. SSL provides secure transmission of cardholder data to and from the cardholder and the merchant’s virtual store. Once the cardholder’s information is received, e-SELECT securely stores the credit card data in accordance with bank security standards. This eliminates the merchant’s concern about holding cardholder data within their own environment.

Royal Bank will provide technical and business support for e-SELECT. There will be a Help Desk for merchants to call should they have questions about their account or need technical assistance.

Royal Bank Merchant Services was first in Canada to complete an end-to- end Secure Electronic Transaction (SET) for payments on the Internet in 1998 and since 1999 has offered a suite of on-line payment processing options for on-line retailers. Royal Bank also launched an on-line directory in November 1999 located at [www.royalbank.com][1] where its on-line merchants benefit from the 80,000 visitors who access the site each day. The virtual point-of-sale terminal e-SELECT joins a family of physical world payment processing terminals including SmartSelect, a touchscreen point-of-sale terminal, TransSelect and wireless point of sale terminals.

Royal Bank of Canada (RY) is a diversified global financial services group and a leading provider of personal and commercial banking, investment and trust services, insurance, corporate and investment banking, on-line banking and transaction-based services including custody. The group’s main business units include Royal Bank, RBC Dominion Securities, Royal Investment Services, RBC Insurance and Global Integrated Solutions. The group has 49,000 employees who serve 10 million personal, business and public sector customers in 30 countries. For more information, visit Royal Bank’s Web site at [www.royalbank.com][2].

[1]: http://www.royalbank.com/
[2]: http://www.royalbank.com/

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Merchant WebLink

Dublin, Ireland-based Peregrine Systems this weekend launched ‘Merchant WebLink’, a web-based solution for acquirers to support the key area of dispute processing. The new service links acquirers and merchants electronically to facilitate end-to-end, online, automated dispute processing 24X7. Online communication eliminates the need for printing, photocopying, scanning and posting documentation related to a dispute case. In addition the costs of servicing the merchant, such as telephone charges and the handling of incoming and outgoing requests are minimized. For the merchant, this new Internet product gives online, instantaneous access to all information associated with chargebacks and retrieval requests against them. This cuts the cost of dispute processing for the merchant while speedy fulfillment and resolution of disputes helps the merchant avoid write-offs and the likelihood of chargebacks and associated fees. Accelerated fulfillment also generates revenue for acquirers by allowing them to take greater advantage of fulfillment incentives offered by the card associations.

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Trial Week #2

As the VISA/MasterCard antitrust trial moves into the second week, the DOJ announced Friday it has dropped top Discover executives from its live witness list. Morgan Stanley Dean Witter chairman Phillip Purcell; David Nelms, president of Discover Financial Services; and Roger Hochschild, EVP of business development at Discover will not testify in-person. However it is expected the Government will use some of their videotaped deposition. This week the DOJ expects to call Kenneth Chenault from American Express; Adam Rothchild from American Express; James Cracchiolo from American Express; Alex Pete Hart, ex MasterCard CEO; Russell Hogg, ex MasterCard CEO; Bennett Katz, former general counsel, Visa U.S.A./International; Joseph Saunders, FleetBoston Financial and former MasterCard board chairman; and Christopher Zyda from Amazon.com.

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Web Stranded

A new study released this morning by Celent Communications revealed that 56% of the financial services firms studied either did not accept Web-based queries or did not respond to e-inquiries placed online by potential customers. Celent estimates that the financial services industry will spend nearly $500 million developing and deploying Internet technologies, but only 23% of the financial institutions surveyed with well-qualified leads provided acceptable email responses and only five percent of all firms surveyed personally contacted the prospect via telephone to follow up on the opportunity. The most common response received was no response at all. Jointly sponsored by Onyx Software, Microsoft, and Genesys Labs, the study was conducted in April 2000.

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New CardService Headquarters

Cardservice International will celebrate the relocation of its 800-employee corporate headquarters to Moorpark, California with a special ribbon-cutting ceremony on Monday, July 3, 2000, from 6 p.m. to 9 p.m.

Cardservice International’s relocation celebration kicks off with a building inauguration at the company’s new 140,000-square-foot site at 6101 Condor Drive, Moorpark, followed by a tour of the recently refurbished facilities. This site, which occupies more than 17 acres, is the former home of Litton Industries. Cardservice International’s President and CEO Chuck Burtzloff and co-founder, Cardservice Executive Vice President Lisa Burtzloff, purchased the property and began renovation in March 2000.

Cardservice International will make this ribbon-cutting a special event for employees, associates and city officials. The company will provide food and beverages, live music, games and carnival booths. The Cardservice International employee family will travel to Arroyo Vista Park to enjoy Moorpark’s yearly fireworks extravaganza, which the company sponsored this year for the first time.

Cardservice International, Inc., is the leader in providing credit card transactions to more than 180,000 businesses in the traditional marketplace and on the Internet. The company processes more than 125 million transactions annually and has an annual credit/debit card volume of more than $12 billion.

Cardservice International has more than 800 employees, including a customer service staff of 200 that provides merchant support 24 hours a day, 7 days a week, in more than 140 languages and dialects. With more than 240 offices and 2,500 sales representatives nationwide, Cardservice International is committed to its customers and providing complete merchant satisfaction.

The Cardservice International 75-employee Call Center has already relocated to the Moorpark site, and the rest of the company is expected to move department by department by the end of this year.

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UK Debit

‘VISA Debit’ transactions have, for the first time, surpassed the number of ‘Switch’ transactions in the UK. According to new data released this morning by the Association for Payment Clearing Service, ‘VISA Debit’ transactions for the month of April 2000 reached £2,956 million or 2% more than ‘Switch’. In the UK payment by check has declined considerably, by nearly 28% since 1990 says APACS. The on-line ‘Switch’ brand is limited to domestic acceptance whereas ‘VISA Debit’ has global acceptance. According to CardPlanet ([www.cardplanet.com][1]), major ‘VISA Debit’, ‘VISA Electron’ and ‘VISA Delta’ issuers in the UK include Lloyds TSB, Barclays, Abbey National, Alliance & Leicester and Cooperative Bank.

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

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