AmEx Consumer Card Head

American Express Company Tuesday announced that Alfred F. Kelly, Jr., 40, has been named President of the Consumer Card Services Group, effective November 1.

In his new role, Mr. Kelly will head American Express’ consumer card business in the United States.  He will also be responsible for the company’s Customer Servicing and Risk Management support for the U.S. card business.

In addition, Mr. Kelly will become a member of the American Express Planning & Policy Committee, and will report to Kenneth I. Chenault, President and Chief Operating Officer.  Mr. Kelly succeeds Phillip Riese, who is leaving American Express to become Chief Executive Officer of OptiMark Technologies, Inc.

Mr. Kelly was formerly Executive Vice President and General Manager of U.S. consumer card marketing.  He joined American Express in 1987, and has held a number of key leadership positions within the consumer card organization.  In those roles he has successfully led efforts to launch new products, expand rewards programs, reduce customer attrition, build credit card receivables and increase market share.

In announcing Mr. Kelly’s promotion, Mr. Chenault said, “Al’s broad knowledge of our card business, along with his exceptional leadership abilities, make him superbly qualified to take on his new responsibilities.”

Prior to joining American Express, Mr. Kelly was Manager of Information Systems at the White House, where he led data processing functions for eight of the 11 agencies that comprise the Executive Office of the President.  He also held a series of positions in information systems and strategic and financial planning at PepsiCo.

Mr. Kelly is a chairman of the Wall Street Charity Golf Classic, which is one of the most successful fund-raisers benefiting the Cystic Fibrosis Foundation.  He also serves on the Board of Trustees for Iona College.

Mr. Kelly received his B.A. and M.B.A. degrees from Iona College in New Rochelle, New York, where he was an adjunct assistant professor from 1980- 1985.  He lives with his wife and four children in New Rochelle.


Smart Cards to Breakthrough

New technologies recently introduced will help the acceptance of smart card based applications by consumers by offering an improved transaction platform and functionality that matches the improved functionality of smart cards, said payment technology expert George Wallner, chairman and chief technologist, Hypercom Corporation.

“Smart cards hold the promise of benefits for consumers and merchants worldwide. But that much-heralded promise won’t turn into widespread reality until the industry delivers new programs consumers genuinely value and also upgrades with new point-of-sale (POS) technology that makes the use of smart cards quicker, easier and more convenient than is the case today,” Wallner said.

With vastly greater information storage and processing capacity than conventional magnetic stripe-based cards, smart cards are finding applications by banks as advanced credit, debit and stored-value bank cards; by healthcare companies for medical and eligibility records and authorizations; by telephone companies for pre-paid services; by universities as all-purpose student ID cards; by governments for benefits programs; by retailers for customer loyalty programs; and by airlines for “frequent flyer” membership cards, among other uses.

Of the more than 2.5 billion cards worldwide used to activate some type of commercial or personal financial transaction, fewer than 99 million are smart cards. In contrast, there are more than 650 million conventional magnetic stripe-based credit and debit cards in the United States alone.

“For consumers and society to reap the benefits of smart cards, an infrastructure must be in place that can not only “read” the embedded microchips in the smart cards, but also support the kinds of new programs that consumers value and that help banks and retailers differentiate themselves with advertising, branding and loyalty programs,” Wallner said. “Advanced POS technology and value-added programs must go hand-in-hand for smart card use to grow worldwide.”

The current generation of point-of-sale terminals, even when equipped with a “reader” for smart cards, do not have the necessary features, such as easy-to-use touch-screen interfaces and portability, and do not support programs like merchant advertising and loyalty programs.

A featured speaker at the Cartes ’98 smart card symposium, Wallner noted successful POS devices in the future will not only “read” microchips, but as importantly will be easily used by consumers, feature faster times for purchase transactions and deliver advertising messages while purchases take place.

In addition to new card payment devices that are easily handled by consumers and support faster connections, the payments industry must also put in “smarter, more powerful” software, typically running on a high-performance server, to handle increased payment volumes, distinguish between payment types and support enhanced security and value-added services, Wallner noted.

Celebrating its 20th anniversary, Hypercom Corporation is a global provider of electronic payment solutions, including multi-functional point-of-sale terminals, peripherals, network products, transaction software, Internet-based and electronic commerce payment solutions. On a global basis Hypercom delivers the services and technology infrastructure required to quickly integrate and deploy new payment applications for competitive value-add 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 global network of offices and affiliates in Argentina, Australia, Brazil, Chile, China, Hong Kong, Hungary, Japan, Mexico, Russia, Singapore, the United Kingdom and Venezuela. Hypercom’s Internet address is [][1].



Chenault on IBM Board

The IBM Board of Directors Tuesday elected Kenneth I. Chenault to the board. Mr. Chenault, 47, is president and chief operating officer of American Express Company.

Louis V. Gerstner, Jr., IBM chairman and chief executive officer, said: “Ken is an outstanding executive with a long track record of success. We are delighted to have him join our board of directors.”

Mr. Chenault has held a series of executive positions since joining American Express in 1981. He has served in his current position since 1997 and from 1995-1997 served as vice chairman of American Express Company. In addition, he has been president of the U.S. division of American Express Travel Related Services Company and president of that unit’s Consumer Card Group. Mr. Chenault is a graduate of Bowdoin College and Harvard Law School.


Smart EMV

Bull also announced Tuesday in Paris that it is extending its ‘SmartEMV’ range with three new cards: ‘CC EMV’, ‘SmartEMV UKIS’ and ‘SmartEMV’ off-the-shelf.  The ‘CC EMV’ card is unique in combining all the functionalities of ‘Proton’ with those of the EMV payment applications. ‘SmartEMV UKIS’ meets the standards of the UK market, and ‘SmartEMV’ off-the-shelf addresses the Europay standard of the same name. By definition multi-application, ‘SmartEMV’ houses several applications offering a range of services on the same card. This means that issuers can load financial credit/debit or electronic purse applications. They can also rent memory capacity on the card to partners who wish to run other applications such as loyalty, administrative data, health files, and all types of portable data.


NOVUS Goes Platinum

Among credit card solicitations hitting mailboxes this week is the new ‘NOVUS ‘Prime Option Platinum Card’. According to CardWeb’s ‘CardWatch’ service the new solicitation offers consumers a 4.9% intro APR until April 1999 followed by a long-term fixed rate of 14.9%. Similar to other ‘Platinum’ offers, NOVUS is dressing-up the card with a purchase protection, extended warranty, collision damage insurance, year-end account summary, choice of billing date, and $1 million of travel accident insurance. The offer also promotes a $25,000 credit limit. The card employs Discover’s typical two-cycle ADB balance calculation method, charges an $18 late fee/overlimit fee and an option prime +12.9% punitive APR. Discover tried unsuccessfully to launch a ‘Prime Option VISA’ card eight years ago which ended up as the subject of an antitrust trial with VISA. Later NationsBank agreed to issue a cobranded card with Discover under the ‘Prime Option’ name. CardWatch, launched in August, is a real-time monitor of credit card marketing featuring hundreds of credit card direct mail solicitations, 174 hotlinks to credit cards offered via the World Wide Web, 42 current print ads, 24 current TV commercials and 38 recent Internet banner ads. For demo and more info: [][1]




Schlumberger unveiled ‘SiShell’, an innovation in smart card security which physically protects the chip from unauthorized access attempts. The ‘SiShell’ solution completes the security environment for smart cards by applying a shield over the active surface which is structured in such a way that physical attempts at access threaten to destroy the chip. This does not affect functionality in any way, but effectively stops attempts at hacking by mechanical or e-beam probing, affixing internal connections. The active surface of a chip protected by ‘SiShell’ is covered completely with a silicon cap which is sealed at the wafer production stage. The most likely first applications for this technology include pay TV, banking, health cards and corporate/network ID.


MS Challenges VISA/MC

The “Windows-ification” of smart cards will challenge directly VISA, MasterCard and Sun Microsystems’ leadership positions in the industry but at the end of the day its main impact will be on the smart card manufacturers who will find their role greatly devalued in the supply chain. Frost & Sullivan said yesterday the eradication of the Java Card or Multos platform by Microsoft is unlikely because of VISA/MC’s strong brand identities and that the smart card industry needs the stamp of approval from VISA and MasterCard in the form of Java Card and Multos if it wants to succeed among banks. F&S also says in the end, Microsoft’s release of ‘Windows SC’ can only jerk the banks into faster smart card adoption, which is good for the smart cards industry overall. F&S says the industry will support a maximum of two, maybe three operating systems. The F&S analysts believe the release of Windows SC along with the developments of the Java Card and Multos platforms will open the smart cards industry to a new path of internationalization and interoperability, marking a new era.


Advanta 3Q

Advanta reported yesterday that it picked up $350 million in business card receivables during the third quarter. Net managed charge-offs on business credit card loans was 5.79% for the third quarter compared to 6.57% in the second quarter. Advanta exited the consumer card business earlier this year, selling off its portfolio to Fleet. For complete 3Q financials and historical data on Advanta visit CardWeb’s CardData service ([][1]).



Self-Service Card Issuance Kiosks

The consumer-retailer relationship took a dramatic leap forward Tuesday when DataCard Corporation introduced its new line of self-service card issuance kiosks at Cartes ’98 in Paris.

The company’s new self-service kiosks will provide consumers with a convenient way to acquire financial cards, enroll in loyalty programs and access a variety of other card-based services offered by retailers, banks and other consumer-based enterprises.

“Consumers will be able to walk into a store or a bank, apply for a credit card, receive it and begin using it immediately,” said Keith Clayton, vice president, self-service solutions group for DataCard’s financial company. “The same holds true for loyalty programs. Instead of filling out forms and standing in line, consumers can apply for acceptance and receive cards instantly.”

“This benefits both the consumer and the retailer or bank. Consumers enjoy new levels of convenience, privacy and choice_and they get their cards immediately,” Clayton said. “Retailers and banks attract new customers and give consumers instant purchasing power while they’re in the store or bank.”

Clayton said a variety of large, consumer-based enterprises are working with DataCard to explore the benefits of self-service kiosks.

“Banks and retailers in Europe, South America and North America are looking for innovative ways to attract consumers and increase revenues,” Clayton said. “Our self-service kiosks provide them with the consumer-driven breakthrough they’ve been searching for.”

While DataCard plans to develop customized solutions for each retailer or bank, a typical kiosk is roughly the size of an automated teller machine (ATM). It features interactive touch-screen controls, full-motion video capabilities and a built-in card personalization system. Consumers will use the interactive controls to navigate a financial or loyalty program, complete an application and receive a ready-to-use card.

“From a consumer perspective, our kiosks are engaging, intuitive and fun to use,” Clayton said. “From the retailer’s or bank’s point of view, our kiosks are extremely secure and cost-effective. In fact, while the key benefits revolve around consumer relationships, the money an enterprise saves in card issuance alone can justify the investment it makes in a self-service strategy.”

“DataCard is exploring self-service kiosk opportunities with a number of solutions providers who serve the retail and financial markets,” Clayton said. “By teaming with other industry leaders, we believe we will be able to greatly expand our portfolio and bring a wide range of breakthrough solutions that enhance the consumer-retailer relationship.”

DataCard Corporation, a privately held company based in Minneapolis, Minn., provides customers around the world with fully integrated solutions for a variety of financial, identification and healthcare applications. In addition to turnkey solutions, the company offers complete lines of card personalization systems, digital photo ID systems, photo ID printers and transaction systems. ([][1])



Smart Cards for Windows

As expected, Microsoft announced yesterday a standards-based platform that provides secure storage for security, loyalty and ePurse solutions in the Microsoft Windows operating system. ‘Smart Cards for Windows’  features: a multipartition file system which physically separates data files so that multiple applications can safely run on a single card; access control rules which tightly control who has access to all the files on the card, as well as files off the card; and pluggable cyptographic algorithms which allow developers and customers to specify and design their own levels of cryptographic support and support for existing smart card standards. Microsoft was joined at the announcement at the ‘Cartes ’98’ conference in Paris by Schlumberger, Gemplus and others. CT-based ICL announced Tuesday it has formed a global alliance with Microsoft to develop applications for ‘Smart Cards for Windows’. Further alliances are expected to be announced this morning. A beta version is scheduled to be available in January 1999.


VISA Invests in CyberSource

CyberSource Corporation announced yesterday that Visa International has made a significant equity investment in CyberSource in order to help foster a more profitable online commerce environment for member banks and their Internet merchants.  A leading provider of electronic commerce solutions, CyberSource designs, develops and markets CyberSource on-demand commerce applications, a portfolio of solutions ranging from secure online payment, a highly accurate fraud screening application and secure digital delivery.

“CyberSource’s product line, the satisfaction of its customers, and the strength of its management team are all areas that we reviewed during our investment process,” said Todd Chaffee, Executive Vice President, Corporate Development and Alliances, Visa International.  “This investment will enhance our collaborative activities focused on delivering more powerful and profitable e-commerce solutions to Visa member banks and their customers.”

In addition to the equity investment, the two companies have begun exchanging data and expertise.  Future coordinated activities aimed at enhancing the viability of online shopping for Visa member banks and their merchants are currently in the planning stage.

“CyberSource has worked closely with Visa over the last few months, and we are pleased to be recognized as a strategic partner in Visa’s endeavors to make the Internet a safer, easier place to do business,” said Bill McKiernan, President and CEO of CyberSource.  “There are many areas where we can work together, from shielding Web merchants and their banks from Internet credit card fraud to implementing more robust payment capabilities to help merchants come online faster and less expensively.”

About CyberSource on-demand commerce applications

CyberSource on-demand commerce applications enable businesses to securely sell products and services via the Internet, worldwide.  Using CyberSource on-demand commerce applications, businesses automate operations and gain the benefits of outsourcing complex Internet commerce infrastructures, without giving up flexibility and control.  Using messaging software installed on a commerce server (or URL link from a web page to a secure order page hosted at CyberSource) businesses remotely access any or all CyberSource on-demand commerce applications, including:

* CyberSource GeoPay; high-performance global payment processing gateway

* CyberSource IVS; Internet fraud screen

* CyberSource GlobalTax; real-time sales & VAT tax calculation

* CyberSource TerritoryManager export compliance and distribution control

* CyberSource NOTIFY; secure fulfillment messaging — EDI and e-mail

* CyberSource SmartCert; secure digital delivery

CyberSource also offers the following services:

* CyberSource Global Rights Registry Services, for digital property management and digital warehousing

* CyberSource Professional Services, for E-commerce implementation

About CyberSource

CyberSource is a global provider of on-demand commerce applications and digital rights management services that enable Internet merchants to securely conduct business online in real time.  Global, on-demand commerce applications include a high performance payment gateway, Internet fraud screen, real-time export compliance and territory management, fulfillment messaging and digital delivery applications; as well as rights management services for digital property.  Leading web merchants use CyberSource on-demand commerce applications to securely transact from hundreds to tens-of-thousands of orders per month, representing over $250 million dollars of Internet commerce. CyberSource’s customers include Adobe, Autodesk,,, Cahners, Compaq, IBM/Lotus, K-Tel, Liquid Audio, Microsoft, Netscape, Network Associates, Pantone, Playboy, Qualcomm, Surplus Direct, Symantec, and T. Rowe Price.  Founded in 1994, CyberSource is a privately-held company headquartered in San Jose, California and maintains offices in the United States and Europe, along with a network of virtual data centers around the globe to service local markets.

For more information visit .

Or email to [[email protected]][1].

[1]: mailto:[email protected]


Small Screen

Bull announced Tuesday it is upgrading its range of small cash dispensers, inaugurated with the successful ‘Minicash’, to its newest offer, ‘TwinCash’. With a built-in PC Pentium, ‘TwinCash’ can accommodate applications requiring a large memory capacity, such as graphics and color animations, while at the same time reducing running and maintenance costs. It also features a 10″ LCD color screen, wide keyboard, LED indicators for customer guidance, and ease of access for the disabled. It is also the smallest dispenser on the world market with a footprint of 0.2 sq. m (2.15 sq. ft.), ideally suited for cramped environments, whether in bank branches or other customer contact locations, and in a stand-alone island of automation or through-the-wall configuration. The dispenser also is delivered standard with two note cassettes (240 mm capacity).