Hawaii Smart Cards

WA-based The Pathways Group, Inc. announced Monday an agreement with the Hawaii Millennium Commission to provide the ‘Official Hawaii Millennium Smart Card’. The cards will be a significant part of Hawaii’s yearlong celebration of the “Dawn of the New Millennium”. It is projected believe that 250,000 smart cards could be used at an estimated 3,800 locations throughout the state. Yesterday’s announcement follows last week’s announcement that Pathways will provide the “Official Hawaii 2000 Millennium Web Site”. As part of this agreement, Pathways will also provide a complete, integrated smart card system that will allow smart card holders to use their cards in both real and virtual e-commerce activities. Pathways will also furnish a full suite of services to its clients, including custom applications, card fulfillment, personalization, and credit card processing.

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GE Corp Cards

GE Capital Financial signed an agreement with Hitachi Credit Corp. last night to support large multinational corporations with operations in Japan. Under terms of the deal Hitachi will provide yen-denominated ‘MasterCard’ corporate charge cards, Japanese language statements and other in-country cardholder services. GE Capital will serve as the primary contact for multinational corporations to streamline global program management. Hitachi will provide card transaction data in a format that allows consolidation of global spending data via GE Capital’s ‘Synergy 2000’ reporting system. GE says this data consolidation leads to more effective vendor negotiations and policy compliance, ultimately driving savings to a company’s bottom line. The Hitachi agreement is the first of several major alliance agreements planned by GE Capital Financial Inc. The alliance complements GE Capital’s existing capabilities to issue and support cards denominated in U.S. and Canadian dollars, euro, Pound Sterling, and Irish Punts.

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PaymentNet Renames

The confusion between ‘PaymentNet’ the company and ‘PaymentNet’ the corporate card Internet reporting system developed by Paymentech has ended. Redwood City, CA-based PaymentNet, Inc. has changed its name to Signio, Inc. and has formed a strategic alliance with Paymentech. Signio also announced this morning a new flat fee, online payment transaction pricing. The company becomes the first in the industry to deliver a rich payment processing platform and suite of services that offers connectivity across the Internet from e-commerce applications to all major back-end credit card processors. Besides a distribution deal with Paymentech, Signio also entered into distribution deals with Wells Fargo Bank and TeleCheck. Signio says it chose its new name because Signio is a variation on the Latin word ‘signum’ which means to mark, sign, or seal. The company says it selected the name as a metaphor for an electronic signature. Paymentech holds a trademark for ‘PaymentNet’.

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SCA Upgrades Web Site

Shoppers Charge Accounts has completed the first phase of its website redesign. SCA, one of the nation’s largest private label credit companies, is a division of Hudson United Bank, a subsidiary of Hudson United Bancorp.

The new site–which can be viewed at [www.shopperscharge.com][1].–is easy to navigate, attractive and filled with important information about SCA’s expertise and services. Information can be obtained via a bulleted list of titles: The Private Label Advantage, The SCA Advantage, Program Services and Frequently Asked Questions. Throughout the site, there are links back to parent company Hudson United Bank ([www.hudsonunitedbank.com][2].). Additionally, the Hudson United site now includes a hotlink back to SCA in the business banking section under the subhead “Private Label Credit Card Program.”

“One goal of the redesign was to create a home page that allowed visitors to immediately understand who we are and what we do,” commented Toni Colello, SCA senior marketing manager. “The photos, credit card shapes, bulleted list and copy were carefully chosen with this goal in mind.” The next phases of SCA’s website redesign include developing a secure section of the site where clients can go to retrieve reports that are normally mailed or faxed. The company is also investigating the possibility of incorporating a secure feature that would allow consumers to apply for credit cards from SCA merchants on-line.

SCA, which services independent, regional and national retailers throughout the U.S., acquires retailers’ receivables or will develop private label credit programs for merchants who currently don’t offer a house charge. In both situations, SCA assumes responsibility for generating customer billing statements; managing credit, collection and lockbox functions; and creating customized marketing programs.

[1]: http://www.shopperscharge.com.–is/
[2]: http://www.hudsonunitedbank.com/

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TSA Acquires SDM

Transaction Systems Architects announced Monday it has acquired SDM International, Inc., a privately held corporation based in Raleigh, North Carolina. The transaction is intended to be accounted for as a pooling of interests. SDM International, Inc. formed in 1980, is a provider of EFT, ATM, and POS payments and EDI communications software. SDM International’s software solutions play a key role in the managing of electronic payments, transaction switching and routing. SDM supports hundreds of product licenses worldwide, with customers in eighteen countries. Transaction Systems’ electronic payment solutions are used on more than 3,200 product systems in 75 countries on six continents.

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PaymentNet Expands

Paymentech’s commercial card unit introduced two new, major features to ‘PaymentNet’ system last week. The new features: ‘PaymentNet.ER’ (expense reporting) and ‘PaymentNet.ESP (electronic statement and payment). ‘PaymentNet.ER’ provides a simple, easy-to-use reporting module that allows cardholders to apply trip-based logic and required IRS information to corporate card transactions while using PaymentNet’s core functionality to reconcile transactions. ‘PaymentNet.ESP’ allows corporate card users to receive, review and audit statements and make payments via the Internet. The company also announced the implementation of a ‘MasterCard’ corporate T&E card program for Gap Inc.. Paymentech issues MasterCard and VISA commercial cards through its Salt Lake City-based First USA Financial Services unit. Meanwhile Paymentech stockholders approved yesterday the purchase by First Data of the publicly-traded outstanding shares of Paymentech, Inc. Upon completion of the transaction, Paymentech’s operations will be combined immediately with Banc One Payment Services. First Data will have a 47.5% stake in the combined entity, while Bank One will own the remaining 52.5%.

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UC Card Goes Prism Credit

Nestor, Inc. announced Monday that UC Card has licensed PRISM Credit, Nestor’s fraud detection system, to protect over $18 billion that is charged annually by its more than 13 million credit card customers. PRISM was chosen by UC Card, the third largest credit card issuer in Japan, through Nestor’s strategic partnership with CSK Corporation.

“We chose Nestor’s transaction-level fraud protection system based on the company’s technology and success in our market,” said a Manager of Security and Risk Management Department at UC Card. “We firmly believe that the technology and Nestor’s custom modeling approach will provide UC Card and our cardholders with an exceptional level of fraud protection. Nestor’s proven success in the Japanese market further validates their technology and expertise in addressing fraud issues worldwide.”

PRISM Credit is an intelligent risk management system that provides early and accurate credit card fraud detection by identifying suspect activity. Unlike most other fraud products, Nestor creates a customized model built from the institution’s own customer transactions. The system automatically adapts to new and altered patterns of criminal behavior before fraud losses multiply. Each bank card transaction is routed through a neural network scoring engine which compares the current transaction with previous cardholder transactions, as well as activity across an entire portfolio. The system then produces a fraud score that reflects the likelihood that the transaction is fraudulent. High scoring transactions are routed to a fraud reviewer who can quickly analyze suspect transactions without inconveniencing credit card clients.

“UC Card’s recognition of PRISM as the best-of-breed solution for credit card fraud protection is a testament to the value our patented neural network technology brings to the card issuer,” said Sushmito Ghosh, Executive Vice President at Nestor. “In our work with another Japanese credit card issuer, we were able to reduce the average loss per fraud incident by almost 47%, and reduce the average number of days between card loss and confirmation from 12 days to five days. We expect to enjoy similar success with UC Card.”

Nestor’s PRISM fraud protection systems for credit and debit cards are currently deployed in more than 25 locations around the world, including Bank of America, Bank of Nova Scotia, Bank One, Dayton Hudson, Europay, Honor Technologies, M&I Data Services, Mellon Bank, Nippon Shinpan (NICOS), and Total System Services.

About CSK

Since its founding in 1968, CSK has occupied a prominent position in the Japanese information services industry. CSK offers services for systems integration, networking, out-sourcing, entertainment and many others. SEGA Enterprises Ltd., a CSK Group member company, is the world’s leader in high-tech entertainment. More information can be obtained via CSK’s web site at [www.csk.co.jp][1].

About Nestor

Founded in 1983 and headquartered in Providence, RI, Nestor, Inc. is a leading provider of intelligent decision-support solutions for the financial services industry. Nestor’s client/server products incorporate innovative pattern-recognition technologies ideally suited for data-intensive, mission-critical decision applications in real-time environments. The company’s products for financial institutions support fraud detection and case management for credit, debit, retail and commercial card fraud, as well as Internet and merchant fraud; bankruptcy prediction; and customer relationship management. Nestor products are sold direct and by selected partners worldwide. Through its subsidiary, Nestor Traffic Systems, Inc., the company also applies its technologies to a suite of video-based intelligent transportation systems that promote enhanced traffic management and improved safety. For more information, call 401-331-9640 or visit [www.nestor.com][2].

PRISM Credit is a trademark and PRISM is a registered trademark of Nestor, Inc. All other company and product names are trademarks of their respective companies.

[1]: http://www.csk.co.jp/
[2]: http://www.nestor.com/

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ATM Calling Cards

The largest deployment of ATM-based, prepaid calling sales in the industry to date and the first large-scale rollout of its kind by a major regional bank is now underway. First Union is now offering MCI WorldCom prepaid calling vouchers at nearly 2,900 ATMs. The vouchers are available in 30- or 60-domestic minute denominations. The ATM receipt serves as a prepaid calling card, with the toll-free access number and PIN needed to place a telephone call printed on the receipt. Buyers are also provided with a receipt with dialing instructions for domestic or international calls. First Union has been offering stamps at approximately 140 ATMs since January.

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SCF Course

The Smart Card Forum, a Washington-based multi-industry trade group, Monday announced the September session of The Smart Card Forum Educational Institute, the industry-leading course dedicated to providing world-class smart card education to newcomers in the industry and others wanting to know more about smart cards. The Smart Card Forum’s next Educational Institute will take place on September 21, 1999, at the JW Marriott in Washington, DC, in conjunction with the organization’s 7th Annual Meeting. A special discounted fee structure has been put in place for attendees of the course, which also includes attendance at the Annual Meeting.

The Educational Institute’s course offering, “Introduction to Smart Cards,” is unique to the industry in that it is designed to give students a hands-on learning experience with regard to smart card technology and applications, enabling participants and enterprises to develop real-world strategies for successfully deploying smart card systems. The Smart Card Forum Educational Institute is also the first and only smart card educational program of its kind that addresses technology, product, business, and legal and public policy issues associated with the application of smart cards.

Now in its third year, the Smart Card Forum’s education program has drawn nearly 250 students from more than 150 leading companies, including MasterCard, Chase Manhattan, AT&T, and Coca-Cola. Students are typically involved in the development or marketing of products and services that incorporate smart cards into application systems.

The Educational Institute’s “Introduction to Smart Cards” course is staffed by a faculty of world-leading experts drawn from some of the leading smart card vendors or user companies such as Gemplus, Visa International, Telcordia and others. Through participation in the course, attendees have access to an unprecedented range and depth of smart card knowledge and expertise.

“Attendees of the Educational Institute are given the unique opportunity to learn from and interact with a wide range of experts that have first-hand experience in the smart card industry,” said Donna Farmer, president and CEO of The Smart Card Forum. “Our hands-on approach to learning makes this course offering much different than other seminars and workshops. Additionally, the Educational Institute offers a vast amount of content presented by an extremely knowledgeable faculty, and a presentation approach that past attendees have found to be engaging and informative.”

The Smart Card Forum Educational Institute’s world-class faculty represents a cross section of expertise in smart card applications and includes: Jean McKenna, senior vice president, Emerging Electronic Payments, Visa International; Gilles Lisimaque, chief technology officer, Gemplus; William Barr, executive director, Telcordia Technologies; Catherine Allen, CEO, Banking Industry Technology Secretariat; Julie Krueger, director of marketing, SPYRUS; Bryan Ichikawa, director of vertical markets, SPYRUS; and John Burke, general counsel & partner, Foley, Hoag & Eliot.

The “Introduction to Smart Cards” course enables participants to learn the basics of smart card applications and technologies and to effectively apply those basics in a business environment. Some of the topic areas include standards, specifications and interoperability; developing smart card applications; smart card security and system integrity; emerging smart card-based applications; and legal and public policy issues relating to smart cards.

The Smart Card Forum Educational Institute is dedicated to providing a breakthrough approach to smart card education that has set the standard in the industry. This course is intended for newcomers to the industry and others wanting to know more about smart cards, including: business executives, investment community executives, program managers, project managers, and other non-technical managers.

Registration and Tuition

For more information regarding the Smart Card Forum Educational Institute, please contact Deborah Volk, director of Services, 202-530-5222, dvolk@smartcardforum.org.

Preferential pricing will be offered to members of The Smart Card Forum.

The fee for non-members is $995. More information is available at The Smart Card Forum’s Web site at [http://www.smartcardforum.org][1].

About The Smart Card Forum

The Smart Card Forum is a non-profit, multi-industry organization of nearly 200 members working to accelerate the widespread acceptance of multi-application smart card technology by bringing together, in an open forum, leading users and technologists from both the public and private sectors. The Smart Card Forum also operates the Smart Card Forum Educational Institute, the industry-leading course dedicated to providing smart card education that has set the standard in the industry. The curriculum is based on leading edge educational models and methodologies utilizing experienced instructors who are experts in the smart card industry. The Smart Card Forum is the leading organization for education and awareness in the development of the smart card. For more information about The Smart Card Forum, log on to the organization’s Web site at [http://www.smartcardforum.org][2].

[1]: http://www.smartcardforum.org/
[2]: http://www.smartcardforum.org/

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MOL-PAY

MerchantOnline.com Inc. announced Monday that it has developed proprietary software to successfuLly integrate the Innovonics PC.2000 card reader to create a new MerchantOnline.com e-commerce product, “MOL-PAY.”

MOL-PAY will enable merchants to accept ATM/Debit cards in a fraud protected card swipe transaction using a personal identification number (PIN) that supports the Data Encryption Standard (DES) algorithm utilized at ATM machines millions of times per day. Tarek Kirschen, president and chief executive officer of

MerchantOnline.com, stated, “Forty percent of the population does not have a credit card and is unable to participate in a world of Internet commerce. As the first e-commerce provider to offer merchants the ability to accept ATM/debit cards as a method of payment, we look forward to reaping the benefits of this huge, virtually abandoned and untapped market.”

MerchantOnline.com is a total, one-stop e-commerce provider offering real-time credit card processing, checks online, shopping cart services and secure hosting at prices unmatched within the industry.

Forward-looking statements in this release are made pursuant to the “safe-harbor” provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including, without limitation, continued acceptance of the company’s products, increased levels of competition for the company, new products and technological changes, the company’s dependence upon third-party suppliers, intellectual-property rights and other risks detailed from time to time in the company’s periodic reports filed with the Securities and Exchange Commission.

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CyberCash Branding Campaign

CyberCash Inc., the world leader in e-commerce technologies and services, has embarked on its most ambitious marketing effort to date with its new integrated branding campaign created by San Francisco-based Katsin/Loeb Advertising Inc.

Spending for the campaign, which highlights Virginia-based CyberCash’s leadership in helping merchants grow their e-commerce businesses, will fall between $10 million and $15 million.

Katsin/Loeb leaps out of the gate with a dozen witty and sophisticated full-page print ads which begin appearing nationwide July 26 in close to 20 newspapers and magazines, including The Wall Street Journal, The New York Times, USA Today, Fast Company, Forbes, Business Week and Internet World. The print campaign will be followed by on-line advertising and broadcast campaigns breaking early fall 1999.

CyberCash Senior VP of Marketing Ken Perez said: “There is so much static in the e-commerce marketplace, that we decided it was time to reassert our leadership position. With this new campaign we are delivering a strong reminder that CyberCash is at the center of the e-commerce revolution.”

Katsin/Loeb chairman/creative director Jef Loeb added: “With the help of CyberCash technologies, merchants can attend to what they do best — which is sell — and to becoming profitable, quickly. We focused our campaign on the happy dilemma faced by merchants who utilize CyberCash: dealing with their success and new-found wealth.”

Katsin/Loeb created a spirited campaign, that is “in your brain, rather than in your face.” Reminiscent of pithy, New Yorker cartoons, the ads are simple and focused in a visual metaphor for CyberCash’s message and services.

Unadorned photographic images are accompanied by humorous thought bubbles. In one ad, a voice emerges from the White House: “We’re all proud of you for inventing the Internet, Al. But how come all these other folks are getting rich off it?” In another, a skyscraper retorts, “I agree, but I just don’t think the phrase ‘e-commerce rocks’ is appropriate for an annual report.”

The ads communicate that CyberCash touches every sector of the marketing food chain. They capture CyberCash’s strengths: its innovative products, broad customer base, company legacy and breadth of business partnerships.

CyberCash ([www.cybercash.com][1]) is a leader in e-commerce technologies and services, enabling commerce across the entire market spectrum from electronic retailing environments to the Internet. CyberCash provides a complete line of software products and services allowing merchants, billers, financial institutions and consumers to conduct secure transactions and other e-commerce functions using the broadest array of popular payment forms.

Credit, debit, purchase cards, cash, checks, smart cards and alternative payment types (e.g., “frequent buyer” or loyalty programs) are all supported by CyberCash payment solutions. Leading brands include InstaBuy(tm), AgileWallet(tm), ICVERIFY(R), PCVERIFY(tm), CashRegister, NetVERIFY(tm) and PayNow(tm).

Katsin/Loeb Advertising Inc. is an award-winning, full-service, independent advertising agency with billings approaching $40 million. Helmed by partner/president Daniel Katsin and partner/creative director Jef Loeb, Katsin/Loeb’s clients include Fireman’s Fund Insurance Company, CyberCash Inc. and Yale-New Haven Health, among others. For more information, visit the company’s Web site at [www.katsin-loeb.com][2].

[1]: http://www.cybercash.com/
[2]: http://www.katsin-loeb.com/

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Fee Barriers

As most major card issuers have jacked up late payment fees and over-limit fees to $29, SD-based Green Tree Retail Services Bank has taken its fees to the $30 level. Like the 19.80% fixed interest rate of the 1980’s, the $29 late fee and over-limit fee has come to signify what the consumer market will bear. Green Tree, which markets the sub-prime ‘Conseco MasterCard’, also greatly raised its interest rate and increased its cash advance fee. According to CardWatch ([www.cardwatch.com][1]), the ‘Conseco MasterCard’ now carries a regular interest rate of Prime + 17.20% and a punitive interest rate of Prime + 20.20%. Last year, Green Tree charged a regular APR of Prime +9.4% and a punitive APR of Prime +12.40%, for the ‘Conseco’ card. The sub-prime specialist also bumped up cash advance fees from 3% with a $3.00 minimum to 3% with a $5.00 minimum. In the business card market Advanta still holds the distinction of charging the highest fees. According to CardWatch, Advanta’s no-annual-fee ‘Business MasterCard’ carries a $35 late payment fee and over-limit fee. Industry wide card issuers charge an average of $24.33 for a late payment and $23.65 for going over the credit limit, according to CardData ([www.carddata.com][2]).

[1]: http://www.cardwatch.com/
[2]: http://www.carddata.com/

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