First USA rolled out its new ‘Gift Card’ yesterday, the first-ever pre-paid VISA card designed to serve as a universal gift certificate. The ‘First USA Gift Card’ is available in amounts from $50 and up. There is a $5 service fee for amounts up to $200. For ‘Gift Cards’ loaded with $200 or more, there is no fee. ‘Gift Cards’ expire six months from the date of issue. Any remaining balance at expiration will be refunded to the ‘Gift Card’ recipient.The cards can be sent directly to the recipient or to the purchaser, within 10 days of the order. Expedited delivery within four business days is also available for an additional fee. Purchasers are required to use their First USA credit card to purchase the ‘Gift Card’. The card features 11 card designs, including four created specifically for the holidays, and offers a personal greeting on the front of the card. First USA says it has applied for a patent for the new card.Details
Los Angeles-based Bank Plus Corp. and its bank subsidiary Fidelity Federal Bank continue to recover from losses related to its venture into sub-prime credit cards. According to the bank’s latest earnings report, FFB incurred a third quarter net loss of $59.8 million, primarily the result of provisions for estimated loan losses of $51.8 million and the write-off of $8.2 million in fees due to the bank from one of its credit card marketers, MMG Direct Inc.. FFB’s FDIC insurance premium rate will also increase to 0.30% of deposits beginning in the first quarter of 1999 from its current level of 0.09%. As of Sept. 30, total outstanding credit card balances were $311 million and the number of cards issued exceeded 340,000. Delinquencies of 30 days or more for the total credit card portfolio were 16.0%. The sub-prime credit card program with MMG accounted for $165 million of the outstanding balances and over 260,000 accounts, and the sub-prime program with American Direct Credit LLC had $123 million of the outstanding balances and over 70,000 accounts. At the quarter end the MMG and ADC programs together accounted for 92% of the total outstanding credit card balances, and delinquencies under the MMG and ADC programs were 19.5% and 13.4%, respectively. However, as of Oct. 31, outstanding balances and delinquencies under the MMG and ADC programs were $168 million and 25.7%, and $133 million and 12.4%, respectively. Bank Plus has since terminated the MMG program and is currently winding down the ADC program. For complete 3Q financials for Bank Plus visit CardData ([www.carddata.com]).
The Smart Card Forum (SCF), a multi-industry organization working to accelerate the widespread acceptance of smart card technology, Thursday announced that seven new members have joined its expanding ranks:
First Data Corporation
Greater Cleveland RTA
Ministry of Transportation of Ontario
With the joining of these seven leading organizations, the Forum has attracted nearly 50 new members during the past year alone, says SCF President and CEO Donna Farmer. That speaks volumes about the continued ascent of smart card technology and the broad interest in its application. It also shows how companies and government agencies see the Forum as the place to be for cross-sectoral dialogue on smart cards. We welcome these new members to our table and to the many benefits each will receive as a Forum member.
The announcement of the new members comes as the Forum holds its latest Educational Institute and Work Group Meetings in Tampa. 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 specific needs of several key sectors and reflect the diversity of both the Forums membership and the new applications being developed and implemented by them.
Centura Software, CIARSE S.A., Dione Plc, First Data Corporation and Iridium LLC all have joined as auditing members of the Forum, while Greater Cleveland RTA and Ministry of Transportation of Ontario each come on board as government members. Both classes of membership offer the organizations access to several Smart Card Forum member services.
— Centura Software was the first company to create fully relational client/server embedded database management solutions for the personal computer.
— CIARSE S.A. specializes in tailored software developments, with a strong focus on smart card advancement in the credit card and banking environments.
— Dione Plc are worldwide market leaders in smart card integrated electronic cash register terminals.
— First Data Corporation is one of the worlds leading providers of transaction processing services — including credit, debit and pre-paid card processing; payment systems; electronic commerce and information-based services — to both businesses and consumers.
— Greater Cleveland RTA is an industry leader in the use of modern technology to improve transit.
— Iridium LLC is a company established by Motorola in 1991 to develop and deploy a network for global wireless communications.
— Ministry of Transportation of Ontario plays a large role in ensuring that transportation supports local job creation and facilitates trade and commerce, and has developed 100 initiatives
to keep this Canadian provinces highways safe.
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.
MasterCard and Opinion Research Corporation released a poll yesterday showing that 10% of Americans plan to shop on the Internet for holiday purchases, double the number for 1997. The survey also found that 22% of Americans will use a debit card to do holiday shopping. More than half of those surveyed said they would use credit cards for holiday purchases if they receive an additional discount at the point of sale. About one-third said they would be motivated to use credit cards if they receive rebates with their statements, while 38% said they would use a credit card if the purchase is covered under a purchase protection plan.Details
Discover Financial Services announced Thursday its commitment to ‘MULTOS’. The company joined MAOSCO, the consortium driving the adoption and development of ‘MULTOS’. Discover joins MasterCard, Europay, American Express and Mondex as backers of the ‘MULTOS’ platform. Discover’s 46 million cards brings the group’s collective cardbase to more than 800 million cards worldwide. Discover said yesterday the multi-application operating system has become the platform of choice.Details
After only three years of operations, OrdaCard was granted VISA International approval to manufacture VISA credit cards, and join the prestigious club that includes 77 manufacturers world wide – a market that is estimated at over 1 billion cards per year.
OrdaCard has secured its first order from VISA Alpha, the new VISA clearing house in Israel, and expects to get orders from neighboring countries in the region in the upcoming months. Says Eli Garber, CEO of OrdaCard: “With the VISA approval OrdaCard joins the ranks of the largest card manufacturers in the world, this is the beginning of our new expansion strategy to the international market.”
Ordacard’s many unique capabilities include: Digital printing using new and upgraded Indigo printers, cutting edge software developed by Clal Imaging and state of the art equipment for smart card manufacturing. These technological advantages allow customers to transmit encrypted graphics over the internet and enjoy quality products in short turn around times.
Mr. Garber adds: “This is a recognition of the high technology and high security available at OrcaCard. Along with the ISO 9002 certification, the VISA Approval positions OrdaCard among the elite of card manufacturers.”
The VISA Certification received by OrdaCard not only allows OrdaCard to produce standard magnetic stripe cards, but also the VISA Cash smart card. OrdaCard is positioning itself to be a leader in the move from magnetic strip cards to smart cards in Israel and around the world.
Ordacard is Israel’s oldest and largest manufacturer and supplier of plastic cards.Partly owned by American Banknote Products include; ID, banking, health- care, insurance, security access, employee, loyalty and smart cards. Ordacard has signed a letter of understanding with Ambient Corporation to merge the two companies. Ambient Corporation develops smart card technology and systems. The company’s contactless cards satisfy an increasing need for multi purpose smart cards. Ambient is also developing a large memory smart card for applications requiring secure, stored recordsDetails
SmarTalk TeleServices, Inc. announced financial results for the quarter ended September 30, 1998.
For the third quarter of 1998, revenues were $59.8 million, representing a 39% increase from $42.9 million in restated revenues reported for the second quarter of 1998, and a 222% increase from $18.6 million in revenues reported for the third quarter of 1997. The Company also reported a net loss of $0.82 per share, compared to the net loss of $1.26 per share for the restated second quarter 1998 and a net loss of $0.14 per share for the third quarter of 1997.
The majority of SmarTalk’s revenues come from decremented minutes, which are the number of minutes of usage that the Company services. Minutes decremented for the third quarter of 1998 increased by 31% to 270.1 million, compared with 205.4 million for the quarter ending June 30, 1998 and increased by 196% compared with 91.2 million decremented minutes for the quarter ended September 30, 1997. Personal Identification Numbers (PINs) are used by the Company’s customers to access the SmarTalk system. The Company also tracks PINs activated as an indication of unique, new card accesses into the Company’s call processing network. In the third quarter ending September 30, 1998, the Company reported a 16% increase to 5.1 million new PIN activations compared with 4.4 million PINs activated for the quarter ending June 30, 1998, and a 183% increase compared with 1.8 million PINs activated for the quarter ending September 30, 1997.
The Company also announced that is has engaged Salomon Smith Barney to assist the Board of Directors in evaluating the Company’s strategic alternatives.
SmarTalk will conduct a conference call for investors and analysts on Monday, November 16, 1998 at 9:00 a.m. Eastern. To access the call, please dial 1-800-491-3988 and reference the call identification number 438046. International callers may connect to the conference call by dialing 303-267-1001 and referencing the call identification number 438046.
SmarTalk TeleServices, Inc. currently maintains distribution agreements with the U.S. Postal Service and leading mass merchandisers, consumer electronics retailers, supermarkets, hotels, home office superstores and convenience stores throughout North America and the U.K. The Company also creates promotional phone card programs for advertisers and corporate clients.
For 3Q/98 Report for SmarTalk visit [www.carddata.com]
The number of electronic banking transactions processed by PULSE EFT Association hit an all-time high of more than 31 million in October, demonstrating that the public continues to take advantage of alternate banking and payment options. Transactions processed through the PULSE network in October totaled 31,068,270. This figure includes transactions at both automated teller machines (ATMs) and point-of-sale (POS) terminals operated by merchants. POS transactions also hit a record high of 12,001,678, more than 38 percent of the total volume for the month.
“The continued strong growth in PULSE’s transaction volume confirms that the public is increasingly embracing self-service banking and electronic payment services,” said Stan Paur, president and chief executive officer of PULSE.
“As more and more merchants accept the ATM card as a form of payment for goods and services, PULSE expects the POS component of the EFT network will continue to experience above-average growth throughout the remainder of the decade,” Paur added. He predicts that more than 130 million POS transactions will be processed by the network in 1998.
PULSE is a not-for-profit, shared electronic funds transfer network comprising nearly 2,000 banks, credit unions, and savings and loans in Alabama, Arkansas, Colorado, Louisiana, Mississippi, New Mexico, Oklahoma, Tennessee and Texas. The network features more than 30,000 ATMs and more than 156,000 PULSE PAY point-of-sale terminals.Details
Western States Bankcard Association and First Data Direct Banking Thursday announced plans to build an innovative multi-client web site that will provide interactive, transactional access to credit card data for all WSBA members.
By pooling the combined resources of its member financial institutions, WSBA announced it will offer state-of-the-art Internet credit card sites to its members at a fraction of the cost of a single site.
Although the site will be sponsored by WSBA, each institution will have the option of a bank-branded or WSBA-branded presence for its customers and individually customized features. Richmond, Calif.-based Western States Bankcard Association provides credit and debit card services to more than 100 financial institutions in 10 Western U.S. states.
“Adding transactional Internet access for our customers is the next logical step as the credit card industry moves into the online age,” said Barbara Kelly, vice president of Western States Bankcard. “Offering our members home banking and Internet card service products at the lowest possible cost is our next step to providing small- to mid-sized community financial institutions with the products and services necessary for customer growth and retention.”
“WSBA approached us with this innovative idea that appealed to us because it represents a value-added enhancement to our NetPrecision Card Services product, one that we think will appeal to other card associations,” said Randy Kahn, president of First Data Direct Banking. “It will truly help small- and mid-sized card issuers harness the power of this exciting new delivery channel to compete on an equal footing with their largest competitors.”
Transactional card services offered as part of the NetPrecision Card Services program include online enrollment, access to cardholder account balances, the ability to view statement data and download it to leading personal financial managers (PFMs) such as Microsoft Money and Quicken. The service also offers an automated customer service system, which includes a secure, private e-mail system through which cardholders can ask questions or report issues to customer service personnel, and monitor the status of issues that have been submitted.
These functions, available to the cardholder 24 hours a day, 7 days a week through the Internet, can reduce customer service expenses by allowing cardholders to access and manage many of their account functions without the intervention of a customer service representative. The integration of online bill presentment and payment, which will be added to NetPrecision Card Services sites next year, will help eliminate the cost of producing and mailing paper statements as well.
CMS Services Inc., which provides terminal management services and web site design for WSBA will build the gateway between WSBA member institutions and First Data Direct Banking’s industry-leading NetPrecision Card Services platform, Kelly said.
About Western States Bankcard Association
Western States Bankcard, a not-for-profit association, offers credit and debit card issuing and acquiring processing to the financial industry. The Richmond, Calif.-based organization has specialized in card services, consultation and turnkey management for more than three decades.
Western States Bankcard can be found on the World Wide Web at [www.wsbahq.com]
About First Data Direct Banking
First Data Direct Banking builds and hosts customized Internet financial service solutions for banks, credit unions, savings and loans, non-bank credit card issuers and brokerage houses of all sizes.
Using the NetSpeed(SM) process as a template, financial institutions can have fully functional, branded web sites up and running in just 30 business days with the NetPrecision system. First Data Direct Banking ties leading-edge online financial services partnerships and template, custom-built or existing web sites into transaction processing provided by electronic payments processing leader First Data Corp.
Direct Banking can be found on the World Wide Web at [www.netprecision.com].
Atlanta-based First Data Corp. 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 smart card at the point of sale or over the Internet; by check or wire money. For further information about First Data, visit the company on the Internet at [www.firstdatacorp.com].
American Express Foreign Exchange Services activated its new Internet-based service to enable small and medium-sized companies to initiate payments in 41 foreign currencies, around the clock. The new online service also lets a firm create and update personalized files of payees, and view and print transaction histories. Businesses may also call or fax AmEx foreign exchange specialists with payment requests in 90 currencies. There are no start-up fees charged to businesses that enroll in the program. For the first three months after enrollment, there are no transaction fees on any foreign currency transaction above $2,500. After three months, the fee for each transaction is $10.Details
Employee Solutions, Inc. and Bank One have teamed up to market an Employee Solutions’ debit card. The debit card, currently in beta testing, will be available to clients and employees later this year. Worksite employees will have the ability to deposit all or part of their payroll into a fund that can be utilized through the ‘Employee Solutions VISA Cash Card’. The card can also be used nationwide at any point of sale location that accepts VISA or to obtain a VISA cash advance at any bank or any ATM including ‘Rapid Cash’ machines. Bank One will provide a 24-hour 800 number for customer information along with a monthly activity statement for cardholders.Details
American Express is now listing special cardmember offers by state and by industry category on its website at [americanexpress.com]. Upgrades, gift-with-purchase promotions and significant savings are available from restaurant, travel and lifestyle retailers. AmEx is also offering a free brochure on “Cybersmarts: Tips For Protecting Yourself When Shopping Online”.