SmarTalk Sheds Unit

SmarTalkSM TeleServices, Inc. today announced that it has signed a definitive agreement to sell its operator services business to New Millennium Communications Corporation. SmarTalk had acquired the operator services center, located in Butler, PA, as part of the December 31, 1997 acquisition of Conquest Telecommunication Services Corp. SmarTalk has previously stated that the operator services center was not key to its core business and had classified it as a discontinued operation as of January 1st.

In exchange for the contracts and assets relating to the operator services (O+), long distance (1+) and enhanced call services businesses of ConQuest Operator Services Corp., SmarTalk will receive $18 million in a combination of cash and notes less assumed liabilities.

We’re pleased with the terms of the call center sale, stated SmarTalk CFO, Andy Folck. This is a fair price for the facility and allows us to get the discontinued operations off our books.

The call center is a viable operation staffed by a group of outstanding employees it simply was not core to the SmarTalk plan. New Millennium is acquiring an important strategic asset that complements its business strategy, added SmarTalk CEO Erich Spangenberg. There will be ongoing synergies between SmarTalk and the new owners of the call center, and we look forward to working together with New Millennium.

Miami based New Millennium Communications Corporation, founded in 1997, designs, operates and manages low-cost, high-quality communications services for its partners and customers around the world. Its new ATM data-centric network architecture will provide traditional local, long distance and international telephone services as well as frame-relay services, voice/video/data-over-Internet, International Toll Free Services (ITFS), Universal International Free Phone Service (UIFPS) and various Operator Services.

The transaction between SmarTalk and New Millennium has created the optimum business relationship, stated New Millennium President and CEO Edward St. Croix. This acquisition enables New Millennium to integrate another key ingredient in our quest to become a full network service provider.

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. Visit the SmarTalk website at [ ][1]



Dual Debit Ready

VISA/TSYS-owned Vital Processing Services announced Friday ‘Integrated Debit Service’ has the seamless capability to support the new online/offline ‘VISA Check Card’ announced last week by VISA. The new card will be both PIN and signature capable through the VISA system, and carries a lower transaction rate for merchants for PIN-based, on-line transactions than the current signature-based off-line VISA rate.  In addition, consumers will have the option to receive cash back at participating merchant point-of-sale locations through VISA. Vital’s ‘VisaNet’ point-of-sale network is designed so transactions can flow directly through ‘VisaNet’ to the check card issuer. Vital will process new ‘Visa Check Card’ on-line transactions like any other debit network transaction by simply adding a new check card indicator to its point-of-sale systems, as is the case today with all on-line debit upgrades.


InterACT 98

More than 1200 attendees are expected at Fair Isaac’s ‘InterACT 98’ conference, underway this morning in San Francisco. The annual forum will feature key presentations by VISA and TSYS. This morning’s keynote will be delivered by management consultant and business author, Dr. Oren Harari. DynaMark and TSYS will also present an in-depth case study this morning on developing interactive database management systems to build profits. Fair, Isaac will also examine, this afternoon, how new data warehousing structures and OLAP tools can help issuers better manage their existing credit card portfolios. The conference runs through Wednesday, June 10.


Cross-Sell Tool

Fair, Isaac announced Thursday it will make its customer relationship management solutions available in the U.S. and Canada. Fair, Isaac’s component approach to CRM includes customer risk management, customer marketing management and customer interaction management. To date, Fair, Isaac has implemented numerous CRM solutions, including those at Bell Atlantic in the U.S., which saved the company an estimated $70 million in the first year, and at the UK’s Barclays Bank, which has seen a 200-300% improvement in responses to cross-sell mailings.


E-Purchasing Progress

Results from a recent Visa U.S.A. survey of purchasing managers at the National Association of Purchasing Management’s International Purchasing Conference in Dallas indicate that electronic purchasing is surging forward, as companies look to streamline their procurement process. Of those surveyed, more than 67% said they currently engage in some form of electronic purchasing, with the number expected to grow to 85% within the next six months.

“The industry is clearly on the brink of change,” said Bruno Perreault, senior vice president of Commercial Card Products, Visa U.S.A. “In today’s competitive marketplace, purchasing managers are pressed to streamline the purchasing process and, therefore, are increasingly looking to innovative methods such as electronic purchasing and other payment tools to realize cost savings.”

The Visa survey found that Electronic Data Interchange (EDI) between buyers and suppliers remains the most widely used method of electronic purchasing, with 76% percent of respondents indicating use of an EDI system. A significant number of companies are also purchasing goods via the Internet; 55% of those surveyed indicated they order goods directly from a supplier Web site, while 36% make orders via intranet based software. Additionally, Enterprise Resource Planning (ERP) systems were cited by 45% of the respondents as playing a role in the purchasing mix.

As companies rely more on electronic purchasing systems to reduce the administrative costs associated with the procurement of goods and services, a growing number of companies are also finding efficiencies in combining this method with purchasing cards, in order to further streamline and manage the payment process. Of those surveyed, 30% indicated that their electronic purchasing system is currently linked with their purchasing card program, while nearly one half (48%) of the remaining respondents plan to use the combination in the near future.

The effectiveness of combining purchasing cards with electronic purchasing systems has already been demonstrated through Visa’s own in-house electronic purchasing pilot program, recently completed in April 1998. By pairing the Visa Purchasing card with an electronic software purchasing system, the company found that a purchase of computer hardware that once took three business days to complete was decreased to 32 minutes, while administrative costs were reduced 50 to 90 percent of traditional paper-based purchasing methods.

Traditional Purchasing Systems Deemed Inefficient

Although electronic purchasing methods are on the rise, companies have not yet abandoned traditional methods of ordering goods and services. In a separate Visa survey on purchasing and payment trends, also conducted at the NAPM show, 83% of those surveyed indicated that they continue to order goods costing less than $5,000 via phone, fax and mail, while 86% continue to rely on these traditional methods for purchases over $5,000. The findings also show that companies continue to pay for goods under $5,000 with checks. Of those surveyed, 73% reported that they typically use checks to pay for small dollar amounts, with the number increasing to 83% for purchases over $5,000.

Despite these large percentages, industry attitudes toward paper-based systems suggest that a shift is imminent. The majority of respondents currently using traditional means for the purchase and payment of goods say they believe it is not the most efficient system, particularly for purchases under $5,000. Of those ordering smaller ticket goods by phone and paying by checks, 81% percent say they believe it is not the most efficient way; 85% of those that order by fax and pay by checks similarly indicate that the process is not the most efficient. For higher ticket purchases, the number drops a bit, as 54% say there is a more efficient system than fax and checks, while 40% believe there is a more efficient system than ordering by phone and paying with checks.

“Our findings show that the industry is looking for more efficient purchasing and payment methods than those currently in place, said Visa’s Perreault. “We believe it is in this area that purchasing cards, used alone or in conjunction with electronic purchasing systems, can provide significant value in the procurement process.”

To learn more about the Visa survey or to obtain a copy of the complete findings, contact Ketchum Public Relations at 212-448-4352.

Visa is the leading card brand and the largest consumer payment system worldwide. It plays a pivotal role in advancing new payment products and technologies to benefit its 21,000 member financial institutions, their cardholders, and the global economy. Visa is the only consumer payment system to facilitate $1 trillion worth of purchases of goods and services in a fiscal year. Visa’s 641 million cards are accepted at more than 14 million worldwide locations, including more than 400,000 ATMs in the Visa/PLUS Global ATM Network. Visa’s Internet address is [][1]



Carolina First Finalizes Resource Merger

Carolina First Corporation announced the completion of its merger with Resource Processing Group, Inc., this week.  Carolina First acquired all the outstanding common shares of Resource Processing Group in exchange for approximately 400,000 shares of Carolina First common stock. Each share of Resource Processing Group stock will be exchanged for 0.0439 share of Carolina First common stock.  The transaction is being accounted for using the purchase method of accounting.

Resource Processing Group, a credit card services company, is a wholly owned subsidiary of Carolina First Corporation.  Substantially all of Resource Processing Group’s activities are related to the origination and servicing of credit cards on behalf of third parties, one of which is Carolina First Bank. Resource Processing Group does not have any receivables associated with credit cards or other loans.  At March 31, 1998, Resource Processing Group had approximately $16.8 million in assets, total equity of approximately $10.3 million and 9,082,126 shares of stock outstanding.

Carolina First Corporation, headquartered in Greenville, South Carolina, is the largest independent bank holding company in South Carolina with $2.3 billion in total assets and 64 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.  Through its subsidiaries, Carolina First provides a full range of banking services, including mortgage, trust and investment services, designed to meet substantially all of the financial needs of its customers.  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 [][1]



FUSA Sponsors E-Zine

Washington, DC-based signed First USA to sponsor its Internet-only, weekly magazine’s business section called “Money, Markets and Management.” The six-month agreement allows First USA to receive a custom-designed sponsor information page and to use any content of IC on its own intranet or Web sites. However the real hook for FUSA is access to America Online’s 12 million customers. Two-year old IC recently entered into a partnership with America Online as an anchor tenant, providing public policy content for AOL’s Newsstand and NewsTalk pages.


VISA Signature Update

VISA’s answer to the ‘World MasterCard’, the ‘VISA Signature Card;’ is taking shape. VISA indicated yesterday several issuers have signed up to issue the high-end card and that it is still pursuing the concept of offering ‘Signature’ cardholders the option to apply mileage bonus points to any airline carrier. The program is anchored by three programs namely VISA Concierge Service, VISA Preferred Access and VISA Signature Preferred Travel. Concierge Service provides a wide range of services such as obtaining reservations at special events and fine dining establishments. Preferred Access offers  VIP access to a host of exclusive and unusual events. Preferred Travel offers automatic room upgrades and guaranteed late check-out at Ritz-Carlton Hotels and Le Meridien Hotels and free upgrades with Avis Rent A Car.


Gone Country

Discover’s ‘Private Issue’ card unveiled its 1998 celebrity artists yesterday who will create a celebrity art credit card for the coming year. Topping this year’s list is country music artist Randy Travis. Discover also named rock music legend Phil Collins as this year’s new celebrity artist. The late Jerry Garcia has been extended for another year as a ‘Private Issue’ celebrity artist. Yesterday Mr. Travis unveiled the original acrylic painting he created for the ‘Private Issue Card’ in ceremonies held in Midtown Manhattan.. He is the first country music artist commissioned by Discover.  The unveiling of Mr. Travis’ art marked the launch of the fourth series of ‘Private Issue’ celebrity art cards.   Each year, ‘Private Issue’ retires the works of two or more of its artists in order to introduce new works to the collection. As each artwork is retired, ‘Private Issue’ funds a National Foundation for Advancement in the Arts Level I ARTS Award.


First SET Marks Granted

The SET race narrowed yesterday as SET Secure Electronic Transaction LLC (or SETCo) announced the awarding of the right to use the SET trademark to the first four vendors of  SET-compliant software. The four winners: GlobeSet Inc., Spyrus/Terisa Systems, Trintech, and VeriFone, Inc.. Each of the four companies were the first to successfully complete a series of SET compliance tests for their respective wallet software. The SET compliance testing, which is conducted by Tenth Mountain Systems, comprises a series of tests for four SET applications:  the wallet software, which performs both the authentication and execution of secure payment and also holds the cardholder’s digital certificate and credit/debit or charge card information; the merchant payment acceptance software, which implements SET at merchant Web sites and enables the authentication of the merchant; the acquirers’ payment gateway software, which allows transactions to flow securely from the Internet to the payment networks; and the certificate authority software used in issuing digital certificates.  The SET spec was originally developed by Visa and MasterCard in Feb 1996 and SETCo was established by both associations in Dec 1997.


AmEx Hungary

The fourth largest card issuer in Hungary, K&H Bank, signed with American Express yesterday as an independent operator. K&H will issue American Express Cards in Hungary, in Forint, the local currency.  Current AmEx cardholders will have the option of converting their card to the new product, retaining their dollar-denominated card, or carrying both cards.   K&H is among the largest financial institutions in Hungary.  It has a country-wide network of 137 bank branches and 148 ATM machines.


Y2K Pain

IDG unveiled its ‘Y2K Pain Index’ in Nebraska yesterday at the ‘Year 2000 Global Forecast’ seminar, sponsored by the First National Bank of Omaha. The index is a chart of Year 2000 probabilities and predictions based on a formula developed by CIO magazine. The calculations show the ripple effect of being connected to external organizations, such as suppliers, customers, banks and other business partners. The probability of experiencing a Year 2000 problem is broken down into four degrees of severity:  Annoying; Disruptive; Business Critical and Catastrophic. A company with 500 connected applications could face a 5.4% probability of a catastrophy.

Connections       Catastrophic    Critical       Disruptive       Annoying
     5               0.1%           1.0%            3.7%            7.4%
    10               0.1%           2.1%            7.3%           14.3%
    20               0.2%           4.1%          14.0%           26.5%
    50               0.5%          10.0%          31.4%           53.7%
   100               1.1%          19.0%          52.9%           78.6%
   500               5.4%          65.0%          97.7%          100.0%
  1000             10.4%          87.8%          99.9%          100.0%