Discover Card Preferred

Discover Financial Services, Inc. announced an agreement with Mills Corporation that makes Discover Card the preferred credit card at nine of Mills’ retail and entertainment destinations across the country.

As part of the agreement, Discover Card will conduct promotions, display signage, run advertising on Mills TV and establish a joint website presence with The Mills. In addition, Mills’ consumers will have the opportunity to receive a Discover exclusive coupon book by simply presenting their Discover card at the information booth. The book will offer exclusive values for Discover Cardmembers and include discounts with merchants such as Samsonite, Wilsons Leather, Burlington Coat Factory, Mikasa Factory Store, Nine West Outlet, Off Rodeo Drive Beverly Hills, OshKosh B’Gosh, Urban Planet, and Vans.

Participating Mills centers include:

Potomac Mills — Prince William, Va. (Washington, D.C.)

Franklin Mills — Philadelphia, Pa.

Sawgrass Mills — Sunrise, Fla. (Ft. Lauderdale/Miami)

Gurnee Mills — Gurnee, Ill. (Chicago)

Ontario Mills — Ontario, Calif. (Los Angeles)

Arizona Mills — Phoenix, Ariz.

The Block at Orange — Orange, Calif.

Concord Mills — Concord, N.C. (Charlotte)

Katy Mills — Katy, Texas (Houston)

Mills’ customers will also benefit from quarterly promotions that will run in conjunction with Discover Card’s national marketing campaigns. A recent opportunity was the Cashback Bonus Countdown Tour, which took place at various malls this fall. During the Cashback Bonus Countdown Tour events, a photo of each shopper was taken in front of a replica of Times Square featuring Discover Card’s electronic billboard. These photos will be broadcast on the Discover Card Times Square sign during the weeks leading up to New Year’s Eve. Discover Card’s Cashback Bonus Countdown Tour was held in conjunction with Discover Card’s Cashback Bonus(R) Countdown Sweepstakes, in which Discover Card will award $1 million to one lucky winner at the Times Square New Year’s Eve celebration.

“Discover Card is looking forward to working with Mills Corporation to help increase brand awareness and usage among Cardmembers,” said Cathy Davis, vice president, advertising and brand management, Discover Financial Services, Inc. “This partnership will result in a more rewarding shopping experience for our Cardmembers and consumer savings at some of the nation’s biggest retail and entertainment properties.”

Tony Wells, Vice President, Partnership Marketing and Sales for The Mills Corporation adds, “Our partnership with Discover Financial Services will provide consumers with unique merchant value offerings maximizing the positioning of both The Mills’ and Discover brands. With over 130 million visitors each year, The Mills provides a competitive edge for Discover to gain a greater share of wallet. Mills marketing opportunities are unmatched in the industry.”

Discover Financial Services, a business unit of Morgan Stanley Dean Witter & Co., operates the Discover Card brands with more than 47 million Cardmembers and the Discover/Novus(R) Network. The Network is the largest independent credit card network in the United States with more than 3.5 million merchant and cash access locations.

The Mills Corporation (NYSE: MLS) is a self-managed real estate investment trust (REIT) based in Arlington, Va., that owns, develops, leases, manages and markets a portfolio of ten market dominant retail and entertainment destinations (nine Mills and one Block), and 11 community shopping centers. Combined, Mills’ projects total approximately 16.8 million square feet in 13 states. Mills will celebrate the grand opening of its newest project, Opry Mills, in Nashville, TN on May 11, 2000. Currently, the company has six projects under construction and/or development in the United States and one in Toronto, Canada. The company’s Internet address is [][1].



Privacy Committee

The Federal Trade Commission announced Thursday it is looking for 30 industry members to form an Advisory Committee on Online Access and Security. Providing consumers access to information collected about them and providing security for such information are two of five core fair information practice principles described in the FTC’s consumer privacy report to Congress. The Advisory Committee will provide advice and recommendations to the Commission regarding options for the implementation by commercial Web sites of the access and security information practice principles, and the costs and benefits of each option. The committee will consider, among other things, whether the extent of access provided by Web sites should vary with the sensitivity of the personal information collected and/or the purpose for which such information is collected; whether the difficulty and costs of retrieving consumers’ data should be considered, whether consumers should be provided access to enhancements to personal information (e.g., inferences about their preferences or purchasing habits); appropriate and feasible methods for verifying the identity of individuals seeking access; whether a reasonable fee may be assessed for access, and if so, what a reasonable fee would be; and whether limits could be placed on the frequency of requests for access, and if so, what those limits should be. The Advisory Committee will also consider how to define appropriate standards for evaluating the measures taken by Web sites to protect the security of personal information; what might constitute reasonable steps to assure the integrity of this information; and what measures should be undertaken to protect this information from unauthorized use or disclosure. The first meeting is scheduled for Feb. 4, 2000.


FDC Hires Fleet

First Data Corp. has created a new position to support both its card issuing and merchant processing lines of business to lead the development and growth of emerging products and services. Steve Van Fleet, a 20-year veteran of the payments business, has joined First Data Corp. as senior vice president across both First Data Resources and First Data Merchant Services.

In this role, Van Fleet is responsible for identifying new opportunities and implementing plans to leverage the strengths of both FDR, the global leader in card transaction processing and card portfolio management services for over 1,400 card issuers, and FDMS, one of the nation’s leading providers of electronic commerce solutions for hundreds of financial institutions and nearly two million businesses.

At First Data, Van Fleet’s specific focus will be on developing, implementing and managing products and services that utilize smart card technology, debit, and other emerging electronic payment technologies. He will report to both El Adams, president of FDMS and Todd Strobe, managing director, FDR.

“First Data’s organizational goal has been to create a unified company with all of our people working together to achieve our strategic objective: To process every electronic transaction worldwide from the point of occurrence to the point of settlement,” said Ric Duques, First Data chairman and chief executive officer. “Under Steve’s direction, this cross-unit function will help us maximize our efforts and provide our clients with the most comprehensive payment solutions in the industry.”

Over the past year, First Data has focused on creating a shared services infrastructure to facilitate the exchange of ideas and resources across subsidiaries and continue the move toward a more customer-centric environment. Van Fleet’s appointment follows a recent announcement by First Data about its creation of an Internet Commerce Group to spearhead Internet Electronic Commerce payment solutions and related initiatives working across all First Data subsidiaries.

“As the boundaries of commerce continue to expand, enabling financial institutions and merchants to conduct business electronically, from processing and safeguarding transactions to collecting and maintaining purchasing information, First Data intends to strengthen its leadership position as the premier provider of payment solutions. By leveraging strengths across First Data’s subsidiaries, the company can provide an unparalleled set of solutions for its clients,” Duques said.

Van Fleet most recently served as a senior vice president at MasterCard International where he was responsible for management of all U.S. consumer products including credit cards, debit cards, chip (stored value and loyalty), remote commerce and remittance processing. Previously, he was general manager for MasterCard’s Global Deposit Access Products, which included the Cirrus global ATM network. He received a juris doctorate from DePaul University, a master’s degree in business administration from the University of Houston and a bachelor’s degree in business and marketing from Northern Arizona University.

Atlanta-based First Data Corp. (NYSE: FDC) 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 businesses to buy goods and services. With more than 33,000 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 Unionr network includes approximately 78,000 agent locations with operations in 176 countries. For more information, please visit the company’s web site at [][1].



ePic Leasing

Hypercom has signed a definitive agreement to acquire substantially all of the assets of Golden Eagle LLC and Golden Leasing, a micro-ticket leasing organization for POS terminals. The acquisition of Golden will add a leasing component to Hypercom’s ‘ePic’ strategy (see CF 12/15). Under terms of Thursday’s deal Hypercom will pay Golden $18.5 million in cash and $4 million in stock, with additional earn out payments if certain objectives are met. Golden, located in Ridgefield, CT, will operate as a standalone business unit under the name of Golden Leasing, and will enable Hypercom to offer the ISO/bank processor marketplace a comprehensive, all inclusive equipment acquisition/deployment program encompassing purchase, rental or lease options for the equipment. The deal is expected to close in early January.


Fuel Card Partners

First of Omaha Merchant Processing and Retriever Payment Systems, both wholly owned subsidiaries of First National Bank of Omaha, announced Thursday an alliance with Voyager Fleet Systems Inc. to process petroleum industry card transactions.

Elias Eliopoulos, chairman of First of Omaha Merchant Processing and Retriever Payment Systems, commented on the recent alliance; “This alliance embraces over 130 years of banking experience with over 83 years of experience in the petroleum and credit card industries to assist our processing partners in all of their payment processing needs. We can now help fleets expand their product and service lines in order to keep their vehicles in top operational order. Additional services such as scheduled vehicle maintenance and fluid changes, towing services, custom parts and service and convenience are now available to suppliers for fleet customers through First of Omaha/Retriever Payment Systems and Voyager. We are excited about this opportunity.”

“Voyager is pleased that First of Omaha Merchant Processing sees the benefit in offering Voyager transaction processing to their merchants. First of Omaha is a leader in the merchant acquiring business and this new partnership will assist Voyager in achieving our goal of universal acceptance at fuel and maintenance locations,” said Michael Oleniczak, vice president of merchant acceptance at Voyager.

First of Omaha Merchant Processing and Retriever Payment Systems are currently some of the only payment processors offering Voyager fleet card settlement, affording the opportunity to become a preferred supplier for fleets nationwide.

First of Omaha Merchant Processing is a premier processor in the direct marketing industry, and also processes bank card transactions for large and small retailers, restaurants, lodging merchants, petroleum marketers, associations/franchise groups and banks. Known for their superior customer service, First of Omaha specializes in providing clients the latest in card processing technologies. Through development of a diversified product line, First of Omaha has become a leader in the merchant processing industry, assisting clients in the reduction of interchange, chargebacks and fraud. First of Omaha is a wholly owned subsidiary of First National Bank of Omaha and is one of the few remaining in-house bank processors. First National Bank of Omaha, founded in 1863, is the 32nd oldest nationally chartered bank in existence. Further information regarding this alliance can be found at [][1] or [][2].

Retriever Payments Systems was founded in 1986 with a vision “to become a world class direct sales and marketing transaction acquisition company.” This vision has become a reality. Retriever Payment Systems services nearly 50,000 merchant locations with superior service and support for their electronic processing needs. Retriever Payment Systems is a wholly owned subsidiary of First National Bank of Omaha.

The Voyager card, accepted at over 147,500 retail locations, provides comprehensive fleet management information services to commercial businesses. Voyager Fleet Systems Inc. is the leading provider of fleet fueling charge cards for state and federal government agencies. A subsidiary of Minneapolis-based U.S. Bank, Voyager offers comprehensive data reporting and card tracking features that allow fleet executives to better manage their fleets.



Delinquency Plateau

Based on figures released yesterday by the American Bankers Association, credit card delinquency appears to be leveling off. According to the ABA quarterly ‘Delinquency Bulletin’ the number of credit card bills paid late during 3Q/99 increased slightly to 3.35% of all accounts, compared to 3.33% in the previous quarter and 3.28% for 3Q/98. Third quarter credit card delinquencies, based on total dollars outstanding, dropped to 4.25%, compared to 4.63% for 3Q/98. However delinquencies, based on total dollar outstandings edged up between the second quarter and the third quarter, from 4.10% to 4.25%. The delinquency trend shown by the ABA tracks with the delinquency trends among card-backed securities and the ‘TrendLine’ calculated by CardData. Based on dollars outstanding among the top 350 card issuers, bank credit card delinquency, on a monthly basis, has fluctuated between 4.70% and 4.89%% over the past six months according to CardData ([][1]).

(based on total dollars outstanding)
1999: 4.25% 1995: 4.21% 1991: 4.54% 1987: 3.72% 1983: 2.75%
1998: 4.63% 1994: 2.90% 1990: 4.01% 1986: 4.90% 1982: 2.92%
1997: 5.31% 1993: 3.83% 1989: 3.45% 1985: 3.15% 1981: 2.37%
1996: 5.03% 1992: 4.27% 1988: 3.40% 1984: 3.30% 1980: 3.50%
Source: American Bankers Association Delinquency Bulletin



Bank Plus Update

Bank Plus Corporation reported that as of November 30, 1999 total outstanding balances in the credit card portfolio of its wholly-owned subsidiary Fidelity Federal Bank, FSB, were $227.2 million, a net decrease of $11.4 million from the October 31, 1999 balances, and total delinquencies decreased to 19.1% from 19.9% at October 31, 1999.

Delinquencies under the MMG Direct, Inc. program decreased to 18.7% at November 30, 1999 from 19.4% at October 31, 1999, while delinquencies under the American Direct Credit, Inc. portfolio decreased to 21.1% at November 30, 1999 from 22.3% at October 31, 1999.

Sale of Outstanding Receivables of the Direct Furniture Portfolio

Effective December 15, 1999 the Bank sold a 100% participation in the outstanding receivables under the Bank’s credit card program with Direct Furniture, Inc., (“Direct Furniture”) to Direct Furniture. Under the terms of the transaction the Bank will continue to provide services under its contract with Direct Furniture, including the issuance of new cards, until December 31, 2000 or such earlier time that Direct Furniture or its designee purchases the program from the Bank. Direct Furniture is obligated to fund any future net advances made by Fidelity under the program. As a result of this transaction, the balances of the Direct Furniture program will no longer be included as outstanding balances in the Bank’s financial statements and the Bank will no longer earn interest from the program. As of November 30, 1999 total outstanding balances under the Direct Furniture program were $8.7 million and total delinquencies were 10.9%.

Bank Plus Corporation is the holding company for Fidelity Federal Bank, FSB, which offers a broad range of consumer financial services, including demand and time deposits and mortgage loans. In addition, through its affiliate Gateway Investment Services, Inc., a NASD-registered broker/dealer, Fidelity provides customers of the Bank with investment products, including mutual funds, annuities and insurance. Fidelity operates through 36 full-service branches, 35 of which are located in Southern California, principally in Los Angeles and Orange counties.

Outstanding Credit Card Balances
As of November 30, 1999
(Dollars in thousands)

MMG ADC All Other Total

Current Balances $80,200 $79,219 $24,301 $183,720
Delinquent Balances:
30 to 59 days 4,702 5,308 2,155 12,165
60 to 89 days 3,667 4,177 913 8,757
90 to 119 days 3,736 4,069 732 8,537
120 to 149 days 3,339 4,128 — 7,467
150 days and over 3,046 3,510 3 6,559
Total Delinquencies 18,490 21,192 3,803 43,485

Total Balances $98,690 $100,411 $28,104 $227,205

Delinquency %
30 to 59 days 4.7% 5.3% 7.7% 5.3%
60 to 89 days 3.7% 4.2% 3.2% 3.8%
90 to 119 days 3.8% 4.0% 2.6% 3.8%
120 to 149 days 3.4% 4.1% 0.0% 3.3%
150 days and over 3.1% 3.5% 0.0% 2.9%
Total 18.7% 21.1% 13.5% 19.1%

Available Credit $18,398 $25,208 $4,777 $48,548


Tidel Profit Margin Slips

Tidel Technologies, Inc. reported full financial results for the fourth quarter and fiscal year ended September 30, 1999. The results for the quarter ended September 30, 1999, together with the results from the comparable period in 1998, are as follows:

Quarter Ended Sept. 30, 1999
1999 1998 Increase

Revenues $16,146,137 $8,496,152 90%
Gross Profit 5,177,637 2,769,244 87%
Pretax Income 1,913,621 367,369 421%
Income Tax (Expense) Benefit (815,000) 579,251
Net Income 1,098,621 946,620 16%

Basic EPS $ .07 $ .06 17%
Diluted EPS .06 .06

Operating performance for the fourth quarter in 1999 was strong as income before taxes jumped 421% from the same period in 1998. Pretax income for the three months ended September 30, 1999 was $1,913,621 or 11.9% of sales compared with $367,369 or 4.3% of sales for the corresponding quarter a year ago.

Although net income and earnings per share for the quarter in 1999 also increased from 1998, the amounts are not comparable due to an income tax benefit recognized in the 1998 period. Principally due to the utilization of net operating loss carryforwards, net income for the fourth quarter in 1998 included a tax benefit of $579,251, whereas net income for the same period in 1999 reflected a tax expense of $815,000.

The improved results were primarily fueled by record shipments of ATMs during the 1999 quarter. As previously reported, Tidel shipped a record 2,742 new ATMs during the three-month period ended September 30, 1999 — a 166% increase from the 1,030 units shipped in the same quarter of 1998. The unit sales reflect the best quarter ever, surpassing by 42% the previous shipment record of 1,937 ATMs set in the quarter ended June 30, 1999.

The results for the year ended September 30, 1999, together with the comparable results from 1998, are as follows:

Year Ended Sept. 30, Increase
1999 1998 (Decrease)

Revenues $45,873,341 $33,607,533 37%
Gross Profit 14,960,424 12,180,278 23%
Pretax Income 4,735,964 3,932,375 20%
Income Tax (Expense) Benefit (1,800,000) 307,251
Net Income 2,935,964 4,239,626 (31%)

Basic EPS $ .18 $ .27 (33%)
Diluted EPS .17 .25 (32%)

The significant increase in ATM shipments also resulted in record sales and gross profit for the year ended September 30, 1999. Due to lower average sales prices for ATM units, however, gross profit margins declined from 36.2% in 1998 to 32.6% in 1999. Despite the lower margins, pretax income was up 20% from the previous year due to a relative decrease in SG&A expenses as a percentage of revenues.

As was the case with the fourth quarter, comparison of net income for 1999 and 1998 is not meaningful due to the difference in taxes attributable to the pretax income for the respective periods. Net income for 1999 reflects an income tax expense of $1,800,000 while net income for 1998 includes a net income tax benefit of $307,251.

“The sales momentum experienced in the fourth quarter of fiscal 1999 has carried forward into the first quarter of 2000,” said James T. Rash, Chairman and CEO. “While the first quarter is typically the lowest sales period of the year, we are presently experiencing rates of growth comparable to those recorded in the fourth quarter. As expected, we are also seeing improved gross profit margins as a result of manufacturing efficiencies and reductions in the cost of certain raw material components. Accordingly, net income for the first quarter is expected to be significantly higher than net income reported for the same quarter a year ago. First quarter results will be announced on or about January 20, 1999.”

He added, “For the balance of fiscal 2000, we expect that sales of our new Internet-enabled, multimedia ATM product, Chameleon, will add substantial revenues and further improve gross profit and operating income margins. An update on the status of this exciting new product line will be reported in the next thirty days.”

About Tidel Technologies, Inc.

Tidel is a Texas-based manufacturer of automated teller machines and cash security equipment designed for specialty retail marketers. Tidel pioneered the dial-up ATM in 1992 and is the fastest growing major U.S. manufacturer of ATMs. Tidel’s common stock is traded on the Nasdaq Stock Market(R) under the symbol “ATMS”.


Global Platform

A London-based cross-industry smart card group is taking shape. GlobalPlatform announced the appointment of its chairman, board of directors and organization structure Thursday. Steve Brown, business development manager for smart cards, British Telecommunications, was elected chairman of the board, and Philip Yen, SVP of Internet and Access Channels at VISA International, was elected vice chairman. Among the other five members appointed to the board: Glenn Weiner, VP Smart Card Technologies at American Express and Masanori Maeda, SVP Electronic Commerce Department at JCB. The board’s mission is to oversee the enhancement and promotion of specifications governing dynamic smart cards, acceptance devices, and back-end systems. The four working committees designated by the board will be chaired as follows: Dominique Hautain EVP at Proton World is chair of the ‘Business Committee’; Nicole Moyal director at American Express chairs the ‘Systems Infrastructure Committee’; Jim Lee SVP at VISA International chairs the ‘Card Infrastructure Committee’; and Michel Dargent architect and new product manager at Ingenico chairs the ‘Terminal Infrastructure Committee’. Global Platform was formed in October and has 33 members.


Cybergold Expansion

Cybergold, Inc. announced that Internet shoppers can now purchase gift certificates for Macy’s, Barnes & Noble and Blockbuster Video at Cybergold’s website ([][1]), thanks to an agreement with This alliance increases the opportunities for Cybergold members to earn cash rewards and shop with Cybergold merchants.

Cybergold’s Earn and Spend Community is home to hundreds of ways consumers can earn real cash by responding to incentive offers. For example, offers new customers $3.00 for requesting a car quote and E*Trade offers $75 for opening a new account. At Cybergold’s new shopping hub, Cybergold Plaza, Toys “R” Us, L.L. Bean and 70-plus other merchants offer cash back on all purchases.

Cybergold’s incentives are real U.S. dollars, which members can transfer to a bank account, use to pay off a VISA card or donate to a worthy cause. They can also spend the cash online: more than 50 sites accept Cybergold’s micropayments, including ZDNet and – and now, through, that cash can be also spent on gift certificates to Macy’s, Barnes&Noble and Blockbuster Video.

“Links at Cybergold’s site make it easy for our nearly 4 million members to find brands that accept or offer Cybergold payments in exchange for their patronage. We continue to be the premiere place on the Web that uses the ultimate incentive accepted everywhere: cash,” said Nat Goldhaber, president and CEO of Cybergold. “These gift certificates are denominated in cash; it’s what consumers want, it’s what merchants accept. Consumers can come to our site, earn real cash and spend it to buy high-quality products from name-brand merchants.”

About Cybergold

Cybergold, Inc. (NASDAQ: CGLD) is a leading provider of Internet-based direct marketing and advertising solutions, including incentive programs which reward consumers with cash for responding to ads and programs. Cybergold’s nearly 4 million members can spend their cash rewards online at “Cybergold Spend” or at the site of more than 50 merchants who have adopted Cybergold’s micropayment technology. Members can also spend their cash rewards offline by transferring it to a VISA card or a bank account. Cybergold consistently ranks among the 100 most visited Web sites, according to PC Data Online. Cybergold’s partnerships include Visa USA, MBNA, AOL, EarthLink, E-TRADE, Xoom, Quintel and Autobytel. Cybergold is headquartered in Oakland, California and counts Intel among its corporate investors. For more information, visit [][2].



GetSmart Record

Providian says its online loan marketplace, acquired earlier this year, has made significant increases in all categories. Providian says attracted nearly 10 million visitors to its Web site in fiscal 1999, generating approximately 500,000 transactions for services. Providian says has also significantly increased the number of financial institutions participating in its lender network to more than 120 financial institutions. The site includes offers from many of Providian’s direct credit card competitors. For fiscal 1998, reported that it attracted 8 million visitors which produced nearly 450,000 transactions or completed loan applications. For 1998 says it spent $13 million to drive traffic to the Web site and provided access to offers from 100 lenders. While Providian did not disclose its marketing expenses for, it is estimated the issuer spent more than $20 million on Internet marketing since March of this year. Providian, which specializes in issuing credit cards to “unbanked” consumers, paid $33 million cash to acquire in February of this year.