CardLess Money Transfers

Western Union Financial Services and EDS announced Tuesday they are developing a system for cardless, consumer-initiated cash and cash equivalent transfers at ATM machines. The system, based on EDS patents, will enable consumers to electronically move funds from person to person, 24 hours a day, seven days a week at more than 13,000 EDS-operated ATM machines and 25,000 Western Union agent locations throughout the U.S..The system will feature on-screen prompts that instruct consumers to enter transaction information and numeric codes on an ATM keypad. The consumer sending cash will insert his debit card, then enter his PIN and amount of cash to be sent. The ATM then asks the customer for a ten-digit number, and the system generates a confirmation code. After verifying the consumer’s ID, the terminals displays a fee amount and issues two receipts. The consumer then simply forwards the transaction information to the recipient. The consumer receiving the cash needs neither an access card or bank account — simply going to the nearest ATM offering the service and receiving the cash instantly.  The companies plan to deliver a domestic pilot program of the new system by April 1999. Western Union will also market the service to other ATM networks.


Calling Card Market

More than 1800 U.S. companies now compete in the prepaid calling card market which grossed $8 billion last year. According to new study from Frost & Sullivan entitled “U.S. Card Calling Markets”, many service providers will need to employ more customer-focused marketing strategies in order to retain their existing customers, and to take more proactive measures in establishing new customer bases. F&S says the prepaid calling cards market has been growing exponentially as a result of its growing visibility and acceptance for mainstream applications such as used by young adults, travelers and students, but aggressive strategies to capture these potentially lucrative end-users markets, such as 10 to 17 year-old children, are important in all  segments of the card calling industry to all participants.


Bankruptcy Reform

The U.S. Senate Judiciary Committee overwhelmingly voted last week to clear proposed legislation on bankruptcy reform for Senate floor action. The Bankruptcy Issues Council, an industry led coalition, says last week’s progress on S. 1301 is an encouraging sign that a strong bill will be enacted by this Congress. BIC also voiced its support for recent amendments which gives priority to alimony and child support in bankruptcy proceedings.


Orient Shoot High

Japan’s 12th largest consumer credit firm, Orient Corp., said this weekend it plans to become the 5th largest firm by the year 2000. Orient says it will issue 1.8 million credit cards this year and 2.4 million next year compared to about one million issued last year. The company also hopes to surpass one trillion yen in annual transaction volume by the year 2000.


First Tenn Signs Promus

First Tennessee Merchant Services Inc. of Denver, announced last week it will process credit card transactions for the portfolio hotels of Promus Hotel Corp. under an exclusive new five-year agreement with INNCO Purchasing and Project Management, Promus’ purchasing subsidiary. The Promus Hotel Corp. portfolio includes the Doubletree Hotels, Embassy Suites, Homewood Suites, and Hampton Inns. FTMSI is one of the hospitality industry’s largest processors of credit card transactions serving clients such as Westin Hotels & Resorts and Hilton Gaming.


Smart Card Landscape

Boston-based analyst Ovum predicts this morning that there will be as many smart cards in circulation worldwide as there are people on the planet by the year 2003.  Ovum also says the balance of power in the global smart card market is shifting. The findings are published in a new report entitled: “The Balance Of Power: Uncertainty And Opportunity In The New Smart Card Market”. According to the report, card manufacturers have lost the driving seat to developers of smart card software with independent software vendors now holding the key positions of influence with prospective implementers. In the U.S., the smart card market will be led by digital certificates for electronic commerce and secure network access. Ovum says the rest of the world is investing in e-cash and prepayment smart card schemes.


CIBC Convenience Banking

CIBC and Silcorp Ltd. announced Friday an agreement to install 638 bank machines in Mac’s, Becker’s and Mike’s Mart convenience store locations over the next two years. This partnership with Silcorp, Canada’s largest convenience store chain, will make CIBC the Canadian market leader for bank machines in this retail segment. By the year 2000, CIBC will have over 750 bank machines at Silcorp corporate store locations in Ontario, Saskatchewan, Alberta and British Columbia.  CIBC says Friday’s deal complements their recently announced ‘Store 2000’ program  with a goal of more than 100 locations per year.


Chargeoffs Decline Again

Charge-offs among $237 billion of card-backed securities dipped slightly in April to 6.6% and remain significantly below last April’s rate of 7.1% according to Standard & Poor’s Credit Card Quality Index.  In other good news delinquency dropped 400 bp during April, hitting 5.2%.  Among major issuers reporting declines in chargeoffs:  Discover’s down 120 bp to 6.5%; Chase’s Chemical Master Trust dropped 90 bp to 6.1%;  and First USA down 20 bp to 5.3%. First Chicago’s Master Trust II reported a sharp increase of 120bp, to hit 9.7%.


Elvis Card Lives

The Bank of Scotland is set to introduce the ‘Elvis MasterCard’ next week. The bank will be using Elvis impersonators to give out application information. An Elvis magazine and special retail discounts are also in the works. BOS will be offering an 11.9% introductory rate. The bank says it projects the Elvis card will surpass its highly successful ‘James Bond 007 MasterCard’. In a bit of irony, Elvis Presley never visited Britain except to refuel his plane.


US Wireless Snags The Pyramid

U.S. Wireless Data, Inc. announced Thursday that “THE PYRAMID” arena will begin utilizing U. S. Wireless Data’s proprietary wireless credit card processing solution, the TRANZ Enabler, using GTE’s Cellular Digital Packet Data network.

The TRANZ Enabler solution will be employed throughout the arena at merchandise, souvenir and concessions stands as well as the ticket office. The Pyramid, located in Memphis, Tenn., is a 20,000 seat, state-of-the-art sports and concert arena. The Pyramid is the site of over 100 major live events annually including major rock concerts, all University of Memphis men’s home basketball games, NBA pre-season basketball games and NCAA basketball tournaments. The first event in which the TRANZ Enabler was employed was a concert featuring Eric Clapton on May 17, 1998. U.S. Wireless Data’s wireless credit card processing solutions are currently in use at a number of arenas and stadiums throughout the United States including:

the Fleet Center in Boston (home to the Boston Celtics & Boston Bruins), the Houston Astrodome (home to the Houston Astros), McNichol’s Arena in Denver (home to the Denver Nuggets and Colorado Avalanche), the Ice Palace in Tampa, Fla. (home to the Tampa Bay Lightening), Texas Stadium (home to the Dallas Cowboys) and Reunion Arena in Dallas (home to the Dallas Mavericks and Dallas Stars).

By implementing U.S. Wireless Data’s TRANZ ENABLER wireless solution, sports arenas and stadiums like The Pyramid are able to execute credit card payments without the added cost of additional telephone lines or tying up other existing phone lines. More importantly, throughput and productivity are enhanced as credit card transactions can be completed in 3-5 seconds versus 15-20 seconds using traditional dial-up credit card terminals. Greg Lowry, marketing manager for The Pyramid, commented, “We were extremely excited when U.S. Wireless Data presented us with a more efficient method to accept credit card payments in a timely manner. As host to as many as 20,000 customers at any one event, speed of service is the top priority. Long lines are very commonplace for purchasing both concessions and tickets, so throughput is a major issue for management. The U.S. Wireless Data wireless transaction processing solution provides the answer. We can now offer a better service to our customers and actually reduce our overall credit card transactions expenses.” Clyde Casciato, vice president of Sales for USWD stated, “The speed of the TRANZ Enabler is a key attribute in its appeal to the marketplace. The arena and live event industry is potentially an explosive and relatively untapped market for these wireless transaction processing solutions. The speed of clearing credit cards using these solutions means that merchants can keep lines moving and optimize productivity.”

USWDA’s proprietary enabling technology, TRANZ Enabler, converts a merchant’s existing dial-up TRANZ VeriFone credit card terminal into a high-speed wireless terminal. It provides merchants with a faster and more cost efficient way to transact business. The wireless transaction takes 3 to 5 seconds versus 11 to 20 seconds with a dial-up service. Going wireless means the merchant no longer needs a dedicated or shared telephone line to carry transaction traffic, thereby eliminating delays, busy signals and the cost to install or pay for monthly telephone service. And because it’s wireless, the merchant can transact business anywhere the customer wishes to buy, instead of being confined to a service counter with a telephone line. U.S. Wireless Data, Inc. has developed, tested and is now delivering new proprietary products, programs and standards for the transaction processing and credit card industry which utilizes wireless cellular digital packet data (CDPD) networks. USWD delivers the fastest and most cost-effective transaction processing solution to retail merchants in the United States today. The Company has joint marketing initiatives in place with GTE Wireless and Bell Atlantic Mobile.


First STV Biometric Card

Product Technologies Inc. (PTi) announces that its smart card platform, SmartCity, was used to develop the first system combining a stored value application with biometric security on a single smart card. SmartCity also manages the system’s back office, including card issuing, transaction processing, settlement, and database management.

SmartCity is PTi’s turnkey smart card based e-purse (electronic purse) application that also provides a multi-application development platform and tools to systems integrators.

Army recruits entering basic training at Ft. Sill, Oklahoma, will receive cards carrying their fingerprints and loaded with $200 to $260 in salary advances to cover their initial expenses.

The last of three stored value applications being tested at Army bases by the Treasury Department’s Financial Management Service, the Ft. Sill project is meant to demonstrate that stored money on smart cards will save trainees, vendors and accountants the hours of paperwork currently consumed processing cash purchases on the base. Prior to the launch of the system in early March, recruits had to sign paper vouchers for every purchase, and the information then had to be transcribed into the Army’s accounting system before vendors could get paid.

“Multi-application solutions such as this one combining e-purse technology with biometrics on a smart card represents the future of the SmartCity application, ” said Bill Mangino, PTi’s president and chairman. “We are very pleased to be involved in such a ground-breaking and already successful project.”

The Ft. Sill project has already been recognized as an innovator in the security industry. At CardTech SecurTech `98, Mellon Network Services, the project’s system integrator, was presented with the Larry Linden Memorial “Innovative Security Technology Application Award” for its work on the Ft. Sill project. CardTech SecurTech, the largest smart card tradeshow of its kind in the world, was held in Washington, D.C., in April.

Convenience and High-Level Security

When the card is issued, a recruit’s right and left index finger are scanned and stored as an encrypted file on the card, not in an online database. This protects the user’s privacy, while providing a much higher level of security than PIN numbers.

Each card is then loaded with a cash value and set up with an adjustable “cumulative spend limit” that intelligently determines whether authentication is required for a purchase transaction. Low-value purchases are made without cardholder authentication, until $10.00 in cumulative purchases are made — allowing for fast throughput on low value/low risk transaction.

When the “cumulative spend limit” is reached, the card instructs the terminal to ask for a finger scan in order for the purchase to proceed. The terminal then compares the finger scan to the template stored on the card, and if there is a match, authenticates the cardholder as the rightful owner and authorizes the transaction.

Mellon Network Services was the project’s system integrator, under contract to the Financial Management Service. Gemplus provided the smart cards and Identicator Technologies provided the biometric technology. VeriFone, Inc. supplied the point-of-sale terminals.

About PTi

PTi is a leading supplier to systems integrators of smart card-based e-purse applications that can be used in combination with loyalty and other applications. It is headquartered in Middletown, CT, with a branch office in Moscow, Russia. Further information on the company can be found at: [][1]



SCIA’s New Officers

The Smart Card Industry Association (SCIA) has elected new officers for 1998 who will continue SCIA’s accelerating growth and manage its role in helping guide the worldwide smart card industry into the new millennium.

The four officers and their positions are Jim Lout of Precis Smart Card Systems, chairman; Peter J. Quadagno of Quadagno & Associates, Inc., vice-chairman; Bruce Caswell of IBM Smart Card Solutions, treasurer; and Jonathan Adams of Schlumberger Smart Card & Systems, secretary.

SCIA President and CEO Dan Cunningham will work with the new officers to grow membership and expand value-added member programs.

SCIA is a global trade association active in the smart card industry, which strives to stimulate the adoption, use, understanding and innovation of smart card technology in the marketplace. SCIA is also co-founder and a sponsor of CardTech/SecurTech, the leading advanced card and security technology conference.

For more information, contact SCIA at 191 Clarksville Road, Lawrenceville, NJ 08648; tel.:(800)848-7242 or (609)799-7032; or access SCIA’s web site at