97 Industry Pulse

According to data compiled by Bankcard Update/CardData, 1997 went out like a lion for the card industry. The fourth quarter surge was apparently driven by intense platinum card marketing. Accounts and cards soared by more than 7% in the final three months of 1997 while volume and receivables grew about 3.5%.

                                    YEAR  END  STATS
                          (Visa, MasterCard, Discover & Optima)
                EOY 1997           EOY 1996          CHANGE
RECEIVABLES  $431.6 billion    $404.7 billion        +6.7%
VOLUME       $789.1 billion    $698.3 billion        +13.0%
ACCOUNTS      335.4 million     311.1 million         +7.8%
ACTIVES       226.7 million     211.9 million         +7.0%
CARDS         483.1 million     443.2 million         +9.0%
       Source Bankcard Update/CardData (Feb 98 issue)

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FDMS to Resell StoreManager

ClearCommerce Corporation, formerly Outreach Communications, announced an agreement with First Data Merchant Services Corporation to resell ClearCommerce’s StoreManager Pro, Plus and Lite, Web storefront building and management software packages.  In addition, First Data Merchant Services Corporation will provide a channel for distributing the ClearCommerce Merchant Engine and Hosting Engine products. FDMS, a subsidiary of First Data Corporation, is a leading global provider of merchant processing services and will sell and market ClearCommerce Internet transaction management software products through its strong channels of Alliance partners and processing clients.  FDMS’ Alliance partners and other processing clients will be able to offer merchants the ClearCommerce transaction processing software they need to conduct secure commerce via the Internet.

Each FDMS Alliance is jointly owned and managed by FDMS and the bank partner, and is poised to take advantage of scale and technology in order to build, retain and grow their merchant customer base.  This agreement provides a significant channel for ClearCommerce, a leader in Internet e-commerce transaction payment, fraud, processing and reporting technology, to sell its Internet transaction software products to merchants.

FDMS will also license ClearCommerce SET and SSL Gateways to process Internet merchant transactions that use the Secure Electronic Transaction (SET) protocol in addition to other secure transaction methods. ClearCommerce’s chief technology officer, Julie Fergerson, resides on the SET committee and has been an integral member of the SET team helping to bring this Internet security protocol into the marketplace.

“Commercial Internet systems are increasingly polarized between transaction processing software and Internet-based customer interaction, or catalog, systems,” said Chris Stevens, analyst with the Boston-based Aberdeen research firm.  “These systems are sufficiently complex to support specialized subsystems or out-sourced services — credit card payment processing requires both.  There remains a strong demand among new and seasoned Internet merchants for any product that will help reduce the risk of credit card fraud — provided that it does not inconvenience consumers or require extensive and expensive merchant system integration.”

“First Data Merchant Services is an essential partner to have and we’re excited that they have chosen ClearCommerce products,” said Robert J. Lynch, CEO of ClearCommerce.  “With FDMS’ Alliance partners and processing clients offering merchants our Internet transaction products, ClearCommerce is helping to build the bridge between the Internet merchants and the banks to make e-commerce a secure and affordable reality.  The payment systems industry, banks and processors, is in a great position to offer the merchant Internet transaction products as a value-add to the services they offer in the physical world.”

“We chose to offer ClearCommerce to our Alliance partners and processing clients because their leading edge technology addresses the issues important to merchants wanting to conduct business over the Internet,” said Allen A. Weinberg, senior vice president at FDMS.  “Merchants want to embrace the Internet as a new sales channel, and getting the best Internet transaction products to them is critical for the financial success of their e-commerce offerings.”

About ClearCommerce Corporation

ClearCommerce Corporation, based in Austin, Texas, is a leader in Internet e-commerce transaction payment, fraud, processing and reporting technology, and is dedicated to advancing technology and safe commerce practices in the Internet e-commerce marketplace.  Since 1995, ClearCommerce has been helping merchants, banks and processors implement successful Internet site and transaction processing strategies.  ClearCommerce products are entering the third generation of development.  For more information on ClearCommerce and its line of Internet payment processing solutions visit or call 888-280-9999.

About First Data Corporation

First Data Merchant Services, a subsidiary of First Data Corporation (NYSE FDC), is a leading provider of one-source merchant transaction and information processing services, as well as electronic commerce and business-to-business purchasing services over the Internet.

Hackensack, N.J.-based First Data Corporation is a global leader in payment systems, electronic commerce and information management products and services.  First Data and its principal operating units process the information that allows millions of consumers to pay for goods and services by credit, debit or stored value card at the point of sale or over the Internet; by check or wire money.  For further information about First Data, visit the company on the Internet at .

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Ultra-Thin Contactless

SCS Corporation and Hitachi Maxell Ltd. announced yesterday that Maxell will begin manufacturing SCS’s patented ‘i2 (Interactive Identification) System’s’ labels in an ultra-thin, contactless card format. The first of their kind in the world, the 0.25-mm-thick RF/ID cards are enabled by drastically reducing the thickness of the ICs and embedding them in a thin, paper-like card that will run through virtually any printer. Users get a complete read/write database in each card, capable of storing 1,024 bits of information, about five times more than found on the mag strip of a credit card. Applications for the cards include airline/mass transit ticketing and phone debit cards. Introduced in June 1997 in the US, the i2 System is the first and only low-cost, passive, read/write RF/ID product on the market.

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PayMate1000

Datacap Systems has introduced a combined cash register and card terminal targeted at small retailers and pay-at-the-counter restaurants. ‘PayMate1000 ECCR’ includes Datacap’s ‘DataTran’ payment interface for interfacing to hundreds of POS systems. ‘PayMate1000’ also uses the same communications package used to support ‘DataTran’ and can also support password use to protect against merchant services hopping.

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Magic Market Online

In an effort to meet the needs of its financial institutions, Magic Line is the first EFT network in the industry to open an online marketing catalogue, Magic Line today launches Magic Market on its Internet Web Site at [ www.magicline.com][1]. The online catalogue offers financial institutions comprehensive marketing and sales materials that help their business grow and educate their consumers. “Magic Market has convenient one-stop shopping 24 hours a day. There’s easy access to a growing list of marketing tools Magic Line financial institutions can utilize to make their programs stronger and more competitive,” said Darlene Crumbaugh, marketing director, Magic Line, Inc.

Pictured in vivid, easy-to-read four-color graphics, marketing items such as Cash Back statement stuffers, decals, ML Pay tent cards, ATM card applications, point-of-sale (POS) products and marketing brochures are available from the case of a desktop computer. The procedure is easy. Financial institutions visit the Web site, click the Magic Market icon, browse through the items, place those they want into their ‘shopping cart,’ follow the ordering prompts for billing/shipping information and get an order confirmation receipt.

As one of the top regional EFT networks linked throughout the United States and globally, Magic Line supports 14.9 million cardholders with access to over 165,000 ATM, POS and remote banking terminals. Magic Line processes over 15 million transactions monthly and serves over 1,010 banks, credit unions and thrifts in Michigan, Illinois, Indiana, Kentucky, Ohio, Missouri and 8 other states. The company offers; cardbase management and authorization services; on-line POS debit services with ML Pay, Maestro and Interlink; off-line POS debit services with MasterMoney and Visa Check Card; remote banking/bill payment services; the Magic Line Mobile ATM; Internet Web Site development; marketing services; and the Magic Line PrePaid Calling Card.

[1]: http://www.magicline.com

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Debit Fraud Tool

WA-based TransAlliance announced Monday its ‘Cardholder Risk Identification Service’ is now available to its subscribing ‘VISA Check Card’ issuers. CRIS is a VISA-developed neural network that identifies global fraud patterns and flags suspect authorizations based on risk thresholds. CRIS was recently recommended by a major credit union insurance underwriter now mandating neural network participation for issuers who wish to expand their plastic card coverage. TransAlliance supports 200 ‘VISA Check’ and ‘MasterMoney’ issuers among its 750 clients.

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New Chase Business Card

To give small businesses a new way to pay for and manage their daily business expenses, The Chase Manhattan Bank will launch the Chase Business Banking Card this month.

The Chase Business Banking Card with the MasterCard logo can be used not only to make ATM transactions, but also to make purchases at over 14 million merchants worldwide — wherever MasterCard is accepted.

Used as an alternative to petty cash or writing checks, purchases made with the new Chase Business Banking Card are automatically deducted from the customer’s checking account. All purchases are itemized on the customer’s checking account statement to make tracking and reconciling expenses easier. To launch the product, Chase customers who use the card will receive a discount to purchase office supplies at Staples stores nationwide.

“Chase is committed to meeting the banking needs of all small business owners, and providing the Chase Business Banking Card is just one more way that we are making it easier for small business owners to focus on what is critically important — running their business,” said Joe Scharfenberger, executive vice president, Commercial and Professional Banking.

Since the personal debit card was introduced in 1997, 1.6 million Chase customers have made over 19 million purchases, greatly exceeding Chase’s expections.

With over $365 billion in assets, The Chase Manhattan Corporation is the largest banking company in the United States. Chase provides integrated solutions that meet its customers’ payment, savings, investment, insurance, credit and financial planning needs. It has relationships with more than 30 million consumers coast to coast. For all those who work hard to achieve or sustain a good life in a world of enormous opportunity and challenge, Chase is the complete financial resource and ally that makes life easier.

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EBT Via ATM

Working with the states of Florida and Georgia HONOR Technologies has established an agreement to allow all HONOR ATMs to accept FL/GA EBT transactions beginning this month. Florida now has 550,000 EBT cards-in-force and Georgia has about 300,000. HONOR said yesterday it is negotiating with members of the Southern Alliance of States to implement a common EBT program for other states including AL, AR, KY, MO, NC and TN.

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Less Taxing – More Volume

BA Merchant Services and EDS are gunning for the capture of state/local taxes and other government fees with a new nationwide electronic payment service launched Monday. The new service offers taxpayers the option of accessing, via 1-888-ALL-TAXX, a VRU-based credit card payment system. Consumers, using as touch-tone phone, simply enter the government entity’s tax bill number, the payment amount and their credit card number. A convenience fee, based on a percentage of the total payment, is added to the transaction. BAMS is handling the marketing to state/local governments and provides the transaction processing. PhoneCharge, Inc. is also participating in the direct sales to government entities and provides promotional services. EDS is providing the technology.

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VISA Purchasing Conversion

Paymentech has partnered with Visa U.S.A. to enable aproximateley 30,000 general retail merchants to accept Visa Purchasing cards. The effort, nearing completion, is part of a broader conversion of certain Paymentech merchants to its Network platform for authorization and electronic data capture (EDC) processing.

According to Visa, this is one of the largest merchant terminal conversion efforts to include Visa Purchasing card acceptance. Visa Purchasing card processing capability includes electronically transmitting additional transaction data (Level II), which is essential for complying with sales and use tax reporting and to streamline expense reconcilation.

“To support the needs of their commercial customers, merchants are requesting the capability to accept purchasing cards, so we are undertaking this conversion to meet their demands and provide them opportunities to improve customer relations and win new business,” said Mary Dees, Paymentech’s group executive for third-party processing. “As a leading issuer of commercial cards, Paymentech has an added interest in expanding the acceptance base to increase the utility of purchasing cards.”

“This move naturally complements our commercial card issuing business.” said James Baumgartner, president of Paymentech’s commercial card unit. “We demonstrate to commercial card prospects our ability to assist them in signing up vendors to accept purchasing cards. Acceptance is critical to our role in acquiring data and translating into information for our customers’ benefit.”

The enhanced purchasing capability is being downloaded as a new application in terminals of small to mid-sized retail outlets. The increased functionality is initially being added to standard POS devices and will ultimately be added to PCs.

Guidelines on accepting purchasing cards are being included in the overall phone training provided with the new aplication. New support materials and manuals will also assist merchants as they begin to accept the cards.

“Paymentech’s upgrade significantly expands acceptance locations for the Visa Purchasing card,” said Cory Gaines, vice president, Commercial Card Acceptance, Visa U.S.A. “Were committed to supporting business suppliers to accept Visa cards and to pass the maximum amount of transaction information wherever possible.”

Paymentech, Inc., founded in 1985, provides full-service electronic payment solutions and is the third largest processor of bankcard transactions in the United States. Paymentech is also a major provider of point-of-sale transaction processing to independant sales organizations and finacial institutions.

Visa is the preferred payment brand and the largest comsumer 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 comsumer payment system to facilitate $1 trillion worth of purchases of goods and services in a fiscal year. Visa’s nearly 600 million cards are accepted at more than 14 million worldwide locations, including 370,000 ATMs in the Visa/ PLUS Global ATM Network. Visa’s Internet address is [www.visa.com/][1]

[1]: http://www.visa.com/

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French MasterCard Promo

The French Government Tourist Office and MasterCard International announced yesterday a joint advertising campaign for Spring 1998. Leading off with an 800 number, the campaign is a call to action. Dialing 1-800-462-9017 will net callers a free 1998 France Discovery Kit, including the FGTO’s Travel Planner and special travel offers from MasterCard Destinations.

Aimed at the 2,700,000 American tourists who will visit France this year, the new campaign offers potential visitors an easy way to start planning a vacation in France by providing the attractive France Discovery Kit. The 1998 France Discovery Guide, a publication of the FGTO, is a highly informative travel planner, with a wide variety of feature articles and evocative photographs, itineraries and maps, designed to help visitors find and experience the diversity of vacations available throughout France. The travel packages offered by MasterCard Destinations are filled with attractive value-added programs to Paris, the Riviera and other exciting locations.

Stating “once in France, forever in love”, the ad campaign comes at a time when France has much to offer. The rate of exchange is very favorable to American travelers with a dollar getting close to 6 francs, and 1998 is the year of the World Cup of Soccer, of which MasterCard International is an official sponsor. The new joint FGTO and MasterCard International ad campaign will be placed in lifestyle and general interest publications as well as trade publications. Designed by Select New York and underwritten by the FGTO and MasterCard International, the campaign begins in March and runs through May. World Cup in Ten French Cities

The World Cup will take place from June 10 through July 12 in ten French cities. Rail Europe, an authorized tour operator for the ’98 World Cup of soccer, is offering packages for groups and individuals that include trans-Atlantic air, hotel accommodations in central Paris, Railpass or Rail ‘n Drive, MobiFoot (public transportation passes good in Paris and the 9 other French cities hosting matches) and even sightseeing arrangements. MasterCard will assist traveling cardholders at dozens of special “Welcome Centers” located at airports, train stations and central areas of interest across the country. In addition to providing travel tips, directions and information about France, the Welcome Centers will distribute the MasterCard Destinations–France Cardholder Directory. The World Cup is the single largest sporting event in the world with a projected television viewership of 50 billion.

For soccer fans and lovers of France alike, these ten cities will offer much in terms of entertainment. Local tourist offices have organized special events before, during and after the soccer games to encourage visitors to discover the touristic wealth, culture and art-de-vivre of these towns and regions. For example, Paris will host the “Three Tenors Concert Carreras, Domingo, Pavarotti” with the Orchestre de Paris conducted by James Levine at the Champs-de- Mars. Saint-Denis–site of the new Stade de France, constructed for the occasion, where both opening and closing matches will be played–will present a performing arts festival with such international artists as Robert Wilson, Mstislav Rostropovitch, Barbara Hendricks, Dee Dee Bridgewater, and Charles Dutoit with the Orchestre National de France. Lyon is offering its annual “Nuits de Fourviere”, theater and music events held in the city’s old quarter Roman theaters.

Other World Cup cities and their regions offer many sights and experiences with particular resonance for American tourists. For instance, near Toulouse, famous for its aerospace industry– Concorde, Airbus and the Ariane space rocket all originated there–visitors can drive a barge on the Canal du Midi, a waterway constructed by King Louis XIV to connect the Atlantic to the Mediterranean and traveled by Thomas Jefferson in 1787; Montpellier’s Languedoc-Roussillon region produces the fabric serge de Nimes originally used by Levi Strauss to make denim jeans. Nearby Nimes’ famed Maison Carree, an elegant Roman temple visited and loved by Thomas Jefferson, was the inspiration for the Virginia State Capitol. Stately Nantes boasts the Chateau of the Dukes of Brittany where the Edict of Nantes–celebrating its 400th anniversary in 1998–was signed by Henri IV in 1598 granting religious freedom to Protestants. “French Welcome 98”–A Festival throughout France.

But if soccer is not one’s cup of tea, there is no reason to be deterred from a French holiday this summer. Under the banner “French Welcome 98”, the Ministry of Tourism and Maison de la France are encouraging all French regions and cities to create a veritable festival throughout the country, so that all visitors–soccer fans or not–can join in the festivities. Special events will be organized throughout France–a festivities directory will be published for the general public; a special Youth Pass will be available for young people under 25, including reductions of up to 15% off prices for accommodations and tourist attractions, and much more. Information on “French Welcome 98” will be available late March 1998.

Year-round, of course, France offers travel opportunities throughout its diverse regions. Annual music, dance, theater, and jazz festivals–Avignon, Aix-en-Provence, La Villette, Marciac to name but a few; the traditional appeal of museums, gastronomy and culture remain top reasons for visiting France; visitors can also gain a new perspective and a uniquely French experience when they choose a participatory adventure such as hiking, biking, cooking, painting, wine tasting, photography or language classes, or any other “hands on” French experience.

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Bad Payment Checks

FDC’s First Data Analytics unveiled a new predictive scoring solution to help card issuers identify the potential risk between a credit card payment and when the payment actually clears the bank. ‘ACS Payment Defender’ uses remittance algorithms to predict the probability of reversed payments based on a set of cardholder characteristics. The model generates a numeric remittance score, which represents the probability that a cardholder’s next payment will be reversed. The issuer can then develop strategies, with several decision keys and actions available, to limit financial exposure on the account’s credit limit.

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