Sub-Prime Bank

MD-based Creditrust Corp. said yesterday it has decided to renew its efforts to obtain a national bank charter for Creditrust National Bank, NA, to be located in Delaware. The collection firm said due diligence in its efforts to acquire United Credit Card Bank, N.A. led Creditrust to the conclusion that this independent charter application would result in a much more timely and cost effective way to obtain a charter. Creditrust says it intends to leverage its extensive database of detailed information on its 1.7 million customers nationwide. The company intends to model and apply this information to market additional products, such as VISA and MasterCards to specifically targeted market segments.


Fee Driver

Cardholder fee income continues to outpace interest income in annual growth according to final figures compiled by CardData ( Based year-end 1998 data, cardholder fee income grew three times more than interest income last year. Over the past five years, cardholder fee income surged by nearly 160%, from $7.3 billion in 1994 to $18.9 billion in 1998. Meanwhile cardholder interest revenues grew 67% over the same period, from $34.8 billion to $58.1 billion. Late payment fees and over-limit fees have been the driving force in the increased fee income. Since 1994, late fees and over-limit fees have doubled in actual dollar averages. Late fees averaged $11.97 in the summer of 1994 and hit $24.02 this summer. Over-limit fees have grown from an average of $12.57 in June of 1994 to $23.44 for June 1999. Additionally most major issuers have reduced the late payment grace period from 14 days to 0 days. Five years ago about 70% of the industry imposed late fees and over-limit fees. Today more than 90% of the industry charges late fees and about 85% charge over-limit fees.

1998: $18.9B (+28.0%) 1998: $58.1B (+9.4%)
1997: $14.8B (+48.0%) 1997: $53.1B (+1.5%)
1996: $10.0B (+20.5%) 1996: $52.3B (+23.9%)
1995: $ 8.3B (+13.7%) 1995: $42.2B (+21.3%)
1994: $ 7.3B NA 1994: $34.8B NA

Source: CardData (


Bull CC 200 Plus Certified

Bull and Proton World have announced that Proton World has certified the CC 200 Plus card, the latest in the Cash Card range from Bull, world leader in the field of the e-purse. The CC 200 Plus incorporates all Bull’s know-how in terms of security and can be used for a variety of other applications. It provides a processing speed in the region of 115,200 bits per second, 12 times faster than that of previous smart cards.

“Proton e-purse technology is the most widely-used smart card technology in the world,” said David Levy, managing director of Bull Smart Cards & Terminals. “With the CC Cash Card range, Bull has made it possible for banks to fully adapt to the needs of their customers at optimal cost. As the first and largest supplier of this technology, since 1995, Bull offers a very diversified and flexible range of products. The Proton experience with which Bull provides its customers is unique in today’s market.”

“Electronic payment card issuers demand a high level of security and flexibility, which is why Proton World has already had a great deal of success throughout the world,” said Armand Linkens, managing director of Proton World. “It is continuing to expand its licensee network by offering smart card solutions that satisfy the needs of all sorts of licensees. We are pleased to add Bull’s new card to our existing range of ‘new generation’ Proton cards.”

The CC 200 Plus card completes a range of smart cards that are fully compliant with Proton technology and used by more than 500 issuers throughout the world:

–CC 1000 — top end multi-application card. In the Netherlands, the CC 1000 is used as an e-purse, loyalty card and for a variety of other applications by 15 million users of the “Chipknip” cards issued by Interpay Nederland, a Proton World licensee.

–CC Duo — Contact/contactless card, launched last year, which combines the advantages of both Proton and contactless technologies.

The CC 200 Plus is fully compliant with Proton R3.1 specifications. Files are managed according to the rules defined by EMV 96 (Europay-Mastercard-VISA). All members of Bull’s CC card family are accepted in existing terminals without the need for any modifications.

Renewed Customer Trust

A large number of banks, particularly in Belgium, Sweden and Mexico, have already renewed their trust in Bull by ordering the CC 200 Plus, thus confirming their confidence both in Proton technology and in Bull’s CC Cash Cards used in national scale roll-outs in Australia, Belgium, the Netherlands, Switzerland and Sweden.

Maximum Security

Using its unrivalled experience in the banking sector, Bull has incorporated its most recent security research into the CC 200 Plus. The CC 200 Plus records the complete history of the card’s content-sensitive access operations in order to detect any possible attempts at fraud.

Powerful and Multi-functional

With 2 KB of memory, the CC 200 Plus is the ideal platform for additional applications such as customer loyalty schemes, transport ticketing, telephone services, security access and payment over the Internet. Apart from its memory capacity, there are no limits as to the number of applications that can be loaded.

With an operating speed of 115,200 bits per second, the CC 200 Plus can be used easily to encrypt and decrypt data for secure messaging. Finally, the CC 200 Plus makes it possible for merchants to load new applications directly at the point of sale (i.e., “dynamic” loading).

Acknowledgement of the Cash Cards Range

Bull’s CC range received the European Information Technologies Prize in 1997. Awarded by the European Commission, this prize is a recognition of technological innovation in response to market requirements.

About Proton World

PROTON WORLD was created by major smart card players (American Express, Banksys, ERG, Interpay and Visa International) to give a boost to common smart card and electronic purse standards. Proton World is a high-technology company that delivers global smart card solutions worldwide. It continues the development and licensing of Proton smart card applications, which have already been licensed in 16 countries.

The Proton technology is the most broadly implemented in national roll-outs and is the most actively used worldwide. The Proton-based smart card schemes have together performed more than 92 million purse transactions since they have been introduced. It also has the largest acceptance base, with more than 247,000 terminals.

Multiple applications are available today on the Proton platform, including electronic commerce, access control, loyalty schemes, telecommunications services, mass transit, university campus cards etc.

Proton will support a variety of technologies and specifications to deliver open, interoperable and global smart card solutions. It will support and implement the Common Electronic Purse Specifications (CEPS) to ensure interoperability of electronic purse schemes worldwide.

For more information, please visit

About Bull Smart Cards & Terminals

Bull Smart Cards & Terminals is the industry leader in the field of secured financial transactions. Bull designs, develops and markets global smart card solutions for financial, loyalty, transport, telecommunications, healthcare and other applications. Products include contact-contactless cards plus a full range of general purpose and EFT/POS terminals (in partnership with Ingenico), automated teller machines, as well as associated software and services.

Bull Smart Cards & Terminals is the acknowledged industry leader in research, development and security related to smart cards and related terminals. The company is also the worldwide leader in electronic purse cards. Since inventing the microprocessor smart card in 1976, Bull has obtained more than 1,200 patents in the field, and has received certification for smart card security that is the highest level ever achieved by a smart card.

In 1998, Bull Smart Cards & Terminals earned revenues of $210 million. Through the Bull international network, the division achieves 80 percent of its revenue outside France.



IC One, Inc., a Delaware corporation based in Salt Lake City, Utah and SCHIMATIC Cash Transactions, Inc., a Florida corporation based in Los Angeles, CA, also known as SCHIMATIC Technologies, Inc. Tuesday announced a merger of the two companies. The new company will maintain SCTN’s stock symbol and name until closing of the transaction on July 12th, 1999. At that time, the new company will retain the name IC One, Inc.

IC One, Inc. has long been a leader in integrated smart-card loyalty and fundraising solutions. SCTN is developing a multi-language touch screen, Internet enabled system of kiosks which provide a multitude of services including cash wire transfers to other kiosks or approved agents worldwide, currency exchange, ATM services, online shopping featuring 3-D Preview Marketing(TM) and virtual tours, e-mail and video conferencing services purchased with cash, credit cards or smart cards. With worldwide connectivity and electronic commerce breaking through traditional retail barriers, IC One, Inc. and its customers will profit from the new retail paradigm.

IC One offers smart-card solutions based on a unique loyalty patent, and fundraising opportunities for schools and non-profit organizations both in the traditional retail marketplace and on the Internet. With this merger, IC One will immediately become one of the chief private-sector-based public fundraisers in the United States, based on the existing success of the IC Kids Card(TM), now in its second year of deployment in Utah.

IC One’s President, A.D. (Skip) Bennett, will remain as President of the new company. Mr. Bennett commented, “We saw a great chance to extend our marketing base while giving our shareholders an immediate public footprint. The combination of our forces had too much upside for us to pass on the deal.” David Simon, Chairman and CEO of SCTN will accept the responsibility as Senior Vice President of Technology, reporting to Mr. Bennett. “On the eve of the new millennium,” Mr. Simon said, “IC One offers an unparalleled opportunity to capitalize on the convergence of proven technology and global consumer acceptance.” Mr. Simon will also move to a seat on the Board of Directors of IC One, Inc.


Mellon in NACHA Debit Pilot

Mellon Global Cash Management Tuesday announced it will participate in a nine-month pilot sponsored by the National Automated Clearing House Association that will allow participating companies to more easily obtain customer authorization to debit accounts.

Beginning Thursday, July 1, 1999, the pilot allows companies to obtain authorization for nonrecurring debits via the telephone, as long as the call is recorded or written confirmation is promptly mailed to the consumer. Currently, consumers must sign and return authorization documents before companies can originate a debit to an account.

“The NACHA pilot provides an opportunity to streamline the consumer payment collection process, significantly reducing authorization time and increasing the number of collections that can be handled via ACH,” said Robert W. Stasik, executive vice president and head of Mellon Global Cash Management. “We look forward to using this pilot as a tool to better serve our customers.”

“The pilot provides ACH originators with expanded opportunities that currently may be unavailable to them because of authorization requirements,” said William Nelson, executive vice president of NACHA. “The procedure allows participating banks to process ACH debit transactions in a controlled environment that preserves consumer confidence.”

Several customers have already enrolled in the pilot with Mellon and many others currently are finalizing their decision. While the pilot can be useful for many types of companies, it offers the greatest advantage to those with sales and collections functions serving consumers via the telephone. Participating companies can begin obtaining consumer payment authorization on July 1, and companies wishing to sign up with a pilot bank, such as Mellon, can do so until July 29, 1999, at which time enrollment will be closed for the duration of the pilot.

Mellon Global Cash Management, an industry leader known for its innovation and expertise, designs complete solutions through its comprehensive line of cash management services to meet the specialized treasury needs of middle market to large multinational corporations, government agencies, nonprofit organizations and financial institutions.

A broad-based financial services company with a bank at its core, Mellon Bank Corporation (NYSE: MEL) ranks among the nation’s largest financial services companies in market capitalization. With more than $2.3 trillion in assets under management, administration or custody, including more than $400 billion under management, Mellon provides a full range of banking, investment and trust products and services to individuals and small, midsize and large businesses and institutions. Its mutual fund companies, The Dreyfus Corporation and Founders Asset Management in the United States, and Newton Management Limited in the United Kingdom, place Mellon as one of the world’s leading managers of mutual funds. Mellon also is a global leader in benefits consulting through its Buck Consultants, Inc., subsidiary in New York. Headquartered in Pittsburgh, Mellon’s principal subsidiary is Mellon Bank, N.A.


ATS Signs Tops

ATS Money Systems, Inc., announced Tuesday it has entered into a contract with Tops Markets, Division of Ahold USA, to provide its grocery stores with the ATS-601 Electronic Coin & Currency Counter. The “mini-settlement system” is expected to result in labor savings and reduced counting errors. The total amount of the contract is in excess of $130,000. Rollout of the ATS-601 is currently underway.

Tops Markets, headquartered in Williamsville, New York, is one of the Divisions of Ahold USA, the American Division of Royal Ahold, one of the world’s largest food retailers. Tops Markets operates about 240 stores in New York and Ohio. Mr. James H. Halpin, Executive Vice President of ATS Money Systems, Inc., commented, “We are encouraged about the continued acceptance of the ATS-601 Electronic Counting Scale in the supermarket and other retail markets. We are delighted to add Tops Markets as an ATS client and are excited about the potential for the use of our electronic counting and check encoding technology in the supermarket industry.”

The ATS-601 has been installed in other companies such as: Wendy’s, White Castle, Nash Finch Company, Musicland, Arby’s, Ames Department Stores, T. J. Maxx, Carson Pirie Scott & Co., Pilot Corporation and The Kroger Company.

ATS Money Systems, Inc., is engaged in the development, sales and service of currency counting systems running on DOS, UNIX, Windows 95 and Windows NT platforms for department and chain store cash offices. Its wholly owned subsidiary, Innovative Electronics, Inc., is a major supplier to the retail marketplace, providing an end-to-end solution that integrates point-of-sale, in-store processing and host applications in a distributed computing network.

Statements made in this Press Release, other than those concerning historical financial information, should be considered forward-looking and subject to various risks and uncertainties. Such forward-looking statements are made based on management’s belief as well as assumptions made by and information currently available to, management pursuant to the “safe harbor” provision of the Private Securities Litigation Reform Act of 1995. The Company’s actual results could differ materially from those expressed in or implied by such forward-looking statements as a result of a variety of factors, including, among others, those identified in the Company’s Annual Report on Form 10-KSB for the fiscal year ended December 31, 1998. A copy of such Annual Report is obtainable from the EDGAR database Internet web site maintained by the Securities and Exchange Commission at Additional factors that could cause or contribute to such differences include general economic conditions, economic conditions in the industries in which the Company’s customers compete, a determination by the Company’s customers to prolong the test cycles of the Company’s equipment, software and software support services and a determination by the Company’s customers to modify or change their underlying computer and cash reporting systems. The Company undertakes no obligation to release publicly the results of any revisions to its forward-looking statements that maybe made in this Press Release to reflect events or circumstances occurring after the date of this Press Release or to reflect the occurrence of other unanticipated events.


Netherlands Smart Cards

Motorola’s Worldwide Smartcard Solutions Division and Australia’s ERG Group were awarded a contract by The Ministry of Transport, Public Works and Water Management in the Netherlands for approximately 14 million guilders (US$6.6 million) to enhance bus service in the city of Groningen by implementing a field trial of an integrated smart card automated fare collection system called ‘Tripperpas’. The results of the study confirmed the need for a smart card field trial as a preliminary step to eventually replacing the ‘Strippenkaart’ paper ticketing system for all public transport within the Netherlands. Motorola’s systems integration and operational management services, ERG-provided bus terminals and ARRIVA bus depot computing equipment will support the ‘Tripperpas’ system. In addition, more than 10,000 ‘M-Smart’ dual-interface smart cards are expected to be issued to customers of ARRIVA for a 24-month field trial involving approximately 80 buses in Groningen that is expected to begin in the second half of next year.


E-Bill Demand Soft

PSI Global says a new study shows that consumers’ interest in electronic bill presentment and payment services lags behind that of companies, particularly high-volume billers, that want to switch from paper-based systems to electronics. PSI says it found that just seven percent of U.S. households think that they could receive and pay bills via the Internet within six to 12 months. And 16 percent say they would like to use the Internet both to receive and pay bills within the next three years. However PSI says the good news for billers is that close to 50 percent of U.S. households already have PCs, and more than a third of these PC owners actively use financial management software. The infrastructure is in place for large numbers of consumers to accept EBPP. The research firm says another positive indicator that consumers will adopt new bill payment methods is the decline in the usage of checks from 90 percent of all payments in 1990 to 76 percent this year. PSI estimates that consumers will make 15.9 billion bill payments this year.


Hypercom Promotion

Hypercom Corporation today announced the appointment of John Marshall as senior vice president and general manager, Hypercom North America POS. Mr. Marshall will be directly responsible for managing and directing Hypercom(R) sales, service and support throughout the United States, Canada, Mexico and Puerto Rico. Marshall will report to Chris Alexander, president of Hypercom Worldwide Payment Solutions, a new streamlined organization responsible for all payment product sales and support, including Hypercom’s POS Multi-Lane Division and The Horizon Group. Marshall had previously served as senior vice president of sales, US/Canada POS.

“Hypercom’s shipments soared by almost 45% in the US last year, in large part due to John Marshall’s efforts. His appointment to this newly-created position is directly in line with our goal to continue that momentum, simplify our organizational structure, improve efficiency and provide existing and potential customers with the most advanced value-added electronic payment solutions,” said Chris Alexander, president, Hypercom Worldwide Payment Solutions.

Marshall is a 30-year veteran of the electronic payments, banking, data processing and communications industries. Prior to joining Hypercom in 1987, Marshall was vice president of sales and marketing for Ausnet and its subsidiary, EFTEL, the operators of Australia’s only independent EFT switch networking running both ATMs and card payment systems.

Hypercom Corporation (NYSE:HYC) is a global provider of electronic payment solutions, including multi-functional point-of-sale terminals, peripherals, network products, Ascendent(TM) payment and transaction software and Internet-based and electronic commerce payment solutions. On a global basis Hypercom delivers the services and technology infrastructure required to quickly integrate and deploy new payment applications. These applications provide competitive value-add programs, improved business performance and low total cost of ownership.

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, France, Hong Kong, Hungary, Japan, Mexico, Russia, Singapore, Sweden, the United Kingdom and Venezuela. Hypercom’s Internet address is


NYCE-Magic Formally Merge

NYCE Corporation and Magic Line, Inc., two of the leading electronic payment services providers in the United States, have formally closed their merger. The transaction received regulatory approval last week from the Federal Reserve Board, the last step required prior to completing their merger.

Last week, the two companies announced that the combined entity will operate under the single brand of NYCE for all products and services throughout its expanded marketplace created by the merger.

The merged company will operate as NYCE Corporation, serving over 45 million cardholders in 15 states, through a network that includes 35,000 automated teller machines (ATMs) and 185,000 point-of-sale (POS) retailer locations.

Dennis F. Lynch is President and Chief Executive Officer of NYCE Corporation. John G. Bascom, who had been President and Chief Executive Officer of Magic Line, Inc., is Executive Vice President of NYCE and President of its Midwest Regional Business Unit, which is based in Dearborn, Michigan, where Magic Line had been headquartered.

“We are pleased to have our merger approved as originally structured and closed, and we are ready and eager to start moving forward as a combined company,” said Mr. Lynch. “Building on the powerful franchises of our two EFT companies, NYCE will become an even greater electronic payments resource for our participants and the consumers they serve. We think the timing of our merger is astute and the combination of all we offer will be unbeatable.”

NYCE Corporation has 12 principal financial institution owners whose representatives serve on NYCE’s Board of Directors. In addition, the Board has four seats for regional representatives from the Northeast and Midwest regions. Mr. Lynch and Mr. Bascom also serve on the Board.


NextCard – InsWeb

NextCard announced this morning it has signed an agreement with InsWeb, an Internet insurance marketplace. The agreement marks the first time that NextCard applicants will be able to access insurance products online through a co-branded insurance center, which may be accessed directly from NextCard’s Web site. Under terms of the deal, InsWeb will become NextCard’s exclusive insurance provider.


De La Rue to Sell

The smart card shake-out has begun! UK-based De La Rue is reportedly in advanced discussions to unload its card division, including its smart card operations. According to this weekend’s Financial Times, De La Rue is in negotiations with three interested parties, namely, Gemplus, Schlumberger and Groupe Bull, all based in France. It was not clear whether Germany’s Giesecke & Devrient or France’s Francois-Charles Oberthur were also involved in the final phase of bidding. NM Rothschild, which replaced Schroders as the De La Rue’s advisers this year, is handling the sale. According to London’s Financial Times, De La Rue’s cards division made operating profits of 4.7mGBP on sales of 161mGBP last year, with smartcards comprising about a third of revenues. The newspaper estimated that De La Rue has been investing 15m-20mGBP a year in smart cards and has an 8% share of the global smart card market. The cards division also produces mag stripe credit and debit cards, including those for VISA and Mastercard. The company is thought to prefer a sale of the division as a whole rather than two separate deals. The deal is expected to fetch 100m-200mGBP. The company has been going through a restructuring since last September.