Smart Cards Enter Hawaii

The Pathways Group announced Friday it has signed a contract to install a Smart Card System to Radford High School in Honolulu, Hawaii. Each student will receive a personalized card that will serve as their picture ID as well as an electronic purse to purchase items such as lunch, school supplies, yearbooks and school-sponsored events. Parents will pay in advance and the money will be loaded on the cards for use by the students. Pathways has also entered into a reward type program with Coca-Cola Bottling of Hawaii to allow students to earn loyalty points each time they purchase a meal or purchase Coca-Cola products using their campus card. The points can then be redeemed at participating merchants such as local surf shops and video rental stores.


NextCard Advertises with ZDTV

NextCard, the First True Internet Visa, today announced an integrated on-air and online advertising campaign with ZDTV, a unit of Ziff-Davis. ZDTV is the 24-hour cable television channel about computers and the Internet. ( ). ZDTV online users will be able to apply for the NextCard Internet Visa ( ). In addition, will produce on-air advertising spots to drive traffic to the NextCard site.

“NextCard is thrilled to advertise with ZDTV,” said Dan Springer, chief marketing officer at NextCard. “ZDTV’s powerful combination of television programming, viewer interaction and unique on-line content enables NextCard to reach the active online community interested in compelling Internet-based services.”

“ZDTV is the only cable television channel offering advertisers a truly customized integrated marketing solution,” said Carol Tweedle, director of advertising sales west for ZDTV. “ZDTV is excited to help NextCard reach this valuable online community.”

The NextCard Internet Visa

NextCard made history in December 1997 by launching The First True Internet Visa. Today, over 1.5 million people have applied for the NextCard Internet Visa, making it one of the leading online credit cards. Internet consumers are attracted to NextCard’s innovative features including:

My Visa Customized upgrades and personalized PictureCard designs.

Rewards Up to double rewards for free travel on any airline, books,
music and more — with no annual fee.

GoShopping! Internet shopping services and a 100% safe online shopping

Community Complete online account service, sweepstakes and special
offers. View and sort statements online. Plus 24-hour
Internet-savvy telephone support.

NextCard, Inc.

NextCard, Inc., creator of the First True Internet Visa, is considered the industry’s leading issuer of consumer credit on the Internet. Since its launch in December 1997, over 2 million people have applied for the NextCard Internet Visa, making it one of the premier online credit cards. NextCard continues to innovate with its Double Rewards program, GoShopping! tools, original PictureCard design, digital wallet and unparalleled online customer service. ( )

About Ziff-Davis

ZDTV is an affiliate of Ziff-Davis, the integrated media and marketing company focused on computing and Internet-related technology, with principal platforms in print publishing, trade shows and conferences, online content, television, market research and education. Ziff-Davis provides global technology companies with marketing strategies for reaching key decision-makers. Produced at the channel’s state-of-the-art studios in San Francisco, ZDTV’s programming ranges from cyber-tips and daily industry news to insightful features on emerging technologies. Specific shows include Internet Tonight, Big Thinkers, The Money Machine, Call For Help, GameSpot TV, The Screen Savers, Fresh Gear, and Silicon Spin. As an integrated Web site to ZDTV, enhances the television channel by providing dynamic, interactive programming that invites audience participation through the Internet.


New Director

First, Inc., Friday announced it has appointed Raymond Chan, former executive vice president and general manager of Visa International’s Greater China region, to Director, Bank Processing Systems. Chan’s new position at First, the leading Internet credit card transaction processing service provider for companies based outside North America, represents a significant move toward strengthening the company’s leadership position in the China and Asian Pacific e-commerce markets. Chan, whose career at Visa International spans 17 years, was instrumental in creating and establishing Visa’s entire Greater China region business from ground zero to a dominant market share position exceeding 70 percent in China, Hong Kong, Macau and Taiwan. In his new position at First, Chan will be responsible for enabling all banks to process electronic commerce transactions by outsourcing to First Integral to Chan’s work at First will be the industry relationships he developed while at Visa, including more than 100 member banks and financial institutions, in addition to managing the day-to-day operations of four regional offices. Chan, whose successful track record has helped establish him as a leading authority on China’s credit card industry, also is credited with making significant contributions to designing and architecting the VisaNet system worldwide.

“The addition of Raymond Chan to our management team is very strategic for First,” said Gregory Pek, First president and CEO. “We know that strategic relationships with banks, especially internationally, are important to our future growth. We can enable banks to process electronic transactions with little or no capital investment, and normally within 30 days. We can further eliminate much of the banks’ operating costs associated with systems operations, merchant application processing and other transaction processing activities. Raymond is ideally suited to presenting our message to the major banks throughout the region.”

Chan earned his M.S. degree in computer science from California State University, San Jose, and holds a B.S. in mathematics from California State University, San Francisco.

About First

First (FEC) is a Hong Kong-based company providing online credit card transaction processing services for merchants outside of North America. Through a series of strategic alliances, FEC approves merchants and processes transactions in a tax-neutral jurisdiction without the need for using U.S. banking institutions or U.S.-based ISPs. Using First Data Corp.’s processing platform, FEC offers online credit card processing solutions for merchants in their preferred currency. For more information, contact First at (888) 305-8233, by e-mail at or at [][1].



E*Trade and Telebanc Merg

E*TRADE(R) Group Inc., a global leader in online investing services, and Telebanc Financial Corporation, the nation’s largest Internet bank, today announced a definitive agreement to merge, creating the first pure-play Internet company to unite banking and brokerage services.

Under the terms of the agreement, Telebanc shareholders will receive 2.1 shares of E*TRADE common stock for each share of Telebanc common stock. Based on E*TRADE’s closing price on May 28, 1999, the merger is valued at approximately $1.8 billion. Following the merger, which is expected to be accounted for as a pooling of interests, Telebanc shareholders will own approximately 13 percent of E*TRADE’s fully diluted common stock.

This strategic e*merger is expected to revolutionize the future of personal financial services by making available to millions of consumers a distinctive, powerful online financial management experience which will eliminate the need for multiple financial relationships. By creating an Internet-based, FDIC-insured cash management account that provides exceptional consumer value and convenience, E*TRADE further solidifies its strong core customer relationship. With this central account, customers will be able to complete a full range of transactions online (such as purchasing mutual funds, CDs and fixed income securities, trading equities and paying bills). The combination will strengthen one of the most cost-effective, scaleable business models in the industry and fuel E*TRADE’s proven customer acquisition engine to better serve and aggressively expand its existing one million-plus customer account base.

“Traditional companies are focused on re-engineering their legacy products and high-cost distribution networks while defending their marketplace. We continue to reinvent for the future, placing the customer front and center. This strategic e*merger, the first to combine two e-commerce leaders, will enable us to deliver unparalleled value to consumers as we continue to expand and evolve an already rich set of investment, banking and cash management tools,” said Christos M. Cotsakos, chairman and chief executive officer of E*TRADE. “We also will continue to enhance our unique business model as we combine our all-electronic, fully scaleable platforms to achieve fast time to market, exceptional cost efficiencies and a sustainable pricing advantage over the competition.”

E*TRADE has invested over $350 million in its patent-pending Stateless Architecture(SM) which enables it to cost effectively support a broad range of complex products and transactions. With Telebanc, E*TRADE acquires the regulatory, management and operating expertise to enable both companies to fully leverage their respective areas of expertise.

Mitchell H. Caplan, Telebanc vice chairman, chief executive officer and president, added, “This e*merger creates the most comprehensive platform for online brokerage and banking, leveraging the strong brand names of E*TRADE and Telebanc, as well as our combined financial resources and leading edge technologies. Through Telebanc, E*TRADE will be able to offer the holders of its one million-plus customer accounts full-featured FDIC-insured Internet cash management services and other highly-competitive FDIC-insured banking products and services, including CD rates at the top one percent of the market and savings rates that are double the national average.”

Telebanc already is larger than the next five pure-play Internet banks, combined. As consumers begin to realize the power and convenience of this new offering, E*TRADE believes it will be well positioned to further expand its customer base and capture and even greater share of wallet.

Winning the Core Consumer Relationship

This e*merger gives E*TRADE another key competitive advantage in the race to capture and develop the core financial relationship with consumers via two strong, asset-gathering products and a powerful, comprehensive online customer experience. The integration of E*TRADE and Telebanc offerings will meet consumer demand for a truly integrated, best-of-breed set of personal financial management products and services. For the first time, millions of consumers will be able to access a full-featured, FDIC-insured Internet cash management account, including ATM access through the national Cirrus(R) network, online bill payment and investing services, thereby enabling them to consolidate their brokerage and banking accounts.

“As industry leaders in online investing and branchless banking with unrivaled focus on the customer, E*TRADE and Telebanc are well positioned to fundamentally change the customer experience,” said Cotsakos. “We will continue to excel in providing our customers with high-quality products and service and ‘anytime, anywhere’ convenience through access across multiple personal computing and communications devices.”

Business Synergies

The combination will enable E*TRADE to further extend its aggressive customer acquisition strategy into the Internet banking market while creating greater “stickiness” through multiple asset gathering products. In addition to exploiting its technology leadership, E*TRADE will be able to combine both companies’ marketing capabilities and resources to maximize the return on its investments in customer relationship marketing and brand building.

This e*merger also will further diversify and strengthen E*TRADE’s revenue base, building on the asset management company it created in February when it launched the first of several proprietary mutual funds. E*TRADE also will capitalize on Telebanc’s capital market expertise to further enhance the profitability of selected asset management products.

Merger Details

E*TRADE expects the transaction to be accretive to both revenue and earnings immediately upon closing. The Boards of Directors of both companies have approved the merger. Consummation of the merger, which is expected to be completed this fall, is contingent on customary conditions including regulatory and shareholder approvals.

E*TRADE is being advised by BancBoston Robertson Stephens and Telebanc is being advised by Goldman Sachs.


A leading branded provider of online investing services, E*TRADE has established a popular destination web site for self-directed investors. The company offers independent investors the convenience of automated stock, options and mutual fund order placement at low commission rates. In addition, E*TRADE offers a suite of value-added products and services that can be personalized, including portfolio tracking, real-time stock quotes, Smart Alerts, market commentary and analysis, news, investor community areas and other information services.

E*TRADE was the first securities and financial services company to be awarded the CPA WebTrust seal of assurance by the American Institute of Certified Public Accountants (AICPA). In consecutive quarters (4Q98, 1Q99), the E*TRADE web site was named the No. 1 online investing site in an international survey of the industry’s top 20 Internet brokerage firms by Lafferty Information and Resource Group, a global provider of high-value and business information research.

For more information on E*TRADE, visit the World Wide Web at or through many other electronic channels and online services, including AOL (Keyword: E*TRADE), and via TELE*MASTER interactive telephone system.

About Telebanc

Telebanc is the holding company for Telebank, the nation’s largest and fastest growing branchless bank providing high value financial products and services over the Internet. Telebank provides a wide range of FDIC-insured and other banking products and services to its customers. Telebank delivers these products and services exclusively through the Internet and other electronic channels, thus avoiding the costs and brick-and-mortar branches. As a result, Telebank is able to offer significantly higher rates and lower fees than traditional banks and deliver these services worldwide through the convenient anytime, anywhere access on the Internet. For more information on Telebanc, visit the World Wide Web at or


Secretaire & WorldNet Agreement

Secretaire Industries, Inc., announced Friday that, on May 21, 1999, it entered into an agreement with Antigua based-WorldNet Global Commerce Systems Limited, pursuant to which Secretaire will acquire an exclusive license for all of the software, hardware and related proprietary technology for the operation of a fully functional Internet payment card transaction processing facility from WorldNet. The payment card processing facility will be in full compliance with the Secure Electronic Transactions (SET) protocol and will have the ability to accept Secure Socket Layer (SSL) transactions.



PubliCARD, Thursday launched ‘SmartReward’, a smart card-based loyalty program designed for retailers in Europe seeking to improve customer retention and reward customer loyalty. The product allows customers to earn loyalty points redeemable only at the point of sale. A smart card is issued to a customer with products/points ratio determined by the retailer. As a cardholder makes purchases, the card is automatically updated with loyalty points. ‘SmartReward’ also has an electronic purse option that retailers can offer to their customers and cash can be stored on the card for use only at the issuing retailer.


Associates Manages BP

Yesterday Associates First Capital Corporation announced it reached an agreement with BP Amoco to manage the combined proprietary credit card program in the US. Terms were not disclosed. The agreement follows the December 1998 merger of BP and Amoco. The Associates has managed and issued Amoco’s co-branded card since 1984 and purchased its proprietary oil card portfolio in September 1994.


April Scoreboard

According to statistics released this morning by CardData ( Citibank continues to lead the top ten issuers with YTD charge volume per active account. Through the end of April Citibank racked up $49.1 billion of the $195.2 billion charged to cards issued by the nation’s ten largest issuers. MBNA holds the distinction of the highest balance per active account, breaking through the $3000 per account level. The average balance per active account for the top ten stands at $2208 as of 4/40/99.

(as of April 30, 1999)
1. Citibank 25.6m or 62% $2715 $1918
2. Bank One/FUSA 26.4m or 58% $2598 $1356
3. MBNA 18.0m or 66% $3156 $1550
4. Discover 22.0m or 59% $1468 $ 836
5. Chase 12.6m or 61% $2500 $1254
6. B of A 10.5m or 61% $1981 $1505
7. Cap One 11.5m or 63% $1235 $ 870
8. Fleet 5.1m or 55% $2745 $1118
9. Household 7.0m or 49% $1857 $1643
10. Providian 7.0m or 56% $1829 $ 743
TOTAL/AVGS: 145.7m or 60% $2208 $1279

Actives- percentage of active accounts versus gross accounts; bal- average balance per active account; vol-year-to-date volume per active account SOURCE: CardData (


First Data Managing Director

First Data Resources Thursday announced that Roger D. Van Scoy, 42, has been named managing director of its European card business.

In his new role, Van Scoy will oversee First Data’s card processing operations in Europe, including locations in the United Kingdom, Germany and Spain. He will report to David P. Bailis, executive vice president, First Data Corporation.

“With more than 20 years experience in the financial services industry, Roger has extensive knowledge of the card business. Under his leadership, I am confident that First Data Resources will continue to enhance and expand our presence in Europe,” said Bailis.

Van Scoy most recently served as managing director of First Data’s international efforts in the Asia-Pacific region. Prior to joining First Data in September 1996, he held several executive positions in sales, marketing and customer service with Electronic Data Systems.

Van Scoy will relocate from Omaha, Neb. to Basildon, England.

FDR Limited (FDRL) is Europe’s largest independent third party processor, whose services center around card transaction processing and related information services. With 2,500 employees, FDRL serves over 40 clients who include major high street banks, building societies and other financial institutions, both in the United Kingdom and mainland Europe.

Atlanta-based First Data Corporation (NYSE: FDC) is a leader in payment systems, electronic commerce and transaction management products and services. First Data and its principal operating units process the information that allows millions of consumers to pay for goods and services by credit, debit or smart card at the point-of-sale, over the Internet, by check or by wire transfer. For further information about First Data, please visit the Internet at [][1].



Start-Up E-Commerce

MDC Communications Corporation Thursday announced the formation of a joint venture with Royal Bank Growth Corporation. The joint venture, named ‘eLab Technology Ventures’, will selectively invest in start-up technology companies that enable e-commerce activity. The joint venture seeks to provide start-up e-commerce technology businesses with a unique combination of access to start-up capital and the business expertise often required by new technology companies. Both MDC and RBGC have each committed start-up capital and value added services, creating a $40 million partnership. The joint venture will officially launch when its CEO has been selected, expected later this summer.


Customer Loyalty

Yesterday, Total Research Corporation released results, from a survey on loyalty marketing and consumer spending. The survey found that 6 out of 10 people spend more money with the company that offers a loyalty program than before joining. Credit card and airline programs were found to more often give more business to the company than other programs. Credit card loyalty programs showed a 46 percent increase. If a company were to discontinue its loyalty program 60% of consumers said they would spend less with the company. Consumers reported they were participants, on average, of 3.2 loyalty programs.