Fastest Growing Issuer

It has taken less than twenty-four months for Metris Companies to grow its card portfolio from $1 billion to more than $3.5 billion. For 1997 Metris’ card receivables more than doubled and charge volume is now growing 89% annually. While other major, aggressive players are growing from either marketing or acquisitions Metris is enjoying the best of both worlds. During the fourth quarter the nation’s preeminent sub-prime card issuer generated 350,000 new accounts and acquired 250,000 accounts. Metris’ marketing expenses totaled $8 million for the fourth quarter and $30 million for all of last year. The company’s other revenue streams are rising too. During the fourth quarter Metris signed up 288,000 card registration customers and about 245,000 extended service plan contracts. The company is also set to launch a new extended service plan product called ‘PurchaseShield’. Chargeoffs and delinquency are also beginning to moderate due to the seasoning of the portfolio. For 1997 Metris had net income of $38.1 million compared to $20.0 million for 1996.

                               METRIS  VITALS  (EOY 97)
       RECV     $3,546,936,000             Charge-Offs     8.3%        
       YTD VOL  $2,700,000,000             Delinquency*    6.6%
       ACCTS         2,293,000             Net Int Margin 13.1%
             * 30+ days past due


Bank One Joins MSFDC

MSFDC, the joint venture of Microsoft Corp. and First Data Corp. , and Columbus, Ohio-based Banc One Corp. announced yesterday their cooperation in a pilot program that will enable Banc One’s online-banking customers to receive and pay a variety of bills over the Internet. Banc One and its subsidiary, First USA, also are planning a biller pilot program with MSFDC to give credit- card holders the option of receiving and paying their monthly statements from Banc One and First USA through the Internet. Banc One also will serve on the MSFDC advisory board.

“We are very pleased to have Banc One’s involvement on our advisory board and in our pilot program,” said Hank DeNero, executive vice president of First Data. “With this alliance, MSFDC has demonstrated its flexibility in working with the banking industry to make electronic bill presentment and payment a reality for all consumers.”

Banc One joins a growing list of banks that want to provide their customers with state-of-the-art electronic bill presentment and payment options. In December, MSFDC announced that a number of nationally recognized banks and billers had agreed to participate in the pilot.

Ken Stevens, chairman and CEO of Banc One Retail Group, said, “Internet-based bill presentment and payment will represent a significant new level of service for our customers — both consumers and corporations. Banc One expects to play a major role in the development of this new industry. We are pleased to be working with MSFDC, which has demonstrated early leadership in this area.”

Benefits to Banks and Consumers

Banc One will customize MSFDC’s electronic bill presentment and payment system for its own online banking customers. With the pilot service, Banc One customers will benefit from an efficient, easy-to-use bill-management system that will collect their bills from participating billers at the Banc One bill presentation site. Using a standard browser, customers will be able to point, click and pay their bills in a fraction of the time they would typically take to write a check, record it in their check register, find a stamp and mail the bill. The MSFDC electronic bill presentment and payment system is planned to be integrated with the Integrion home banking service offered by Banc One.

Unlike current electronic bill payment services that charge banks for payments made by their online customers, the MSFDC service includes no fees for the branding banks, like Banc One. In fact, MSFDC will share revenues with financial institutions that offer the service. There also are revenue opportunities for banks that offer the MSFDC service to their commercial customers.

“When combined with cost savings in billing, payment processing and check handling, electronic bill presentment and payment represents a significant profit enhancement to participating banks,” DeNero said.

For billers using the service, MSFDC provides a variety of services for complete control and efficiency in bill delivery and collection, such as returning error-free remittances, allowing full involvement in the bill’s image and design, and providing flexible payment options. Billers pay MSFDC a fee, roughly equivalent to the cost of postage, to deliver an electronic version of a bill or statement to their customers via a financial institution’s branded site, like Bank One Online Services. For no additional cost, MSFDC also returns the remittance information (like a bill stub) and payment instructions to the biller or the biller’s lockbox.

About Banc One

Banc One Corp. had total managed assets of $142.9 billion, total assets of $113.1 billion, and common equity of $9.9 billion at Sept. 30, 1997. Banc One operates banking centers in 12 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 [http//][1], through InvestQuest at [http//][2] or by fax-on-demand at 614-844-3860.


Based in Denver, MSFDC is a joint venture of Microsoft Corp. and First Data Corp. formed in June 1997. In summer 1998, the company is scheduled to introduce the nation’s first end-to-end system for electronic presentment of richly formatted bills over the Internet, as well as next-generation electronic payment and remittance capabilities.

MSFDC’s service, which will use existing payment systems, will allow consumers to access and pay their bills through the branded home-banking services of participating financial institutions. Information on the service is available through the Internet at [http//][3].

NOTE  Microsoft is either a registered trademark or trademark of Microsoft Corp. in the United States and/or other countries. Other product and company names herein may be trademarks of their respective owners.



Davis+Henderson Sign Canada Trust

MDC Communications Corporation today announced that its payment systems unit, Davis + Henderson , has been awarded a three-year cheque contract with Canada Trust. This arrangement provides D+H with supplier status for providing cheques and accessories for Canada Trust and its network of over 400 branches and alternate delivery channels across Canada.

Miles S. Nadal, MDC’s President and Chief Executive Officer, said, “D+H’s commitment to investment spending on leading edge technology for software development, intelligent voice response, PC banking and internet banking is paying significant dividends. We are excited about initiating our relationship with Canada Trust in the area of payment systems.”

Michael Robinson, Senior Vice President, Sales and Marketing, of Davis + Henderson, added, “We are thrilled by Canada Trust’s decision to award this contract to D+H. Canada Trust is a major customer in the market and one with whom we were particularly interested in establishing a long-term relationship because of its innovative approach to the marketplace.”

Tim Hockey, Canada Trust’s Vice President, Core Banking Services, commenting on the agreement, said, “We were looking for a vendor that is capable of providing dependable and reliable service as well as the ability to support Canada Trust in delivering these services through alternate technology in the future”.

D+H is the largest cheque printer in Canada and the fourth largest in North America, supplying the majority of personalized cheques to Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Royal Bank of Canada, TD Bank and other major market segments in Canada. With the recently announced merger agreement with Artistic Checks, MDC will also have the second largest direct-to-consumer cheque business in the United States.

MDC Communications Corporation is a publicly-traded international organization with operating units in Canada, the United States, the United Kingdom, and Australia. The Company is a leading provider of security product solutions and marketing services to customers in over 65 countries around the world. MDC has a strong record of growth, generated both internally and from strategic corporate acquisitions.

MDC offers security product solutions through five core offerings personal and business cheques; postage and excise stamps; credit, debit and smart cards; event and transportation tickets; and other outsourcing services including remittance processing, data imaging, corporate payables, personalization and fulfillment, and data management. MDC’s diversified range of security product solutions will allow the company to fully participate in the ongoing global evolution of secure products and secure electronic transactions.

MDC shares are traded on the Toronto Stock Exchange under the symbol MDZ.A and on the American Stock Exchange under the symbol MDQ.


Another Doubler

For the six months ending Dec 31, Paymentech realized net income of $10.8 million versus $5.1 million for same period in 1996. For the December 97 quarter (2Q fiscal 98) Paymentech processed 476 million transactions representing $13.6 billion in bankcard sales. Paymentech’s sales volume is growing 22% annually and its transaction volume is growing about 39% a year. During the quarter Paymentech sold its share of the PHH/Paymentech joint venture to PHH’s new parent company but remains the exclusive provider of MasterCard corporate fleet cards for PHH.


AmEx Nagano Support

[Click here for a page by page look at the complimentary Nagano City Guide][1]

American Express announced Tuesday the availability of complimentary Nagano City Guides at its offices in Japan and through merchants in Nagano, the site of the 1998 Winter Games.  The user- friendly guide provides a comprehensive introduction to Nagano and highlights the array of services American Express provides its Cardmembers and merchants at Nagano.

The bilingual Guide was produced by American Express in English and Japanese as a part of its local merchant network enhancement program.  The easy-to-carry, concise guide contains maps of suburban and downtown Nagano and highlights American Express merchants in Nagano.  The restaurant and hotel listings also include helpful information such as reservation necessity, price ranges, parking availability, and entertainment offerings.  The guide also provides Cardmembers with information on American Express services, including

— Banks and ATMs where the American Express(R) Card is welcome;

— Banks offering Cardmembers over-the-counter cash and foreign exchange         services;

— Locations for quick and easy encashment of American Express Travelers         Cheque;

— Toll-free telephone numbers for Travelers Cheques and travel         arrangements; and

— Emergency Card replacement services and general Cardmember inquiries.

In Nagano, the Guide is available at hotels, restaurants and department stores.  The guide is also available to American Express Cardmembers through Membership Service Centers in Japan.  Cardmembers in Japan may call American Express’s toll-free number (0120-020120) for copies of the guide or for assistance during their stay in Nagano during the Winter Games.

American Express has long developed and managed merchant relationship in Nagano the area.  Cardmembers can enjoy use of their cards throughout Nagano, including 95% of all lodging establishments, 95% of all restaurants and bars, and 92% of all retail outlets.  As part of American Express’s efforts to service its Cardmembers, specially designed point-of-sale materials have been designed, including window, door and counter decals that state “Cards Welcome”, “Thank You” and “Welcome” in eight different languages.

American Express Travel Related Services Company, Inc., is a wholly owned subsidiary of the American Express Company — a diversified worldwide travel and financial services company founded in 1850.  It provides card, Travelers Cheque, travel and financial services in over 160 countries.

[1]: /cardflash/secure/oldstatic/1998/january/nag.html


Drexler Doubles Last Year

Drexler Technology Corp. reported profits for the fiscal 1998 third quarter and nine months ended Dec. 31, 1997, with revenues rising more than 200% over the year-ago quarter and nine months.

For the three months ended Dec. 31, 1997, the company had net income of $676,000, or a profit of 7 cents per share, compared with a net loss of $694,000, or a loss of 8 cents per share, for last year’s third quarter. Revenues for the fiscal 1998 third quarter were $3,229,000 vs. $815,000 for the same quarter a year ago.

For the nine months ended Dec. 31, 1997, net income was $978,000, or a profit of 10 cents per share, vs. a net loss of $1,777,000, or a loss of 20 cents per share, for the nine months ended Dec. 31, 1996. Revenues for the recent nine months were $7,620,000 vs. $2,451,000 for the year-earlier period.

For the fiscal 1998 third quarter, LaserCard(R) optical memory card shipments rose to 732,000 cards compared with 123,000 cards for the year-earlier quarter. For the first nine months of fiscal 1998, LaserCard shipments reached 1,582,000 optical cards vs. 305,000 optical cards for last year’s first nine months.

At Dec. 31, 1997, the company’s cash and cash equivalents totalled approximately $4,191,000 compared with $2,916,000 at March 31, 1997. The company has no debt.

On Dec. 17, 1997, the company announced receipt of a $6.4 million purchase order for LaserCard optical memory cards for a U.S. government application. The award more than doubled the company’s backlog for LaserCard products, to $10.2 million from $3.8 million.

On Jan. 5, 1998, the company announced receipt of a $900,000 purchase order for LaserCard optical memory cards, the company’s largest non-government order for optical cards.

During the quarter ended Dec. 31, 1997, the company shipped over 90 percent of its products to U.S. customers, but there were also overseas sales to Argentina, Belgium, China, Kuwait, the Philippines, Portugal, Russia, and Turkey. LaserCard applications include immigration cards, cargo manifests, access control cards, healthcare records, high security/interactive ID cards, automotive records, medical image storage, portable records with audit trails, and consumer transaction systems.

Drexler Technology is based in Mountain View, Calif., where it manufactures LaserCard(R) optical memory cards and “microchip ready” Smart/Optical(TM) cards. The company’s wholly owned subsidiary, LaserCard Systems Corp., develops system software for PC-based optical memory card systems. At Dec. 31, 1997, Drexler Technology had 9,530,551 shares of common stock outstanding.

              Drexler Technology Corp. and Subsidiaries
            Summary Consolidated Statements of Operations
                (In Thousands, Except Per Share Data)

                               Three Months Ended    Nine Months Ended
                               12/31/97  12/31/96   12/31/97  12/31/96 
Revenues                       $ 3,229   $   815    $ 7,620   $ 2,451
Cost of sales                    1,709       558      4,214     1,656
Operating expenses                 893       962      2,508     2,621
Other income, net                   72        11        115        49
Income tax expense                  23      —           35      —  
Net income (loss)              $   676   $  (694)   $   978   $(1,777)
Net income (loss) per share
(basic and diluted)           $   .07   $  (.08)   $   .10   $  (.20)
Shares used in computing net
income (loss) per share
Basic number of shares          9,525     9,109      9,324     8,967
Diluted number of shares        9,780     9,109      9,579     8,967

Forward-Looking Statements Certain statements made in this report relating to plans, objectives, and economic performance go beyond historical information and may provide an indication of future results. To that extent, they are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and each is subject to factors that could cause actual results to differ from those in the forward-looking statement. Such factors are described in the company’s Report on Form 10-K and other documents filed by the company from time to time with the Securities and Exchange Commission.


Citi Card Income Declines

Citibank reported Tuesday that net income from cards worldwide declined 26% during the fourth quarter compared to the same quarter a year ago. About 36% of the decline was attributed to the U.S. market with the remainder coming from emerging markets. Citi says its number of U.S. card accounts dropped 2% last year. However, compared to the year-ago quarter, U.S. card volume increased 4% to $27.9 billion and U.S. receivables increased 2.5% to $48.2 billion. Chargeoffs, as a percentage of average loans, increased from 5.45% last year to 5.64% but inched down slightly from the third quarter. Delinquency (90+ day) declined from 1.90% to 1.80% at year’s end. For Citibank the percentage of bankruptcy related chargeoffs hit 40.8% during the fourth quarter compared to 38.0% last year. Citibank ended the year with 65 million cards-in-force worldwide representing 36 million accounts.


CTST Sells Out to F&G

Faulkner & Gray announced the acquisition of CTST, Inc., the world’s leading organizer of card technology conferences, known globally under the name CardTech/SecurTech. Terms of the deal were not disclosed.

“The smart card is the next platform of information technology, and CardTech/SecurTech is the leading source of professional and trade information to the industry that develops and uses this technology,” said Jack Love, President of Faulkner & Gray. “With this acquisition, we bring together the largest card technology conference and the number one card technology magazine to create an indispensable trade information resource for a burgeoning industry.”

A unit of Thomson Corp., Faulkner & Gray is the publisher of 18 specialty business magazines, including Credit Card Management, Card Technology, and Card Marketing–the principal products it markets to the global card industry, along with related newsletters, directories and conferences. Card Technology, a monthly magazine introduced in early 1996, is F&G’s primary publication in the advanced card field with 25,000 subscribers throughout the world. In addition, the company publishes Smart Card Alert newsletter, Card Technology Directory and Smart Card Sourcebook Series.

“We are tremendously excited about the opportunities that our new relationship generates,” said Miller. “The card technology and security industries have entered a period of rapid growth that will be further fueled by the combination of the premier providers of information resources”.

Miller, the entrepreneur who co-founded the CardTech/SecurTech Conference, will join Faulkner & Gray as Senior Vice President in charge of the company’s new CTST Division headquartered in Bethesda, Md. He will continue to serve as Chairman of all CTST events, reporting directly to Love. The existing CTST staff will become full-time employees of Faulkner & Gray.

The CardTech/SecurTech main conference, which this year is scheduled for April 27-30 at the Washington, D.C., Convention Center, is the card industry’s largest gathering. The 1998 show will feature presentations by 180 expert speakers and is expected to attract 8,500 visitors and 320 exhibiting companies displaying innovative card and security solutions in a sprawling six acres of exhibit space.

With its three annual shows, CardTech/SecurTech is the premier conference and exhibition company in the rapidly growing smart card industry. Smart cards–plastic cards with built-in microprocessors–are the enabling technology for a wide variety of application solutions, including use in banking, telecommunications, transportation, government, health care and retailing. The cards, when used in conjunction with biometric and cryptographic technologies, which are covered at CTST shows as well, also provide the basis for enhanced security in internet commerce, intranets, traditional identification programs and systems for physical access control.

CTST’s long-term sponsorship agreement with the Smart Card Industry Association will be assumed by Faulkner & Gray, which intends to expand the relationship between the organizations. Under that agreement, SCIA will remain the exclusive industry sponsor of all CardTech/SecurTech conferences. SCIA, a trade association comprised of 45 major smart card industry vendor companies, helped form CTST along with Miller in 1991. It has been expanding rapidly in the last two years under an aggressive membership drive designed to capitalize on the growing application of smart card systems and solutions. F&G is in discussions with SCIA to greatly expand its CTST relationship through a variety of programs.

Based in New York, Faulkner & Gray is one of the nation’s leading publishers of specialty magazines, newsletters and directories for a wide array of other financial service industry segments, including accounting, banking, credit collections, credit unions, mortgage banking, managed care, and insurance. In addition to its new CTST conferences, F&G organizes two dozen annual conferences serving its card and various financial markets.

Faulkner & Gray is a division of Thomson Financial Services, a leading provider of quality financial information, research, analysis, and software products to the global investment and corporate communities. Part of The Thomson Corporation (TTC), TFS employs more than 5,500 people in nearly 40 offices around the world.

The principal activity of TTC is specialized information and publishing worldwide. In addition, TTC has important interests in newspaper publishing in North America and in leisure travel in the United Kingdom and Sweden. TTC had sales of US$7.7 billion in 1996 and has some 50,000 staff members. TTC’s common shares are traded on the Toronto, Montreal and London stock exchanges. For more information, visit TTC’s Internet address at [][1]



A-Net Card Endorsed in Asia

Orion Technologies, Inc. announced Tuesday that its debit and credit card program, called A-Net, has been officially accepted and endorsed by the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP), which has 79 bank members in 33 Asian Pacific countries.

“This is a major milestone in our efforts to launch a new worldwide debit and credit card,” said Keith Cowan, president of Orion Technologies.

Orlando Pena, Secretary General of ADFIAP said, “This is a welcome development which is a step forward to eventually having a global card facility for the use of ADFIAP member banks and their clients in 33 countries of the region.”

Today’s announcement follows approval by the Secretariat of the American National Standards Institute to confirm Orion Technologies as a blockholder of 94 IINs (Issuer Identification numbers) for Orion’s A-Net credit and debit cards.

Cowan said, “Any one of our planned debit and credit cards will be recognized worldwide just like VISA or MasterCard cards are known. Furthermore, we are now officially recognized as a bona fide card scheme by the International Organization for Standardization (ISO), which is administered by the American Bankers Association. All of our cards’ BINs (Bank Identification Numbers) will begin with a prefix which is our exclusive number worldwide.”

In 1995 ADFIAP entered into a strategic alliance with Orion to build A-Net, an intranet designed to provide electronic services to its member banks and their clients.

Orion Technologies Inc. develops and manages secure, global electronic networks. Through these networks, Orion provides a range of secure, integrated services, including electronic commerce, transaction processing and card services, EDI, electronic trading, and electronic mail communications.


Cashing In On Notices

Change notices for cardholder agreements have marketing value says Moore’s Response Marketing Services. Moore’s introduced yesterday a new service called ‘Strategic Alert’ that adds value to credit card repricing messages by tailoring them by product line, customer type and using them to promote related products/services/benefits. RMS says card issuers can reposition their card’s value, reinforce brand identity, acknowledge top customers, survey customer opinion, or spark an increase in overall card usage-all while delivering basic information about account term changes.


Gambling ATM Card

Tom Hughes, Chairman and CEO, announced Tuesday that Betting, Inc. has joined with GameWay Technologies to develop and market applications for its ATM card with PIN payment processing technologies into the public gaming sector.  The initial project of the joint-venture, to be known as “WinLink,” is to provide self service instant-payment capabilities for account wagering from public locations such as Sports bars, airport lounges and hotel lobbies.

State Off-Track Betting (OTB) phone account holders will soon be able to use their ATM card and PIN to replenish available balances in their accounts immediately with instant and non reversible cash, and without the exorbitant surcharges connected with credit-card cash advances currently in use.  Players will use Betting Inc.’s PayMaster device (with exclusive patents licensed to it by ET&T) to assist in adding non reversible ATM card with PIN cash to their accounts with OTB’s, casinos, lotteries, etc., wherever such account wagering is legal.  In-state account wagering is approved and in operation in eight states (including New York, Connecticut, Pennsylvania, Kentucky, Ohio and Nevada).

WinLink will pursue global home usage wagering applications, such as in Australia and Great Britain.

The WinLink joint venture will be managed by GameWay President Scott Jacobs.  Mr. Jacobs was the founding V.P. Marketing of SportXction in Las Vegas, and is known for introducing innovations into legal lottery and gaming, such as telephone and PC playability.

Betting, Inc. looks forward to a very profitable relationship with GameWay and will process all of WinLinks’s transactions.


NYT Card

A private label discount charge card for The New York Times will launch in May according to Toronto-based Advantex Marketing International, the firm  responsible for the overall management of the program. Dining card developer IGT Services will handle the merchant participation. ‘The New York Times TimesCard’ will be available to seven day, full price subscribers in the NY metro area who pay their subscriptions six months in advance.