Card Scam Settles

The FTC, the Illinois Attorney General and four Chicago area defendants announced a settlement Friday in a case stemming from a national crackdown on credit cards marketed for an upfront fee. The defendants promised consumers a major credit card with a high credit line for a $97.50 processing fee. Instead consumers received a ‘Consumer Express’ card only good for purchases from a high-priced, mail order catalog. The group operated under several names including: Creative Concepts, Premier Card Services, Premier Services, Tower Financial Services, Tower Services, Prime Credit Services, Prime Services, Colonial Financial Services, Colonial Financial, and Consumer Express.


TCM Card Bank Opens

The OCC authorized the IBAA Bancard’s limited-purpose credit card bank to open for business this morning. TCM Bank, N.A. will deliver credit card services to community banks through Bancard’s ‘Total Card Management’ program. The bank will provide an agent bank option for IBAA member banks who prefer to issue VISA or MasterCards risk-free or who prefer not to manage their own card program through IBAA’s ‘Bancard Direct’ program. IBAA members are wary of agent relationships with major national issuers especially big card issuers who cross-sell products to the bank’s customers. Equifax Card Services, a longtime service IBAA service partner, will provide processing support for TCM.


Vacation Planning

When U.S. consumers were surveyed recently by MasterCard International, 37 percent said the one thing they think about most before traveling is payment products, ahead of clothes (29 percent), identification (14 percent), and medication/medical information (11 percent). Yet, when it comes to actually planning budgets, “packing” their wallets, and other financial preparation, 40 percent of Americans spend no time at all and 91 percent spend less then 30 minutes.

“Although Americans recognize the need to prepare financially for vacation, most travelers do not spend the necessary time organizing a financial game plan before leaving home,” said Mary Alice Kellogg, consumer travel expert and editor of Delta Airline Shuttle’s in-flight magazine. “Every traveler should take at least thirty minutes before leaving home to formulate a plan and should seriously consider using debit and credit cards to enjoy favorable exchange rates, worldwide acceptance and convenience, and a host of related services while traveling. Actions such as setting a budget, determining the best ways to pay, and how and where to access funds while traveling are important steps which can literally pay dividends on everything from getting some of the best exchange rates to having local, reputable assistance in case of an emergency.”

While taking a credit card on vacation is very common today, savvy travelers also are starting to understand the benefits of traveling with a debit card. Used as a safe alternative to carrying lots of cash and more convenient and widely accepted than checks, debit cards enable travelers to access their home bank accounts at merchants and ATMs anywhere in the world. Because there often are questions about debit card usage and the advantages of this payment method, MasterCard and “Call For Action,” a consumer advocacy group, have created a brochure titled ‘A Smart New Way to Pay,’ which features information on using debit cards and is available to consumers who call 1-800-647-1756.

Properly Preparing to Travel

The key to properly packing wallets and financially preparing for vacations is organization. Taking inventory of finances, setting a budget, determining advantageous methods of payment, and ensuring wallets contain all necessary items will help travelers maximize their financial resources while traveling.

Consumers also should weigh the benefits of using a particular payment tool to make purchases while traveling. Things to consider include:

— Fifty-six percent of international travelers surveyed said they were interested in getting a good exchange rate when making purchases. In most cases, travelers using a credit or debit card to make purchases and to withdraw cash will receive close to the wholesale exchange rate, which is the most favorable exchange rate available to consumers.

— Making significant purchases on a debit or credit card that offers warranty protection will ensure items are protected against theft and damage.

— Using a co-branded payment card while vacationing can provide the added benefit of getting rewards when making purchases.

— When trying to maintain a budget, using a debit card, which draws funds directly from a cardholder’s checking account, can help keep track of spending and minimize post-vacation bills.

Travelers also should be aware of any special services their credit cards and debit cards offer. Often, travelers do not realize that their payment cards may provide services to help locate lost luggage, identify local medical services, and provide roadside assistance.

Traveling on a Budget For many travelers, finding ways to maintain a vacation budget is important. In the recent MasterCard survey, 75 percent of Americans set budgets before traveling. But according to Kellogg, many travelers will spend more than their original budget because they don’t properly track their spending and do not have varied resources for making purchases.

“A vacationer should have several payment options when they leave home. One smart option that often is overlooked is a MasterCard debit card,” said Kellogg. “Not only does it let travelers make purchases and access cash wherever MasterCard is accepted while on vacation, it also is a great tool for monitoring expenses and sticking to a budget, and it frequently provides special discounts and offers.”


Citibank Card Bonds Rated

Duff & Phelps Credit Rating Co. (DCR) has assigned a ‘AAA’ (Triple-A) rating to the $1.25 billion Class A certificates and a ‘AA’ (Double-A) rating to the $80 million Class B certificates issued by Citibank Credit Card Master Trust I Series 1998-7. The Class A certificates have a coupon of one-month LIBOR plus 0.01 percent and the Class B has a coupon of one-month LIBOR plus 0.125 percent. Both classes have a final maturity date of April 10, 2003.

![][1]     Given that this series is included in Group One of Citibank Credit Card Master Trust I, the credit enhancement levels for this series are identical to the other series issued by the master trust, relying on 11 percent enhancement for the A class and 7 percent for the B class.  The enhancement contemplates supporting the weighted-average coupon (WAC) of the master trust, and therefore does not vary from uncapped floating-rate deals to fixed-rate coupon deals.  Based upon DCR’s modeling, current credit enhancement more than covers potential investor loss caused by either a rapid and sustained increase in losses or coupon expenses, or the simultaneous occurrence of both.  The impact upon master trust WAC is measured given the respective coupons and series termination dates.  Citibank continues to manage the respective series expenses and staggered maturities to mitigate concerns of spiraling coupon expenses as the trust matures.

For a copy of the New Financing Report Summary on this transaction, please call the DCR Hotline at 312-368-3198 or email [][2].

[1]: /graphic/citibank/citibank.gif



BUYPASS Corp. processed 272.6 million transactions for the first quarter, a 28% increase over the previous year, according to figures released Friday by EPS. BUYPASS indicated that POS debit volume grew 75% and EBT volume was up 123% for the quarter. The company also announced its terminals are now capable of accepting 37.5 million JCB cards. BUYPASS EBT added the states of Hawaii and Alaska to 25 other states for EBT processing.


AmEx Lynks Up

Atlanta-based Lynk Systems, Inc. announced Friday an agreement with American Express to provide debit card processing services to its network of merchants.  Under terms of the agreement Lynk will provide split-dial debit services to merchants using American Express POS terminals for credit card processing.  Both companies recently completed a pilot program in several key markets. AmEx sales agents will begin offering the debit processing service to merchants this month. Lynk provides payment processing services to over 40,000 merchants, cash advance services in over 5,000 U.S. locations,  employs 250 full time management and technical personnel, has 26 direct sales offices and employs more than 500 sales agents.



San Diego’s Star System Inc. reported Friday that POS volume totaled 120 million transactions in the first quarter of this year, a 39% increase over the same period in 1997. POS transactions in March alone reached 42.6 million transactions, a 35% increase over March 1997. Meanwhile first quarter ATM transactions were up a mere 3% for a total of  80 million. Total transactions (ATM and POS) for Star System in the first quarter of this year were 199.2 million, a 22% jump from the first quarter of 1997. The Star network now has 37,000 ATMs and 72,000 POS merchants.


Banc One Integrated Web Banking

Banc One Corporation , Integrion Financial Network and CheckFree announced Friday their agreement to launch a pioneering program which will enable financial institutions to provide fully integrated, Web-based electronic banking, bill presentment and payment services to consumers.

The integrated program, which will be implemented by Banc One later this year, combines the security, scalability and strength of Integrion’s Interactive Financial Services (IFS) platform with the accuracy and sophistication of CheckFree’s electronic bill presentment and payment system.

“Banc One is committed to deepening the relationships we have with our customers by continually providing them innovative and superior services,” said Bruce Luecke, President of Interactive Delivery Services for Banc One.

“As an Integrion owner, we are excited to be providing what is the next generation of integrated electronic banking services with Integrion and CheckFree.  We will deliver an unparalleled level of choice and flexibility in online banking and bill payment to our customers in a streamlined online environment.”

Benefits for Consumers and Financial Institutions

The new integrated service will enable Banc One customers to receive, view and scrutinize a wide range of bills electronically.  Rather than receiving paper bills in their mailbox, consumers will be able to receive them conveniently online.  Customers can then pay these bills through their computer, transferring funds directly from their bank accounts to pay any biller that presents an online bill through CheckFree.  Using any standard 128 bit browser, a Banc One customer will enjoy a single log-on Web site for all electronic financial services with integrated enrollment and activation. Once activated, the Banc One customer can pay the bill from the online summary page or choose to see the full bill detail.  Through this integrated system, consumers will simplify the monthly chore of paying bills.

“The only way Internet-based banking will gain widespread acceptance is with the continual development of integrated Internet-based financial services that give consumers easy access to multiple transactions,” said William M. Fenimore, Jr., CEO and Managing Director of Integrion. “Today’s announcement signals the beginning of a marketplace for truly integrated online financial services.”

“Integrion and CheckFree forged a strategic partnership last year with the clear goal of delivering combined electronic banking, bill payment and presentment services to financial institutions,” Fenimore continued.  “We are pleased to launch this service with Banc One, an institution that continues to prove itself to be a leading provider of online financial services.”

In keeping with the Integrion and CheckFree philosophy of ensuring all electronic solutions are bank branded, Banc One will customize the look and feel of its bill presentment service to provide customers with a truly unique experience.

Proven and Operational Architecture

The system will connect Integrion’s IFS platform and CheckFree’s Bill Presentment and Remittance system with Banc One’s internal bill payment engine.  All systems are currently operational in the market.  Since 1997, Banc One has been utilizing Integrion’s IFS platform which was developed and is operated by IBM.  CheckFree, the preeminent provider of Internet-based bill presentment, payment and processing services to the banking industry, has relationships with 23 of the nation’s largest billers and has been providing services to Banc One since 1991.  As a result of the Integrion/CheckFree alliance, Integrion’s IFS platform is the preferred routing mechanism for all CheckFree transactions, and CheckFree is the bill presentment and payment supplier to Integrion customers.

“Banc One’s launch of the Integrion/CheckFree solution clearly marks a new era of sophisticated online financial services being offered to consumers through the industry’s trusted agent — their bank,” said Peter J. Kight, Chairman and CEO of CheckFree.  “Institutions like Banc One — which offer consumers all critical financial transactions in a seamless Web environment and provide an important distribution channel for billers — are clearly the driving force behind the rapid expansion of online financial management.”

“As a member of Integrion, IBM is excited to be a part of this breakthrough implementation in online financial services,” said Paul Loftus, IBM, General Manager, Solutions, Global Banking, Finance & Securities Industries.  “Banc One continues to set an aggressive pace for Integrion implementations.  This rollout will bring an integrated offering of home banking, bill payment and bill presentment to Banc One customers delivered through Integrion’s IFS platform — an environment with open, efficient, secure and now enhanced customer function.  IBM’s active involvement with Integrion epitomizes our ongoing commitment to the e-business strategy and the delivery of end-to-end solutions in the banking, finance and securities marketplace.”

About Banc One

Banc One Corporation had total managed assets of $147.0 billion, total assets of $115.9 billion, and common equity of $10.2 billion at December 31, 1997.  Banc One operates more than 1300 banking centers and cash dispensing and automated teller machines in 49 states.  Banc One also owns several additional corporations that engage in a full range of financial services.  Information about Banc One’s financial results and its products and services can be accessed on the Internet at , through InvestQuest at or by fax-on-demand at 614-844-3860.

About CheckFree

Founded in 1981, CheckFree () is the leading provider of electronic commerce services, software and related products for more than 2.4 million consumers, 1,000 businesses and 850 financial institutions.  CheckFree designs, develops and markets services that enable its customers to make electronic payments and collections, automate paper-based recurring financial transactions and conduct secure transactions on the Internet.

About Integrion

Integrion Financial Network is a leading provider of interactive banking and electronic commerce services to financial institutions.  Through the Interactive Financial Services (IFS) platform, Integrion offers financial institutions a network through which electronic transactions flow from multiple consumer access points to a bank’s host system and/or processor. Technology partnerships with IBM and CheckFree Corporation allow for the delivery of flexible, high utility applications that can be employed at a financial institution for the benefit of end customers.

Integrion’s operating philosophy allows banks to determine the manner and format in which home banking and electronic commerce services are offered, ensuring consistency with the bank’s full range of services, effective branding by the bank and maximum customer benefit.  For more information, visit the Integrion web site at

About IBM

IBM is the number one technology partner to the world’s financial services industry.  Working directly  with its financial services customers, IBM develops and deploys mission-critical, industry-specific solutions, which comprise the full range of IBM capabilities including consulting, software, hardware, research and services.


MasterCard Excited

MasterCard used the final Seinfeld episode last night to run its first-ever Internet-related broadcast ad. The commercial, a continuation of the new MasterCard “Priceless” campaign, promotes it brand new alliance with Excite’s Shopping Channel. MasterCard International and Excite announced Thursday a strategic marketing alliance aimed at building consumer awareness of the benefits of shopping online. The objective of the partnership is threefold educating consumers that shopping on the Web can be fast, easy and safe;  building consumer awareness of the Excite Shopping Channel; and promoting the MasterCard brand as the preferred way to purchase products and services on the Web. The multi-year alliance names MasterCard as the exclusive payment system sponsor of Excite’s Shopping Channel.  Under terms of Thursday’s deal, both firms will also work to promote SET by establishing a link to a list of SET-enabled merchants by the end of this year.


Concord EFS Stock Split

Concord EFS Inc. reported that the board of directors approved a three-for-two stock split. The record date for the split is June 1, 1998, with the additional shares to be distributed on June 8, 1998.

The company recently announced the following first quarter 1998 financial results revenue of $69,632,000 compared to $47,045,000, up 48 percent; net income of $11,367,000 compared to $7,933,000, up 43 percent; and earnings per share of $0.18 compared to $0.13, up 38 percent. Management believes the announced agreement to acquire Digital Merchant Systems & Affiliates Inc. and the related restatement of first quarter 1998 earnings will be completed in the current quarter.

Dan M. Palmer, chairman and CEO, stated that the three-for-two stock split represents management’s belief that the company will continue its growth through its internal sales channels and acquisition strategy during the year. Concord EFS provides electronic transaction authorization, processing, settlement and funds transfer services in selected markets. Concord EFS’ primary activity is Card Services, including credit, debit and electronic benefit transfer (EBT) card transactions to supermarket chains, grocery stores, convenience store merchants and other retailers. Concord EFS also provides electronic payment, banking products and payroll services to trucking companies, truck stops and other niche segments of the market.

This release may contain statements which may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Prospective investors are cautioned that any such statements are not guarantees for future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Important factors currently known to management that could cause actual results to differ materially from those in forward-looking statements include significant fluctuations in interest rates, inflation, economic recession, significant changes in the federal and state legal and regulatory environment, and competition in the company’s markets. The company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future results over time.


Encore Services

Encore Marketing International, Inc., a specialist in fee-based enhancement programs to the credit card industry formed a new wholly owned subsidiary, Encore Services, Inc yesterday.  ESI has been formed to create and market new retail products unique to DDA, debit and smart card markets as well as adopt existing EMI products for the wholesale credit card market. Beginning next month, Encore Services will be marketing “Debit Protection Select” a comprehensive protection program for debit card issuers and their customers.  Features of Debit Protection Select include Purchase Protection with Automatic Extended Warranty Up to 1 Full Year; Debit/Credit Card Registration with Fraud Protection; Emergency Cash; $10,000 24 Hour Accidental Death & Dismemberment Insurance; $5,000 Emergency Accident Medical/Dental Expense Coverage; and $500 Theft Reimbursement.   Encore Marketing has marketed and operated its own fee-based enhancement programs for over 20 years including the Encore Preferred Traveller Club, Home & Garden Savings Club, Pet Care Savings Club, Protect-Your-Cards card registration program, CreditVue credit monitoring program, LawPhone prepaid legal plan, and their newest addition MedAdvantage discount health card program. The company services more than 3,500,000 cardholders.