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THE IDEA BEHIND SO-CALLED "stored-value" cards is familiar to anyone who has ever paid $10 or $20 for a prepaid, long-distance calling card. Today many types of companies, not just long-distance carriers, sell stored-value cards, which allow consumers to spend preset amounts on their goods and services. But few companies have taken the idea as far as Wildcard Systems Inc. of Sunrise, a privately held, five-year-old company that expects $30 million in sales this year.

Tucked into a quiet third-floor office in the Sawgrass Industrial Park, WildCard is quickly becoming a leading company in the development of a cashless society. The firm specializes in electronic payment systems that use rechargeable, stored-value cards with magnetic stripes embedded in them. "The idea is so simple, it's actually clever," says Larence Park, president and CEO of Wildcard.

Wildcard's growth is being driven by government and private industry mandates to get away from mailing checks for recurring transfers of money. Instead of paychecks and company credit cards for expenses, for example, corporate and US government employees can get their salaries or expense budgets electronically deposited into accounts that are accessible online or with the magnetic-striped cards.

In addition to payroll and government benefits, Wildcard systems have been set up to substitute stored-value cards for such paper payment items as gift coupons, traveler's checks and personal checks. Clients include Thrifty Car Rental, Ford Motor Company, Ace Hardware, Simon Property Group, Marriott Hotels, BellSouth and AAA.

"We are essentially a software development, data processing business," says Park. "We handle all of that bulletproof authorization and settlement activity." And the secret weapon behind the various applications? Cards linked to a Wildcard system can be used anywhere Visa or MasterCard is honored. "We are leveraging the ubiquitous network of Visa and MasterCard worldwide, and adding functionality," Park says.

While consumer awareness of stored-value cards is still low, they are likely to gain in popularity over time, says Rob Leathern, an analyst with high-tech consulting firm Jupiter Research in San Francisco. He says issuance of stored-value cards "serves a real consumer need as a good alternative to checks and check-cashing stores." People who don't have bank accounts can avoid check-cashing fees by accepting stored-value cards, instead of paper checks, for salary or government benefits.

Some banks are promoting the use of stored-value cards to capture new customers and to cement relationships with existing ones, says Joseph A. Lyons, a Charlotte, N.C.-bascd manager of stored-value programs for Bank of America, a Wildcard client. "The entire prepaid category is a way to deepen the relationship with our customers," Lyons says. Adds Park: "It's a classic high-technology marketing strategy."

Overseas opportunities also beckon to Wildcard, whose multinational clients include travel company Thomas Cook AG and Visa International. "The strategy is to build a mosaic of global partnerships," says Alex Fernandez, Wildcard's senior vice president of international business.

To build that mosaic, Wildcard has become a joint-venture partner of Visa International in Asia, Canada, Latin America and the Caribbean region. The companies are currently conducting joint tests of money-transfer initiatives in Mexico and the Dominican Republic.

Wildcard formerly operated under the name ClaimCard, and provided insurance payments via stored-value cards, a market the company still serves. As Wildcard branched out into other lines of business, opening offices in Orlando and Silicon Valley along the way, investment flowed in. The company's cumulative venture capital financing since 1998 totals about $50 million, Park says.

The 180-employee company turned its first monthly profit in December, Park says, and Wildcard expects 2002 to be a profitable year. Even if it falls short of its bottom-line forecast, Wildcard has a big cushion of capital to fall back on. Its most recent equity infusion came in late 2001-$14.5 million in venture capital from a group led by Sutterhill Ventures of Palo Alto, Calif.

So far, the company's key advantage may be its willingness to enter unexplored markets for stored-value cards. As Park explains, "We picked a niche that gave us plenty of headroom for growth-but small enough that the big guys didn't see it."

# posted by Medical Information : 2:56 AM