Do Not Call Registry Approaches 30 Million

The FTC reported that a total of 28.7 million telephone numbers have been registered in the National Do Not Call Registry as of yesterday morning. Eighty percent of those registrations have been made on the Internet, and 5.7 million or 20 percent via the telephone. Registrants should experience less telemarketing calls starting October 1, 2003, with the exception of calls from political fundraisers, charitable solicitations and survey calls which are exempted from the Registry.

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eFunds Hires Outsourcing Execs

eFunds has hired Atul Kunwar, former COO of Syntel, as managing director and also hired Tom Klein, former CEO of SalesFirst Outsourcing, as VP of sales. Prior to Syntel, Mr. Kunwar served as CEO of Bharti BT Internet, and previously held senior executive positions at 3Com India and HCL. Mr. Kunwar will be based in Mumbai, India, where eFunds operates two call center facilities, and will be responsible for managing the day-to-day activities of all worldwide outsourcing operations. At SalesFirst Outsourcing Co., Mr. Klein founded and built a web based sales management software system for optimizing sales performance. Mr. Klein will serve as vice president of sales, Global Outsourcing Solutions division at eFunds with responsibility for all global outsourcing sales initiatives.

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Fair Isaac Buys NAREX for $10MM

Fair Isaac is acquiring CO-based NAREX, a specialist in analytic solutions for collections and recovery, for $10 million cash. Fair Isaac says NAREX’s solutions and expertise will give the Company the added ability to drive businesses’ late-stage collection and recovery strategies. The NAREX operation will continue to operate from its Golden, CO, location under the Fair Isaac name, operating within Fair Isaac’s Global Account Management Solutions division. Using artificial intelligence-based, proprietary technologies, NAREX builds custom and non-custom scoring solutions, optimization models, debt evaluation services, and other offerings to improve collections and recovery results. In 2002, NAREX introduced “UniScore,” a complete Web-based score package that prioritizes accounts for optimum recovery performance.

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Bankrate Profits Up 152%

Bankrate reported that net income increased 152% in the second quarter to $2.5 million on revenues of $9.6 million. This is the seventh consecutive profitable quarter as a result of increased advertiser demand and positive traffic patterns. Net income for the first six months of 2003 increased 168% to a record $4.5 million. Total revenue for the six months ended June 30, 2003 rose 53% to $18.1 million from $11.8 million in the same period in 2002.

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CRESERC

Hitachi, Mitsubishi Electric, and NTT have launched a new encryption technology for secure and efficient implementation of an elliptic curve cryptosystem. The new encryption called “CRESERC” is the world’s first case of well-established leaders in the field of cryptography collaborating in the development of implementation technology by integrating their advanced skills and technologies. In March, the EU approved “NESSIE 5,” a project to select the next-generation cryptographic algorithms. They selected “Camellia” 6 jointly developed by Mitsubishi Electric and NTT, “MISTY1” 7 by Mitsubishi Electric, and “PSEC-KEM” 8 by NTT as recommended algorithms. Meanwhile, the ISO has been promoting the standardization of encryption goals by the Spring of 2004 at the earliest. In their deliberations, they have nominated not only “Camellia”, “MISTY1”, “PSEC-KEM” but also “MULTI-S01” 9 and “MUGI” 10 by Hitachi for international encryption standards. In addition, they have also been selected as recommended cryptographic algorithms by CRYPTREC: the cryptography evaluation project for e-governance by MPHPT (Ministry of Public Management, Home Affairs, Posts and Telecommunications) and METI (Ministry of Economy, Trade and Industry).

FULL STORY:

Hitachi, Ltd., Mitsubishi Electric Corporation, and Nippon Telegraph and
Telephone Corporation hereafter, Hitachi, Mitsubishi Electric
and NTT, respectively, announced their success in mutually researching and
developing an implementation technology of an elliptic curve cryptosystem
(ECDSA signature) 1. They named the technology “CRESERC”. To establish
this technology, Hitachi, Mitsubishi Electric and NTT founded a project
team to research and develop a secure and efficient implementation for
elliptic curve cryptosystem (ECDSA signature). This is the world’s first
case of well-established leaders in the field of cryptography
collaborating in the development of implementation technology by
integrating their advanced skills and technologies.

Background to the Joint R&D

To realize e-governance 2 and the ubiquitous 3 environment listed in
“e-Japan Priority Policy Program”, there is a pressing need to establish a
fundamental technology to realize a truly secure communication
environment, and to support the advanced information sharing society.
Encryption and electronic authentication 4 are central to this technology.

“Secure and efficient implementation technology” is a vital R&D goal for
achieving practical use. However, R&D has been faced with a trade-off
between “security” and “efficiency”. Therefore, Hitachi, Mitsubishi
Electric and NTT launched the joint project and now they have succeeded in
developing an implementation technology with the world™fs strongest
security level while matching the efficiency of the existing products in
the market.

In March 2003, EU (European Union) approved NESSIE 5, a project to select
the next-generation cryptographic algorithms. They selected “Camellia” 6
jointly developed by Mitsubishi Electric and NTT, “MISTY1” 7 by Mitsubishi
Electric, and “PSEC-KEM” 8 by NTT as recommended algorithms. Meanwhile,
ISO (International Organization for Standardization) has been promoting
the standardization of encryption goals by the Spring of 2004 at the
earliest. In their deliberations, they have nominated not only
“Camellia”, “MISTY1”, “PSEC-KEM” but also “MULTI-S01” 9 and “MUGI” 10 by
Hitachi for international encryption standards. In addition, they have
also been selected as recommended cryptographic algorithms by CRYPTREC:
the cryptography evaluation project for e-governance by MPHPT (Ministry of
Public Management, Home Affairs, Posts and Telecommunications) and METI
(Ministry of Economy, Trade and Industry).

Since the late 1990’s, the U.S. and Japanese governments, EU and ISO, have
actively promoted these encryption algorithm validation, selection, and
standardization activities. They are now being almost completed, and the
cryptographic algorithms that will be widely used in the first half of the
21st century are being listed up. The above Japanese cryptographic
algorithm’s excellent efficiency and their high commercial viability (LSI
implementation) are highly regarded throughout these activities and it is
likely that one or more of these Japanese company’s algorithms will be
widely used. Currently, ISO and CRYPTREC recognize that they need to
emphasize “secure implementation”, and they plan to establish the
corresponding validation criteria and validation standards.

As concern over “secure implementation of cryptosystems” increases,
“CRESERC” is expected to be set into various application areas that
require information security (for example, e-governance and ubiquitous
communication systems) as the world’s leading implementation technology in
the field.

Roles of the 3 Companies

Hitachi, Mitsubishi Electric and NTT mutually carried out this joint R&D
by sharing their preeminent technology on the basis of their shared
advantage: the mathematical theory of elliptic curve cryptosystems. Their
roles are as follows:

Hitachi: secure implementation technology of elliptic curve
operations
Mitsubishi Electric: efficient implementation technology of elliptic curve
operations
NTT: efficient and secure implementation technology of basic
arithmetic

Future Plan

These three companies plan to launch products incorporating each company’s
preeminent technology in e-governance system and ubiquitous-related
security products based on their joint R&D results, namely “CRESERC”.

Terminology

1. Elliptic curve cryptosystem: Public key cryptosystems utilizing the
mathematical operations over elliptic curves. They can encrypt the data
using short key lengths at high efficiency while maintaining the high
level of security, thus it is receiving attention as the new generation
public key cryptosystems that can replace RSA schemes. ECDSA (Elliptic
Curve Digital Signature Algorithm) is a digital signature algorithm based
on elliptic curve cryptosystems; it has been selected by NESSIE and
CRYPTREC as one of the recommended signature schemes.

2. e-governance: A governance support tool that allow various tasks
including administration to be executed electrically by utilizing computer
systems and Internet technology.

3. Ubiquitous: Derived from Latin meaning “exists everywhere”. It means
the environment where user can access information network like the
Internet at any time from everywhere.

4. Electronic authentication: A technology to realize seals and seal
certificates in the electronic world by utilizing electronic signatures
and public key certificates (electronic certificates).

5. NESSIE (New European Schemes for Signatures, Integrity, and Encryption)
EU approved project to select the next-generation cryptographic schemes
started in 2000 and completed in the beginning of this year.

6. Camellia: 128 bit block encryption algorithm jointly developed by
Mitsubishi Electric and NTT. Specifications are already disclosed and
published.

7. MISTY1: 64 bit block encryption algorithm developed by Mitsubishi
Electric. Specifications are already disclosed and published.

8. PSEC-KEM: A public key encryption algorithm developed by NTT.
Specifications are already disclosed and published.

9. MULTI-S01: 256 bit key length stream encryption algorithm developed by
Hitachi. Specifications are already disclosed and published.

10. MUGI: 128 bit key length stream encryption algorithm developed by
Hitachi. Specifications are already disclosed and published.

About Mitsubishi Electric Corporation

With over 80 years of experience in providing reliable, high-quality
products to both corporate clients and general consumers all over the
world, Mitsubishi Electric Corporation (TSE: 6503) is a recognized world
leader in the manufacture, marketing and sales of electrical and
electronic equipment used in information processing and communications,
space development and satellite communications, consumer electronics,
industrial technology, energy, transportation and building equipment. The
company has operations in 35 countries and recorded consolidated group
sales of 3,639 billion yen (US$30.3 billion) in the year ended March 31,
2003.

About Hitachi, Ltd.

Hitachi, Ltd. (TSE: 6501 / NYSE: HIT) headquartered in Tokyo, Japan, is a
leading global electronics company, with approximately 320,000 employees
worldwide. Fiscal 2001 (ended March 31, 2002) consolidated sales totaled
7,994 billion yen ($60.1 billion). The company offers a wide range of
systems, products and services in market sectors, including information
systems, electronic devices, power and industrial systems, consumer
products, materials and financial services.

About NTT

NTT (TSE: 6472)is a holding company of the Global Information Sharing
Enterprise Group and NTT group, which consists more than 430 companies.
One of the important missions of NTT group is to contribute the
achievement of a Ubiquitous Broadband society. NTT group concentrates on
integrating the group on expanding Broadband Service on Photonic Access,
Third Generation Cellular Phone, Wireless LAN, are provided for Access
means, promoting the structure of distributing the contents of Movies and
music, and enhance the providing contents.In November 2002, the
Vision for a new optical generation is announced.

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TNB Opens MasterCard Family Account to All Clients

Dallas-based TNB Card Services has launched the new “MasterCard Family Account” for all its card issuing clients. The new program features one shared credit line assigned to the primary cardholder such as a parent, or some other supervising adult. The primary cardholder then determines who else will receive a card and what each individual’s spending limit will be. The “Family Account” will also include cash access to ATMs and monthly-itemized statements. TNB launched the pilot of this program in conjunction with GECU of El Paso, TX as the issuer. GECU began issuing MasterCard Family Accounts in April. GECU is offering the card with no annual fee. Gold cards offer an APR of 9.9% and standard cards carry a 12.5% APR. (CF Library 11/7/02; 4/30/03).

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E-GALLEON CARD DEAL

National Australia Group Europe has inked a four-year contract with Schlumberger Smart Cards & Terminals for more than 2.5 million top-level security cards per year. The project marks the first time Schlumberger cards will be used to support dual currency, using pound sterling for UK transactions and euros for the Republic of Ireland. National Australia Group Europe will distribute Schlumberger’s “e-Galleon” card for enhanced security, comprehensive risk management and faster transaction times. National Australia Bank Limited ranks in the top 100 banks worldwide based on assets. The bank has a major presence in the UK and the Republic of Ireland through its ownership of Clydesdale Bank, Yorkshire Bank, Northern Bank and National Irish Bank.

FULL STORY:

Schlumberger Smart Cards & Terminals, a business unit of Schlumberger Limited, announced that it has signed a four-year contract with National Australia Group Europe to supply over 2.5 million of its top-level security e-Galleon cards a year.
National Australia Bank Limited ranks in the top 100 banks worldwide based on assets. The bank has a major presence in the UK and the Republic of Ireland through its ownership of Clydesdale Bank, Yorkshire Bank, Northern Bank and National Irish Bank.

The e-Galleon card from Schlumberger offers cardholders a range of features for enhanced security, comprehensive risk management and faster transaction times. “Security for our customers and eliminating fraudulent transactions is one of our highest priorities,” said Brent Skeffington from National Australia Europe. “The e-galleon smart card will be a key tool in enabling us to provide a secure service to our customers. We are looking forward to deploying these cards in our branches throughout the UK and Ireland over the next four years.”

“The move to EMV cards that enable the use of a PIN rather than a signature at the point of sale is the next step in the battle against card fraud,” said Howard Berg, regional director for the UK and Ireland at Schlumberger Smart Cards & Terminals. “As a worldwide smart card technology provider, Schlumberger is ideally positioned to partner with companies in the banking community, drawing on our business expertise across consulting and EMV project management to support our banking customers’ global activities.”

The project marks the first time Schlumberger cards will be used to support dual currency, using pound sterling for UK transactions and euros for the Republic of Ireland.

Schlumberger has a proven track record of delivering a wide range of business solutions, services and products that improve the competitive advantage of financial institutions, while providing them with the highest level of security possible.

About National Australia Group

National Australia Bank Group, (The National) is an international financial services group operating across four continents and 15 countries including Australia, the United States, the United Kingdom, New Zealand and Asia.

The National has an asset base of over GBP131 billion ($212 billion), assets under management and administration of more than GBP21 billion, assets under custody and administration of GBP127 billion. With almost 8 million banking and more than 2.8 million Wealth Management customers globally, it is ranked as one of the 50 largest banks in the world by revenue.

Financial Services Europe (FSE) is the retail banking arm of National Australia Group for Great Britain and Ireland. Following recent changes, FSE includes all European based consumer, business and agribusiness banking, together with cards, payments, leasing and shared services.

Members of Financial Services Europe include Clydesdale Bank in Glasgow, Yorkshire Bank in Leeds, Northern Bank in Belfast and National Irish Bank in Dublin.

About Schlumberger Smart Cards & Terminals

Schlumberger Smart Cards & Terminals is the world’s leading provider of microprocessor cards (Gartner 2003, Frost & Sullivan 2003) – the key to digital networks – and a major supplier of card-related terminals and transaction software. Its 5000 employees serve customers in more than 100 countries, with worldwide sales exceeding 2.6 billion smart cards to date. The company has more than 20 years’ experience in smart card innovation and leads its industry in security technology and open systems.

Schlumberger Smart Cards & Terminals continuously creates new generations of products for use in a variety of applications in the telecommunications, finance, retail, transport, entertainment, healthcare, personal identification, information technology and public sector markets. Smart card solutions provide convenience, security and privacy to public and private services operators, their customers and end users.

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Fidesic Payments Targets Mid-Sized Businesses

WA-based Fidesic Corporation has launched Fidesic Payments to offer mid-sized companies an affordable system to automate the processes of creating, authorizing and sending payments. Fidesic Payments transforms the labor-intensive, paper-laden, traditional payment process into an efficient, automated operation. Fidesic Payments eliminates the need to have to print, fold, stuff and mail payments. Fidesic is certified by TRUSTe, and all data is encrypted, ensuring that customer information is both secure and private.

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ATM EMV SOLUTION

UK-based cashless payment specialist, CreditCall Communications, has partnered with North Carolina-based Nexus Software to create an “EMV Level 2” compliant solution for Nexus’ “INvolve” family of middleware and its more than 90,000 installations worldwide. The product, known as “EmvX”, is based on the “CreditCall CardEaseEMV” certified smart card transaction processing engine, which provides a straightforward means for financial institutions and payment machine operators to upgrade almost any existing Windows-based payment terminal, whether operating attended or unattended, to accept and process EMV cards. The “EmvX Toolkit” is aimed primarily at payment system developers.

FULL STORY:

Nexus Software, Inc., a provider of cross-channel client middleware for financial services delivery, announced a strategic alliance with Bristol, U.K.-based cashless payment specialist, CreditCall Communications, to create an Europay/Mastercard, Visa Level 2 compliant solution for Nexus’ INvolve(R) family of middleware and its more than 90,000 installations worldwide.

Through this alliance, CreditCall’s EmvX(TM) toolkit now fully supports INvolve and will facilitate a rapid and cost-effective path to full EMV compliance for any machines that utilize the INvolve single or cross-channel solution. The product, known as EmvX(TM), is based on the CreditCall CardEaseEMV(TM) certified Smart Card transaction processing engine, which provides a straightforward means for financial institutions and payment machine operators to upgrade almost any existing Windows(R)-based payment terminal, whether operating attended or unattended, to accept and process EMV cards.

“We recognized that the Nexus INvolve platform was innovative as well as trusted and that it was important to support it in our EmvX product,” said Nick McGarvey, managing director of CreditCall. “Given that both products are based on the same Microsoft(R) COM architecture, there was technical synergy from the outset.”

Europay International, Mastercard International and Visa International joined together in 1999 to create EMVCo, LLC. According to the company, it oversees the EMV Smart Card Specifications for Payment Systems as chip cards become more accepted and used worldwide. Mandating compliance with EMVCo specifications, guarantees that single terminal and card approval processes will develop along with cross-channel payment systems, so one does not outgrow the other.

The EmvX Toolkit is aimed primarily at payment system developers, giving them a powerful suite of software tools to allow EMV Level 2 compliance to be added to existing Microsoft Windows applications with the minimum cost and development time. By adding it to the INvolve family of cross-channel client middleware, Nexus connects financial services solutions to multiple and varied sets of banking-specific devices used with branch teller workstations, kiosks and automated teller machines (ATMs).

“As European financial institutions approach the 2005 EMV deadline and other financial companies around the world begin to adopt the standard, it was important that Nexus work with CreditCall to develop an efficient and cost-effective EMV solution,” said Robert Usner, marketing director for Nexus Software, Inc. “The INvolve family of products and EmvX compliance toolkit together provide a complete EMV-ready platform for any ATM or Smart Card solution.”

INvolve 3.2 is available immediately to existing customers and evaluation versions are also available. EmvX is a free download from CreditCall’s EMV Web site. The Trialware download includes a PCSC driver for any standard EMV Level 1 compliant card reader that supports PCSC.

About CreditCall Communications Ltd.

Founded in 1996, CreditCall Communications, a provider of credit and debit card-based solutions for the cashless society, is a major UK supplier of payment solutions for diverse applications including in-room card-based telephony solutions, Pay & Display car parking, E-TopUp, Vending, Ticketing and Pay TV.

CreditCall invests heavily in research and development and aims to provide facilities, which will allow any machine or device to be enabled to accept cashless payment, either via credit, debit, or micro payments.

For more information about CreditCall products and services visit www.creditcall.com. For more information on CreditCall EmvX visit www.emvx.co.uk.

About Nexus Software

Nexus Software is the world-leader in cross channel client middleware and related products and services for financial services providers that connect any solution to any device in any channel from any vendor. Nexus Software XFS standards-based, vendor neutral solutions are installed in more than 90,000 ATMs, Kiosks and Branch teller stations at over 580 financial institutions around the world. Nexus Software is headquartered in Raleigh, N.C., USA, with development offices in Portsmouth, England and Edinburgh, Scotland.

For more information on Nexus Software products and services, visit the company’s Web site at www.nexussoft.com.

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Malaysia Leads EMV A-P Migration

Smart cards are gaining momentum in Asia Pacific, as evidenced by more than 12 million VISA-branded EMV smart cards issued regionally, alongside over 120,000 EMV POS terminals. VISA aims to migrate the majority of payment cards and terminals to EMV chip standards in Asia Pacific by end 2008. VISA recently sponsored a “VISA Smart Vendor Conference” in Kuala Lumpur attended by more than 120 chip and technology professionals from 70 international companies. More than 70 leading vendors already participate in the “VISA Smart Program,” and many are actively supporting VISA members in their coming launches of VISA EMV card programs. Besides global vendors, an increasing number of Malaysian vendors, such as Cassis, have recently joined the program. The migration to smart cards is gaining speed in Malaysia and the country could very well be the first country in the region to complete national migration to EMV. In Asia Pacific, VISA has a greater market share than all other payment card brands combined with 59% of all card purchases at the point of sale being made using VISA cards. There are currently more than 365 million VISA cards in the region. During 2002, US$700 billion was spent at point of sale or withdrawn from ATMs in Asia Pacific using VISA cards, an increase of 43% over the previous year.

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NCR 2Q/03

NCR reported that its ATM division generated second-quarter revenue of $260 million, a 2% gain over the year-ago period. The company says revenue growth in the Americas region offset continued market weakness in Europe and the impact of SARS in China. The Retail Store Automation unit produced $204 million in revenue, up 17% from the second quarter of 2002. During the quarter, NCR signed $25 million of orders for NCR’s advanced-function ATMs for five large US banks. Internationally, the company inked a deal with the State Bank of India to install and manage 1,500 ATMs and also signed an agreement with the Bank of Communications and Agricultural Credit Union Bank in China for “Personas” ATMs and “APTRA” software. In the Company’s Retail Store Automation business, NCR was awarded a $40 million contract during 2Q/03 with the USPS for POS terminals and services including software development, project management, installation, help desk and maintenance. NCR also signed an UK deal to refresh Sainsbury’s POS technology in all of its 500 supermarkets and 200 gas stations with “RealPOS 80c” terminals and “RealScan” bar-code scanners.

FULL STORY:

NCR Corporation reported finalized results for the quarter ended June 30, 2003, including revenue of $1.37 billion, a decrease of 1 percent from second quarter of 2002 and in line with guidance. The 1 percent revenue decline includes a year-over-year benefit of 6 percentage points from foreign currency fluctuations.

Operating income for the second quarter was $16 million versus $51 million in the second quarter of 2002. Included in the reported results was a $43 million year-over-year decline in operating income resulting from pension expense of $24 million in the second quarter of 2003, versus $19 million of pension income in the second quarter of 2002.

NCR reported net income of $9 million, or $0.09 per diluted share, versus net income of $26 million, or $0.25 per diluted share in the second quarter of 2002.

“Every NCR business segment met or exceeded expectations in the second quarter,” said Mark Hurd, president and chief executive officer of NCR. “We are determined to achieve our objective of delivering superior customer value propositions and are making good progress towards reducing operating expenses $250 million by the end of 2005, of which $50 million to $60 million will be realized in 2003. Reaching these goals will significantly enhance NCR’s competitiveness while positioning the company to build value as business conditions improve.”

Operating Segment Results

The operating segment results discussed below exclude the impact of $24 million of pension expense in the second quarter of 2003 and $19 million of pension income in the second quarter of 2002. NCR excludes the effect of pension expense/income when evaluating the performance of and making decisions regarding its operating segments. Schedule B, found later in this earnings release, reconciles total “Income from operations excluding pension expense/income” for all of the company’s segments to “Total income from operations” for the company.

Data Warehousing Segment

Support services growth and cost, expense initiatives result in
improved operating margin

NCR’s Data Warehousing segment reported second-quarter revenue of $300 million, down 3 percent year-over-year. Second-quarter revenue included a year-over-year benefit of 5 percentage points from foreign currency fluctuations. Operating income of $32 million for the quarter increased $2 million from the second quarter of 2002 driven by 24 percent revenue growth in support services and on-going expense reduction initiatives.

NCR’s Data Warehousing business provides the market-leading Teradata(R) data warehousing database software, hardware platform and related services that enable companies to gain a competitive advantage by efficiently analyzing customer behavior and then delivering that business intelligence to company decision-makers.

During the quarter:

— Lloyds Bank, one of the largest financial services groups in Europe, expanded its Teradata enterprise solution.

— Bank of China, one of the top four banks in mainland China, selected Teradata warehouse and Teradata CRM solutions to build the customer service and sales system for its card business.

— The Salk Institute began using the Teradata data warehouse solution to allow scientists and researchers to use data-mining techniques to accelerate the pace of genetic research.

Financial Self Service Segment

Operating margin improved on slightly higher revenues

The Financial Self Service segment generated second-quarter revenue of $260 million, in line with guidance and up 2 percent from the year-ago period. Revenue growth in the Americas region offset continued market weakness in Europe and the impact of Severe Acute Respiratory Syndrome (SARS) in China. Second-quarter revenue includes a year-over-year benefit of 8 percentage points from foreign currency fluctuations. Operating income of $32 million improved from $25 million generated in the prior-year period.

NCR’s Financial Self Service business provides high-quality automated teller machines (ATMs) and the APTRA(TM) multivendor application software that delivers advanced functionality to banks, credit unions and retailers.

During the quarter:

— Five of the largest U.S. banks ordered more than $25 million of NCR’s advanced-function ATMs.

— The State Bank of India, the country’s largest commercial bank, selected NCR to supply, install and manage 1,500 ATMs.

— Both the Bank of Communications and Agricultural Credit Union Bank in China placed orders for NCR’s Personas(TM) ATMs and APTRA software.

Retail Store Automation Segment

Break-even operating income on better-than-expected revenue and
cost reductions

For the second quarter of 2003, Retail Store Automation generated $204 million in revenue, up 17 percent from $174 million in the second quarter of 2002, including a year-over-year benefit of 5 percentage points from foreign currency fluctuations. The break-even operating performance is a $13 million improvement from the operating loss reported in the prior-year period.

NCR’s Retail Store Automation business provides store-automation technologies such as point-of-sale (POS) terminals, bar-code scanners and software, as well as innovative self-checkout systems and other store-automation solutions to retailers.

During the quarter:

— The United States Postal Service, in Stage III of its POS One technology initiative to improve local Post Office operations and customer service, awarded NCR contracts totaling more than $40 million for POS terminals and services including software development, project management, installation, help desk and maintenance. Installation of these terminals will occur over the next several quarters.

— The refresh of Sainsbury’s POS technology in all of its 500 United Kingdom supermarkets and 200 petrol stations with NCR RealPOS 80c terminals and NCR RealScan bar-code scanners was completed by NCR. The deal with Sainsbury’s information technology partner, Accenture, also includes a six-year agreement for ongoing managed services provided by NCR.

Customer Services Segment

Operational performance improved, mitigating the impact of
continued pricing pressure

Customer Services revenue increased to $463 million, up 4 percent from the prior-year period including a year-over-year benefit of 6 percentage points from foreign currency fluctuations. Operating income improved to $7 million from the $6 million reported in the second quarter of 2002. Customer Service operating income continues to be affected by pricing pressures and an adverse mix shift.

NCR’s Customer Services Division provides hardware and software maintenance, deployment and managed services around the world for NCR’s Financial Self Service, Retail Store Automation and Payment and Imaging customers as well as for third-party technology providers.

During the quarter:

— Snap Appliance, a global leader in network storage systems, signed a contract for NCR managed services.

— Banco Popolare di Verona e Novara, one of the largest retail banks in Italy, signed a contract for maintenance of the bank’s entire installed base of 1,300 ATMs, 800 of which are units from an NCR competitor.

Systemedia Segment

Improved operating margin on lower revenues

Systemedia second-quarter revenue was $122 million, down 8 percent from the revenue generated in the year-ago period. The reported revenue includes a year-over-year benefit of approximately 5 percentage points from foreign currency fluctuations. This business segment generated $3 million of operating income, the same as reported for the second quarter of 2002.

Systemedia provides business consumables and products including ink-jet and laser printer supplies, thermal transfer ribbons, labels, paper rolls, ink ribbons, laser documents, business forms and retail office products.

Payment and Imaging Segment

Improved operating income on comparable revenue due to lower
expense

Payment and Imaging increased operating income to $5 million from $4 million in the second quarter of 2002. Operational efficiencies drove the improved performance on revenues of $36 million versus the $35 million of revenue generated in the second quarter last year.

NCR’s Payment and Imaging business provides end-to-end solutions for both traditional paper-based and image-based item processing. This business utilizes advanced image recognition and workflow technologies to automate item processing, helping banks and other financial institutions increase efficiency and reduce operating costs.

During the quarter:

— The U.S. House of Representatives and the U.S. Senate passed versions of Check 21 legislation which must be reconciled in conference committee.

— Fifth Third Bancorp signed a $7 million contract to transform the bank’s check and remittance processing systems using NCR’s ImageMark(TM) Archive platform.

Non-Operating Items

Net Interest and Other Expense in the second quarter of 2003 was $4 million, down from $15 million in the prior-year period.

The weighted average number of diluted shares outstanding declined to 95.3 million from 100.5 million in the prior-year period due to the company’s share repurchase activity. During the second quarter, NCR used approximately $9 million of cash to repurchase approximately 385,000 shares.

Balance Sheet

NCR ended the second quarter with $585 million in cash and short-term investments, a $56 million increase from $529 million on March 31, 2003. As of June 30, 2003, NCR had short- and long-term debt of $312 million, down from $318 million on March 31, 2003.

Cash Flow

NCR generated $98 million of cash flow from operations in the second quarter of 2003, an increase from the $59 million of operating cash flow in the same period of 2002. Capital expenditures for property, plant and equipment, reworkable service parts and additions to capitalized software in the second quarter of 2003 were $45 million, versus $70 million of capital expenditures in the year-ago period.

Outlook

Assuming 4 to 5 percentage points of benefit from fluctuations in foreign currency, NCR expects the following revenue trends in the third quarter.

NCR expects earnings per share for the third quarter in the $0.07 – $0.13 range. Historically, NCR’s second- and third-quarter revenue and operating performance have been similar in nature.

Based on year-to-date achievements, on July 9, NCR increased its expectations for full-year earnings per share to the $0.45 to $0.55 range.

Pension Update

Although the performance of the equity markets improved during the first half of 2003, lower interest rates and other changes in pension variables are likely to result in 2004 pension expense exceeding the $95 million of pension expense in 2003. More specific information regarding 2004 pension expense will be provided when NCR completes its annual pension calculations in January 2004.

Fox River Update

As previously discussed in prior periods and formally disclosed in NCR’s public filings with the U.S. Securities and Exchange Commission (SEC), NCR may be considered a potentially responsible party for environmental clean-up costs associated with the Fox River in Wisconsin.

During the next few weeks, the government is expected to release its Record of Decision (ROD), which will address the final clean-up plan for downstream areas of the Fox River. NCR will provide an update regarding the status of the ROD when the company files its second-quarter report on Form 10-Q. For further information regarding NCR’s potential liability and the factors relating to NCR’s potential liability associated with the Fox River, see the company’s previous public filings with the SEC.

The earnings-per-share guidance for the remainder of 2003, provided earlier in this earnings release, does not reflect any potential changes to the company’s environmental reserves.

About NCR Corporation

NCR Corporation (NYSE: NCR) is a leading global technology company helping businesses build stronger relationships with their customers. NCR’s ATMs, retail systems, Teradata data warehouses and IT services provide Relationship Technology(TM) solutions that maximize the value of customer interactions. Based in Dayton, Ohio, NCR (www.ncr.com) employs approximately 29,500 people worldwide.

For details on NCR’s 2Q/03 results visit CardData (www.carddata.com).

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VISA USA Names BofA’s Phillips as Chairman

VISA USA has named Patrick Phillips, president of Card Services and e-Commerce at Bank of America, to the post of chairman of its board of directors. Phillips, who has been with Bank of America since 1973, served as president of NCNB Financial Products, president of NCNB Services Inc. and served in various other corporate banking and marketing roles. Phillips takes over as chairman of the board from Phil Heasley, the former CEO of Bank One Card Services. Phil Heasley resigned from the board after stepping down from his position at Bank One on July 16.

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