Bylaws Slammed

American Express CEO Harvey Golub predicted Monday that the U.S. Department of Justice will either overturn VISA and MasterCard’s bylaws prohibiting members from issuing card products offered by American Express and Discover or reach a settlement with VISA and MasterCard. Golub points out that similar bylaws have been pre-emptively struck down around the world enabling AmEx to establish partnerships with more than 40 foreign financial institutions. AmEx also announced yesterday a renewal of its efforts in the USA to reach out to banks to do co-branding relationships or buy existing portfolios. Golub originally invited VISA and MasterCard members, three years ago, to do business with AmEx, in violation of the card associations’ bylaws. Golub’s comments were made, yesterday and three years ago, at a Faulkner & Gray conference and reported on by American Banker. Faulkner & Gray and American Banker are both units of Thomson Financial Services.


Wiz Picks GERS

GERS Retail Systems announced that The Wiz, New York area’s largest consumer electronics retailer, has chosen the GERS Retail Suite of products to facilitate its day-to-day operations.

“We’re pleased to welcome The Wiz to our family of clients and are happy they chose our system to handle their operational needs,” said Jim Henderson, GERS’ President and CEO. “The agreement with The Wiz marks GERS’ largest online POS installation to date, making this opportunity extremely important to us.”

Along with GERS Base Package, The Wiz will purchase the Radio Frequency Warehousing, Bar Coding, POS, Customer Service, Credit Card Interface, Third Party Credit Card Authorization, and EDI Interface modules. The Wiz is scheduled to begin using GERS’ system in July.

Headquartered in Edison, New Jersey, The Wiz will utilize 1,000 user licenses in its 40 New York City area stores. The retailer sells a broad assortment of electronics and music, including stereos, CD players, DVD, computers and TVs. Future services planned for The Wiz include store ticket sales for events at Madison Square Garden and Radio City Music Hall and payment centers for Cablevision customers.

Built within an Oracle relational database to facilitate optimal growth, the GERS Retail Suite of products is a comprehensive management tool that alleviates retailers of manual tasks by providing real-time automation of integral daily tasks such as sales, inventory, merchandising, and accounting, with the flexibility to shape the system to their individual needs. The GERS system features clear menus with friendly pop-up windows to guide users through each procedure to save time and increase employee productivity.

Commenting on the agreement with GERS, Thomas Dolan, Senior Vice President and Chief Information Officer of Cablevision, said, “As Cablevision grows to become the New York area’s leader in entertainment and telecommunications services, customer retention is increasingly important. The integration of key technical systems with our current systems will assure our ability to further strengthen customer service and satisfaction.”

Bill Marginson, President of The Wiz, added, “Our significant investment in technology is an acknowledgement of how important excellent systems are to The Wiz’s mission and the success of our long-term strategies.”

San Diego-based GERS Retail Systems provides fully-integrated, Open Systems computer solutions software, hardware, and comprehensive training for retailers of softlines, hardlines, department stores, home furnishings retailers, and consumer electronics/wireless retail operations.

Cablevision Systems Corporation is one of the nation’s leading telecommunications and entertainment companies. The Company’s cable television operations serve more than 3.4 million customers located primarily in the New York, Boston and Cleveland Metropolitan areas. Rainbow Media Holdings, Inc., a 75% owned subsidiary of Cablevision, manages entertainment, news and sports programming services. Rainbow Media’s assets include ownership interests in American Movie Classics, Bravo, Madison Square Garden, L.P., Radio City Entertainment and FOX Sports Net. The Company also owns and operates The Wiz consumer electronics stores at 40 locations in the New York Metropolitan area as well as Clearview Cinemas, operators and consolidators of community-based movie theatres.


First Quarter 1999

The seasonal contraction in credit card outstandings has been verified again as portfolio results for the first quarter begin to trickle in. According to CardData’s ‘1Q/99 Portfolio Survey’ ( the first quarter contraction appears to be somewhat modest this year. CT-based People’s Bank added more than 60,000 accounts during the first quarter despite a $100 million+ drop in outstandings. Likewise First Virginia, which recently sold its portfolio to MBNA, posted a slight gain in gross accounts, active accounts and cards-in-force despite a decline in first quarter outstandings. First Virginia reported Friday that its sale of $101.8 million in card loans to MBNA was completed last month and resulted in a one-time gain of $10.7 million. First Virginia also sold $51.5 million of its portfolio late last year.



People’s Bank $3,633,404,606 $1,730,588,253 2,767,657 1,766,538 3,492,742
KeyCorp $1,338,322,657 $ 508,133,842 1,087,488 622,992 1,418,802
First Virginia $ 104,231,000 54,453,000 202,000 110,000 233,000
FirstMerit $ 98,598,309 59,425,798 100,273 61,815 123,152
Calif. Commerce $ 61,680,179 29,515,056 45,923 27,617 66,675

Source: CardData (


Edify Signs Six Community Bank

Edward J. Wehmer, President and CEO of Wintrust Financial Corporation, announces a new Internet banking initiative for their six community banks.

Wintrust Financial has signed a contract with Edify Corporation to provide Wintrust’s community banks with full service Internet banking. This Internet capability, scheduled to be launched in the second quarter of 1999, is another step in Wintrust providing a full service alternative delivery system for its community banks’ complete array of products and services.

This electronic banking system will allow customers to access account information and perform secure transactions across the Internet, 24 hours a day, seven days a week. As a full service Internet bank, customers will be able to log on to their bank’s personalized Web page to access a variety of products and services including account balance review, funds transfer and electronic bill pay. It uses leading bill payment processors like CheckFree(R) and Integrion(R). This system is also fully compatible with personal financial management software like Intuit Quicken(R) and Microsoft Money(R). Eventually customers will be able to submit loan applications, look up the status of their trust and investments, and trade securities electronically. Wintrust’s insurance premium finance subsidiary, First Insurance Funding Corp., will also be using this system to distribute its products and services more efficiently, while providing customers real time access to their loan accounts.

“We see Internet banking as another important delivery system for our special kind of community banking,” says Wehmer. “Most of our customers still will want to visit our banks and interact with their personal banker. But for those more ‘technologically demanding’ customers, we wanted to provide them a state-of-the-art electronic banking system. This Internet banking technology is the portal for future high tech distribution initiatives by Wintrust’s community banks and our Wintrust Asset Management subsidiary.” Wehmer continues, “while we still want to provide customers with good old-fashioned banking service, there is a growing demand to provide these same services electronically. We want our banks to be a leader in this area as well.”

Lloyd Bowden, Wintrust’s Executive Vice President of Technology states, “technology is a great equalizer for community banks like ours. It enables us to have high tech services such as Internet banking that are every bit as advanced as the big banks. And because we can license these systems and avoid internal development, our technology is advanced, our costs are less, and our speed of delivery is quicker.”

Wintrust is a financial services holding company whose common stock is traded on The Nasdaq Stock Market(R) under the symbol “WTFC”. Its six suburban Chicago community bank subsidiaries, each of which was founded as a de novo bank since December 1991, are located in high income retail markets — Lake Forest Bank and Trust Company, Hinsdale Bank and Trust Company, North Shore Community Bank and Trust Company in Wilmette, Libertyville Bank and Trust Company, Barrington Bank and Trust Company, N.A., and Crystal Lake Bank and Trust Company, N.A. The banks also operate facilities in Lake Bluff, Glencoe, Winnetka, Clarendon Hills and Western Springs, Ill. The Company’s finance subsidiary, First Insurance Funding Corporation, one of the largest commercial insurance premium finance companies operating in the United States, serves commercial loan customers throughout the country. Wintrust Asset Management Company, N.A., a new trust subsidiary, allows Wintrust to service customers’ trust and investment needs at each banking location. Currently, Wintrust operates a total of 21 banking offices. All of the Company’s banking subsidiaries are locally managed with large local boards of directors and local management. Wintrust Financial is one of the fastest growing de novo bank groups in Illinois.


Convergent Acquisitions

Convergent Cos. Inc. announced Friday that it has acquired controlling interest of WebCash Corp. and Galaxy.NET Telecom Inc., both private companies, located in Campbell, Calif. for an undisclosed amount of cash and stock.

These acquisitions represent the completion of Convergent Cos. initial acquisition program to offer E-Commerce (one stop for credit card, electronic checks, 1-900 billing and 1-800 credit), solutions to websites and Broadcast capabilities to website hosted by the company.

WebCash is presently offered to its E-Commerce web site hosted customers. Prime Video, a wholly owned subsidiary of Convergent Cos., will provide proprietary video technology to the web hosting customers to provide the best video possible. The company plans to announce and exhibit this new service at the National Associations of Broadcasters show in Las Vegas April 19-21, 1999.

The company has completed a 24 month beta test of its WebCash service in which 300 web sites were enabled to use WebCash. During the beta test over 400,000 transactions with $4 million of commerce were successfully completed. The company has development work and testing on going with major corporations and expects to be able to announce in the near future the launches for these new customers.

The company currently hosts web sites for 300 customers and does web site development for 50 customers. Some of the customers use multiple company services.

Convergent Cos. and its acquired companies currently employ 24 full and part time people.

Convergent Cos. will expand its board of directors to seven persons. Michael Lindsay, CEO and president of Galaxy and WebCash will join the board.


ABH Head Resigns

American Bank Note Holographics Inc. announced Friday that its CEO and Chairman has resigned. The resignation of Morris Weissman was effective immediately. Two weeks ago Salvatore D’Amato was re-appointed to the Board of Directors following the resignation of Jeffrey Silverman. D’Amato was the Chairman and President of ABH from 1983-1990. ABH is the world leader in mass-produced secure holograms for credit cards, ID cards and valuable documents.


Toning Down

San Francisco/London-based GS Telecom, Ltd. is toning down its projections for sales revenues and the ‘ATTM Universal Card’. The company said Friday the independent analyst who made the projections is no longer considered “independent”. GS says it found out Thursday that Barrington Financial Securities is an affiliate of Switzerland-based Union Trading-Financial. Union Trading has been engaged by GS to raise $25 million in capital to acquire the ‘ATTM Card’ technology. The ‘ATTM Card’ is a multi-currency smart card that features phone card applications as well as ATM access. GS predicted last month it expects to produce annual revenues of about $1.5 billion by 2004 and issue one million ‘ATTM Universal’ cards over the next 36 months. Barrington said it found the GS figures to be “extremely conservative”. GS said Friday that until funding is available ATTM International, Inc. will have few staff and limited resources.


Metris New Headquarters

Metris Companies Inc. announced Friday that the company’s growth and infrastructure development have led to the need for a new corporate headquarters. As a result, the company has signed a lease with Opus Northwest, L.L.C., to anchor the second phase of the Crescent Ridge Corporate Center in Minneapolis, Minn.

“As the nation’s fastest-growing direct marketing company, we have experienced rapid growth in both our fee-based and consumer credit businesses,” said Ronald N. Zebeck, president and chief executive officer. “An expanded corporate headquarters will provide the space necessary to add additional management, finance, IT and operations staff to serve our current customers and continue our growth.”

The Crescent Ridge Corporate Center is located at I-394 and Hopkins Crossroads. Initially, Metris will utilize four floors of the second building, which they expect to occupy in September 2000.

“In our search for a new corporate headquarters location, we evaluated several sites in the western suburbs and chose this one because of its proximity to our current headquarters and the flexibility Opus can provide,” explained Zebeck.

Earlier this year, Metris announced it will open a new operations center in Jacksonville, Fla., to house an additional 800 collections, customer services, teleservices and management employees; this new facility is expected to open in June.

“As we move forward, we will continue our expansion efforts across the nation and will be opportunistic about the growth opportunities available within the direct marketing and credit card industries,” concluded Zebeck.

Metris Companies Inc. is an information-based direct marketer of consumer credit products and fee-based services primarily to moderate income consumers. Based in St. Louis Park, Minnesota, Metris also has operations in Tulsa, Oklahoma; Baltimore, Maryland; Champaign, Illinois; Phoenix, Arizona, and Jacksonville, Florida and currently employs over 2,000 people. Visit Metris on the Internet at [][1].

This press release contains forward-looking statements. These statements include statements regarding intent, belief or current expectations of the company and its management. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties that may cause the company’s actual results to differ materially from the results discussed in the forward-looking statements. Among the factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: the company’s limited operating history as a stand-alone entity; the company’s limited experience with respect to originating and servicing credit card accounts, including limited delinquency, default and loss experience, the lack of seasoning of its credit card portfolio, which makes the predictability of delinquency and loss levels more difficult; risks associated with unsecured credit transactions, particularly to moderate income consumers; risks associated with acquired portfolios; interest rate risks; dependence on the securitization of the company’s credit card loans or the capital markets to fund operations; general economic conditions affecting consumer income, which may increase consumer bankruptcies, defaults and delinquencies; state and federal laws and regulations, including consumer and debtor protection laws; and the highly competitive industry in which the company operates. Each of these factors is more fully discussed in Exhibit 99 to the company’s Annual Report on Form 10-K, for the fiscal year ended December 31, 1997. Reference to this Cautionary Statement or Exhibit 99 in the context of a forward-looking statement or statements shall be deemed to be a statement that any one or more of these factors may cause actual results to differ materially from those anticipated in such forward-looking statement or statements.



Poor Response

The Automobile Association of the UK has reportedly pulled the plug on its combined membership and credit card program due to poor response. Only 70,000 members out of a 9.5 million member-base signed up for the program issued by HFC Bank. As a result HFC will convert the cardholders to its ‘GM Card’ program. The AA indicated it will roll out two new credit cards next month, a gold card and a low interest card, with Bank of Scotland. The new cards will also be marketed to non-members.


Persona Card

American Express Incentive Services recently rolled out the ‘Persona Reward System’, an employee incentive system that motivates performance by delivering rewards based on the employee’s individual lifestyles and dreams. AmEx says a new survey showed that rewarding employees with cash does not motivate employees since many use the funds to pay bills instead of treating themselves. Under the AEIS system, participants earn points (equivalent to dollars) that are stored on a ‘Persona Card’. Backed by American Express, the ‘Persona Card’ is accepted by more than 250 retail and travel merchants. The merchants were chosen because they provide rewards that fit within 10 lifestyle categories. AEIS is a joint venture between American Express and Maritz Performance Improvement Company.