CAC Milestone

The Department of Defense yesterday marked a milestone in its military smart card personnel identification program. Service personnel from the Navy and Air Force received “Common Access Card” numbers one million and one million one. This marks approximately 25% completion of the largest U.S. smart card identification program, which ultimately will involve issuing of smart cards to more than 4 million employees (civilian, military and certain contractors) of the DoD. The program began rolling out in October 2001. SchlumbergerSema uses Infineon chips to produce the smart cards provided to the DoD by Electronic Data Systems Corporation under a contract awarded as part of the Defense Manpower Data Center’s “CAC” program. In addition to the security microcontroller, the card contains a photograph, magnetic stripe, linear bar code, 2D bar code and several other anti-counterfeit security features.

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Household Audits

Household International, Inc. announced that its independent auditor, KPMG LLP, has completed its audits of Household International and its wholly- owned subsidiary, Household Finance Corporation, for each of the years ended December 31, 1999, 2000 and 2001, and has rendered unqualified opinions for both entities.

In connection with the completion of these audits Household International and Household Finance Corporation have filed with the SEC amended Forms 10-K as of December 31, 2001, which include financial information for each of the years ended December 31, 1999, 2000 and 2001. As a result, both entities are now able to issue debt and/or equity securities under their respective, effective registration statements.

Household Finance Corporation expects to re-enter the debt markets next week with Inter Notes (retail placed medium-term debt). Household International will resume the issuance of equity securities through its employee benefit plans and its dividend reinvestment plan.

About Household

Household’s businesses are leading providers of consumer loan, credit card, auto finance and credit insurance products in the United States, United Kingdom and Canada. In the United States, Household’s largest business, founded in 1878, operates under the two oldest and most widely recognized names in consumer finance- HFC and Beneficial. Household is also one of the nation’s largest issuers of private-label and general-purpose credit cards, including The GM Card(R) and the AFL-CIO’s Union Plus(R) card. For more information, visit the company’s Web site at .

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GIFT CARDS

Canadian Tire Retail has inked a deal with TSYS to convert its existing paper gift certificates to electronic gift cards. Under the agreement, services already provided by TSYS to Canadian Tire Financial Services will be extended to integrate the existing electronic payment system with a new gift card system. Canadian Tire will offer the cards through its network of more than 450 stores. Totally, the company has more than 1,000 locations including gas bars across Canada. Canadian Tire has worked with TSYS since 1998, when Canadian Tire Financial Services converted its private label and MasterCard accounts from an in-house system to the TS2® processing system by TSYS.

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SCOTIABANK 2Q/02

Scotiabank reported that as of July 31, its total assets were $300 billion, up $29 billion and $3 billion, respectively, from last year and April 30, 2002. Compared to last year, the retail loan portfolio grew due to the success of the Bank’s Canadian “ScotiaLine VISA” and mortgage products, with market share gains in both areas. The Scotiabank “Classic VISA” card now offers up to 1% cash back on purchases, effective August 1. Earlier this year, the Bank launched the “No-Fee Value VISA”, the only no-fee, low-rate credit card in Canada. During the quarter, Scotiabank joined CertaPay and three other Canadian banks to launch the
a person-to-person e-mail money transfer service. Scotiabank was the first of the major banks to introduce P2P e-mail money transfers in a pilot in April. Scotiabank is also managing an innovative pilot service that allows customers to order and pay for their favorite McDonald’s food and beverages in advance, using the phone or the Internet. Customers open a secure “McQuick” account, then use a credit card to automatically deposit money into it. The amount of the purchase is deducted from the account when an order is placed. In addition to managing the pilot, the Bank is providing credit card transaction processing.

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TRINTECH 2Q/02

Dublin-based Trintech reported that revenues for the quarter ending July 31, fell 41% from $18.4 million for last year to $10.9 million. However the company reported its sixth consecutive quarter of declining pro forma operating expenses, which fell strongly by 44% in 2Q/02, compared to the corresponding period last year. Trintech is seeking to reach pro forma break-even by the end of its fiscal year in early 2003. Second quarter product revenue decreased 72% to $1.8 million for the quarter. Product revenue shortfall for the first half and second quarter can be attributed to an ongoing general weakness in the Company’s POS business line, due mainly to a fall off in new IT investment at retail level in the German market. Second quarter service revenue fell 8% from $3.5 million for the second quarter last year to $3.2 million for the second quarter ended July 31, 2002.

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Membership Rewards

American Express has launched a new dining & entertainment category within its “Membership Rewards” program. Enrollees can now redeem points through a new partnership with Ticketmaster for concert tickets, Broadway plays, sporting events, etc. Enrollees can also redeem “Membership Rewards” points for movie theater tickets, movie rentals and restaurant certificates through a number of other partners including: “Be My Guest Dining Cards,” BLOCKBUSTER, Broadway.com, Clear Channel Entertainment, Smith & Wollensky Restaurant Group, NY Restaurant Associates, Fleming’s Prime Steakhouse & Wine Bar, Hollywood Movie Magic, Morton’s of Chicago, The Steakhouse, “By Invitation Only” events from American Express and the US Open Championships. Membership Rewards, first launched in 1991, has more than 4 million U.S. enrollees and more than 9 million worldwide.

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BASE24 Clients

ACI Worldwide reported several financial institutions are in production with “BASE24 6.0” including: ABSA Group, Ltd. (South Africa); Bank One (United States); CEKAB (Sweden); Comercial Mexicana (Mexico); Giro Bankcard, Ltd. (Hungary); El Palacio de Hierro (Mexico); and National Credit Card Center of R.O.C. (Republic of China). To support new delivery channels allowing consumers to shop and bank almost anywhere in the world, BASE24 6.0 gives users the ability to acquire transactions in different currencies and apply them to accounts operated in many currencies.

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FEE FALL-OUT

Australia’s central bank’s decision to cut merchant credit card fees and permit merchants to charge customers fees for using credit cards will hit the bottom line of issuers. Future earnings of National Australia, ANZ Banking Group, Commonwealth Bank, and Westpac could be reduced by up to 2%. The major global card networks, VISA and MasterCard, may also get tangled up in similar reforms launched in other countries. American Express is not subject to reforms by the Reserve Bank of Australia. The RBA announced yesterday it will drop average interchange fees by 40% and lift the restriction imposed by credit card programs which prevent merchants from recovering from cardholders the costs of accepting credit cards. Interchange fees will decrease from around 95 basis points to approximately 55-60 basis points by July 1, 2003. The Reserve Bank’s standard on merchant pricing will come into force on January 1, 2003. The RBA also announced an end to restrictions imposed by credit card networks which limit the entry of new competitors. Specialist credit card institutions authorized and supervised by the Australian Prudential Regulation Authority will now be eligible to apply to participate in credit card programs. There are approximately 10 million cardholders among Australia’s population of 20 million.

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