Taiwan Goes VISA Open Platform

Financial Information Service Co. Ltd (FISC), Taiwan’s national operator for interbank information network services including ATM, debit and credit cards, Monday announced its intention to migrate its proprietary chip cards to the Open Platform specifications.

The FISC/Open Platform migration program is expected to commence in the last quarter of 1999. An estimated one million FISC cards will be based on Visa’s Open Platform upon completion of the program in the year 2001.

The plan by FISC is being seen as a necessary move to keep pace with the explosive growth of the Taiwan payments industry, and is widely expected to accelerate Taiwan’s plan to migrate from magnetic stripe cards to smart cards. By using the Open Platform, FISC’s members will be able to choose from a wide range of chip operating systems, card and terminal manufacturers, and application developers in order to offer to their cardholders a wide range of services, all residing on a single card.

The new FISC/Open Platform cards will initially offer debit, electronic purse and ATM services. Discussions are underway with FISC members to explore the possibility of adding other applications, such as credit and loyalty programs, to optimize the capability of the new multifunction smart cards.

Ms. Lin Chen Chen, President of FISC, said: “As part of our plan to migrate our existing FISC chip cards to an industry standard, we conducted feasibility studies on several options available in the market today. We are convinced that the Open Platform approach adopted by Visa is the best multifunction smart card technology available today because its open, non-proprietary chip platform offers our members a choice of global standards, flexibility and convenience. FISC is definitely committed to using Open Platform technology in the Taiwanese market.”

The Open Platform was first introduced by Visa International in June 1998 with the launch of the Standard Chartered Open Platform Visa card in Singapore. It represents a collection of specifications and technologies that enable Members to securely deploy multifunction smart cards. With the Open Platform, card issuers are able to easily and cost-effectively develop a broad array of competitive value-added functions, using smart card technology.

Philip Yen, senior vice president, Emerging Technology at Visa International, said: “Over the past 10 months, the Open Platform approach has been endorsed by multiple industries, including financial institutions, telecommunication standard institutes and the set top box industry. Today’s announcement by FISC highlights the growing worldwide support for this non proprietary approach and demonstrates the demand for a chip platform which offers the best combination of services at the lowest cost and which provides maximum choice while protecting investments.”

Ms. Lin added: “For the stored value program on the new FISC/Open Platform smart card, we are also pleased to announce that FISC is currently conducting feasibility studies on the adoption of the Common Electronic Purse Specifications (CEPS), another global standard currently being promoted by Visa and several leading electronic purse operators worldwide.”

CEPS has been jointly developed by Europay International, SERMEPA in Spain, Visa International, and ZKA (Zentraller Kreditausschuss, Germany). Available since March 1999, CEPS are open and non proprietary specifications that will ensure global interoperability for electronic purse cards worldwide. To date, more than 90 percent of the global electronic purse operators have agreed to adopt CEPS.


Bank One Overseas

Bank One named a new CEO for its European credit card operations and a new CEO for its Canadian credit card operations Friday. James Corcoran will oversee the management of Bank One International Credit Card’s European credit card division. Corcoran joins Bank One from Citigroup where he operated as the company’s managing director of global sales delivery. Bank One, which began marketing credit cards in the UK late in 1998, indicated it expects to add more than 1,000 UK employees over the next few years. Gary Heatherington, former SVP/GM of MasterCard’s Canada Region, will oversee the management of Bank One International Credit Card’s Canada team.


Winkler’s New Job

Cleveland-based Century Business Services, Inc. announced this morning that it has named Fred M. Winkler,, as President and COO. Winkler was also named to the Board of Directors. Prior to joining Century, Mr. Winkler served for five years as CEO of First Union Corporation’s Customer Direct Access Division. He also served as COO of AT&T Universal Card Services Corporation from 1989 to 1993. Century provides integrated business support services through a network of more than 200 company offices in 36 states, as well as through its subsidiary, Century Small Business Solutions, a franchisor of accounting services with 650 franchisee offices in 47 states. The company has about 110,000 business clients.


ATM Surcharging

A North Carolina legislator has joined the state-level push to stop banks from charging non-customers to use their ATMs. NC state Representative Paul Luebke introduced the bill late Thursday to end ATM surcharging by North Carolina banks. A similar North Carolina bill, introduced in 1997, died in committee. Meanwhile, in California, the Berkeley City Council has become the first city government to prohibit ATM fees. The City Council passed the ordinance Tuesday evening by a vote of 6 to 1 with the two members abstaining, including the Mayor. The Berkeley law provides for a minimum of $250 in compensatory damages and a maximum of $5,000 in punitive damages for each violation. However enforcement of the law is limited to personal civil suits. The Berkeley ordinance will not become law until it passes a second round of voting next month. Efforts to limit ATM fees in the state of California remain alive as ‘State Bill 270’ is set for debate next month in the Senate Committee on Finance, Investment and International Trade. Like North Carolina, a similar bill in the California Senate died two years ago.


Internet Positive Pay

IA Corporation, a provider of high-volume application software solutions for the financial services industry, Friday announced CheckVision Internet Positive Pay, a new application that allows a bank’s corporate and business customers secure access to view suspect check images via a standard Internet browser.

The new application, which will be installed this quarter at one of the country’s top 25 banks and demonstrated at BAI, offers financial institutions and their corporate customers a powerful protection against check fraud, allowing customers to easily, quickly and securely review suspect check images online, and send pay/no pay decisions to the bank in real time.

“With the emergence of the Internet as a powerful customer service tool, IA is leveraging its expertise in the financial services industry to develop new software products that provide superior customer services and increase operational efficiency,” said Kevin Moran, chairman, president and chief executive officer of IA.

“Internet Positive Pay is a saleable customer service that will keep financial institutions competitive by satisfying strong customer demands.” Positive pay is a cash management service that allows a bank and its corporate and business customers to work together to reduce the risk of check fraud.

Traditionally, the corporate customer electronically sends the bank a list of all checks it issued each day. The bank compares checks received for payment against that list each day and identifies checks not on the company’s list, checks that exceed a specific dollar amount, or stale checks, i.e. checks issued on a date which is long past due. Suspect checks are copied and faxed or mailed to the customer for review. The customer would then call or fax a pay or no pay decision to the bank.

With Internet Positive Pay, banks streamline the positive pay process by using Internet and image-based technology. This reduces internal operations costs and the risk of fraud, and greatly improves customer service.

Suspect check images can be clearly and immediately viewed remotely by customers via a standard Internet browser. Once a customer has carefully scrutinized the front and back of the check image with Internet Positive Pay’s viewer plug-in, they can instruct the bank on a pay or no pay decision right from their desktop PC.

“Check fraud is a multi-billion dollar annual expense to commercial banks and their corporate customers, which is why it is important to develop innovative and effective Internet-based products that mitigate this growing problem,” said Bill Guthrie, vice president of sales, IA Corporation.

“By presenting exact replicas of suspect checks immediately and securely to bank customers for online pay or no pay decisions, the risk of fraud is greatly reduced as is the risk of error and the need for manual processing.”

Allowing the user to make real time pay or no pay decisions to the bank while eliminating the need for any fax, phone or mail correspondence is a key factor in reducing the exposure to fraud and enhancing customer offerings. Fraudulent checks can be investigated immediately rather than days after they are returned.

With Internet Positive Pay, suspect checks can be carefully examined with reverse video display and zoom capabilities. Check images can be zoomed and flipped from front to back for instant viewing of critical check information such as payee, signature, deposit information and payee endorsement.

CheckVision Internet Positive Pay resides on an Internet server at the bank. Therefore, customers are not required to install custom desktop software. Upgrades are immediate and each time a user logs on to the system they will view suspect check images with the most recent software version.

Internet Positive Pay includes advanced security measures to ensure that only authorized users have system access. An authorized user can report on items such as stale checks (for escheatement), voided or stopped checks, and review bank transmission logs. Customers can issue pay or no pay instructions in real time.

“IA realizes the vital role Internet-based products and services play in today’s world of financial services,” added Guthrie. “Microfilm and paper-based processing systems are antiquated, time-consuming and costly. Banks want to streamline operations and their customers want current Internet and image-based services such as these.”

IA Corporation

IA Corporation, headquartered in Emeryville, currently sells archive and application software solutions for retail and commercial banking services such as CheckVision Internet Inquiry(TM), CheckVision Statements(TM) and CheckVision ARP(TM).

The company’s customers include leading organizations such as Comerica, Harris Bank, Sanwa Bank California, LTD., SouthTrust Bank, UMB Bank, NA, Union Planters and Wachovia.


Diebold Builds Brand Awareness

Diebold, Incorporated Friday announced the launch of a diverse, multi-million dollar program geared at positioning the company for global success by building awareness, recognition and preference for the Diebold brand. The program is intended to communicate Diebold’s competitive advantage for its products and services as well as introduce the company to targeted markets through advertising, public relations and other marketing and communications efforts.

The branding campaign focuses on communicating Diebold’s commitment to providing solutions for its customers through technology-based, integrated delivery systems. Key messages include the company’s total commitment to self-service technology, the flexibility and open architecture of its systems, and its use of technology to solve challenging business issues. The campaign began with a series of advertisements placed in Europe in February.

“Proactive efforts and the strategic placement of advertisements have begun in targeted countries,” said Donald E. Eagon, Jr., vice president of corporate communications for Diebold. “The branding program aims at specific audiences throughout Europe, Asia/Pacific, North America and Latin America. The year-long campaign will incorporate our Web site, trade shows, direct mail campaigns and other communications vehicles which will become part of the global branding campaign.”

To maximize the company’s efforts, public relations and advertising agencies were hired in each of the major global markets Diebold serves. The agencies will assist Diebold in attracting media coverage, localizing key messages for each market as well as supporting media relations efforts at trade shows and conferences worldwide.

Diebold, Incorporated is the global leader in providing integrated delivery systems and services. Founded in 1859, the company employs more than 6,000 associates in some 120 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 [www.diebold.com][1].

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


New Fair, Isaac SVP

Fair, Isaac and Company, Inc. has named Dennis Purpura senior vice president and head of North American Client Relationship Management in its Financial Services Unit. Purpura will direct the sales of the entire suite of Fair, Isaac solutions to U.S. and Canadian clients in banking, finance and insurance. He replaces Gordon Kaye, who retired from Fair, Isaac in late 1998 after 18 years of heading the company’s North American sales efforts.

Purpura comes to Fair, Isaac with more than 25 years of sales and sales management experience. He most recently served as director of sales at Geac SmartEnterprise (formerly D&B Software) with sales offices in San Mateo and Los Angeles, Calif. His experience also includes positions as business unit executive at Early, Cloud & Co., an IBM Company, in San Francisco, Calif.; vice president of sales and marketing at PeerLogic in San Francisco, Calif.; senior vice president of sales at Software Alliance in Berkeley, Calif.; and director of sales at Interlink Computer Sciences in Fremont, Calif. Purpura holds a master’s degree in business administration from the University of Southern California.

“I am delighted that we’ve brought Dennis onto our management team at a time of great change in financial services,” said Patrick G. Culhane, executive vice president at Fair, Isaac. “Dennis’ background and industry knowledge, combined with his excellent business skills, will ensure that we will be even more responsive to the changing needs of our clients.”

Fair, Isaac (www.fairisaac.com) helps businesses worldwide maximize the value of data to make more profitable decisions about their customers, operations and portfolios. Known for its pioneering work in credit scoring and its use of data in transaction-level decisions, Fair, Isaac now delivers data management services, analytics, software, and consulting to the financial services, direct marketing, personal lines insurance, retail, and healthcare industries. Headquartered in San Rafael, Calif., Fair, Isaac employs 1,500 people in 17 offices worldwide. For the fiscal year ended September 30, 1998, the company reported revenues of $245.5 million. For more information, contact Fair, Isaac at 800-999-2955.


VISA – Indonesia

Citibank launched a ‘VISA TravelMoney’ card in Indonesia last week. The new prepaid disposable card is available in denominations ranging from US$400 to US $10,000. Up to eight additional cards can be linked to the same prepaid account. According to the Jakarta Post, Indonesia becomes the fifth country to launch ‘VISA TravelMoney’. The other four countries include India, Singapore, Philippines and Australia. Meanwhile VISA is gearing up for a big push for its ‘Electron’ card in Indonesia following the card’s initial launch in December. VISA indicated it is projecting 12.5 million ‘Electron’ cardholders in Indonesia within the next five years. VISA is also introducing ‘COPAC’ cards in Indonesia later this year.


Cap One’s Brand Budget

Capital One announced this morning the selection of D’Arcy Masius Benton & Bowles as its new integrated communications agency partner. Capital One forecasts an $80-$100 million brand communications budget with DMB&B over the next 12-18 months. Capital One and DMB&B will partner on creative development, media planning and buying, interactive communications and global brand strategy. Direct marketing will continue to be handled by Capital One’s in-house agency, where marketing amounted to $446 million in 1998.


Citi Card Income

CitiGroup reported this morning that core income for credit cards increased 75% to $268 million in the first quarter. Citi says revenues increased 40% as a result of pricing increases and 48% growth in receivables to $69 billion, driven by the UCS acquisition and core business improvement. Credit experience also continued to improve, with net charge-offs in the U.S. bankcard portfolio falling to 4.72%. More details on Citi’s first quarter performance will be available in Tuesday’s CardFlash with full financial details available via CardData ([www.carddata.com][1]).

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


Small Biz Card Pie

American Express’ domination of the small business card market is dwindling according to a new survey released Friday by PSI Global. The research firm found that VISA’s share of the small business card market soared to 20%, compared to an 11% share last year. The ‘1999 PSI Global Commercial Services Research Program’ survey shows that VISA now stands just two points below American Express in the small business commercial card market. The survey also found that MasterCard now has a 13% market share, up from 10% in 1998. The new ‘CSRP’ study, which is based on telephone interviews with 900 companies with sales between $500,000 and $10 million, found that 49% of all small businesses in this category are now using some type of business credit card. In 1998, 37% of these firms used a business credit card. While the number of companies using business credit cards has grown steadily, total card billings have remained relatively unchanged. The average small business spends about $10,000 each year on a business card, typically revolving about $2,000 monthly.


Equifax – Brazil

Equifax announced Friday afternoon that it has sold its minority ownership in Proceda Tecnologia e Informatica S.A., the technology outsourcing company interest it acquired as part of its card processing initiative in Brazil. MCI Worldcom Inc. is the purchaser. Equifax will record a slight gain on the sale of its financial interest. Equifax acquired 34% ownership in PROCEDA in Sept. 1998 as part of the acquisition of a majority ownership of Unnisa – Solucoes em Meios de Pagamento Ltda., a major provider of full service bankcard and private label card processing. PROCEDA will continue to provide all the data processing services related to UNNISA’s 2.5 million credit and debit cards in Brazil.