Gathering Steam

Following a sluggish January revolving credit picked up steam in February with a seasonally adjusted annual growth rate of 8.8%. According to February consumer credit figures released by the Federal Reserve, overall consumer credit is growing at an annual rate of 7.8% compared to 5.7% rate for last February. While revolving credit is strong it remains below last year’s pace. For February 1997 revolving credit was growing 9.4% annually. At the end of February American consumers were $1.244 trillion in debt, exclusive of home mortgages.


Bloody Mad

U.K. cardholders are getting tangled up in late payment fee policies for credit cards and they’re hopping mad about it. According to yesterday’s London Daily Mail, MBNA and NatWest are hitting U.K. cardholders with late fees if the payment is not posted by the due date. MBNA reportedly said it takes up to three days to have a payment posted after receipt and NatWest indicated it requires the payment to “clear” before it is posted. People’s Bank and Beneficial Bank reportedly have similar policies. The Daily Mail says by contrast RBS Advanta has a 10 day late payment grace period. Also Capital One, Barclays and Royal Bank of Scotland all consider the payment posted upon the day of receipt.


7-Eleven Chic Cell Cards

7-Eleven has teamed up with Ameritech to offer Pick UP & Go Cellular Prepaid Cards for on-the-go 7-Eleven customers in the Chicago area.  To get started with Ameritech’s cellular service, customers can either purchase a new phone or bring in their own cellular phone to a local Ameritech Communication Center or authorized dealer (a $35 activation fee may apply).  Once customers have activated their cellular service, they can purchase a Pick Up & Go Cellular Card at any of the participating 15- 7-Eleven stores in the Chicago area for $30 or $50 worth of cellular calling.



Today, ARKSYS announced an agreement with Industrial Employees Credit Union of Jackson, Miss., to provide a software solution to link the credit union’s members to the EDS Electronic Funds Transfer (EFT) gateway network.

Industrial Employees Credit Union (IECU) will implement ARKSYS’ Integrated Transaction Management(TM) (ITM) software on its AS/400 to route cardholder activity directly and also to provide on-line communications with the EDS Gateway network. Once implemented, IECU members will access checking or savings accounts from any ATM worldwide that are members of the CIRRUS international EFT switch system.

“ARKSYS’ ITM solution properly positions IECU to add other retail delivery products such as PC banking and voice response as desired,” said Mitzi Tate, President and CEO of IECU. “The integrated solution offers on-line, real time features and functionality which benefit both our organization and our members.”

IECU is a member-owned cooperative whose purpose is to help members achieve financial goals through proper money management. IECU was chartered in 1956 as a credit union for Presto Manufacturing Company. The credit union has since evolved to a credit union that services hundreds of industrial and commercial businesses in Mississippi. IECU’s home page address is .

ARKSYS offers Integrated Transaction Management, a family of payment and transaction processing solutions that allow financial and non-financial institutions to provide their customers on-line, real time transactions twenty-four hours a day, seven days a week from a variety of devices. ARKSYS’ ITM provides institutions with the ability to process and manage retail delivery operations including card and client management systems, international credit card, debit card, ATM and POS management; merchant management; electronic funds network solutions, on-line and intercept; access solutions, interactive voice response, Internet/intranet/extranet personal banking and bill payment; Internet security; and wholesale delivery with Internet/intranet/extranet commercial cash management. The company’s solutions are established in more than 70 countries.

Visit ARKSYS’ home page at .

For more information, contact Rob Roedel, Director of Public Relations, 501-218-7226 (USA), or E-mail: [][1].



Army Smart Cards

Gemplus announced Friday its participation in the first system combining a stored value application with biometric security on a single smart card. Gemplus has committed to supply 20,000 smart cards for a pilot program at Ft. Sill in which Army recruits entering basic training 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.



The Boards of Directors of CIBC and TD Bank announced Friday a definitive agreement to combine their operations as equal partners and create a new, Canadian-owned, globally competitive financial services company.  The combined company will have more than 10 million customers in Canada and around the globe, with more than 74,000 full-time equivalent employees, shareholders’ equity of more than $18 billion and assets of $460 billion.  It will be the 10th largest institution in North America in terms of market capitalization.


Royal Bank Card Bond

Royal Bank of Canada announced Friday that it has structured an asset-backed commercial paper program that will enable it to sell a $1.1 billion ownership interest in its VISA credit card receivables.

The transaction involves the creation of a special purpose trust, Luna Credit Card Trust, which will hold a $1.1 billion ownership interest in the bank’s credit card receivables. The Trust will fund its purchases of the ownership interest by issuing commercial paper. The commercial paper program is being managed by RBC Dominion Securities, Royal Bank’s investment banking arm. The Dominion Bond Rating Service has given the commercial paper a rating of R-1 (high).

“This transaction is similar to the $1.5 billion credit card securitization we announced last October and reflects our continuing emphasis on the efficient management of the bank’s balance sheet and capital,” noted Suzanne Labarge, executive vice-president of Royal Bank’s Corporate Treasury Group.

Royal Bank of Canada is Canada’s premier global financial services group with leading market shares in personal and business banking, corporate and investment banking and wealth management. As one of North America’s largest financial institutions, Royal Bank and its key subsidiaries Royal Trust, RBC Dominion Securities, RBC Insurance and Royal Bank Action Direct have 55,000 employees who serve 10 million clients through 1,600 branches and offices in 36 countries.


AmEx Financial Change

American Express Company today filed a Form 8-K with the Securities Exchange Commission noting that, as previously reported, it will modify its business unit segment reporting to reflect organizational changes made in last year’s third quarter.

Effective with the issuance of the Company’s first quarter 1998 financial results later this month, the results of the Travelers Cheque Group will be reported in a new segment with American Express Bank. The Travelers Cheque Group had historically been reported as part of the Travel Related Services (TRS) segment. The change is being made in accordance with Statement of Financial Accounting Standards No. 131 which redefines operating segments based on management’s internal reporting structure. As announced in last year’s third quarter, responsibility for the Travelers Cheque unit was moved from TRS to the Chief Executive Officer of American Express Bank. The move was made to better align the Travelers Cheque business with The Bank’s strengths in overseas markets and improve its ability to take advantage of synergies that can be realized from closer cooperation between the two units.

The filing includes selected 1995-1997 segment financial results to reflect the change in reporting of the Travelers Cheque operation. This segment reporting change had no impact on consolidated financial results for those periods.


Diebold Up 15%

Diebold, Incorporated today announced its 1998 first quarter results. In the quarter ended March 31, Diebold reported net income of $26,850,000, or $.39 per share, on revenues of $295,739,000. This compares to first quarter 1997 net income of $23,733,000, or $.34 per share, on revenues of $264,608,000, which represents increases of 15 percent in earnings per share and 12 percent in revenues.

“We are pleased to once again report double digit growth in both revenues and earnings for the quarter,” said Robert W. Mahoney, Diebold chairman and chief executive officer. “We continue to focus on the opportunities that exist in our global markets and concentrate on executing our long-term strategies to capitalize on those opportunities.”

Diebold, Incorporated, headquartered in Canton, Ohio, is a global leader in providing card-based transaction systems, security and service solutions to the financial, education and healthcare industries. Founded in 1859, the company develops, manufactures, sells and services automated teller machines, campus systems, smart card systems, electronic and physical security equipment, automated medication dispensing systems, integrated systems solutions, software and supplies.


Three Months Ended
March 31,
1998 1997
Net Sales
Product $193,130 $171,760
Service 102,609 92,848
Total 295,739 264,608

Cost of Goods 193,604 172,249

Gross Profit 102,135 92,359
Percent of Net Sales 34.5% 34.9%

Operating Expenses
Selling, General and Administrative 49,746 43,553
Research, Development and Engineering 14,930 12,901
Total 64,676 56,454
Percent of Net Sales 21.9% 21.3%

Income Before Taxes 40,993 35,959
Percent of Net Sales 13.9% 13.6%

Taxes on Income 14,143 12,226
Effective Tax Rate 34.5% 34.0%

Net Income $26,850 $23,733
Percent of Sales 9.1% 9.0%

Diluted Average Shares Outstanding 69,647 69,436

Diluted Earnings Per Share $0.39 $0.34


SIMS Hires Sales EVP

SIMS Communications Inc. announced today the appointment of Marvin S. Berger as executive vice president Sales & Marketing.

In making the announcement, SIMS’ president, Mark Bennett, noted that Berger has earned for himself an outstanding track record of achievement in the communications and computer industries.

“We are most pleased that Marv Berger has joined SIMS”, stated Bennett. “His personal attributes, professionalism, and broad experience in communications and transaction processing sales and marketing complements SIMS total dedication toward meeting the product and service expectations of our customers.”

Berger has had a distinguished career with several major corporations including IBM, where he held sales, marketing, and management positions, Data General Corporation, where he served as sales manager for the Northeast Region, and Visage Corporation where he served as vice president of Sales. Berger’s last position was as vice president Sales, Special Accounts, with SmarTalk Telecommunications Inc., a prepaid phone card company. Berger was with SmarTalk from its formation and, in four years, he was instrumental in helping it grow to a billion dollars in capitalization and $100 million in sales.

Berger received a Masters in Business Administration from the Amos Tuck School of Business Administration at Dartmouth College in Hanover, New Hampshire in 1970 where he was designated a Tuck Scholar for scholastic excellence. He also received a Bachelor of Science in Electrical Engineering from Worcester Polytechnic Institute in Massachusetts in 1965.

Berger has served as voluntary chairman of the New Hampshire Muscular Dystrophy Association, as director of the Manchester, New Hampshire Chamber of Commerce, and as a volunteer consultant for the Small Business Administration.

SIMS Communications provides low cost, turnkey, transaction processing solutions to retailers. These solutions include its patented, intelligent, DebitLink POS terminal, custom software and comprehensive network of financial transaction processors including most credit card and ATM networks. Also included are prepaid services including prepaid phone card activations and prepaid cellular transactions.


Microsoft & Integrion LinkUp

Integrion Financial Network and Microsoft Corp. announced plans yesterday to jointly develop a connection between consumers using Microsoft Money personal financial management software and Integrion’s Interactive Financial Services platform.  For the planned fall release of Money 99, the companies will develop server technology that translates Open Financial Exchange messages into GOLD Standard messages.  The solution is scheduled to be available at the end of this year for Integrion banks that offer Money 99 to their consumers.  Going forward, both organizations plan to conform their products to the new converged industry message standard announced last week by the Banking Industry Technology Secretariat.  This initiative expands the existing relationship between Integrion and Microsoft.  Integrion currently supports Money 98 and prior versions of the software on the Visa Interactive-banking platform, which Integrion acquired in August 1997.