TSYS 4Q

Total System Services reported yesterday that net income for 1998 increased 15.5% to $54.8 million on 1998 revenues of $396.2 million. TSYS says for the first time in the history of its Year 2000-compliant cardholder system, TSYS is processing a majority of its accounts on ‘TS2′. At the end of the fourth quarter of 1998, TSYS was processing approximately 62 million of its 117 million accounts on file on TS2.  The conversion of the Universal Card Services’ accounts to ‘TS2′ was completed in the fourth quarter of 1998. Also during the fourth quarter TSYS acquired the Partnership Card Services unit from Columbus Bank & Trust and as of Jan.1., the new unit became part of TSYS’ wholly owned subsidiary, TSYS Total Solutions, Inc. TSYS projected yesterday that by the end of 1999, the company will increase its accounts on file to approximately 190 million with the conversions of the card portfolios of Sears, Canadian Tire and Royal Bank of Canada.

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ETA Fees

The EBT Industry Council Thursday asked the federal government to re-think key components of its plan for converting federal benefit payments to electronic funds transfer. The council said the service fee for the U.S. Treasury Dept’s proposed all-electronic bank account, called an Electronic Transaction Account, is too low. The EBT council says the proposed ETA service fee of $3.00 may not be sufficient for banks to cover operating costs in some areas of the country and that the disparity in operating costs around the country may make it difficult for banks in certain regions to participate in the ETA program. The ETA would be aimed at the estimated 10 million federal check recipients who currently do not have bank accounts.

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PubliCARD Hires Smart Card Exec

PubliCARD, Inc. announced Thursday it has appointed Richard Phillimore, age 52, to the newly created position of Executive Vice President/ Smart Card Businesses.

Mr. Phillimore was formerly Senior Vice President/Chip Business Development with MasterCard International.

Mr. Phillimore will be responsible for developing and managing PubliCARD’s existing smart card businesses, as well as for seeking future acquisitions. In addition, he will serve on the Company’s recently formed Technology Committee. The committee is comprised of several members of the Company’s Board of Directors and the chief technology officers of its smart card related businesses. It was established in September 1998 for the purpose of providing technological and strategic direction to the Company. Mr. Phillimore will report directly to James J. Weis, president and chief executive officer of PubliCARD.

James J. Weis, president and chief executive officer, stated, “We are very excited to have added such a prominent figure in the world of smart cards to PubliCARD’s team of professionals. Richard has made extensive contributions to several chip development projects over the past six years. Most notable, he was instrumental in developing MasterCard’s chip business to a position of leadership in the financial services sector. We are confident Richard’s knowledge and skills will help PubliCARD establish a significant presence in the smart card industry.”

Richard Phillimore noted, “PubliCARD is tapping into the U.S. smart card market at just the right moment and I am thrilled to be involved on the ground floor of this venture. The ability to make a range of complementary acquisitions within the smart card industry is an elegant strategy that will enable PubliCARD rapidly to become a leading participant in this dynamic and fast growing market.”

PubliCARD Inc., headquartered in Fairfield, Connecticut, owns businesses engaged in the development of smart card systems and technology, manufacturing and engineering services. More information on PubliCARD can be found at [www.publicard.com][1].

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

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Hypercom Multi-Lane Exec

Hypercom Corporation announced Thursday the appointment of Roger Hitchcock as Vice President and General Manager of the Hypercom(R) POS Multi-Lane Division. Hitchcock is responsible for furthering Hypercom’s efforts in the multi-lane market, targeting large national retailers, chain drug stores, and supermarkets.

“With the introduction of our Interactive Consumer Environment (ICE) terminals and Ascendent(tm) software, Hypercom can now focus on bringing our innovative solution to the multi-lane environment,” said Al Irato, president and CEO, Hypercom Corporation. “Roger is a proven innovator with excellent experience in the multi-lane marketplace. He is the right person to help provide our value-added resellers (VARs) and customers the ability to deploy new payment applications. Our customers can take advantage of emerging payment types and update their existing infrastructure without huge capital investments.”

Hitchcock joins Hypercom from Checkmate(R) Electronics, Inc., where he was senior vice president of sales and marketing. He previously served as a general manager of the Retail Business Unit at VeriFone(R), Inc., where he built a systems organization that moved the company into a leading position in supermarket payment systems. He was also responsible for conceiving a popular supermarket controller and software linking the payment terminal directly to the cash register in a multi-lane environment. Hitchcock was also the founder, president and CEO of NTN, Inc., a systems integrator. He built the company into a major participant in the supermarket industry, and brought the company public in 1987.

“The point-of-sale terminal market is expanding rapidly to adapt to new payment schemes and technologies such as smart cards and loyalty programs. The multi-lane environment is at the forefront of these developments,” said Hitchcock. “As an industry leader, Hypercom is in the unique position to quickly deliver a complete multi-lane systems solution. This solution is more interactive, while being smart-card ready. I look forward to leveraging my experience to help further expand the recent growth at Hypercom and provide innovative systems solutions to the multi-lane marketplace.”

Hypercom Corporation (NYSE:HYC) is a global provider of electronic payment solutions, including multi-functional point-of-sale terminals, peripherals, network products, Ascendent payment and transaction software, and Internet-based and electronic commerce payment solutions. Hypercom delivers the services and technological infrastructure required to quickly integrate and deploy new payment applications. These applications provide competitive value-added programs, improved business performance, and low total cost of ownership.

Headquartered in Phoenix, Arizona, Hypercom markets its products in more than 60 countries through a network of offices and affiliates in Argentina, Australia, Brazil, Chile, China, Hong Kong, Hungary, Japan, Mexico, Russia, Singapore, the United Kingdom, and Venezuela. The Hypercom Internet address is [www.hypercom.com][1].

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

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Lockhart Joins AT&T

Former MasterCard CEO and Bank of America unit president Eugene Lockhart was appointed to the position of EVP and chief marketing officer of AT&T yesterday. Lockhart, who will become a member of the company’s most senior executive body, the AT&T Operations Group, will be responsible for brand management across the company and will oversee the development of marketing programs for all units.  He will also set overall marketing strategy for the Consumer Services Group and directly manage its advertising, billing and customer care operations across all product lines. This is the first time AT&T has named a chief marketing officer. The company spent over a year searching for a chief marketing executive. Reportedly, Lockhart’s compensation package will include about $1 million in annual salary plus options to acquire more than 250,000 shares of AT&T. Lockhart resigned as president of BofA’s Global Retail Bank last year following the announcement of the BofA and NationsBank merger. Lockhart reportedly received a $23 million severance package from BofA.

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CUNA Insurance Package

Equifax Card Solutions and CUNA Mutual Group are debuting a new credit card insurance enhancement package that will benefit both credit unions and their card-carrying members.

Through an exclusive marketing agreement, several coverages — Credit Disability, Involuntary Unemployment, and Family Leave — have been bundled in a highly attractive program that promises excellent member value and ease of administration.

Lee Kennedy, Equifax executive vice president, said, “The alliance between CUNA Mutual and Equifax brings together two of the industry’s strongest performers in the areas of insurance and credit card enhancement programs.”

According to Kevin Shea, CUNA Mutual’s Chief Lending Officer, “Credit card insurance programs are well known for their value in promoting credit card programs and encouraging responsible card use.  They also offer credit unions income opportunity through administrative reimbursements, while protecting credit union members and their families.”

Equifax, which acquired CUNA Service Group’s Card Services Division in 1996, handles more credit union card processing business than any other single processor in the U.S., with volume exceeding 11 million transactions monthly. More than 40 leagues and league service corporations endorse Equifax, which is the largest single provider of card processing service to credit unions in the world.

“Our 60+ years of providing lending-related insurance to credit unions and their members demonstrates our commitment to delivering quality products to a market we understand,” says Shea.

CUNA Mutual Group is headquartered at the Credit Union Center, in Madison, Wisconsin.  With more than $7 billion in assets, the company is the leading provider of insurance, financial and technological services to credit unions and their members worldwide.  CUNA Mutual serves 99 percent of the more than 11,000 credit unions in the U.S. and some 30 million of their members.  The principal companies of CUNA Mutual Group — CUNA Mutual Insurance Society and CUNA Mutual Life Insurance — are rated “A” (excellent) by A.M. Best.  The company’s credit insurance products are endorsed by the Consumer Federation of America.  For more information on CUNA Mutual, visit the company’s web site at [www.cunamutual.com][1].

EQUIFAX (NYSE: EFX) is a worldwide leader in shaping global commerce by bringing buyers and sellers together through its information, transaction processing, consulting and knowledge-based businesses.  Equifax serves the banking, financial, retail, credit card, telecommunications/utilities, transportation and healthcare industries and government.  Founded in 1899, Atlanta-based Equifax today has 14,000 employees in 18 countries and sales in more than  45 countries.  Revenues for the 12 months ended September 30, 1998, were more than $1.5 billion.  For more Equifax information, visit the company’s Internet web site at [www.equifax.com][2].

[1]: http://www.cunamutual.com
[2]: http://www.equifax.com

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Tax Charges

Following the IRS pilot to accept some credit cards for income tax payments this year, nearly one million California taxpayers will be given an option to pay their past due state income tax bills by credit card. The State Controller and chair of the Franchise Tax Board said the pilot project will kick off today. Certain billing notices will have a special insert explaining the credit card payment option. For a convenience fee, Discover, MasterCard and American Express will be accepted via telephone. VISA, as with the IRS pilot, has declined to participate. Based on an average payment of $740 the convenience fee is expected to average $19. Payments under $100 will be charged a convenience fee of $3.

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Discover’s Pro Forma

Discover Financial Services, formerly known as NOVUS Services, reported yesterday that delinquency and chargeoffs continued to improve during the fiscal fourth quarter. For the quarter ending Nov. 30, Discover’s net chargeoff rate stood at 6.94% compared to 7.21% one year ago. Delinquency (30+ days) also dropped from 6.98% for the fourth quarter 1997 to 6.53% for fourth quarter 1998. While Discover’s interest spread increased from 8.58% last year to 8.71% this year, the interest yield for the fourth quarter declined from 14.79% in 1997 to 14.72% for 1998. Due to the sale of Bravo receivables and other adjustments, Discover’s overall card portfolio size declined about 10% during 1998 from $36.0 billion on Nov. 30, 1997 to $32.5 billion on Nov. 30, 1998. At the end of its fiscal year Discover captured $58 billion in transaction volume. For full 4Q stats on Discover visit CardData (www.carddata.com). CardData’s year-end and fourth quarter stats for more than 350 issuers will be available beginning Monday, Jan. 11.

DISCOVER’S  PULSE
                             11/30/98          11/30/97
Gross Accounts:            38,000,000        40,000,000
Active Accounts:           22,000,000        23,000,000
Avg Recv Per Act Acct:         $1,486            $1,382

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Super Bowl Spots

VISA and BBDO New York are currently developing two new 30-second TV spots to premiere during Super Bowl XXXIII on Jan. 31.  VISA said Thursday this marks only the second time it will break two new spots since the company began advertising during the Super Bowl in 1994. The two new VISA spots are scheduled to air during the first half of the game. VISA’s 1998-99 NFL integrated marketing program includes title sponsorship of the FOX Halftime Report, NFL-themed advertising, member-supported national consumer promotions, retail tie-ins, league support, charitable contributions and a new fan exhibit at the Pro Football Hall of Fame entitled “Visa Hall of Fans.”

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AmEx ATM Carolina Deal

Carolina First Corporation announced an agreement between its subsidiary, Carolina First Bank, and American Express ATM Holdings, Inc. Under the agreement, Carolina First Bank will display its name and logo on all American Express ATMs in South Carolina. In addition, Carolina First Bank customers may use American Express ATMs in South Carolina without being charged a fee. American Express expects its network of over 40 ATMs in South Carolina to be operational in the first quarter of 1999.

James W. Terry, Jr., President of Carolina First Bank, said, “Our affiliation with American Express doubles the number of free ATMs available for our customers. Plus, the American Express ATMs will be located in high traffic areas where customers choose to shop or purchase gasoline. This initiative is an excellent fit with our strategy of making banking convenient for our customers.”

Carolina First Corporation, headquartered in Greenville, South Carolina, is the largest independent bank holding company in South Carolina with $2.7 billion in total assets and 73 banking offices throughout the state. It operates Carolina First Bank, the largest South Carolina-based commercial bank, and Carolina First Mortgage Company, the second largest mortgage loan servicer in South Carolina. Other subsidiaries include an automobile finance company, a credit card servicing company and a small business investment company which invests in bank technology companies. Carolina First’s common stock trades on the Nasdaq National Market under the symbol CAFC. Additional information about Carolina First is available on its web site at [www.carolinafirst.com][1].

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

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CyberCash Raises Cash

CyberCash, Inc., the world leader in e-commerce payment technologies and services, announced Thursday that it has raised $10 million in equity capital through a private placement of common stock and warrants.  CyberCash says it plans to use this equity to support the roll out of its new InstaBuy one-click shopping service. Funds managed by Rose Glen Capital Management, L.P. and The Palladin Group, L.P., respectively, provided the financing.

“The additional funds will help to support marketing, sales and customer support efforts behind CyberCash’s InstaBuy Service unveiled in August of 1998,” Condon said.  “It will assist us in telling the story about the safety and convenience of our universal, interoperable one-click Internet shopping capability.  The InstaBuy Service meets the needs of merchants who want to convert a higher percentage of web visitors to buyers, addresses the desires of consumers who want the convenience of one-click shopping and solves a problem for banks that want to strengthen their relationships with customers online.”

The private placement involves the issuance of Units, each consisting of one share of the Company’s common stock and a warrant to purchase 0.75 shares of the Company’s common stock.  The purchase price is $16.40 per Unit, which is 105% of the closing bid price of the Company’s common stock on January 5, 1999.  The exercise price of each warrant is $20, subject to reset under certain circumstances beginning one year after the date of issuance.  The Company has agreed to register under the Securities Act of 1933 the resale of the common stock issued in the offering as well as the common stock issuable when the warrants are exercised.

In addition, the Company is committed to sell, and the investors have agreed to purchase, additional Units for an additional $5 million in cash after the registration statement covering this private placement is declared effective by the SEC.

CyberCash is the world’s leading provider of secure electronic commerce payment technologies and services spanning the retail point of sale through the Internet, CyberCash, the CyberCash logo and InstaBuy are trademarks or service marks of CyberCash, Inc.

This press release contains statements that are forward looking, including statements about the Company’s future profitability and stock price.  They are based on the Company’s current expectations, and are subject to a number of uncertainties and risks, and actual results may differ materially.  The uncertainties and risk include the need for additional capital, the pace of growth of Internet commerce, the development by the Company and its competitors of new products and services, strategic decisions by major participants in the industry, competitive pricing pressures, legal and regulatory developments, general economic conditions, and stock market developments affecting technology companies.  Further information about these and other relevant risks and uncertainties may be found in the Company’s report on Form 10-K, and its other filings with the Securities and Exchange Commission, all of which are available from the Commission and from the Company’s worldwide web site as well as other sources.

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