Portland, OR-based SmartStop, Inc., yesterday introduced the first nationwide smart card network for the U.S. trucking industry. SmartStop, a national telecommunications-based solutions provider to the trucking industry, says its new network will enable fleets and drivers to use the cards to electronically store and pay for the items they purchase, use for phone calls, and facilitate the transfer of funds between fleet and driver accounts. Users will also be able to access and/or pay for such services as fueling, repairs, meals and convenience items. Industry loyalty programs can also be integrated into the multi-application trucking card. The technology for SmartStop’s wireless/contactless smart card was developed by On Track Innovations Ltd..Details
Hilton said yesterday that despite all the new bells and whistles in the new Starwood hotel frequent guest program it falls short of the double dipping and credit card advantages of Hilton’s ‘HHonors’ loyalty card program. Hilton HHonors is now the only hotel program that allows its members to simultaneously accumulate both airline miles and hotel points for the same business-rate stay through its ‘Double Dip’ earnings feature. The ‘Westin Premier’ program also offered this feature until yesterday when it was replaced by the ‘Starwood Preferred Guest’ program. The ‘Hilton HHonors’ also offers a unique two-way exchange of points to miles and miles to points with 30 partner airlines. In a special promotion through Mar. 31 guests charging their stay to any American Express card earn double points and double miles. Hilton’s response also attract too much Internet traffic . . . it’s Web site has also been down since early Wednesday. For details on the new program visit CardWatch ([www.cardwatch.com]).
The Smart Card Forum , a multi-industry organization working to accelerate the widespread acceptance of smart card technology, today announced that it has created a new membership category to serve the education sector.
This mirrors the fact that colleges and universities are enjoying a great deal of success in the deployment of smart cards and systems on campuses across the continent.
“College and university campuses have proven very successful environments for community-wide adoption of smart card technology, so the Forum is expanding its membership spectrum to both reflect and support that growth,” says SCF President and CEO Donna Farmer. “Now that educational institutions have a formal seat at our table, we can learn from their successful marketplace experience and they can benefit from access to all the know-how and networks our current members offer them.”
There is a very unique dynamic within the education arena that is conducive to rapid rollouts of smart cards to large numbers of people. Campuses are concentrated and “closed” communities that allow the multi-application possibilities and benefits of smart cards to be realized by large numbers of people. From the library to the laundry room to the campus bookstore, smart cards make sense for students. They also make sense for local merchants, whose businesses profit from proximity to students able to use a new form of payment that they are able to accept.
The Forum also announced that the University of Illinois has joined its ranks as an Education Member. While the university*s card program is currently magnetic stripe and bar code, the school is planning a move to smart cards to provide more applications and greater security.
“We look forward to the tremendous benefit we’ll receive from the market-driven data and expert information to which we will have direct access as a member of the Smart Card Forum,” says Gary Brinkley, technical director with the University of Illinois. “The combined knowledge and experience of the Forum*s members will help us make better decisions and design systems that will work together. The campus environment is ripe for smart cards, and the addition of a new membership category to serve the unique needs of organizations like ours will help speed the deployment of smart cards on campus.”
The University of Michigan, which runs a campus smart card program nearly 100,000 cards-strong, has been a member of the Forum since early last year. U of M adopted the *Mcard* in 1995. It serves as a photo ID, access/entry card, and ATM, debit, calling, library and entree card. In addition to that, many off-campus Ann Arbor merchants accept the card for payment.
“Some of our corporate members are now involved in more than 25 campus card programs in the U.S. and Canada,” says Farmer. “This kind of cross-sector cooperation is what the Forum is all about — and these partnerships are resulting in a fast-increasing number of successful implementations. What we have called a ‘rising tide’ of acceptance in other contexts is now becoming a tidal wave on many campuses. That’s why this is the right time for universities and colleges to join the Forum.”
The Forum is inviting universities and colleges to join its growing ranks. To qualify, the institution must be accredited and either run a smart card program now or express clear interest in exploring the possibility of smart card deployment in the future.
The Forum is currently holding its latest Educational Institute and Work Group Meetings in Salt Lake City. SCF Work Groups — including education, health care, interoperability, legal and public policy, multi-application, network applications, retail, technology, telephony, transportation, and travel and entertainment — serve the needs of many key sectors and reflect the diversity of both the Forum’s membership and the new applications being developed and implemented by them.
In Salt Lake City, the Joint Work Group Meetings will address the issue of secure access in the college campus environment during one of its many information sessions.
In addition to the new Education category, the Forum’s membership types include: Principal, Auditing and Government.
The Smart Card Forum ([www.smartcardforum.org]) is a non-profit, multi-industry organization of 200 members working to accelerate the widespread acceptance of multiple application smart card technology by bringing together, in an open forum, leading users and technologists from both the public and private sectors.
In a week replete with announcements of new hires, BannerDirect added three new positions to its rolls. After a watershed year, the direct marketing firm announced today that it has created the three new positions in order to satisfy the increasing demands of its growing business. “Banner Direct has surpassed its expected goals in such a manner as to demand the introduction of these new positions,” said Christine Fontana, president.
The new positions are strategically located across the country and include creative director for the production division in Wilmington, NC andearlier this week BannerDirect named Kinga Baransky to fill this post; Richard Mcintosh has been placed to conduct accont management, and will be operating out of the marketing firm’s headquarters in New York, NY; and working from the sales and marketing base in Milwaukee, WI, Rosalyn Piecka has been named strategis development manager.
“It became evident during the course of the past year that BannerDirect was expanding beyond its previous limitations and stretching its boundaries,” said Ms. Fontana. “This staff development will not only ease our collective workload but will galvanize the business further in ways we can’t even begin to imagine!”
As an agency devoted primarily to direct response marketing for financial, entertainment, oil, and retail companies, BannerDirect, Inc. was founded in 1990. The company is a full-service direct marketing agency, developing response marketing via direct mail, with a concentration on the credit card industry — from acquisition, to product fulfillment, to incentives for activation and usage. Its specialty is in bringing co-branded and affinity cards to the public, and in developing both business-to-consumer and business-to-business marketing lans. As today’s announcement attests, BannerDirect is ever expanding, not only of a client base in different industries and exciting catagories, but its employee-base as well. The company is geographically positioned to meet the needs of its clients with corporate headquarters in New York City, production management headquarters in Wilmington (NC), and account management offices in Milwaukee (WI), New York City, and Carson City (NV).Details
In step with consumers’ appetite for credit, retail credit card usage has gained momentum in recent years, with total outstanding receivables fast approaching $100 billion. With traditional programs flourishing and acceptance of retail commerce and card programs taking hold on the internet, Fitch IBCA expects retail and private label lending to proliferate further in the coming years.
As retail and private label card issuers increasingly turn to the securitization markets to fund their growing portfolios, the need for consistent analysis across all credit card portfolios has arisen. As such, Fitch IBCA is releasing its criteria for rating securities backed by retail and private label card portfolios entitled “Retail Card ABS in the New Millennium.”
Among retailing giants like Sears, Roebuck and Co. and JC Penney, lie specialty players such as The Limited, Inc., Pier 1 Imports, and Circuit City Stores, Inc. and others that issue proprietary cards to purchase their goods and services. In addition, many banks and finance companies issue private label cards tailored specifically for retailers without the capacity or desire to run their own portfolios.
The programs benefit issuers, cardholders, and merchants alike. For retailers, proprietary cards function as effective marketing tools helping to increase sales and build customer loyalty. For consumers, the programs provide alternative and often attractive financing options, many of which include discounts on purchases, deferred payments, and rewards-type programs.
Fitch IBCA’s criteria used in rating retail card ABS transactions generally follows that used for rating portfolios backed by general purpose Visa, MasterCard, and Discover portfolios. However, the need to account for corporate bankruptcy issues and industry, merchant and geographic concentrations in retail and private label card ABS gives rise to additional stresses and assumptions when setting appropriate credit enhancement levels. The new report highlights the key differences Fitch IBCA’s general purpose and retail card ABS analysis and details reasoning used in arriving at its assumptions for both.
Copies of the new report “Retail Card ABS in the New Millennium” and Fitch IBCA’s general-purpose credit card criteria titled “ABCs of Credit Card ABS,” are available on Fitch IBCA’s website at [www.fitchibca.com] or by calling 800-753-4824.
One of the largest on-line marketing deals was sealed yesterday between America Online and First USA. The five-year agreement is anticipated to generate up to $500 million if expected thresholds are met, and contains significant guaranteed revenue to AOL and significant marketing commitments to First USA. With yesterday’s agreement, First USA becomes the exclusive marketer of credit card products and services on AOL, the CompuServe service, AOL.COM and AOL Instant Messenger in the U.S. and Canada, and will also market products and services on a non-exclusive basis within AOL’s Digital City. Wednesday’s agreement extends the AOL/FUSA relationship that began in 1996 with the introduction of the ‘AOL VISA’ card. America Online has more than 15 million paying subscribers and CompuServe has about 2 million paying members. Based on current industry intelligence AOL attracts about 31 million on-line visitors each month.
WEB TRAFFIC LEADERS
Internet Firm Monthly Visitors
America Online: 30.9 million
Microsoft 27.7 million
Yahoo 27.2 million
Lycos 25.6 million
Netscape 17.2 million
Excite 17.1 million
Source: BlueJag’s WebStuff
De La Rue Card Systems, one of the world’s leading suppliers of smart cards, electronic transaction solutions and identify systems, has signed a contract with Egg – Prudential’s 24-hour direct banking service – to supply banking cards for its growing customer base.
Selected for its heritage and expertise in providing secure banking solutions, De La Rue will be supplying customers with Egg magnetic stripe cards for use at either Midland Bank ATM’s or The Royal Bank of Scotland ‘Cashline’ ATM’s throughout the United Kingdom.
Geof Hanley, Project Manager, Egg, comments: “With other cards products to follow, Egg sees De La Rue as the ideal partner to drive the transition from magnetic stripe to microprocessor (smart) cards. Potentially allowing applications such as banking, loyalty, pension and insurance policy details to be loaded onto one card, smart cards will provide essential customer information for sales and marketing purposes and offer Egg customers a convenient and easy to use transaction card.
Ian Robson, President Northern Europe, De La Rue Card Systems, adds “This is an exciting time for both Prudential and DO La Rue as we are at the brink of a new banking revolution that will bring enhanced benefits to card users. We feel that this is just the beginning of Egg’s innovative banking offerings and look forward to working with Egg on the introduction of chip-based cards.”
Launched earlier in October, Egg offers savings, loans and mortgages over the telephone and Internet, aiming to meet the requirements of all age groups. Egg is designed to provide a flexible and comprehensive range of services, creating tailored solutions for individual financial needs, all at market leading rates.
Prudential’s commitment to Egg is reflected in its investment of 1,500 new jobs, to be created over three years, at its purpose-built Derby call- centre.
Staff undertake a thorough eight-week training programme, where they are fully instructed in the art of listening rather than selling. As staff complete their training and begin to speak with Egg customers, they possess the right ‘people’ skills to identify the particular needs of each individual.
Recognised as the number one provider of Visa and MasterCard products worldwide, De La Rue’s expertise in providing secure and innovative smart banking solutions is supported by the recent announcement by APACS (the Association for Payment Clearing Services) that debit, credit and cash cards issued by UK banks will be ‘smart’, following the successful completion of trials with over 1 00,000 De La Rue smart debit/credit cards.
De La Rue Card Systems – part of De La Rue the `cash to cards` group whose 1998 annual turnover was GBP 790.2M – supplies almost 500 million magnetic stripe and microprocessor based smart cards each year and has produced over 500,000 point of sale terminals worldwide. The world’s leading supplier of VISA and MasterCard products, De La Rue Card Systems also holds manufacturing Licenses from Europay, Mondex, Diners Club, APACS (UK Banks), GIE Cartes Bancaires (French Banks), American Express and others. Specialising in third party card integration and customer solutions for banking, telecoms, PayTV, retail, transport, health and identification markets, it also offers total end- to-end solutions for electronic and mobile commerce applications. Its vision is that ‘by 2005, 10% of the world’s population will possess a De La Rue smart card’.Details
The GM Card has launched a new country-wide initiative called GM Call 1861, open to all its cardholders, which is set to, reduce call costs by 30%, irrespective of whether calls are made to local, national, international or even mobile phone numbers.
By teaming up with WorldxChange Communications’, The GM Card has created a new free service – once cardholders have registered, they simply dial 1861 prior to making a call to automatically receive a 30% discount.
This new offer is an additional benefit to GM Cardholders who already enjoy a competitive APR, and one of the best reward schemes on the market. When cardholders use their GM Card, 3% of the total purchase is credited to their GM Card Account as Rebate Points. Each Rebate Point is equivalent to GBP 1 and there is no limit to the amount that can be collected. A maximum of 2,500 Rebate Points per redemption can be used to save money off a new Vauxhall. The new GM Call 1861 offer fits in with the Card’s existing proposition as Richard Parker, Manager of The GM Card, explained: “The GM Card’s Rebate Points scheme, and the savings that can be made. provides our customers with significant amount of money off the price of a new Vauxhall.
“The new GM Call 1861 service works in a similar way
– it costs nothing to join, yet knocks 30% off call costs. And, because it charges your monthly bill to The GM Card, every time the service is used it earns Rebate Points for the cardholder – all. without any hassle or effort.”
To take advantage of these savings, apply for a GM Card by calling 0345 462777. Existing GM Cardholders should call freephone 0800 294 29 29 any time between 8.30am – 10pm weekdays or 9am-9pm weekends, with their account details to hand. Once cardholders have spoken to a GM Call representative, registration is effective immediately.Details
Competition among frequent hotel guest card programs is heating up after yesterday’s unveiling of the new ‘Starwood Preferred Guests’ program. Starwood Hotels & Resorts Worldwide, Inc., which now owns the Sheraton, Westin, St. Regis/Luxury Collection, Four Points, Caesars, and W hotel chains, replaced the former ‘Sheraton Club International’ and ‘Westin Premier’ program with the new program. Starwood declared its new program the “most flexible and rewarding program of its kind” however it drew prompt criticism from competitors. (see CardFlash story #3 for today). Nevertheless public interest in the new program was too much for Starwood’s Web site. The Web channel detailing the program crashed last night and was still unaccessible early this morning. Among major features of the ‘Starwood Preferred Guest’: no blackout dates and no point expiration dates for active members, plus instant rewards and on-line award redemption. Under the new program it will typically take an average of three stays, or $1,000 in spending, for members to earn their first free weekend night. Members can also instantly redeem points on-line, track account information and access ‘Starwood Preferred Guest’ special offers via a special Web site. Travelers can also enroll in the program via the Internet and create their own personalized web page based on their travel preferences. Starwood cardholders may also transfer ‘Starpoints’ to most major airline carriers in any increment as well as an unlimited number of transfers within each membership year. Starwood has more than 550 participating hotels in over 60 countries. For details on the new program visit CardWatch ([www.cardwatch.com]).
OH-based Huntington National Bank introduced its smart card program during a mass carding event held on the University of Central Florida campus. The event attracted more than 18,000 students, faculty and staff who lined up to be one of the first to receive the new ‘UCF Card’. In addition to serving as an identification and library card, other functions include purchases at campus vending machines and photocopiers and pre-paid long distance phone service. It also serves as the users’ ATM card for their Huntington checking account. To date, the bank has issued 24,000 ‘UCF’ cards and opened 2,500 UCF accounts.Details
HONOR Technologies Inc. and Star System Inc. Wednesday announced that they have received Federal Reserve approval to merge. Following a shareholder vote, the two companies are slated to merge on Mar. 1. The company will be privately held by the 52 current owners of HONOR Technologies Inc. and Star System Inc.. The new company will serve in excess of 3,700 financial institution members with a primary service area covering 20 states across the country. More than 70,000 ATMs and 250,000 POS locations will be part of the newly formed network.Details
American Express also announced yesterday it is beefing up its ‘Membership Rewards’ program with the addition of several new partners. The new partners are: Borders Books & Music, Champs Sports, Coach, Foot Locker, Kids Foot Locker, Lady Foot Locker, The NBA Store, Royal Doulton, Samsonite Company Stores, The Sharper Image, Zany Brainy and Avis and Cathay Pacific Airways in the travel category. The AmEx program, launched in June 1991, now has more than 3 million enrollees. ‘Membership Rewards’ points, which do not expire, can be redeemed for airline rewards beginning at 1,000 points and for merchandise rewards beginning at 2,500 points.Details