Y2K OK

The Y2K bug has yet to emerge in the payment card industry. Except for a well publicized glitch in London last week, the Y2K gremlins have yet to appear. Last Tuesday around 15,000 retail POS terminals in the UK began rejecting certain credit cards over a conflict with year 2000. The affected terminals were manufactured by UK-based Racal with most of the terminals deployed by HSBC. The glitch was resolved by Wednesday. VISA reported over the weekend that it processed 48 million error-free transactions worldwide in the first 19 hours of 2000, a 35% increase over the same period last year. The 19 hour period began with the arrival of the new year in Kiribati in the South Pacific. MasterCard also reported Saturday that its St. Louis center processed more than 17.5 million transactions by 10:30 pm CST without Y2K problems. ATM networks also report this morning a Y2K glitch-free weekend.

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KeyCorp Deal

Associates First Capital and KeyCorp announced last week an agreement to enter into an agent bank partnership, under which the companies will jointly manage KeyCorp’s credit card program. Under the terms of the agreement, The Associates also will acquire KeyCorp’s credit card portfolio of approximately $1.3 billion in receivables and nearly 600,000 active VISA and MasterCard accounts by the end of January. KeyCorp projects a net gain of approximately $330 million. As part of the agreement, The Associates will assume control of the KeyCorp credit card facility in Toledo and expects to retain its more than 300 employees.

KEYCORP SNAPSHOT (3Q/99 data)

Recv: $1,307,522,752 3Q Vol: $566,106,700
Accts: 1,083,872 Actives: 597,465 Cards: 1,429,766

Source: CardData (www.carddata.com)

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Triumphant

Vectrix.com acquired Triumphant Enterprises, Inc. last week. TX-based Triumphant, founded in 1991, will change its name to Triumphant Enterprises, Inc., a subsidiary of Vectrix.com and assume its position in the realm of interactive communications services. The acquisition further allows Vectrix.com to meet the needs of clients without third-party vendors. TEI currently authorizes VISA, MasterCard, American Express, Discover, Diners Club, Carte Blanche, and JCB. The firm also has debit links into many major debit networks. Vectrix.com is a full-service provider of e-business solutions, including Web site design and development, performance marketing and online branding, media services, hosting, and credit card transaction processing. Vectrix.com’s clients include Apple Computer, America Online, Hitachi, Compaq, Conoco, BMG Entertainment, Kraft Food Services, Devon Energy Corporation, Enron International, Emerson Radio, Hilton Worldwide and Nest Entertainment.

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NPC – Heartland

National Processing announced this morning it has purchased a merchant processing portfolio, consisting of 15,000 regional accounts, from Heartland Payment Systems LLC. The purchase represents approximately one-third of Heartland’s total portfolio. NPC will provide point-of-sale credit card and on-line debit card transaction processing for the accounts, which represent more than $2 billion in annual transactions conducted with local and regional merchants. NPC estimates the new accounts will generate about $15 million in additional annual revenues.

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Korean Card Venture

The international law firm of Coudert Brothers last week announced the closing of a credit card joint venture between Korean Exchange Bank Credit Services and Olympus Capital Holdings Asia. Coudert represented Olympus in this transaction.

Olympus is a U.S. investment company established to make direct investments in companies throughout Asia. It manages funds guaranteed by the U.S. Overseas Private Investment Corporation as well as funds from Ziff Brothers Investments.

Timothy O’Brien, a partner with Coudert Brothers’ Hong Kong office and the supervising lawyer on the project, commented on the significance of this transaction noting, “The transaction brings to a major Korean financial services group financing and technical expertise in credit card business development and management. As Korea continues to develop to a mature economy, credit card use will grow dramatically, providing significant opportunities to KEBCS and its financial partners.”

At the closing, the Board of Directors of Olympus Capital Korean Exchange Bank (KEB) announced its approval of a capital investment for a joint venture agreement between KEBCS, a subsidiary of KEB, and Olympus. As structured, the agreement requires Olympus to undertake the issuance of new shares by KEBCS. Olympus will pay 100 billion Korean Won (KRW) this year, KRW 38 billion of which will be used to increase the capital of KEBCS over the next two years. The agreement will also expand the equity of KEBCS shareholders from KRW 129 billion to KRW 267 billion and enable KEBCS to strengthen its competitive position as well as benefit from advanced financial know how and foreign expertise. Olympus will be introducing an expatriate chief operating officer and creating other new positions in the areas of marketing, finance and risk management in an effort to improve the management of KEBCS.

KEB is one of the largest commercial banks in South Korea. It is anticipated that this joint venture will enable KEB to construct stronger consumer finance abilities and more stabilized profit base.

Founded in 1853 and headquartered in New York City, Coudert Brothers is a single, integrated global law firm with offices in 15 countries. It employs over 525 lawyers worldwide in seven U.S. and eighteen overseas offices and provides legal support to its global clients for investment, finance, international trade, market access, patent and intellectual property, regulatory compliance and dispute resolution. In addition to its Hong Kong office, Coudert Brothers has offices in New York, Washington, D.C., Moscow, St. Petersburg, London, Paris, Brussels, Singapore, San Francisco, Beijing, Sydney, Los Angeles, San Jose, Tokyo, Bangkok, Jakarta, Ho Chi Minh City, Hanoi, Berlin, Denver, Montreal, Almaty, Palo Alto and Frankfurt, as well as formal affiliations with local law firms in Mexico City and Budapest.

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Discover Millionaire

Discover Financial Services announced Friday that Samuel Mundy of Accokeek, MD was the recipient of the $1 million grand prize in the ‘Discover Card Cashback Bonus Countdown Sweepstakes’ amid thousands of cheering New Year’s Eve revelers in New York’s Times Square. Mundy’s name was revealed on the Discover Card sign atop One Times Square Friday morning. Five finalists were selected from a pool of 2,000 qualifiers in the sweepstakes. Each finalist and a guest received a trip to Times Square for New Year’s Eve to be present for the announcement of the winner. In addition to the trip to New York, the remaining four finalists each won $25,000. Discover Card began announcing 2,000 qualifiers on Sat, Oct. 9, at 5 p.m. EST, one for each hour remaining in 1999. These 2,000 qualifiers each won a special $100 ‘Cashback Bonus’ award and were announced on the Discover Card sign in Times Square as well as on Discover’s website. Discover Card’s 55’x55′ electronic billboard is directly below the spot where the famous New Year’s Eve ball descends. The sign is seen by 1.5 million people every day and 30 million tourists a year.

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Owens to Associates

James A. Owens has been promoted to senior vice president of Portfolio Management for Credit Card Operations at Associates First Capital Corporation. In this position, Owens will oversee credit card portfolio risk management activities for the U.S. bankcard and private label divisions.

Prior to joining The Associates, Owens spent three years with U.S. Bancorp where he was responsible for credit card portfolio risk management. He has a degree in engineering from the University of Missouri at Rolla and a Masters at Business Administration from St. Louis University.

Associates Credit Card Operations issues Visa and MasterCard credit cards as well as a number of private label credit cards on behalf of such leading retailers as Gateway Computers, Helzberg Diamonds, Office Depot, Radio Shack, Staples and Value America. The Associates is also the largest issuer of private label oil cards in the nation, with its BP Amoco, Shell and Texaco programs, and is one of the largest independent sources of financing for personal computers and related products.

Associates First Capital Corporation, established in 1918, is a leading diversified finance company providing consumer and commercial finance, leasing, insurance and related services worldwide. The Associates has operations in the United States and 13 international markets. Headquartered in Dallas, it is the largest publicly traded finance company in the United States, based on total market capitalization. For more information, visit The Associates Web site at [www.theassociates.com][1]

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

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American Floral Card Deal

NDC eCommerce announced yesterday a three- year agreement with American Floral Services, Inc. to provide the association’s member florists with credit card, debit card and check processing services.

The agreement calls for NDC to provide American Floral Services’ member florists the ability to accept credit and debit cards at the point of sale, as well as via the Internet. Check guarantee, verification and recovery services, as well as deployment of equipment and supplies will also be provided by NDC eCommerce in this comprehensive payment solution. In addition, extensive transaction reporting capabilities through NDC eCommerce’s proprietary InSight Payment Intelligence(TM) and Customer Access System (CAS) products are also part of the agreement.

American Floral Services, Inc. is one of the three largest floral wire services providing ordering and delivery services through its members and affiliates throughout 200 countries. Based in Oklahoma City, it has 24,000 members worldwide, with 4,700 merchants processing credit cards.

“NDC understands this market and what our members need to grow their businesses and continue to improve the delivery of high quality customer service,” said Guy Lookabaugh, manager of credit card services at American Floral Services. “This partnership gives us the complete solution for our payment services needs.”

Paul R. Garcia, chief executive officer of NDC eCommerce, said, “We’re delighted to have established this relationship. Our end-to-end payment solutions allow American Floral Services to offer more services and value to their members while streamlining setup and support procedures through one provider, NDC eCommerce.”

National Data Corporation (NYSE: NDC) is a leading provider of electronic commerce solutions and health information services that add value to its customers’ operations.

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Cap One – Top Workplace

For the second year in a row, Capital One Financial Corporation ranked in Fortune’s listing of the “100 Best Companies to Work for in America.” Capital One ranked 60.

“We created Capital One with the vision of being a great place to work — a place that challenges people to develop and use their talents, and gives them the training, tools, and work environment they need to do their best. By every measure, it’s working,” said Richard D. Fairbank, Chairman and Chief Executive Officer. “Our business continues to grow at a rapid rate by adding innovative products and services that are welcomed by consumers around the world.”

Nigel Morris, President and Chief Operating Officer, added, “We have a culture in which we listen to our associates and respond by implementing the programs they need. We remain committed to building upon this success and committed to building an environment that fosters teamwork, open communication and entrepreneurship.”

Fortune collaborated with best-selling authors Robert Levering and Milton Moskowitz to compile the list. Levering and Moskowitz, who have been tracking the best companies since 1981, searched their database of more than 1,000 companies and selected 236 companies as the most viable candidates for this list. Then, employees from each company were surveyed. Capital One associates completed the Great Place to Work Index, which is designed to evaluate trust in management, pride in work and camaraderie, along with the Hewitt People Practices Inventory, a questionnaire developed by Hewitt Associates, a management consultant firm.

Capital One presently employs more than 15,000 associates worldwide. The company hired more than 4,600 associates (net) in 1999 alone. Among the programs that differentiate the company from other employers are the associate selection process; a number of ongoing training and development courses; outstanding benefits, including three weeks vacation; and entrepreneurial compensation.

Senior Vice President for Human Resources Dennis Liberson said, “We have developed methods to not only attract and select the best and brightest people to work at Capital One, but more importantly to keep them. We are dedicated to helping associates develop in their careers — with innovative assimilation programs, ongoing performance feedback, training and tuition reimbursement. Our attrition rates are considerably lower than industry averages, which allows us to grow more efficiently — enabling us to enjoy much success.”

Capital One has operations in Richmond, Fredericksburg and Falls Church, Virginia; Dallas, Fort Worth and Plano, Texas; Tampa, Florida; Federal Way, Washington; Boise, Idaho; and Boston, Massachusetts; as well as London and Nottingham, United Kingdom.

Headquartered in Falls Church, Virginia, Capital One Financial Corporation ([http://www.CapitalOne.com][1]) is a holding company whose principal subsidiaries, Capital One Bank and Capital One, F.S.B., offer consumer lending and deposit products. Capital One’s subsidiaries collectively had 20.8 million customers and $18.5 billion in managed loans outstanding as of September 30, 1999, and are among the largest providers of MasterCard and Visa credit cards in the world. Capital One trades on the New York Stock Exchange under the symbol “COF” and is included in the S&P 500 Index.

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

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Y2K Unconcern

As bankers pack their bags to spend the New Year’s weekend in the office the concern among consumers over potential Y2K problems continues to dwindle. A New Orleans bank said a survey of its customers found that only 7% were “very concerned” about Y2K. At the same time, 16% of consumer and 22% of commercial clients reported being “somewhat concerned.” Within this concerned group, overreaction by the public and availability of food and necessities, was most frequently named as a potential problem in the Hibernia National Bank survey. Only 11% of consumer and 8% of commercial customers surveyed plan to withdraw extra cash, and 15% of consumer and 16% of commercial customers plan to save bank statements. A mere 1% said they planned to stop direct deposit. The findings mirror a recent Gallup Poll which showed that consumer confidence in Y2K preparations by the banking industry has reached an all-time high of 90%, up from 76% last March. This week, the FDIC and the Federal Reserve said they are satisfied that 100% of the more than 10,200 banks and thrifts they regulate are ready for year 2000.

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