Aria Milestone

While Providian’s stock price continues to languish in the wake of an expanding national probe into its credit card business practices, the sub-prime specialist announced this morning its online credit card program, the ‘Aria VISA’, has signed up more than 100,000 new accounts since May. Providian has spent upwards of $90 million this year for its e-commerce initiatives which include the acquisition of Getsmart.com and the WebCard VISA portfolio from H&R Block. Providian is currently in the midst of a major offline advertising campaign for Aria which began Oct. 6. The ongoing $10 million+ campaign includes television, billboard and print advertising in such publications, such as Yahoo! Internet Life, Forbes, Wired, People, Bride’s, TV Guide and USA Today. Providian has aggressively positioned its online card products head-to-head with San Francisco-based NextCard, which was formed by former Providian executives. The ‘Aria VISA’ program offers a range of card pricing, from super-prime to sub-prime. However the product line is heavily weighted to the sub-prime segment The four ‘Aria’ VISA cards include ‘Aria VISA Platinum Premium’, ‘VISA Platinum’, and two sub-prime card programs, ‘VISA Portrait’ and ‘VISA Persona’. ‘The instant rewards feature for ‘Aria’ is the ‘MyPoints’ program which offers 5 points for every purchase dollar, a 500 point bonus for opening an account, and a 2,500 point bonus for a balance transfer.

PROVIDIAN’S ARIA PORTFOLIO

VISA Product INTRO PURCH BAL TXFR CASH ADV
Platinum Premium 0%/3mo 7.99% 12.99%-21.99% 21.99%
Platinum 0%/3mo 12.99% 12.99%-21.99% 21.99%
Portrait 0%/2mo 19.99%* 21.99% 21.99%
Persona 0%/2mo 23.99%** 23.99% 23.99%

* Portrait requires a $59 annual fee and offers no grace period for
purchases.
**Persona requires a one-time processing fee of $29, $49 or $89, plus an
Annual Fee of $59 or $89 and offers no grace period for purchases.
Source: CardWatch (www.cardwatch.com)

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Concord Acquisition

Concord EFS announced this morning it has reached an agreement to acquire Phoenix-based Virtual Cyber Systems, Inc., an Internet software development company specializing in user-friendly solutions for non-technical users. Concord executives said that today’s agreement to acquire VCS is the final piece of the puzzle in their three-tiered strategy to provide vertically-integrated e-commerce services to retailers of all sizes. VCS’ core software product is the ‘SiteMerger’, which is designed for use by small business owners to build and maintain their web sites without third-party help. The VCS transaction is expected to be completed by year-end.

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Alfa Bank’s New Card System

IFS International, Inc. announced that Alfa Bank, a major Russian, Moscow-based banking corporation, has licensed IFS’ TP-CMS product to replace its existing payment card management systems.

TP-CMS will be used at Alfa Bank to issue and settle domestic debit and credit cards, Visa cards, Europay, MasterCard, American Express, Diners Club and JCB cards. The bank’s existing card management systems, CardMan and UC+, will be replaced by TP-CMS, allowing Alfa Bank to increase the level of service offered to its customers. The Banking Production Centre (BPC), IFS’ authorized distributor in the Russian Federation, will serve as the prime contractor on the project, overseeing the installation and certification of the system. The TP- CMS software will run on HP hardware.

Alfa Bank already has the IFS TPII product to manage its network of Automatic Teller Machines (ATM), Point of Sale (POS) terminals and interfaces to the payment card networks of Visa, Europay, Union Card, American Express, Diners Club and JCB.

Vladimir Izoutin, Head of Alfa Bank Card Division, explained, “The Card Management project for Alfa Bank is another step in the implementation of the bank’s long term technology infrastructure development program. After a detailed evaluation, we believe that TP-CMS has the most comprehensive and appropriate functionality of the prominent card management systems in the market. TP-CMS is unique in terms of its modern architecture, chip support, and, of course, openness and scalability which are the trade mark of all IFS’s products. We are looking forward to the implementation of TP-CMS being as flawless as our ongoing project with IFS’ TPII.”

David Hodge, CEO and President of IFS International, stated, “IFS is delighted to be able to announce another customer for our recently launched TP- CMS product. As a card management system designed and developed in the Chip age, TP-CMS has attracted a lot of attention since its launch and this new sale of the system further underscores the company’s decision to invest so significantly in this new product over the past 9 months. It is particularly satisfying that Alfa Bank, who already have our TPII product, once again chose IFS for this new project.”

Anatoli Loginov, BPC Director, commented: “We were very pleased with IFS’s announcement of a new product in the TPII family. The recently launched card management system, TP-CMS, now allows us to present throughout Russia a full functionality integrated payment card solution designed with all latest trends in mind, that is open, scalable and, thus, applicable to any financial institution in Russia no matter what size and market niche. We appreciate the decision of Alfa Bank very much and consider it as a big credit to the quality of IFS products and services, as well as to BPC’s project management and system integration skills. With a growing successful business Alfa Bank had a virtually unlimited choice of systems but the decision in favor of TP-CMS looks very logical and well-thought. The bank will be able to grow together with the new product free of the cumbersome and rudimentary features of legacy systems.”

About IFS International

IFS International, Inc. and Network Controls International, Inc. (NCI) are divisions of IFS International, Inc. (Delaware) which has headquarters in the United States and subsidiary offices in the U.S., United Kingdom, Singapore, Australia and Germany.

IFS International, Inc. develops, markets and supports software products for the EFT market. IFS International’s TPII and TP-CMS products provide support for ATMs, POS devices, network switches, smart cards and card management. NCI, Inc. provides complementary products for bank teller platform, home banking, money brokers and call centers, including NCI Business Centre?, an enterprise wide retail bank branch solution designed to deliver traditional as well as Internet/Intranet based transactions.

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Equifax Online

[][1] The nation’s largest credit bureau this morning is introducing three new online services for consumers. ‘Equifax Credit Profile’, ‘Equifax Sentinel’ and ‘Equifax Millennium Monitor’ are designed to help consumers understand their financial information, enhance their buying power and prepare for the new millennium. These three new services will enable U.S. consumers, for the first time, to order, view and monitor credit information about them directly from Equifax’s Web site. ‘Equifax Credit Profile’ enables consumers to enhance their buying power by viewing the credit information businesses, banks and employers use to make credit and employment decisions. ‘Equifax Sentinel’ will inform consumers via a quarterly update if any new account, address, inquiry, public record or collection information is posted to their credit profile. ‘Equifax Millennium Monitor’ allows consumers to order a printed copy of their Equifax Credit Profile as of early December 1999 and then receive a second copy as of mid-February 2000. ‘Equifax Credit Profile’ is available for online delivery for $8. ‘Equifax Sentinel’ is priced at $49.95 per year. ‘Equifax Millennium Monitor’ is delivered via the U.S. Postal Service for $12.95.

[1]: http://www.cardweb.com/cardflash/1999/november/equifax_sample.html

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Kahn Joins ePhones

ePhones.com announced the addition of several new executives to its senior management. Eric Kahn, Vice President of Marketing, joined ePhones.com from Visa USA; Dominic Constantino, Vice President of Business Marketing joined the company from Beyond.com; and Cassandra Kanuk, Director of Web Development, came from Netscape. These new additions follow the recent appointment of Steven Yeffa, formerly of Leasing Solutions, Inc., as Chief Financial Officer.

With over twenty years of corporate level brand management and marketing experience, Eric Kahn joined ePhones.com from Visa USA. At Visa, Kahn was Vice President of Consumer Product Management, building the consumer credit card business for the Classic, Gold and Platinum cards as well as developing new products. Prior to that Kahn was a Principal of Document Protection Services and Vice President of Credit Card Marketing for Wells Fargo Bank. Kahn also served as brand manager at The Clorox Company. He received his BBA from the University of Massachusetts and MBA from UCLA Graduate School of Business.

Dominic Constantino joined ePhones.com from Beyond.com, where he served as Director of Marketing for the Direct eCommerce Division. Constantino has over 12 years of information technology experience with Internet companies, peripheral manufacturers, industrial distributors and start-ups. Prior to Beyond.com, he served as Director of Marketing at Xirlink, and as National Sales Manager for All American Semiconductor. Constantino graduated from Cal Poly State University in 1987.

Prior to joining ePhones.com, Cassandra Kanuk served as Systems Engineer in the Website Operations team at Netscape. Kanuk has over 19 years experience in Internet, communications and information technology. Prior to Netscape, Kanuk was Webmaster at CyberStar and Information Systems Project Manager for Space Systems/Loral. Kanuk has published over sixty reviews in InfoWorld magazine and has contributed to over five internationally distributed computer magazines.

CFO Steven L. Yeffa has over nineteen years of senior level finance and corporate management experience. Prior to joining ePhones, he served as Executive Vice president and Chief Financial Officer for Leasing Solutions Inc., where he directed the worldwide financial operations of the publicly traded leasing company. Before Leasing Solutions, Yeffa was Vice President at Matsco Financial Corp. Yeffa is a graduate of St. Mary’s College of California and completed a degree in Lease Management at Columbia University Graduate School of Business. He is the author of “Lessor’s Guide to Building a Relationship for Successful Funding.”

“Dominic, Steven, Eric and Cassandra bring years of valuable experience and proven talent,” says ePhones.com CEO Mike Merrill. “We’re building a world class team, and this core group represents the strong upward direction ePhones is taking in our continued growth and success.”

About ePhones.com

ePhones.com offers the widest selection of wireless services available online, including: cellular and PCS phones, accessories, pagers, wireless modems, long distance, and information services. With over 11 years experience in wireless, ePhones offers services through 44 carriers nationwide, including: AT&T Wireless (NYSE:T), Sprint PCS (NASDAQ:PCS) MCI Worldcom (NASDAQ:WCOM), Qwest (NASDAQ:QWST), SkyTel, and PageMart (NASDAQ:PMWI). Unlike other sites, every phone and rate plan ePhones offers is available to buy online.

ePhones.com is backed by U.S. Venture Partners, Alta Partners, and Alta Communications. The company is based in Fremont, CA, with retail stores in California, Washington and Utah, and is privately held.

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VISA & Toys for Tots

eToys Inc., the leading Internet retailer of children’s products, and Visa U.S.A., the leading payment brand, are spreading holiday cheer to underprivileged children throughout the country through an easy, innovative online toy donation program.

For the second year in a row, eToys and Visa have partnered to create a convenient online location where consumers may contribute a toy to the Marine Corps Toys for Tots national holiday toy drive.

From now through Dec. 20, online shoppers may donate to Toys for Tots by logging on to the eToys site ([www.etoys.com/toysfortots][1]) and selecting from a number of popular toys, such as Koosh Catchers, Deluxe Art Sets and basketballs. Toys are available for donation at 50% off the regular retail price when purchasing with a Visa card.

During last year’s online holiday drive, 15,000 toys were donated to Toys for Tots over a seven-week span. eToys and Visa are predicting a substantial increase in this figure through the 1999 online donation program.

“eToys is in the business of bringing smiles to children. Together with Visa, we are proud to support such a worthy cause as Toys for Tots to help make a difference this holiday season,” said Toby Lenk, chief executive officer of eToys.

Based on a recent study conducted by Forrester Research, online shoppers will spend more than $10 billion this holiday season. Charities, such as Toys for Tots, are hoping that some of this new age consumer spending will trickle their way through online giving programs.

“eToys and Visa are helping bring the spirit of giving online,” said Major Bill Grein, vice president of the Toys for Tots Foundation. “Since people are pressed for time during the holidays, yet still want to give, the Internet is an easy way for people to help us make the holidays a little brighter for needy children.”

About eToys

Based in Santa Monica, eToys Inc. ([www.etoys.com][2]; AOL keyword: eToys; and [www.etoys.co.uk][3]) is the leading Internet retailer for children’s products, carrying more than 100,000 items, including both nationally advertised and specialty toys, software, videos, music, video games, books and baby-oriented products.

By combining this extensive selection, an attractive, easy-to-use Web site and excellent customer service, eToys offers consumers a unique one-stop source for children’s products. Through its wholly owned subsidiary, BabyCenter Inc. ([www.babycenter.com][4]), eToys offers Webby-award-winning content and community for new and expectant parents.

About Visa U.S.A.

Visa is the leading card brand and the largest payment system worldwide. It plays a pivotal role in advancing new payment products and technologies to benefit its 21,000 member financial institutions, their cardholders and global economy. Visa is the only consumer payment system to facilitate $1.4 trillion worth of purchases of goods and services in a fiscal year.

Visa’s more than 600 million cards are accepted at more than 17 million worldwide locations, including more than 500,000 ATMs in the Visa/PLUS Global ATM Network. Visa’s Internet address is [www.visa.com][5].

About Toys for Tots

For more than 50 years, Toys for Tots has been the U.S. Marine Corps’ premier community action program and one of the nation’s flagship holiday charitable causes. Toys for Tots has donated more than 240 million toys to 120 million needy children since 1947.

[1]: http://www.etoys.com/toysfortots
[2]: http://www.etoys.com/
[3]: http://www.etoys.co.uk/
[4]: http://www.babycenter.com/
[5]: http://www.visa.com/

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EBT Fights Day Care Fraud

The need for states to embrace a card-based point-of-sale system that can manage and distribute financial payments, attendance records, batch reports, and curb reporting fraud in the US government’s subsidized child care industry is growing. While unemployment has dropped to record lows since the Federal Government launched its “welfare to work” mandates two years ago, child-care enrollment has risen dramatically. The lack of automation at day care-centers nationwide has states wrestling with fraudulent time attendance and eligibility reporting, and overpaying day-care centers millions of dollars annually.

“Welfare fraud at child-care centers could be virtually eliminated if these centers were required to use an enhanced version of the point-of-sale card payment systems that 40 states currently use for financial payments. If the states make this a requirement, they could realize an enormous savings that could be used to support other programs that help the nation’s working poor,” declared John Wojcik, vice president, global business development, Hypercom Corporation, in his address at the Electronic Funds Transfer Association EBT “The Next Generation” conference. “Now is the time for states to embrace advanced payment systems, better serve their constituents and save millions of dollars annually.”

“Electronic payment technology has made significant strides in recent years. This is particularly true with the new interactive consumer touch-screen terminals, which are a perfect fit for the expansive network of US child care centers serving families on welfare,” Wojcik said. “Without such advanced online systems to verify eligibility and control fraud, it becomes virtually impossible to monitor benefits from welfare rolls that can change daily.”

Although 40 states already have EBT systems in place for financial payments to families in welfare programs, there is no mechanism for using that same technology to streamline the operation of government aided child-care centers, according to Wojcik.

“Menu-driven, screen-based card payment systems in state social service centers, child care homes, county offices and other public service buildings will give ready access to a wide range of government services and expand the use of EBT card service programs” Wojcik said. “Advanced card payment terminals that can help state governments better reach and serve those in need while also slashing fraud are here today. It is time to embrace this new technology and all of the advantages it affords.”

Hypercom Corp. (NYSE: HYC) is the single-source global provider of end-to-end electronic payment solutions, including card payment systems, peripherals, network products, software and e-commerce payment solutions that add value at the point-of-sale for consumers, merchants and acquirers.

Headquartered in Phoenix, Arizona, Hypercom markets its products in more than 70 countries through a global network of affiliates and offices in Argentina, Australia, Brazil, Chile, China, Germany, Hong Kong, Hungary, Japan, Mexico, Russia, Singapore, Sweden, the United Kingdom and Venezuela. Hypercom’s Internet address is [www.hypercom.com][1]

Hypercom is a registered trademark of Hypercom Corporation. All other products or services mentioned in this document are trademarks, service marks, registered trademarks or registered service marks of their respective owners.

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

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New MasterCard Team

MasterCard International has formed a new ‘Global Mobile Commerce Team’ to focus on the convergence of the card payments and mobile telephony industries. The team will be led by Chris Jarman, VP of Electronic Commerce and Emerging Technologies. The team also includes key representatives from MasterCard, Maestro International, Europay International, Mondex International, and MAOSCO. The MasterCard group has established three distinct forums to involve key industry players in the mobile commerce initiative: a ‘Member Forum’, composed of MasterCard’s key international members; an ‘Industry Forum’, composed of key wireless technology organizations; and a ‘Network Operators Forum’. MasterCard is also an active participant in the WAP Forum and the Global Mobile Commerce Forum.

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Prepaid Ripoffs

The American Public Communications Council is urging the FCC and the FTC to take action on deceptive advertising and practices by prepaid phone card companies. The APCC says prepaid phone cards are often marketed by advertising a specific per minute rate that has little or no relationship to the total charges consumers will actually incur. The trade association says many prepaid cards advertise rates as low as $.01 per minute, however, these advertised rates are misleading since consumers will incur hidden charges, terms, or conditions buried in small print or not disclosed at all. The APCC says consumers need to be aware of the hidden prepaid phone card costs that include connection fees ranging from $0.50 cents to $2.00 per call; surcharges, as high as $0.75 cents, for certain types of calls placed by the consumer; monthly or semi-monthly services fees that are automatically deducted whether or not calls are placed; and the termination of a consumer’s card account resulting in the remaining balance being erased when the balance is no longer sufficient to pay for the minimum connection and calling charge. The APCC notes many cards now require a minimum call duration. The APCC represents over 2,000 owners, operators, suppliers and manufacturers of public communications equipment and services.

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EMV Certification

Europay and Mastercard this morning awarded Schlumberger worldwide EMV 3.1.1 Level 1 standard certification across its ‘MagIC 6000’ and ‘MagIC 9000’ point-of-sale terminal range. This certification guarantees any EMV-compliant smart card will be accepted by the terminal. Schlumberger terminals feature an advanced, flexible architecture that allows for the development of applications that can run stand-alone or simultaneously alongside others. ‘MagIC 6000’ is a compact desktop terminal for counter-based operations in all retail locations. ‘MagIC 9000’ is a portable terminal with a high-speed silent printer, which uses wireless communications.

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Providian Dives Again

Providian Financial Corporation said Monday that it has received an inquiry from Connecticut Attorney General Richard Blumenthal seeking information in connection with a civil investigation into credit card issuance and billing practices. In response to the inquiry, which the company received late Friday,

November 5, Providian Chief Public Policy Officer Konrad S. Alt issued the following statement:

“We have great respect for Attorney General Blumenthal and welcome his inquiry. We have confidence in the integrity of our business practices and are prepared to defend them. Providian is working hard to become an industry leader in customer service and satisfaction. We are optimistic that Attorney General Blumenthal will recognize the impressive strides Providian has already made toward achieving that objective. Naturally, we hope to resolve this matter as quickly as possible.”

San Francisco-based Providian Financial Corporation ([http://www.providian.com][1]) is a leading provider of lending and deposit products to customers nationwide and offers credit cards in the United Kingdom. Providian serves a broad, diversified market with loan products that include credit cards, home equity loans, secured cards and membership services.

With a commitment to 100% customer satisfaction, Providian’s mission is to help its customers build or rebuild, protect and responsibly use credit by providing a quality borrowing experience that leads to active and lasting customer relationships. The sixth largest bankcard issuer in the nation, Providian Financial has over $20 billion in assets under management and over 11 million customers.

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

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