Card Debt Soars

The 1999 holiday shopping season pushed revolving consumer credit significantly higher during January. According to preliminary figures released Tuesday afternoon by the Federal Reserve, Americans piled on $7.5 billion in outstanding revolving credit during January. Last year, American cardholders added $6.2 billion during January 1999. Over the past twelve months consumers have added a total of $37.6 billion to revolving credit. Revolving credit is mostly credit card debt. Overall consumer credit is now growing at a 14.6% rate, according to the FRB. At the end of January American consumers were $1.412 trillion in debt, exclusive of home mortgages.

REVOLVING CREDIT HISTORICAL
Jan 00 Dec99 Nov99 Oct99 Sep99 Aug99 Jul99
%GRWTH: 15.1% 12.5 10.2 -0.5 0.0 2.5 12.1
$OWED: $603.5 596.0 589.8 584.3 584.5 584.5 584.6

Jun99 May99 Apr99 Mar99 Feb99 Jan99
%GRWTH: 13.8 4.5 5.6 -0.9 3.4 11.6
$OWED: 578.5 572.2 569.9 567.3 567.5 565.9

Source: Federal Reserve; revised figures as of 3/07/00;
For complete historical data visit www.carddata.com.

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MBNA Wedding Loans

An online wedding resource called, The Knot, announced yesterday a three-year partnership with MBNA to provide financial-related services to brides and grooms. As part of the new program, MBNA will sponsor a special editorial section on The Knot, geared towards helping couples plan their wedding budget. This area, set to launch next month, will feature articles on budgeting and finance-related topics. In addition, couples will be able to find out more about the services that MBNA offers to engaged couples, including loans to help them pay for their wedding. This section on The Knot will link to an MBNA website where to-be-weds can apply on-line for a special wedding loan and receive an instant decision. Applicants who are approved will receive checks from MBNA which can be used for any or all wedding-related expenses.

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Princivalle to TradeOut.com

TradeOut.com (www.tradeout.com), a global Internet marketplace for business surplus, announced Tuesday that it has named Karin Princivalle as its Vice President of People.

Karin joins TradeOut.com from Citigroup’s credit card business, the largest credit card business in the world with 53 million accounts and 90 million cards in circulation. In this role, Karin had responsibility for approximately 15,000 employees located throughout North America. She brings over 20 years of human resources experience from Citigroup, Frito-Lay and Kaiser Aluminum.

During Karin’s tenure with Citigroup, she was involved in business start-ups in Washington, D.C. and San Antonio, Texas; led the integration of the AT&T Universal Card acquisition and managed the human resources activities in Citigroup’s emerging markets in Central and Eastern Europe, the Middle East and Asia.

“Karin has a strong track record of developing strategic Human Resources frameworks focusing on leadership development and building high performance work environments,” said TradeOut.com CEO George Samenuk.

Princivalle joins TradeOut.com after 15 years with Citigroup. She received her BS in Labor Relations from LaSalle University and her MA in Industrial Relations from St. Francis. TradeOut.com ([www.tradeout.com][1])

TradeOut.com, a privately held company based in Ardsley, New York, is a business-to-business Internet marketplace for excess inventory and idle assets. TradeOut.com offers a fast and easy way to buy and sell business surplus, and features products for sale from a wide variety of industries, from consumer products to utilities. For more information about TradeOut.com, visit [www.tradeout.com][2], send an e-mail to customerservice@tradeout.com or call 1-888-525-TRADE.

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

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Faster & Smarter

Schlumberger unveiled a new modem option for its ‘MagIC 6000’ POS terminal that provides the retail industry with the fastest connectivity on the market. The new modem provides a choice of 9600 and 14400 baud full-duplex transmission rates in both asynchronous and synchronous operation. Schlumberger has also extended the scope of the ‘MagIC Management System’ with remote maintenance capabilities, giving banks, distributors and maintenance organizations the capability to fine-tune performance while reducing maintenance costs. ‘MagIC terminals’ continually log operational information, which can now be accessed remotely and analyzed. Banks and card issuers can now monitor authorization response times, file transfer times and details of any failed transactions to ensure that terminals continue to deliver fast and efficient transactions for both the card user and retailer. There is also capability for detecting potential problems, such as an increase in the number of swipes required to read a magnetic stripe card. Schlumberger also announced Tuesday it has gained certification for its ‘MagIC 6000’ POS terminals for use in health applications in the next phase of France?s national electronic health card program, ‘Vitale’.

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Citi Invests in Paytrust

Paytrust.com, the service that lets consumers receive, review, pay and organize all of their bills online, announced Tuesday that it will receive an investment from Citigroup’s e-Citi unit, pending regulatory approval. The funds will be used to continue to expand marketing and operations. This private placement brings the total amount of funds raised over the past year by Paytrust.com to nearly $50 million.

The Paytrust.com service harnesses the power and efficiency of the Web to deliver 100 percent of consumers’ bills to a single, secure Web site and direct payments from users’ pre-existing checking accounts. Paytrust customers simply decide which bills they want to receive online and the bank accounts from which they want payments made. Like a personal assistant, Paytrust.com manages a consumer’s bills and payments. Paytrust’s SmartBalance(TM) feature aggregates a customer’s bank account information with Paytrust payment information to automatically balance their checkbook.

“Receiving an investment from one of the world’s leading financial services companies is a testament to the strengths of Paytrust.com,” said Edward G. McLaughlin, CEO of Paytrust.com.

Leveraging proprietary, patent-pending technology, as well as the ability to work with any biller and any bank, Paytrust.com delivers on the promise of consumer-focused electronic bill presentment and payment (EBPP). Customers have quick and easy access to Paytrust.com to view and pay all of their bills anytime, anywhere. As an added incentive to try the service, consumers who visit the Paytrust.com site can enroll for a three-month trial period. Following the trial, subscribers simply pay a monthly fee of just $8.95.

About Paytrust.com

Paytrust.com is the flagship service of Paytru$t, Inc., a privately held company based in Princeton, New Jersey. Founded in October 1998, the company is financially backed by American Express, AT&T Ventures, GE Equity, SOFTBANK Venture Capital, and Spectrum Equity Investors. More information on the company can be found on its web site located at [http://www.paytrust.com][1] or by calling 1-877-PAYTRUST.

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

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Green Stamps Card

Fleet Credit Card Services and S&H greenpoints.com, Inc. have teamed up to offer co-branded credit card. Incorporated in 1896, S&H introduced ‘Green Stamps’. In early 1999, S&H was re-acquired by a group of investors led by a member of the founding Beinecke family (Sperry) to reinvent the company for the digital economy with the launch of S&H greenpoints.com, Inc. and ‘S&H greenpoints’, a branded digital rewards currency. Under the Fleet deal consumers can earn ‘S&H greenpoints’ in three ways: through any purchase on the S&H greenpoints Fleet co-branded credit card, through an authorized bricks and mortar merchant, and while purchasing online from more than 60 merchants through S&H greenpoint.com’s consumer shopping portal. S&H cardholders can redeem or save these points for rewards like computer and electronic products, retail merchandise, and travel, or donate them to charitable community partners.

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Small Biz Voice

American Express Small Business Services launched a campaign to engage small business owners in a national dialogue about the issues that matter to them most. The year-long ‘Voices From Main Street’ program, began with the airing of a 30-second television advertisement last night. Full page ads appear this morning in the Wall Street Journal and other major papers. Features of the program include: national opinion polls to take the pulse of entrepreneurs on important issues; a print advertising campaign encouraging business owners to speak out; a web site where small business owners can discuss issues, chat with their peers and industry leaders and obtain relevant information on the issues; a nationally broadcast town hall dedicated to small business owners; and regional forums for small business owners to meet with their peers and engage in these discussions on a local level.

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Abrams on PBS

Multimedia Productions, Inc. is proud to announce the appearance of Steve Abrams, senior vice president, Corporate Payment Solutions for MasterCard International, on World Business Review. The weekly television series is hosted by General Alexander Haig, Secretary of State during the Reagan administration. The topic of the discussion is “Redefining the Movement of Money”.

“MasterCard International was selected to appear on the program because its innovative “One-Card” program is helping companies simplify and improve their business practices, while saving both time and money,” said Clayton Haggit, the show’s associate producer.

What started as a product targeted specifically at consumers, the credit card soon became a must in business. Using a business-only credit card, organizations were better able to keep track of expenses, examine trends and retool their practices where needed. Soon, many companies began using a different card for individual expense categories, such as travel & entertainment, office supplies, etc. Today, the business card family has expanded to include fleet cards, which allow companies with large numbers of vehicles (or ships) to more closely track fuel and maintenance expenses, while benefiting from the convenience of a credit card.

For many businesses, the trend has been to return to the days when only one card was used for multiple expenses. This “one card” policy – which integrates purchasing, travel and fleet functions all on one credit card – has allowed many companies to simplify their employees’ lives while streamlining what has become a major portion of their operating expense: accounting.

Abrams says that recent advances in corporate card systems “allow us to provide financial managers with the tools and techniques to effectively control, streamline and simplify routine business expenses, without having to maintain multiple card programs.”

To help organizations keep close tabs on their one-card accounts, MasterCard International maintains a centralized database, which includes all account activity. This database is updated at the end of each business day and the information is the sent to the corporations, “usually within forty-eight hours,” said Abrams, who added that this is the primary characteristic which sets MasterCard apart from others offering a one-card solution.

Although having a single card in your possession for all types of purchases makes logical sense, some financial managers have been reluctant to embrace the one-card philosophy. Indeed, there was little objective evidence in favor of a one-card solution, until Deloitte & Touche LLP studied these programs and looked at the ways they impact a business.

In a field report filmed on location at Deloitte & Touche headquarters in Houston, Texas, World Business Review’s Susan Starnes spoke with L. David Blanc, Senior Manager in the Management Solutions and Services practice, about the study, which was authored by MasterCard International. Blanc said that among other findings, the study revealed that there are relatively few one-card programs in use today, and that they are viewed as “unique and innovative.”

However, said Blanc, those companies that are using such a program have been pleased with the results. And, he added, successful one-card programs can be found in all types of businesses. Said Blanc, “The results reveal that the one-card solution is already in place and considered successful by a wide variety of organizations, and the acceptance of one-card is growing rapidly.”

Deloitte & Touche gathered information from 19 U.S. organizations in industries including financial services; government; healthcare; education; manufacturing; packaged goods; real estate; retail and utilities. Blanc said twelve of the organizations surveyed have a one-card program in place, while the others have separate card programs for T&E, vehicle fleet and/or purchasing. Many of these, he said, are considering a one-card solution.

The main findings from the study indicate that utilizing a one-card program saved a company both time and money, compared to simultaneously managing several credit card programs. An added benefit of using a one-card program, said Abrams, is an overall improvement in the ability to manage information. “Using a one-card program consolidates and generally improves the quality of management information and business process control,” he stated. This finding is in opposition to some deep-seeded beliefs on the part of those charged with managing their company’s credit card program. Blanc said, “The perception among many card program managers of traditional separate card programs is that a single card cannot deliver the same information and control. In fact, our study found that many single card programs can deliver the same information control and compliance benefits as separate card programs, without redundant costs.”

Taped in Washington, D.C., World Business Review currently airs on PBS the Business Channel, and in prime business slots in numerous Public Television markets, including San Francisco, New York, Denver and Miami. The weekly series can also be viewed on TWA, United Airlines, or from any desktop computer via AENTV.

Individual videotapes or continuing education systems (via Indiana State University) are available by calling 1-800-WBR-1032, or by visiting [www.wbrtv.com][1], which showcases feature topics and specific companies’ technology.

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

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ID Theft Soars

The Federal Trade Commission warned a Senate Committee yesterday that identity theft is a serious and growing problem in the US. The FTC says that its newly-installed, toll-free FTC hotline to take identity theft calls is already logging 400 calls a week. The FTC testified it is anticipating the call volume to grow to 200,000 a year. The FTC pointed to other statistics to make its point. The General Accounting Office reports that consumer inquiries to the Trans Union credit bureau’s Fraud Victim Assistance Department increased from 35,235 in 1992 to 522,922 in 1997. The Social Security Administration’s Office of the Inspector General conducted 1153 social security number misuse investigations in 1997 compared with 305 in 1996. In 1999, the telephone hotline established by the Social Security Administration Inspector General received reports of almost 39,000 incidents of misuse of Social Security Numbers. The FTC and the Department of Treasury are working together on a National Summit on Identity Theft, scheduled for March 15 and 16.

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MyPoints for Staples VISA

MyPoints.com announced Tuesday that its card services arm, Alliance Development Group, has been chosen by U.S. Bancorp to manage the rewards program for the new Staples Visa Business Card.

Yesterday’s announcement brings the number of credit card rewards programs operated by MyPoints.com on behalf of U.S. Bancorp to three, including programs for the nation’s leading supermarket retailers, Albertsons and the Kroger Co.

“U.S. Bank works with leaders in all areas to provide its clients with the very highest level of service,” said Daniel Frate, president of Payment Systems for U.S. Bancorp. “MyPoints.com’s card services group has the experience we can rely on to operate complex rewards programs for demanding partners, and it continues to be our program manager of choice for high-profile rewards programs such as this.”

“MyPoints.com continues to strengthen its leading position in the substantial market for credit card services both online and offline,” said Frank Pirri, Senior Vice President of Offline Commerce for MyPoints.com. “By working closely with leading partners such as U.S. Bank, MyPoints.com believes the company is well positioned to take advantage of the inevitable integration of commerce, credit cards, loyalty programs and the Internet.

The new Staples Visa Business Card, designed to provide small businesses with the credit they need, is the first such business credit card offered by an office supplies retailer and one of the only business cards to offer rewards with no annual fee. With every dollar charged on the Staples Visa Business Card — at Staples or anywhere else Visa is accepted — cardholders will earn points redeemable for free Staples products and services, free airline tickets, restaurant and movie certificates, hotel accommodations and rental car services. The points are accrued at the company level and can be used by the business or gifted to employees or customers.

About Staples, Inc.

Staples (NYSE: SPLS) is a $7 billion retailer of office supplies, furniture and technology to consumers and businesses from home-based businesses to Fortune 500 companies in the United States, Canada, the United Kingdom, Germany, the Netherlands and Portugal. Headquartered outside Boston, Staples invented the office superstore concept and today is the largest operator of office superstores in the world. The company has over 46,000 employees serving customers through more than 1,100 office superstores, mail order catalogs, e-commerce and a contract business.

About U.S. Bancorp

Minneapolis-based U.S. Bancorp, with $82 billion in assets, is the 12th largest bank holding company in the nation and operates approximately 1,000 banking offices in the Midwest and West. The company provides comprehensive banking, trust, investment and payment systems products and services to consumers, businesses and institutions. It operates a network of 5,300 ATMs and provides 24-hour, seven-days-a-week telephone customer service. The company offers full-service brokerage services at approximately 100 offices through U.S. Bancorp Piper Jaffray. The company is the largest provider of Visa corporate and purchasing cards in the world, and is one of the largest providers of corporate trust services in the nation. For further information, please see the U.S. Bancorp web site at [http://www.usbank.com][1].

About MyPoints.com

MyPoints.com is a leading developer of Internet direct marketing services and loyalty infrastructure. The Company’s database-driven direct marketing service, MyPoints(R), enables businesses to identify, acquire and retain customers through a unique program that integrates highly targeted email and Web-based offers with incentive points to respond to those offers both online and offline. MyPoints.com is also a leading developer of Internet loyalty infrastructure, including MyPoints(R) Network and custom-branded rewards programs based on the Company’s proprietary technology platform — the Digital Loyalty Engine(TM). MyPoints.com has sales offices in cities nationwide. For direct marketing and loyalty product information please call toll-free 800-890-9351, 212-699-8050, ext. 7702 from outside North America, or visit them online at .

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

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CyberCash Record Volume

CyberCash, Inc., the world’s leading provider of electronic payment technologies and services, announced Tuesday that the company’s Internet payment processing volumes surpassed eight million transactions in February, tripling the number from the same month last year.

CyberCash also said that hrblock.com, the popular Web site of tax giant H&R Block, led the way among CyberCash’s 20,000 Internet merchants with more than one million transactions processed in February.

“This tripling of transactions in a month that is usually slower than others demonstrates both the success of CyberCash and the phenomenal growth of Internet payment processing,” said Chuck Riegel, executive vice president of worldwide marketing.

“Internet payment volumes are exploding and CyberCash is uniquely positioned to capture this business,” he said. “Internet payment processing is required by all sorts of new businesses, from filing taxes to political contributions to our bread-and-butter business of e-commerce.”

H&R Block is a diversified company with subsidiaries providing a wide range of financial products and services. H&R Block Tax Services Inc. served 18.9 million taxpayers in more than 10,000 offices worldwide in 1999. This year, H&R Block began offering free electronic filing in the majority of its U.S. offices. Block’s Web site, hrblock.com, offers online tax preparation, tax advice, brokerage services, mortgages, insurance and other financial services. Block also publishes the award-winning TaxCut software program.

“We’re pleased with the growth of online tax preparation and sales of our tax software on the Internet,” said Gene Goldenberg, senior vice president for software and e-commerce at H&R Block. “We chose CyberCash to help us handle this business because they offer the speed, reliability and security which are necessary to be competitive on the Web.”

CyberCash has experienced enormous growth as the leading provider of payment processing services to the burgeoning Internet economy. CyberCash doubled its merchant base in less than a year to the current 20,000 that includes ReplayDVD.com, hrblock.com and FatBrain.com. The company experienced a 110 percent increase in Internet revenues between 1998 and the end of 1999. In February of last year, CyberCash processed 2.6 million transactions.

About CyberCash

CyberCash, Inc., the world’s leading provider of Internet payment services and electronic payment technologies, is a pioneer in payment software and solutions spanning both the e-commerce and physical world markets. CyberCash today has more than 20,000 Internet merchant customers, more than 130,000 physical world software products shipped and solutions that are delivered as either software or services. CyberCash offers the broadest reach in the payment industry with a comprehensive distribution network that includes direct and indirect sales as well as marketing partnerships with financial institutions, Internet service providers, application service providers, storefront solution providers and leading independent software vendors.

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AmEx Invests in Respond.com

American Express announced Tuesday that it has made a minority investment in Respond.com, a leading “shop by request” online service that connects buyers with sellers. The two companies also signed a joint marketing agreement in which American Express will promote the Respond.com services on its merchant Web site ([http://www.americanexpress.com/me rchant][1]), and Respond.com will promote American Express services on its Web site. Terms of the deal were not disclosed.

“We are delighted to make an investment in Respond.com,” said Pierric Beckert, Senior Vice President of Interactive Investments at American Express. “Consumers and businesses can save time and money with Respond.com’s easy-to- use online shopping service and benefit from the company’s excellent customer service. In addition, merchants of all sizes have a great way to gain new customers at a low monthly fee. We look forward to working with Respond.com to deliver these benefits to our customers.”

Buyers using Respond.com’s free “shop by request” service simply type in a description of the item they want to purchase at [http://www.respond.com][2]. A buyer’s request is forwarded to the Respond.com sellers who have registered for requests in given categories. Sellers respond via email to the buyer, who then chooses which seller to contact directly to negotiate the purchase. Buyers remain anonymous to the sellers throughout the process, only revealing themselves when they are ready to make a purchase.

Buyers can browse through more than 3,000 product and service categories, such as travel, consumer electronics, antiques and office supplies, and use Respond.com’s search feature to find exactly what they’re looking for.

“We are pleased to be aligned with a company like American Express that understands the importance of the buyer-merchant dynamic. This investment and our work with American Express are instrumental to our growth in 2000,” said Will Clemens, CEO of Respond.com. “We are pleased that they share our enthusiasm of providing buyers with a way to ‘shop by request’ online and receive exactly what they are looking for.”

American Express Company is a diversified worldwide travel, financial and network services company founded in 1850. It is a leader in charge and credit cards, Travelers Cheques, travel, financial planning, investment products, insurance and international banking. At [http://www.americanexpress.com][3], consumers, small businesses and corporations can choose from a wide range of Internet products and services. American Express is making minority equity investments in emerging Internet companies, as well as building strategic alliances with these organizations by signing marketing and supplier agreements, obtaining exclusive offers for customers, or targeting investment dollars for marketing purposes.

Respond.com(TM) ([http://www.respond.com][4]) is the leading online shopping service that allows buyers to “shop by request” using their own words to request a wide range of products and services. Unlike online auction sites or shopping search engines, Respond.com takes the work out of shopping, saving buyers effort and time. Sellers with Respond.com benefit by receiving highly targeted leads from customers who are ready to buy. Respond.com has partnered with American Express, America Online, Excite@Home and additional online businesses to provide their members access to Respond.com’s community of buyers and sellers. Based in Redwood City, California, the company is funded by The Barksdale Group, Benchmark Capital, Hummer Winblad Venture Partners, Morgan Stanley Dean Witter Private Equity along with Access Technology Partners, Amerindo Capital Management, Attractor Investments and Index Ventures. Respond.com was founded in 1998.

[1]: http://www.americanexpress.com/merchant
[2]: http://www.respond.com/
[3]: http://www.americanexpress.com/
[4]: http://www.respond.com/

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