People’s Switch

CT-based People’s Bank announced during the holiday it is switching U.S. card processors, from TSYS to First Data. More than 2 million domestic credit, debit, and commercial card accounts will be involved in the switch. The seven-year agreement expands the bank’s existing relationship with First Data for its U.K. credit card portfolio. First Data and People’s Bank have worked together on an international basis since 1996, when FDRLimited started processing for the bank’s U.K. credit card portfolio. According to to CardData ([www.carddata.com][1]) at the end of the third quarter People’s held total receivables of $3,440,545,679 with 2,726,509 gross accounts.

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

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MARS Card

NJ-based IDT has signed an exclusive multi-year supply and distribution agreement with M&M’s Chocolate Candies to provide specially-branded prepaid phone cards. Through the marketing relationship, M&M’s cards will be available to all of the retailers that currently carry M&M’s Chocolate Candies. The phone cards will feature the likenesses as well as voices of the M&M’s brand characters. IDT will be providing its own distribution channels for the cards through its partnership with Union Telecard Alliance, which distributes phone cards to newsstands and grocery stores throughout the U.S.. The prepaid phone card market is projected to become a $3.6 billion industry by 2001.

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Driver’s Edge Expands

Citibank is expanding its ‘Driver’s Edge Rebate Program’ to allow cardholders to redeem rebates toward the purchase or lease of any used car. Citibank says this is the first credit card rewards program wherein cardholders can redeem rebates when purchasing or leasing a used car, van, light truck, or sport utility vehicle, whether the vehicle is acquired through a dealership, over the Internet, or through a private sale. Citibank says cardholders, as of Jan. 1, can effectively redeem their current and future rebates toward the purchase or lease of absolutely any car on the U.S. market. Consumer details of the program are available via CardTrak ([www.cardtrak.com][1]). Citibank says it is responding to the growing number of consumers that are purchasing and leasing used vehicles, which in 1997 represented 73% of all vehicles sold.

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

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FDC Goes Visual

Lucent Technologies and First Data Corporation announced an agreement for FDC to use Visual Insights data visualization software to help clients better use their bankcard data.

Visual Insights is a venture of Lucent Technologies, and FDC is a global leader in payment systems, including credit, debit and stored-value card processing, electronic commerce and information management products and services.

“By partnering with Lucent Technologies, we can offer our clients leading edge technology in visual data mining so that they can analyze their data more effectively,” said Richard A. Zehnacker, managing director for First Data Resources, Inc., the card processing unit of FDC. “Our collaboration will significantly strengthen the competitive edge our customers achieve by enabling them to see their data in different ways and use the data to develop competitive strategies and make better business decisions.”

“First Data is a global leader in its field, and our relationship with them is a major win for Visual Insights and for the rapidly advancing field of interactive data visualization,” said Doug Cogswell, CEO and president of Visual Insights. “First Data shares our vision for making interactive data visualization software a key user interface and tool — simplifying complex decisions by displaying large volumes of data in intuitive graphical formats.”

The Visual Insights Developer’s Toolkit includes 10 interactive visualization components, based on the Microsoft ActiveX(R) control architecture; sample applications; an extensive, on-line help system; and data interface tools.

First Data plans to use the Developer’s Toolkit to add a visual display and analysis environment that will provide clients with the most technologically advanced visual data mining capabilities available.

Card issuers use bankcard data analysis services to understand buying patterns, improve customer retention, mitigate risk, identify cross-selling opportunities and optimize credit.

“We help financial institutions analyze immense quantities of data,” said Zehnacker. “By offering Visual Insights data visualization software capabilities, our clients can more effectively analyze their data and better understand consumer behavior.”

Omaha, Neb.-based First Data Resources provides the most advanced credit and debit card processing solutions available in today’s global marketplace. Through the consistent delivery of industry leading system functionality and the deployment of client driven service structures, First Data partners with clients to enhance their portfolio growth, increase market share, reduce risk and improve profitability.

Atlanta-based First Data Corporation (NYSE: FDC) is a global leader in payment systems, electronic commerce and information 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 stored-value card at the point of sale or over the Internet, by check or wire money. For further information about First Data, please visit the Company on the Internet at www.firstdatacorp.com.

Visual Insights is also developing two other applications that provide end-to-end solutions for key business challenges. Visual Insights Software for Application Performance monitors end-user performance, collects relevant data, and uses interactive data visualization to help managers diagnose application performance problems. Visual Insights Software for Retail Analysis, scheduled for release in early 1999, focuses on customer buying activity.

Lucent Technologies, headquartered at Murray Hill, New Jersey, designs, builds, and delivers a wide range of public and private networks, communications systems and software, data networking systems, business telephone systems and microelectronic components. Bell Laboratories is its research and development arm. For further information on Lucent Technologies, visit the web site at

Visual Insights, headquartered at Naperville, Illinois, is a wholly owned venture of Lucent that designs, builds, and delivers software solutions that revolutionize customer decision making and analysis by providing world class data visualization. Its web site is

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PublicCARD Acquisition

PubliCARD, Inc. announced it signed a letter of intent to acquire California-based Greystone Peripherals, Inc.. Terms of the proposed transaction were not disclosed.

Greystone Peripherals, Inc., founded in 1992, is a developer of PC Card (PCMCIA products), hard disk duplicators, and digital camera flash film readers. The Company designs, manufactures and markets these three lines of proprietary computer peripherals for OEMs, system integrators, VARs/VADs and end users. Greystone’s innovative products support PC Card (PCMCIA), including the CardDock PCMCIA card reader/writer, DataFast products for affordable, high speed software duplication onto hard disks, and digital camera readers for flash-based image management using PC cards. Greystone has both hardware and software capability and is currently positioned to develop products directed specifically at the smart card market. Greystone is headquartered in Los Gatos, California.

James J. Weis, PubliCARD’s president and chief executive officer, noted, “Greystone’s high quality, affordable and innovative computer peripheral products will serve to augment PubliCARD’s existing card-based product offering. The planned acquisitions of Greystone and more recently, Amazing Smart Card Technologies, Inc., coupled with the acquisition of Tritheim Technologies, Inc. and the formation of Greenwald Intellicard earlier this year, clearly demonstrate our continued dedication to position PubliCARD as a significant player in the U.S smart card industry.”

Consummation of the acquisition is subject to, among other things, negotiation and execution of a mutually satisfactory definitive acquisition agreement and satisfaction or waiver of the conditions that may be specified in such an agreement.

PubliCARD Inc., headquartered in Fairfield, Connecticut, is a developer and manufacturer of smart card systems, software and components for applications in cable and broadcast access, Internet and network data security, electronic commerce, commercial laundry equipment, and the parking and access control industries. The Company also designs and manufactures coin meters used in the commercial laundry industry and provides general engineering design and architectural services. Visit PubliCARD’s website at [www.publicard.com.][1]

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

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AmEx Euro Cheques

American Express euro-denominated travelers cheques will be available beginning January 4, 1999 at participating American Express travel service offices, AAA clubs and select financial institutions nationwide.  The number of locations offering the product will be expanded as demand for the product grows.

The American Express euro travelers cheque will represent one of the first opportunities for consumers to use a euro-denominated payment product as the new single currency is phased in over the next three years.  The new cheques, featuring a pastel-colored world map and tri-lingual acceptance instructions come in denominations of  50, 100 and 200 euro.

American Express anticipates that travelers to the euro-zone, initially made up of eleven countries(1), will find the product extremely convenient because it allows them to travel with travelers cheque in only one currency, saving on the cost of changing money between various foreign currencies.

“The American Express euro-denominated travelers cheque will be indispensable in the euro-zone,” said James Berrien, General Manager of the Travelers Cheque Group.  “We foresee it becoming one of the biggest volume travelers cheques in the world because it eliminates the need to carry multiple euro-zone currencies.”

Although the euro becomes the official currency of the euro-zone on January 1, 1999, when national currency exchange rates are fixed to the euro, there will be a three-year transition period before euro notes and coins go into circulation on January 1, 2002.  During this time, consumers will be able to use the American Express euro-denominated travelers cheque to pay for goods and services as merchants begin to convert to euro pricing.

The euro-denominated travelers cheque has a contemporary look with a world map on the front of the cheque, and acceptance instructions in English, French and German on the back.  In addition, the new cheque includes security features like those introduced last year on the U.S. dollar-denominated $50, $100, $500 and $1,000 travelers cheques.  Those security features include a colorful holographic foil displaying images of a Centurion, alternating with the American Express “Blue Box” logo and euro denominations, an embedded security thread and a Centurion watermark.

With sales of $25 billion in 1997, American Express Travelers Cheques are a popular method of carrying travel money because they are replaceable if lost or stolen.  According to global research commissioned by American Express, travelers rated travelers cheques “very safe” more often than any other type of payment, including credit and debit cards and cash(2).

During the three-year transition period, American Express will continue to offer travelers cheques denominated in local currencies as well as the euro. As with all travelers cheques, local currency travelers cheques will continue to be valid indefinitely and will be honored at any future date.  Beginning on June 30, 2002, local currencies and local currency travelers cheques will no longer be sold as the euro will be the only legal currency used in the participating member countries of EMU.

The American Express Company, headquartered in New York City, is a diversified worldwide travel, financial and network services company founded in 1850.  It is a leader in charge and credit cards, Travelers Cheques, travel, financial planning, investment products, insurance and international banking.

(1) The eleven participating European Union member countries are Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain.

(2) According to a public opinion survey of 1,950 travelers from 13 countries conducted in April 1998 by Research International of London for American Express.

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CSI Attracts Japanese Investment

Card Services International announced capital investments totalling US$3 million. Participants in this investment include JAFCO, Japan’s largest venture capital firm, and CSI’s current venture partner ICC Software Partners Limited.

The funds are being used to strengthen CSI’s position as a leading supplier of smart card software solutions to the international banking market and the airline industry. Smart cards are now recognised as the most secure medium for Internet payments and CSI expect to play a significant role in the general electronic commerce market.

CSI, located in Dun Laoghaire, Co Dublin, includes among it’s customers the major Irish Banks, the leading card organisations Europay and Visa, and banks in Europe, Middle East, Africa and South America. The company’s core product CardBASE2000(R) is recognised by the industry as the most advanced smart card management system available. This position is confirmed by CSI’s involvement with the French Company Gemplus, the world’s largest producer of smart cards. Gemplus holds a 15% equity interest in CSI. CSI’s credibility as a global smart card software supplier lead to a strategic worldwide agreement with IBM who assist in the marketing and implementation of CSI’s smart card solutions.

Mr Aonghus Geraghty, CSI’s Chief Executive Officer, confirmed that, “the involvement of a Japanese company at this stage of development is part of a strategy which includes developing a presence in key markets. The Asian market is adapting quickly to the use of smart cards and our involvement with JAFCO provides the credibility to bid for profitable business with major banks and airlines in the region. The Japanese also have a very clear understanding of the importance of smart cards in the rapidly developing Internet and electronic commerce market. Future CSI product developments will benefit from this understanding and we expect to announce a number of exciting new products in 1999.”

Mr Hiroshi Ikegaya, JAFCO said, “Ireland continues to develop a strong position as a world leader in software development. Our interest in CSI recognises the Company’s lead in the development of smart card technology solutions and most importantly their understanding of the need for multi-application Card Centre Software, installed by card issuers in order to control and manage the smart cards in circulation. We plan to work closely with CSI to help in their goal to be the No1 provider of Card Centre Software products.”

ABOUT CARD SERVICES INTERNATIONAL (CSI)

Card Services International (CSI), headquartered in Dublin, is a leading international supplier of smart card based electronic payment systems. The company was established in 1993 and has offices in the United States and Africa.

CSI’s smart card management system, CardBASE2000(R), is designed to support the issue of multiple payment applications on a single smart card. The market for CSI’s CardBASE2000(R) is aimed at financial and corporate institutions wishing to issue secure, smart card based, electronic payment products. CardBASE2000(R) currently supports electronic purse, passbook/savings account, debit, loan accounts and funds transfer.

CSI has delivered quality solutions to major international clients including Europay International, British Airways, Standard Chartered Bank and Citibank. By the turn of the century, CSI anticipates that CardBASE2000(R) will be the underlying technology behind the world’s leading international smart card brands.

ABOUT JAFCO

JAFCO Co., Ltd. – established jointly in 1973 as Japan Associated Finance Co., Ltd., by the Nomura Securities Co., Ltd., Nippon Life Insurance Co., and the Sanwa Bank, Ltd. – is the pioneering company in Japan’s venture capital industry. The principal activities of the Company and its consolidated subsidiaries (collectively, JAFCO) are investing in and offering consulting and information services to private companies with high potential for future growth.

From the time of its establishment to September 30, 1997, JAFCO made investments in a total of nearly 1,800 venture businesses, backed the initial public offerings (IPOs) of around 460 companies, and managed 51 Partnership Funds with a cumulative 262.5 billion yen in committed capital provided by institutional investors and business corporations around the world.

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Pathways – LinkOpps

The Pathways Group, Inc. announced that it has entered into a letter of intent with LinkOpp Marketing, Inc., a private company located in Hermosa Beach, California. The letter of intent anticipates a contract between Pathways and LinkOpp to provide a set of “turn-key” Smart Card solutions for LinkOpp’s national membership, currently transacting business on the Internet. These solutions include the adaptation of Pathways’ existing Smart Card technology and providing smart cards, terminals and other PC related read/write devices, card fulfillment, transaction processing and related backroom support services.

Under the terms outlined in the Letter of Intent, LinkOpp anticipates purchasing up to 1.5 million Smart Cards from Pathways, which will be issued to the LinkOpp membership as part of the initial rollout during 1st Quarter, 1999. These cards will be programmed with Pathways’ proprietary multi-purse technology and work in conjunction with a variety of Pathways’ merchant terminals. These solutions also include home user and eTeller(TM) software, which will be used by LinkOpp along with other offerings to their membership. The initial rollout is projected to include a large mix of Smart Card and Magnetic-Stripe Card compliant hybrid merchant terminals and several other PC compliant Smart Card read/write devices including PCMCIA technology and keyboards. It is anticipated that Pathways will also be providing other services to LinkOpp from their suite of transaction processing services. These services include credit and debit card adjudication, national “on-line” and telephone technical support as well as detailed management, member, and merchant tracking and reporting of transactions, which have occurred.

LinkOpp management seeks to issue an additional 10 million cards over the next eighteen months, with extensive expansion of the features to be offered to their members both with the Smart Card technology as well as providing other electronic retailing benefits.

Pathways anticipates adapting their Smart Card technology to work within the LinkOpp paradigm, giving LinkOpp the advantage of Pathways’ proven Smart Card technology as well as Pathways’ years of experience in the electronic transaction arena.

LinkOpp’s membership base, as well as their aggressive marketing plan, projects placing LinkOpp and Pathways at the forefront of electronic commerce on the Internet. LinkOpp and Pathways are believed to be the first cooperating companies to introduce Smart Card transaction processing, with affinity benefits, which will provide discounts and loyalty awards both in the LinkOpp retail merchant setting as well as those subscribing merchants who are part of the LinkOpp network of Internet merchants.

Carey Daly, president and CEO of Pathways said, “We are very pleased to be adapting our secure technology to the fast paced marketplace of Internet e-Commerce. Our proprietary Smart Card technology and our established electronic transaction processing abilities will guarantee a quick, efficient and successful rollout of this venture. By partnering with LinkOpp, we benefit from their knowledge and experience in Internet e-Commerce. This enhancement to our skill set will position Pathways as the premier Smart Card solution provider and processor in the country. LinkOpp will likewise benefit from Pathways’ experience and gain themselves significant advantages in both market timing and positioning.”

LinkOpp, a global Internet community, offers corporate web hosting, retailing, and membership based goods and services.

The Pathways Group, Inc. provides clients with innovative and unique solutions for securely creating, capturing and processing data and electronic transactions using custom application software and hardware systems. The company was established in 1987 by Carey Daly and has evolved into a leader in the development of custom software and hardware for electronic banking, data and transaction processing, and smart card applications. Pathways’ creation of proprietary “back room” systems allows for the capture and processing of data and transfer of funds via “ACH” protocol, the standard used in the banking industry for transfer of funds in retail, medical and institutional environments.

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No-Surcharge Crumbles

Sanwa Bank California says it has reluctantly decided to begin imposing a $1.50 surcharge on noncustomers who utilize its ATMs in California beginning in the spring. Sanwa operates 108 ATMs throughout the state. The decision comes after all of Sanwa’s major competitors, including Union Bank of California, Glendale Federal Bank and California Federal Bank, abandoned the “No Surcharge Alliance” they formed 18 months ago to fight ATM surcharges imposed by Bank of America and Wells Fargo. When founding member Union Bank of California officially left the alliance a few months ago, Sanwa was the only major regional bank remaining as a member.

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PNC Exits

Just as the holiday break got underway Pittsburgh-based PNC announced the sale of its entire portfolio to MBNA. PNC will receive a 15% premium on outstanding credit card receivables of approximately $2.9 billion and 3.3 million accounts. The sale includes AAA-branded affinity credit card accounts. The transaction is expected to close within the first quarter. MBNA has also entered into long-term agreements with both PNC Bank and AAA. MBNA will market credit card products to the 3.3 million households served by PNC and the 36 million members of AAA. However PNC will continue to market consumer loan and deposit products to AAA members nationwide through the AAA Financial Services program. Fitch IBCA says the transaction will allow PNC to bolster lagging loan loss reserves, strengthen capitalization, and allow the company to reallocate capital resources to higher return, strategic businesses. Fitch also noted the card sale will benefit PNC’s consolidated capital ratios. According to CardData ([www.carddata.com][1]) PNC had $3,867,150,000 in 3Q/98 receivables and 2,075,445 active accounts.

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

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Weak Holiday Sales

FDC’s TeleCheck Services said Tuesday that weak West Coast sales is one of several factors dampening holiday spending, with same-store sales for the first 24 days of the holiday shopping period up 0.7% over the same period last year. The data, which covers the period from Nov. 27 through Dec. 20, are based on a same-store comparison of the dollar volume of authorized checks written by consumers at more than 27,000 of TeleCheck’s 200,000 subscribing locations. TeleCheck says the impeachment vote and the resulting fall-out in Washington, along with the Iraqi situation, undoubtedly diverted consumer attention and interest from shopping. Promotions and deep-discounts may have spurred sales, but reduced retailers’ total dollar sales volume.  And sales on the West Coast, which is experiencing problems connected with the weak export market and low energy prices, held down the national number. The strongest area for sales so far has been the Midwest with sales up 3.1%.  Wisconsin’s sales were up 3.3%, Illinois’ rose 3.2%, Michigan’s gained 2.9%, and both Minnesota’s and Ohio’s rose 2.6%.

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