Sears 2Q/99

Second-quarter credit revenues for Sears Roebuck & Company declined 13% from a year ago, to $973.4 million, primarily due to lower late fee income and a reduction in the level of owned credit card receivables. The company said yesterday that credit quality has improved significantly and has more than offset any decline in credit revenues. Sears reported Thursday that its net earnings were driven by the performance of its credit business. At the end of the second quarter Sears held $26.2 billion in domestic card receivables compared to $27.2 billion for 2Q/98. Net U.S. charge-offs for 2Q/99 logged in at 7.11% compared to 7.37% last year. Delinquencies have declined to 7.29% for 2Q/99 from 8.07% for 1Q/99 and 9.28% for 4Q/98. For complete details on Sears’ 2Q/99 performance visit CardData ([][1]).



The King is Back

The Elvis Presley credit card has returned. Elvis Presley Enterprises Inc. announced yesterday that it has signed an affinity card deal with MBNA America to issue the official ‘Elvis Presley’ credit card. The new cards feature two images of Elvis and will benefit the Elvis Presley Charitable Foundation’s Presley Place, a transitional-housing project that will provide homeless families up to one year of rent-free housing, child day care, job training and counseling, and financial guidance. The Elvis Presley program is the newest affinity program in MBNA’s ‘Alliance Sector’, which has now established credit-card programs with 300 organizations and groups including the Frank Sinatra program. MBNA has nearly 4,000 affinity programs worldwide. According to CardTrak ([][1]), the ‘Elvis Presley MasterCard’ was formerly issued, since the late 1980’s, by Memphis-based Leader Federal Bank. Last year Bank of Scotland introduced an ‘Elvis MasterCard’ for British fans.



ECHO Gets U-Haul

Electronic Clearing House announced Wednesday that Phoenix-based U-Haul International has awarded to ECHO a bid for credit card processing service for its independent dealers who participate in the ‘Preferred Dealer Program’. ECHO developed and manufactured the software and hardware that provides inventory processing services for U-Haul dealers. ECHO also processes and supports the daily transaction activity for more than 11,000 dealers. ECHO will enhance the software in the system to include credit card processing for the dealers’ non-U-Haul activity. ECHO provides credit card processing, check guarantee, inventory tracking services and various Internet services to more than 19,000 retail merchants and U-Haul dealers across the nation.


Creditrust 2Q/99

Creditrust Corp. announced Wednesday net earnings of $4.9 million or $0.46 per fully diluted share for its second fiscal quarter ending June 30, 1999, versus net earnings of $2.4 million or $0.28 per fully diluted share for the quarter ended March 31, 1999. Profitability increased largely due to costs of operations which dropped to 55% of revenues, from 64% of revenues in the first quarter of 1999.

Last year’s net earnings for the quarter ended June 30, 1998 were $3.0 million or $0.51 per fully diluted share. The 1998 second quarter included a gain on sale of $6 million while 1999’s second quarter earnings were driven entirely by substantial growth in recurring income on receivables, which increased by $13.8 million. Year to date net earnings increased $3.9 million to $7.3 million in 1999 over the same period a year ago or $0.76 per fully diluted share from $0.58 in 1998.

Collections on managed receivables hit a record $20.4 million over $13.4 million last quarter and $3.7 million for the same period a year ago. Purchases of receivables were $36.0 million representing a face value of $482.3 million. The Company has over 1.7 million accounts under management with a face value of $3.8 billion.

Revenues for the second quarter increased $6.4 million to $18.4 million, compared to $12.0 million for the first quarter or an increase of 53%. Revenues for the second quarter increased $10.0 million over the same period last year.

Operating expenses increased 33% from $7.6 million to $10.1 million in the second quarter over first quarter. Income from operations increased 89% from $4.4 million to $8.3 million over the first quarter. Operating expenses increased from $3.3 million to $10.1 million over the same quarter last year. Income from operations increased from $5.1 million to $8.3 million for the quarter ended June 30, 1999 over June 30, 1998.

Earnings before interest expense, income taxes, depreciation and amortization (EBITDA) rose to $9.0 million for the quarter ended June 30, 1999 over $4.7 million for the first quarter of 1999 and $5.0 million for the same quarter a year ago.

Founded in 1991, Creditrust Corporation acquires, manages and collects delinquent consumer receivables utilizing an information-driven strategy. The Company uses proprietary technology to acquire receivables primarily consisting of charged-off Visa(R), MasterCard(R), and private label credit card accounts issued by major banks and merchants.

For more information on Creditrust’s 2Q/99 financial results visit CardData ([][1]).



MBNAbuy Service

MBNA and CyberCash, a leading provider of online wallet technology, have launched the MBNAbuy service ([][1]). MBNAbuy, an electronic wallet service, is designed to store customer payment, shipping, and purchase information on a secure electronic server to allow safe completion of online transactions.

MBNAbuy allows Customers to make one click purchases at any Web page that displays the Instabuy logo. It uses industry standard Secure Sockets Layer (SSL) technology and 128-bit encryption along with two part consumer authentication to ensure Customer information security. The stored information allows the Customer to shop with ease online without having to repeatedly fill out credit card and shipping information for each online store.

“Most industry observers agree that online holiday shopping in 1999 will eclipse the dramatic increase we saw during last year’s holiday season,” said Russ Stevenson, senior vice president, CyberCash. “MBNA is positioning itself just right to take advantage of the explosive growth in Internet commerce, and CyberCash is very pleased to be working with MBNA toward that goal.”

“Providing superior Customer service is important to us,” said John Cochran, executive vice chairman of MBNA. “As our Customers become increasingly active on the Internet, we want that experience to be as safe, secure, and easy as possible. Electronic wallets allow us to achieve these objectives.”

“MBNA wants to make online shopping as easy and safe as possible for its Customers. We are confident that the inclusion of the Instabuy technology in MBNA’s program will eventually ensure MBNA a leadership position in the rapidly evolving world of e-commerce,” said Nancy Goldberg, executive vice president, CyberCash.

MBNA Corporation (NYSE: KRB) ([][2]), a bank-holding company and parent of MBNA America Bank, N.A., a national bank, has $64.5 billion in managed loans. MBNA, the largest independent credit card lender in the world, also provides retail deposit, consumer loan, and insurance products.

CyberCash is the world’s leading provider of e-commerce technologies and services spanning the retail point of sale through the Internet. CyberCash, the CyberCash logo, Agile Wallet, and Instabuy are trademarks, service marks, registered trademarks or registered service marks of CyberCash, Inc.




A Lindenhurst, IL-based firm and secured card specialist First National Bank of Brookings unveiled an innovative business card program yesterday for companies that frequently provide cash advances or reimburses employees for expenses. PocketCard, Inc. is offering the new VISA card which enables companies to have flexible control over the card’s spending limit. Under the ‘PocketCard’ VISA program, the employer funds the program by transferring money from the company’s bank account into a ‘PocketCard’ virtual account. The funds are then made immediately available to each employee with a ‘PocketCard’, but the employer sets individual limits for each card. These limits, however, can be changed at any time, in real-time, by the company’s designated managers. Whenever an employee reaches the limit of his or her allocation, the card will not be accepted for purchases until the account is replenished. The employer can also review all card transactions at any time by accessing the account at PocketCard’s web site. The employer also has the option to let any or all cardholders access funds through an ATM. There is a $20 annual fee for a business ‘PocketCard’ program. The fee includes one employer or sponsor card and one employee or spender card. Each additional employee card costs $2.50.


Diebold Sells 500 bio-ATMs

Diebold, Incorporated announced yesterday that innoVisions, which is jointly owned by the wholesale bank of Wells Fargo & Co. and Cash America International, Inc., has purchased 500 advanced-function automated teller machines with check cashing and biometrics identification technologies. In addition, Diebold will provide service on these units.

Beginning next month, the ATMs will be installed in convenience and grocery stores in the Houston, Phoenix and Dallas-Fort Worth areas. The ATMs will serve as the platform that delivers an array of financial services by innoVisions, that do not require a bank account in order to be accessed.

These services include low-cost, self-service check cashing without an ATM card or personal identification number (PIN). The machines employ facial recognition technology to create digital photographs of customers at the time of enrollment and with each subsequent transaction. This allows for secure and confidential authentication of identity and provides a swift transaction that sends customers on their way.

“innoVisions’ revolutionary cash-management systems are designed particularly for the millions of Americans who either do not have a bank account or do not rely on traditional banks for their cash needs,” said Frank A. Petro Jr., chairman and chief executive officer of innoVisions. “The Diebold platform helps us provide these ‘self-banked’ customers with access to their money when and where they need it — in convenient locations such as the local grocery or convenience store.”

Thomas W. Swidarski, senior director of worldwide marketing for Diebold, said that the company provided innoVisions with an open platform that allows all of its technology to be easily integrated. “Diebold advanced-function ATMs incorporate a document processing module and gives innoVisions the ability to connect to backend servers; essentially enhancing their current system,” he said.

San Francisco-based innoVisions designs, builds, and operates interactive systems for personal financial transactions. It was formed in May 1998 as a joint venture between Wells Fargo Bank, N.A. and Mr. Payroll Corporation, a wholly owned subsidiary of Cash America International. Mr. Payroll was merged into innoVisions in March 1999. More information about innoVisions can be found by visiting the company’s site on the World Wide Web at [][1].

Diebold, Incorporated is the global leader in providing integrated delivery systems and services. Founded in 1859, the company employs more than 7,000 employees in more than 135 locations worldwide with headquarters in Canton, Ohio, USA. Diebold reported revenue of US$1.2 billion in 1998 and is publicly traded on the New York Stock Exchange under the symbol ‘DBD.’ For more information, visit the company’s Web site at [][2].



BankAtlantic On-Screen Ads

IATM (Interactive Touch Marketing) has announced it has signed a marketing agreement with BankAtlantic, whose parent is BankAtlantic Bancorp to pioneer the sale of on- screen advertisements on its on and off-premise ATM machines.

BankAtlantic, the largest bank headquartered in Florida has assets of $4.2 billion, operates 68 full-service branches and has approximately 800 installed ATMs. It has pursued the aggressive growth of its installed base of ATMs in a variety of retail locations including Wal-Marts, Kmarts, Cumberland Farms and other convenience stores, college campuses, malls and even cruise ships.

After evaluating the recent developments in ATM advertising, BankAtlantic entered into a research and development effort with IATM, a Coral Gables new media firm. “We were very impressed with both the information technology capabilities and interactive media marketing and sales expertise that IATM has demonstrated as a leading touch-screen and internet-kiosk provider here in South Florida,” said Chris Klein, BankAtlantic Senior V.P.- ATM Systems. IATM’s principals have already sold over $1 million of digital advertising to some 300 local, regional and national clients on a network of South Florida kiosks,” said Carlos Luchsinger, COO of IATM.

IATM has cooperated with BankAtlantic and one of its ATM service providers Access Cash, Inc. of Arden Hills, MN, in designing and transmitting various brands images to selected ATMs over regular phone lines. Carlos Luchsinger, COO of IATM, stated, “We have demonstrated our capability by working with Access Cash to broadcast brand images to the ATM, similar to a computer screen-saver image, while the machine is not in use. Additionally, without interfering with, or prolonging, the transaction, we can present brand images during the actual transaction in the Welcome, Please Wait, and Thank You screens.”

Isilio Arriaga, CEO of IATM stated, “We are very pleased to have the opportunity to work with BankAtlantic on the first network of 100+ NCR ATMs located in Cumberland Farms and Amoco convenience stores. We anticipate announcing the availability of other BankAtlantic ATM networks shortly to those brands and advertising agencies we are targeting for strategic alliances. We aim to take a leading role in the introduction and promotion of this exciting option in the new media arena.”

IATM is currently demonstrating the newest of new media options to brand managers and major advertising agencies in its Coral Gables headquarters. For information relative to the ATM advertising program, locations or rates, please contact Antoinette Okon or Ray Knight of IATM at 305-569-0500, e-mail at or or visit the firm’s online media and information site at [][1].



Creditcard Upgrades Falcon

Credicard Brasil S.A., Latin America’s largest credit card issuer, has signed a contract with HNC Financial Solutions, a division of HNC Software Inc. , to upgrade its Falcon bank card fraud detection system and Falcon Expert subsystem.

The upgrade is part of an aggressive fraud prevention program by Credicard, in which Falcon helped the company reduce overall fraud losses by 40% in one year. Under the contract, HNC will create a custom Falcon model that will be based entirely on Credicard data and will lead to further increased fraud detection.

“Since going on-line with Falcon, we’re able to discover potential fraud cases in seconds as opposed to once a day,” says Jason Crauford, Credicard’s Vice President of Fraud Prevention. “We look forward to implementing the custom model, increasing Falcon’s ability to detect fraud, and being the first company in the country to have a purely Brazilian fraud model.”

Falcon monitors the transactions of more than 4.5 million cards in Credicard’s portfolio. In the near future, Credicard plans to migrate to a real-time processing format in order to gain even more benefit from the Falcon system.

“Credicard selected Falcon because of its proven track record and its ability to detect fraud in real time without having an adverse effect on the performance of the authorization system,” added Crauford.

Credicard Brasil is headquartered in Sao Paulo and is jointly owned by Citibank, Unibanco, and Itau. It is the largest MasterCard and Diners Club acquirer in Brazil.

Falcon is a leading credit card fraud detection system that uses patented neural network-based software to examine transaction, cardholder, and merchant data to detect bank card fraud. The system protects more than 260 million cardholders worldwide.

About HNC Financial Solutions

HNC Financial Solutions is a leader in predictive customer relationship management (CRM) software for the payment card and consumer lending industries. Its powerful suite of proven decision platforms and predictive business solutions address the mission-critical, customer-lifecycle needs of financial institutions. For more information, contact Patsy Campbell, Director of Marketing, HNC Financial Solutions, 5935 Cornerstone Court West, San Diego, CA 92121, 858/799-8206.

About HNC Software

Headquartered in San Diego, HNC Software Inc. (Nasdaq:HNCS) is a leading provider of complete Predictive CRM solutions for service industries. HNC divisions include Financial Solutions, Retek Retail Solutions, Insurance Solutions, eHNC, and Telecommunications Solutions.

HNC’s suite of Predictive Software Solutions can provide real-time insight into customer relationships based on transaction-level data, helping business-to-consumer companies manage their relationships with individual customers. By accurately predicting customer behaviors, these companies can create initiatives to mitigate risk and attrition; improve customer service; develop marketing programs to enhance profitability; optimize store replenishment activities; and detect fraudulent customer transactions.

For more information, visit HNC’s Web site at or contact Jane Leonard, HNC Software Inc., 5935 Cornerstone Court West, San Diego, CA 92121, 858/799-3880. For the investor relations hotline, call 800/396-8052.


Chase Results

Chase Manhattan formally released its second quarter results yesterday which showed improving delinquency rates and charge-off rates in its credit card portfolio. Net charge-offs, as a percentage of average receivables, dropped from 5.94% for 2Q/98 to 5.80% for 2Q/99. Delinquency (90+ days) also declined from 2.06% last year to 1.80% this year. Both figures include Chase’s domestic and international credit card activity. Other card portfolio data for Chase’s U.S. portfolio were published (prematurely) in Tuesday’s (7/20) CardFlash and are also available via CardData ([][1]).



Sears Permier Card

Sears, Roebuck and Co. confirmed Wednesday it will introduce this month the ‘Sears Premier Card’. The new program is designed to recognize and reward customers who have made ‘Sears Card’ purchases totaling at least $600 in the previous 12 months. A newly designed blue and gold credit card will replace the current ‘Sears Card’ held by customers who meet ‘Sears Premier Card’ purchasing criteria. Sears will begin mailing welcome kits July 26. ‘Premier’ cardholders will also receive priority in-home service calls, special preview shopping days prior to key sales events and exclusive money-saving offers. Sears will review all ‘Sears Card’ accounts semi-annually to determine which customers meet the criteria for upgrades to ‘Sears Premier Card’.


PaymentNet & Allaire

PaymentNet and Allaire Corporation announced Wednesday a strategic partnership to provide payment solutions to Allaire’s ColdFusion and Spectra products. Earlier this year, the partnership produced a payment-enabling plug-in to Allaire’s flagship product, ColdFusion, providing direct access to PaymentNet’s payment processing services. Widely adopted by the ColdFusion community, the PaymentNet service provides merchants access to PaymentNet’s comprehensive multi-payment processing platform and services including credit card and electronic check payment processing.

“By integrating our e-commerce solutions, Allaire and PaymentNet offer merchants a cost effective, performant and easy to deploy solution for their e-commerce needs,” said Philippe Courtot, Chairman and CEO of PaymentNet. “Now developers of all comprehension levels can deploy industrial-strength e-commerce Web sites with an affordable, highly reliable, and scalable payment and commerce solution,” he added.

“Critical to any successful online business venture is the ability to support secure transaction and payment processing,” said Jeremy Allaire, vice president of technology strategy for Allaire. “Our partnership with PaymentNet gives our customers access to the leading e-commerce transaction processing service, which in combination with Allaire products can be used to create an online business that is fully automated and secure.”

Leveraging both Allaire and PaymentNet technologies, Virtual’s president and CEO, Paul Cormier, was impressed with how quick and efficient payment-enabling his web site actually was. “PaymentNet and Allaire provided the one-two punch to building and deploying our Web store. I have confidence in PaymentNet’s and Allaire’s products and services,” stated Paul Cormier in a recent interview. Paul’s storefront was deployed last year and has proven remarkably successful. Focusing on digital software delivery, Paul uses the PaymentNet platform for real-time payment authorizations and settlement and the ColdFusion product for web development and deployment.

The PaymentNet-ColdFusion module can be downloaded immediately from both the Allaire and PaymentNet web sites.

About Allaire

Allaire Corporation is the industry’s leading, independent web application platform vendor. The company’s products, ColdFusion and HomeSite, are used by more than 250,000 developers worldwide to build and deploy a broad range of interactive Web applications and public Internet sites. With a network of over 1,500 partners, including system integrators, consultants, Internet service providers, independent software vendors and complimentary technology vendors, the Allaire Alliance Program delivers integrated Web application development and business solutions to customers around the world. Headquartered in Cambridge, Massachusetts, Allaire Corporation also has offices in Europe and Asia Pacific and can be found on the World Wide Web at [][1].

About PaymentNet

PaymentNet is the leading e-commerce payment processing platform. The service provides secure, Internet-based transaction and processing for a broad range of businesses that through a variety of e-commerce media. It offers industry-leading automation and customer care with its reliable credit card, debit card, and electronic check processing services.

The PaymentNet service is based on a scalable, secure TCP/IP architecture that automates the processing of multiple payment instruments. It leverages the Internet as a virtual private network between PaymentNet’s proprietary transaction processing server and individual clients dispersed on Internet and Intranet locations. The service is pre-integrated with many leading “shopping carts” and integrates easily with e-commerce front-ends of many types.

The service has been deployed across a wide range of businesses with excellent results. Notable customers include CBS SportsLine, EC Direct, Network Solutions, Inc., Value America, and Virtual Vineyards.

PaymentNet is headquartered in Pleasanton, California, is relocating to Redwood Shores on August 14th and can be found on the Web at [][2]. Contact PaymentNet corporate offices at 925-225-1670.