EDS DoD Cards

EDS yesterday announced a task order under an existing smart card contract to secure about 50,000 computers at more than 100 Air Force sites worldwide. Under yesterday’s order, EDS will serve as the Air Force’s single provider of middleware technology and smart-card readers for the service-wide implementation of a Department of Defense smart-card initiative. The task order could extend EDS’ support to hundreds of thousands of users as the program continues to be implemented throughout the Air Force. In November, EDS began issuing 600,000 smart cards at 900 DoD sites worldwide. To-date, EDS has issued more than 100,000 cards for the DoD, and the DoD is scheduled to issue 4 million of the cards during the next two years. The CAC card issued by EDS is a smart card enabled to use Java technology and certified to meet the Federal Information Processing Standard 140-1 Level 2 standard for security requirements for cryptographic modules.

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Smart Target

Target has moved into the Top 25 of U.S. card issuers as VISA receivables topped $2 billion in the quarter ending May 4th. Since the launch of the smart VISA program in September 2001, Target has issued more than 6 million cards, becoming the largest issuer of smart VISA credit cards in the nation and the second largest issuer of general purpose smart credit cards in the USA. Target says it will have smart card readers installed in all stores by August. The company plans to make e-coupons available to smart VISA card customers by the Christmas holiday shopping season. Target ended its first fiscal quarter of 2002 with $4.2 billion in total card receivables which includes $2.2 billion in private label credit card receivables. The Target Guest Card had $899 million in receivables, while the Mervyn’s card had $607 million, and Marshall Field’s card had $687 million. Target’s private label card receivables have declined 16% over the past year. Target said yesterday it expects to add between $1.5 billion and $2.0 billion to credit card receivables by the end of 2002. Across the Target portfolio, delinquency (60+ days) is running at 5% while charge-offs are running about 7%. For complete details on Target’s 1Q/02 performance visit CardData ([www.carddata.com][1]).

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

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GenPass Renews Hancock

Hancock Bank Holding has signed a three-year renewal with Genpass Service Solutions for servicing, supply and cash replenishment services for 130 ATMs throughout southern Mississippi and Louisiana. This renewal is part of the continuing expansion of business that Genpass Service Solutions has been experiencing over the last year. In 2001, Genpass Service Solutions had a 20% increase in total business. Genpass Service Solutions provides ATM servicing, supply, and cash replenishment services throughout the U.S. to more than 6,000 ATMs.

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CIBC 1Q/02

Toronto-based CIBC says market acceptance of its new American Express entourage cards remained strong during quarter ending April 30, and bank says it is optimistic about the prospects for its new CIBC Shoppers Optimum VISA card, launched with Shoppers Drug Mart Inc. in early May. CIBC says it had a market share, based on card volume, of 32.3% during the quarter, up from 32.1% the previous quarter. CIBC says its calculation of market share, based on card balances, remained at 21.7% for the quarter ending 4/30/02. During the quarter, CIBC continued to expand Amicus, its co-branded retail electronic banking business, in both Canada and the U.S.. The number of registered customers increased 7.0% during the quarter, bringing the total number of customers to 1,073,000. For complete details on CIBC’s latest performance data visit CardData ([www.carddata.com][1]).

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

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Hudson’s Bay 1Q/02

Canada’s Hudson’s Bay Company reported that as of April 30, there were 3.0 million active accounts in the combined credit card portfolios of Bay and Zellers. Credit card receivables amounted to $392.4 million or 5.9% below last year’s 1Q receivables balance of $417.1 million. Excluding the adjustment for securitizations, the receivable balance at April 30 increased 5.8% from the April 30, 2001 level and decreased 23% from the 2001 year-end level. Delinquency (30+ days) was 5.1%, slightly better than last year. Gross write-offs in the first quarter were $25.4 million, higher than Q1 2001 level by $2.4 million reflecting the impact of the personal bankruptcy levels in the Canadian economy. For complete details on Hudson’s Bay Company’s latest performance data visit CardData ([www.carddata.com][1]).

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

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VISA-MASTERCARD

VISA and MasterCard credit card volume grew 6.3% while the number of cards-in-force grew 12.3% during 2001. Gross dollar volume hit US$93.4 billion and the number of cards-in-force at year-end 2001 was 45.4 million. VISA holds a 70% share of the Canadian market, down from 72% in 2000, as MasterCard expands. MasterCard’s volume grew 10.8% last year to US$27.7 billion. VISA’s 2001 gross volume was $65.7 billion. MasterCard’s cards-in-force grew 22.5%, from 16.9 million in 2000 to 20.7 million at year-end 2001. VISA added 1.3 million cards last year to grow 5.6%, from 23.4 million to 24.7 million. Total transactions for both VISA and MasterCard combined was 1.4 billion.

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AmEx Art Funds

American Express yesterday announced over $1.5 million in grant awards through its Performing Arts Fund to more than a dozen performing arts organizations nationwide. The American Express Performing Arts Fund was created in 1997 to assist performing arts organizations across the United States in developing and sustaining broader audiences. Since its inception, American Express has given more than $6 million to more than 60 arts organizations throughout the United States.

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I-CLASS FINGERPRINTS

HID Corporation and Bioscrypt today jointly unveiled a practical and affordable new solution for access control that combines the high security of biometrics with a new generation of recently announced contactless smart cards from HID called iCLASS.

Bioscrypt, the world s leading provider of fingerprint-based biometric readers for access control, launched V-Smart iCLASS, a two-in-one reader solution. The new system combines bioscrypt on board, the company s brand for its proven fingerprint matching technology, with support for iCLASS contactless smart cards from HID, the global leader in proximity and Wiegand cards and readers. The iCLASS technology, optimized for access control and multiple applications, delivers the security and versatility of smart cards, yet retains the affordability and convenience advantages of proximity cards.

The two leaders cooperated in the development of V-Smart iCLASS to insure that traditional access control customers can use a superior biometric product that offers one-to-one biometric template authentication and user convenience. These two features support the markets requirement for fast throughput and individual privacy. The new smart cards and readers will be available July, 2002.

The market demand for higher security, biometric template storage and more applications on a single credential has increased steadily during the past 12 to 18 months, said Mark Scaparro, Executive Vice President of Sales and Marketing for HID. Yet until now no one has offered a cost-effective contactless smart card technology optimized for access control. iCLASS fills that gap.

We specifically designed the technology to make access control more secure and more powerful, Scaparro continued. At the same time, we included the features needed to implement other applications that can make the cards more useful. Finally, iCLASS breaks the last barrier to smart card penetration of the access control market price. For the first time, contactless smart cards are now affordable for access control.

V-Smart iCLASS”

Smart cards are an ideal complement to fingerprint biometrics, which led us to the decision to introduce the new reader and capitalize on the technology and security advances made by iCLASS, said Julia Webb, Vice President of Global Marketing and Business Development for Bioscrypt. Our fingerprint biometrics in V-Smart iCLASS gives security managers the peace of mind that comes with identifying the individual, not just the card. With bioscrypt on board they get what we call one-to-one security: one security credential and only one person who can use it.

In the new system, fingerprint templates are securely stored on the cards, not in the devices, making iCLASS smart cards portable databases that are well-suited for installations spanning multiple sites. Storing the template on the card simplifies system start-up and enables the support of unlimited populations. It also eliminates the redundant wiring requirement for biometric template management, lowering implementation costs significantly.

V-Smart iCLASS has bioscrypt on board, the advanced fingerprint matching algorithm proven on over 30,000 installations. It works with the latest in fingerprint sensor technology to provide a highly accurate and reliable solution that performs well even in extremely difficult cases. Designed to plug into existing access control systems, its stylish design is compact and modular. The reader features a double-gang surface mount and provides flexible communication options supporting Wiegand formats up to 64 bits. The convenient VeriAdmin software package provides user-friendly fingerprint template enrollment and administration capabilities.

HID s iCLASS

iCLASS is a new contactless smart card technology from HID. The company plans to manufacture a range of cards, keys, tags and readers that target access control and other applications.

An important advantage of iCLASS technology compared to other contactless smart cards is a read range of approximately three inches. That performance is comparable to proximity cards for access control, an industry first for smart cards. A longer read range makes it more convenient for users and increases the throughput of the system, because the fingerprint template transfer begins as soon as the card enters the range.

The iCLASS technology brings the power and security of smart cards to access control and offers several unique features that enhance traditional radio frequency identification (RFID) technology. These capabilities work together to reduce the risk of compromised data or duplicated cards and make additional secure applications possible:

Secure reading and writing of data

Cryptographic data storage

Mutual authentication between cards and readers

Secure encryption of all radio frequency data transmission

User definable access keys and optional DES and triple DES encryption

The new technology, developed by the Identification Technology Group (ITG) of HID s parent company ASSA ABLOY, utilizes advanced semiconductor technology based on the 13.56 MHz frequency and is compliant with the ISO standards for contactless smart cards 15693 and 14443 Types A, B1 and B2. Compliance with ISO standards enables many equipment and application developers to work with this technology to create a broad range of uses for the cards.

All iCLASS credentials will be available in either a 2K bits or 16K bits configuration. The iCLASS Tag will affix to existing cards or devices such as a cellular telephone or PDA to allow users to seamlessly and cost-effectively add contactless smart card technology to existing cards or devices. HID will also offer multi-technology credentials, iCLASS Prox and iCLASS Wiegand, that allow users to carry one card with a photo ID that is compatible with multiple types of readers.

About Bioscrypt

Bioscrypt Inc. (TSE: BYT) is a leading provider of advanced fingerprint technology with over 30,000 fingerprint readers currently installed. The company s solutions combine the convenience of touch with the high security of fingerprint-based biometrics for simple and secure access to facilities, equipment and information. Using the bioscrypt on board ” brand, the company offers packaged products, OEM components and software licensing to leading security solution manufacturers and integrators worldwide for physical, wireless and network security applications. Among the many cutting-edge companies and partners using Bioscrypt technology are the U.S. Army, NASA, Continental Airlines, Intel, Atmel, HID Corporation, Honeywell and Northern Computers. Bioscrypt s patented technology is interoperable with leading fingerprint sensors and is both platform and operating system independent. Bioscrypt is traded on the Toronto Stock Exchange under the symbol BYT. For more information, visit the Bioscrypt Web site at www.bioscrypt.com.

About HID

As interest in PC secure log-on and other smart chip applications increases, HID’s credential remains the platform of choice to carry multiple applications. HID multi-technology credentials can be used throughout organizations to leverage the investment in existing systems, while providing for enhanced functionality in other areas. As the largest manufacturer of contactless access control readers and cards for the security industry, HID has shipped over 125 million credentials to customers worldwide. HID pioneered the development of radio frequency identification (RFID) technology for security. Their experience in developing card technologies enables HID to play a critical role in the evolution and adoption of smart card technology. For more information on HID, visit their website at www.HIDCorp.com.

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ATM National

Washington, DC-based ATM National said Monday it has executed Letters of Intent with institutions representing 2.4 million debit cards and terminal deployers representing 13,000 ATMs to participate in its new nationwide surcharge-free ATM network. The company also announced that a pilot is scheduled to launch with several major deployers this summer. The startup company announced plans to build the ATM network in November. ATM National will provide customers of financial institutions with little or no ATM presence credit unions, community banks, and others with surcharge-free access to ATMs owned by the largest terminal deployers across the country. Membership for card issuers offers their customers free access to a national physical distribution channel at a fraction of the cost of building and maintaining their own network and infrastructure. Membership for deployers provides a source of incremental income through the network’s unique bundled pricing model. Under this approach, card issuers pay a fixed monthly fee to participate in the network, with deployers receiving a monthly payment from ATM National as compensation for participation. Deployer membership will be on a regionally exclusive basis, with one or two major deployers participating in each region of the country. The company has formed an alliance with Diebold and EDS for technology and EFT network solutions in support of its operations and product offerings. (CF Library 11/14/01)

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PAYWARE SMART PIN & MERCHANT

Trintech Group Plc, a global provider of
secure payment infrastructure solutions, announced at Retail Solutions
2002 the launch of PayWare SmartPIN, a complete Chip and PIN solution that
cost-effectively manages the imminent migration to chip-based credit and debit
cards.

PayWare SmartPIN is aimed at merchants and retailers that have immediate
requirements for a secure and standards-compliant Chip and PIN solution that
can integrate seamlessly with new or existing electronic point-of-sale (EPoS)
infrastructure. The solution includes Trintech’s proven PINPad hardware, EMV
application and application programming interface (API) that enables chip
acceptance with PIN authentication in any EPoS system.

PayWare SmartPIN is designed to tackle the growing fraud problem in
markets such as the UK. Recent statistics suggest that card fraud costs the
industry 400 million pounds sterling annually and is rising at 55 percent each
year (1). With counterfeit and stolen cards accounting for the majority of
all fraud, magnetic stripe technology with signature authentication has been
identified as a primary weakness of the current system. PayWare SmartPIN
allows merchants and acquirers to benefit from increased security, since chip
cards are extremely difficult to counterfeit and PIN verification is
inherently more secure than a signature. The banking industry has mandated
that, by 1 January 2005, any retailer that does not accept chip cards
authenticated by PIN will be fully liable for all card fraud.

“Chip and PIN offers retailers and merchants, and the financial community
a solution to the escalating fraud problem,” said Eamon Keating, General
Manager of Trintech’s eMerchant Division. “PayWare SmartPIN addresses the
issue of fraud without requiring significant changes to a retailer’s EPoS
environment. In addition, we have harnessed market-proven technology, such as
PayWare PINPad, to deliver one of the most market-ready and cost-effective
solutions in the industry.”

About PayWare SmartPIN

PayWare SmartPIN is a secure, standards-compliant, end-to-end Chip and PIN
solution that delivers significant benefits to merchants and retailers of all
sizes. The solution includes PayWare PINPad hardware, an EMV application and
application programming interface (API).

Trintech Launches PayWare Merchant Retail Edition,

Trintech Group Plc, a global provider of
secure payment infrastructure solutions, announced at Retail Solutions
2002 the launch of PayWare Merchant Retail Edition, a complete card processing
solution for retailers and merchants that reduces costs and dramatically cuts
deployment times.

PayWare Merchant Retail Edition is targeted at retailers and other
merchants who require integrated online card payment processing instead of
using stand-alone card processing terminals. The solution provides seamless
card processing integrated with the merchant’s electronic point-of-sale (EPoS)
system. The system has been carefully designed to reduce implementation time
and costs by enabling merchants and third party installation teams to easily
deploy and configure the solution by using an easy-to-use configuration
wizard.

Certified by all of the UK’s leading acquiring banks, the solution is
designed to speed up transactions at the point-of-sale by performing rapid
online authorizations. This enables retailers to operate lower floor limits
for card transactions, thereby reducing the risk of fraud and the possibility
of improved merchant service charges. The speed of transaction allows
retailers to reduce queues and serve more customers.

By replacing stand-alone card payment terminals with an integrated
solution, retailers can avoid errors associated with keying data into two
systems, a common source of both operator fraud and customer dissatisfaction
in a retail environment. PayWare Merchant is also fully compliant with EMV
chip card acceptance with PIN authentication as a means of reducing fraud and
chargeback levels.

“We are providing retailers with a solution that is both easy to implement
and also provides features critical for point-of-sale merchants,” said
Eamon Keating, General Manager of Trintech’s eMerchant Division. “High on
this list is our support for chip and PIN which will become critical for
retailers in the coming months. We believe PayWare Merchant Retail Edition
will be an important enabling technology for merchants that want to reduce
costs, speed their time to market, boost profitability and improve customer
satisfaction.”

About PayWare Merchant Retail Edition

PayWare Merchant Retail Edition is Trintech’s latest generation payment
server that enables merchants to accept card payments and perform rapid online
payment authorization from any electronic point-of-sale (EPoS) system. It
also handles delivery of transactions for end-of-day settlement. The product
employs TCP/IP and serial messaging to ease the integration with a wide
variety of EPoS systems. A unique easy-to-configure installation wizard makes
PayWare Merchant Retail Edition easy to install and deploy.

About Trintech

Founded in 1987, Trintech is a leading provider of secure electronic
payment infrastructure solutions for card-based transactions for physical
world commerce, eCommerce and mobile commerce. The company offers a complete
range of payment software products for credit, debit, commercial and
procurement card applications, as well as being a world leader in the
deployment of payment solutions for Internet commerce that are fully SSL and
SET(TM) compliant. Trintech’s range of scalable open systems architecture
solutions for UNIX(R) and Windows NT(TM) platforms covers consumer, merchant
and financial institution requirements for physical payments and the emerging
world of electronic commerce.

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Grace Periods

Grace periods have declined more than 28% over the past twelve years. According to CardData ([www.carddata.com][1]), grace periods on bank credit cards have dropped from 29.7 days in 1990 to 21.2 days as of April 2002. During the 1980s, grace periods averaged 30 days as interest rates averaged 19%. As annual fees began to disappear and interest rates began to decline in the early 1990s, the shortening of the grace period was not far behind. The launch of the AT&T Universal Card in 1990 and the growing success of the Discover Card, launched in 1986, were contributing factors to the disappearance of annual fees. Major card issuers shifted to variable interest rates in 1992 following the introduction of the General Motors MasterCard and as the prime rate dropped to 6.0%.

BANK CREDIT CARD GRACE PERIODS
(VISA, MasterCard, Discover, American Express)
1990: 29.7 days 1997: 24.3 days
1991: 29.4 days 1998: 23.9 days
1992: 28.6 days 1999: 23.5 days
1993: 27.8 days 2000: 21.8 days
1994: 26.8 days 2001: 21.5 days
1995: 25.3 days 2002: 21.2 days
1996: 24.7 days
Source: CardData (www.carddata.com)

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

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