Farmer Leaves SCA

The high profile spokesperson for the Smart Card Alliance is leaving to form her own company. Donna Farmer, President and CEO of the smart card oriented non-profit entity, is creating a new company to focus on secure ID programs and authentication, offering a range of consulting services, and marketing support. The Smart Card Alliance was formed by the merger in December 2000 of the Smart Card Industry Association and The Smart Card Forum. Farmer held her position with the association since 1998, serving first as President and CEO of the Smart Card Forum and then of the Alliance after its formation. She will continue her involvement with the Smart Card Alliance and the work of its initiatives, from her new position as a Special Advisor to the Board of Directors.

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Card Stock Rally

Federal Reserve Chairman Alan Greenspan indicated yesterday that an interest rate hike is unlikely for the near term, however rates could move upward by the end of this year. The news sent the stock of credit card specialists and consumer finance companies up 2% to 4% Wednesday. Household’s stock climbed 4.2% yesterday, to close at $52.08, after briefly hitting $53 per share. Capital One’s stock rose 3.2% and MBNA was up 2.4%. Capital One came close to $50 per share Wednesday, while MBNA topped $35 per share during intraday trading. American Express inched up by 1.5%, as sub-prime specialist Metris Companies picked up less than 0.2%. Greenspan told the House of Representatives Committee on Financial Services that the end of the recession is very near, but the recovery may not be robust. The Feds cut rates eleven times during 2001, which dropped the prime rate to 4.75%. The average prime rate for 2001 was 7.02%, the lowest since 1994, according to CardData ([http://www.carddata.com/>www.carddata.com][1]).

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

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Citibank Reforms

Citibank yesterday signed an agreement with the attorneys general in 27 states to protect its customers from alleged unfair and deceptive practices by telemarketing firms that solicited business using Citibank’s customer lists and encrypted credit card numbers. The agreement settles a multi-state, two-year investigation led by Illinois Attorney General Jim Ryan and attorneys general in New York, California and Vermont. Under the agreement, Citibank admitted no wrongdoing but agreed to pay $1.6 million to the states. Since the mid-1990s, Citibank customers complained that deceptive pitches by the bank’s partners resulted in consumers being charged for products and services that they did not knowingly agree to purchase. In some cases, telemarketers promoted free trial offers on dental plans or credit card loss protection service. When the trial period ended, consumers did not understand that the companies would charge their credit card for continued use unless the consumers canceled during the trial period.

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Card Designs

When offered, nearly four out of ten debit card applicants will choose a card design over the financial institution’s card design. Among credit card issuers, Capital One has aggressively offered consumers a choice of card designs, while First USA is now promoting an offer to enable applicants to match their credit card design to their personal check design. Fiserv’s Personix division said Wednesday that its ‘Card Collection’, featuring 35 card designs, has produced higher response and transaction levels for credit and debit card issuers. Personix said one major issuer found that in direct mailings, 38% of applicants chose a ‘Card Collection’ design over the financial institution’s card design. And since the launch of an in-branch debit card campaign, 95% of customers walking into the branches have chosen a ‘Card Collection’ design. The Top-100 financial institution which offered the choice, also realized increased card activation, card transactions and dollar value per sale as a result of customers choosing their own card design. Card activation rates have risen from 40% to 49%, card transactions increased by 25% per month, and dollar value per transaction increased an average of 30%, according to Personix. First USA’s ‘Image Check Platinum VISA’ offer, which was mailed out in the fourth quarter, offered consumers a choice of ten different designs to match personal checks by Image Checks to a VISA card. Capital One offers a wide range of card designs on its sub-prime VISA offer, ranging from Leopards to Lightning, according to CardWatch ([www.cardwatch.com][1]).

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

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ORGA & PPP

IL-based Perfect Plastic Printing and ORGA Card Systems have finalized a collaboration to offer a U.S.-based alternative to serve the secure chip-based card products market. Under terms of the deal, the manufacture of smart cards, including chip insertion and pre-personalization will take place in Perfect Plastic Printing’s St. Charles, IL facility. Perfect Plastic Printing has been a top card manufacturer for nearly 40 years. ORGA has 30 year experience offering smart card hardware, software, systems, system integration and solutions for telecommunications, banking, retail, healthcare, and Internet companies around the world.

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Digital Account Aggregation

Digital Insight Corp. launched account aggregation services this week for Plano, Texas-based Community Credit Union and Naperville, Ill.-based Allied First Bank. The credit union, with $1.2 billion in assets, and the bank, with $85 million assets, are the first Digital Insight clients to launch account aggregation, which enables customers to securely manage all their financial relationships from a single Web address with one password.

“Account aggregation is a service that our most profitable customers have requested. Providing them with one-step access to all of their accounts really boosts the stickiness factor for our Internet channel and contributes to customer retention,” said Andy Hardin, marketing director for Allied First. “By partnering with Digital Insight, we were able to implement this service quickly and affordably.”

Digital Insight offers a private-labeled aggregation solution enabling end-users to view, access and manage consolidated account summaries of their user-selected accounts from a variety of supported categories- including bank balances, investments, bills, email, news, travel reservations and much more. Users can access their private information from a personal computer.

“Account aggregation is yet another way Community Credit Union can strengthen our relationship with our members,” said John Bock, executive vice president and chief information officer for Community Credit Union. “Digital Insight continues to offer the latest eFinance technology to their client financial institutions, enabling them to effectively compete with the largest banks in the nation.”

About Digital Insight

Digital Insight(TM) Corporation is the preferred eFinance enabler for visionary financial institutions. Through its comprehensive portfolio of outsourced, Internet-based financial products and services built upon the company’s unique architecture, Digital Insight moves banks and credit unions Beyond Internet Banking(TM) to become the trusted transaction hub for their retail and commercial customers. Digital Insight provides retail and commercial Internet banking, electronic bill payment and presentment, eCommerce portal technology, wireless channel delivery, advanced targeted marketing, website development and maintenance, as well as online and call center lending services. Each Digital Insight product and service reinforces the brands of its client financial institutions. Digital Insight. Beyond Internet Banking.(TM)

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Cap One Corporate Citizenship Director

Capital One Financial Corp. announced the appointment of Dorothy Broadman to Director of Corporate Citizenship. Broadman joins Capital One from the California Federal Bank (Cal Fed) where she managed the bank’s community development department.

Broadman will oversee the management of Capital One’s community affairs, philanthropy, volunteerism, non-profit partnership programs, financial education programs and community development lending and investments, as well as the company’s compliance with the Community Reinvestment Act (CRA).

The Federal Reserve Board recently appointed Broadman the 2002 Chair of the Board of Governor’s Consumer Advisory Council, which advises the Fed on consumer matters, including privacy, consumer protection laws, and CRA. She served as Vice Chair of the Council in 2001.

“Our communities provide us with associates who are key to our achievements, customers who are the bedrock of our business, resources that allow our business to thrive, and support that enable us to operate,” said Nigel W. Morris, Capital One’s President and Chief Operating Officer. “Our commitment to our communities is deep, combining the real strength of Capital One — our associates — with financial resources to provide long-term support to programs that help children at-risk.”

“We created the position of Director of Corporate Citizenship to build on our successful community programs and achieve greater synergy between our volunteerism, philanthropy and community investments,” said Richard A. Woods, Capital One’s Senior Vice President for Corporate Communications, which includes Corporate Citizenship. “Dorothy is the ideal candidate for the position.”

At Cal Fed, Broadman was responsible for customer diversity, community outreach/corporate giving, community development loans and investments, and CRA compliance. Earlier in her career at Cal Fed, Broadman managed the affordable multifamily lending unit. Broadman served in CRA and market-rate commercial real estate lending positions at Citibank and Wells Fargo Bank before joining Cal Fed in 1989.

Broadman currently serves on the Consumer Bankers Association Community Reinvestment Committee, is a member of the Board of Directors of the Low Income Housing Fund, and is a member of the Board of Directors and Chair of the Regulatory/Legislative Committee of the National Association of Affordable Housing Lenders (NAAHL).

Broadman earned a M.B.A. from the University of California at Berkeley and a B.A. from Tufts University with summa cum laude honors and membership in the Phi Beta Kappa Society.

Headquartered in Falls Church, Virginia, Capital One Financial Corporation ([http://www.capitalone.com][1] e.com/> ) is a holding company whose principal subsidiaries, Capital One Bank and Capital One, F.S.B., offer consumer lending products. Capital One’s subsidiaries collectively had 43.8 million customers and $45.3 billion in managed loans outstanding as of December 31, 2001. Capital One, a Fortune 500 company, is one of the largest providers of MasterCard and Visa credit cards in the world. Capital One trades on the New York Stock Exchange under the symbol “COF” and is included in the S&P 500 index.

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

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PCCharge Perks

Return on Investment Corporation announced that GO Software, an ROI subsidiary and a leading provider of payment processing software, released PCCharge Perks version 1.2, a feature-rich software product that processes Stored Value/Loyalty/Gift Card transactions for Retail, Restaurant, or any merchant wanting to accept gift cards at the point of sale.

“Since the successful introduction of PCCharge Perks into the marketplace last year, GO Software has improved the functionality of this product in order to better serve our Retail and Restaurant clients and Gift Card processing partners,” said Tony Abruzzio, Vice President and General Manager of GO Software, Inc. “PCCharge Perks can operate as a standalone solution or with existing Windows-based POS systems. Its independent nature is also suitable for the merchant who has a PC and wants to accept gift/loyalty cards, but doesn’t have use for a full-service credit card processing solution. In addition, Perks is a completely integrateable solution so developers can use it with web storefront and POS applications.” said Abruzzio. “Consistent with all PCCharge products, Perks allows a co-branded solution for our partners.”

PCCharge Perks 1.2 Enhancements:

· Added Mellennia Gift Card Processor

· Added World Gift Card Processor

· Graphical User Interface fine-tuned to operate seamlessly with leading restaurant POS systems.

Standard PCCharge Perks Features:

· Certified with Gift Card Processors including:

o Givex

o Paymentech

o ValueLink

o Valutec

· Integratable with POS systems

· Operates in a touch screen environment

· User-friendly on-screen virtual keyboard

· TCP/IP or dial connectivity (depending on Processor)

According to the Standard Register, the gift card market awareness has increased from 15% in 2000 to 80% in 2001, with usage quadrupling from 11% to 45% in that time, representing the highest growth category in consumer cards. Gift card revenue was projected to have grown from $20 billion in 2000 to $32 billion in 2001.

About Return On Investment Corporation ([www.roicorporation.com][1])

More than 50,000 businesses use ROI software to process payments on virtually any computer and to connect IBM midrange systems to the rest of the world. In the United States, in terms of the number of payment processing software licenses, GO Software (an ROI subsidiary) is the number one company in the IBM midrange market and is second behind First Data Corp. in all computing markets. Campana Data (an ROI subsidiary) markets consulting and transaction processing services. Net400 (an ROI subsidiary) provides software for IBM midrange computers that facilitates e-mail and e-commerce communications, system and device connectivity, web enablement of business applications, and business-to-business and business-to-consumer transactions.

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

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Coinless License

Coinless Systems Inc., a leading developer, manufacturer and supplier of coinless technology and products for the gaming industry announced that the Company has signed a licensing agreement with TEKBILT INC.

Under terms of the licensing agreement, TEKBILT INC, is allowed to use Coinless

Systems’s patented technology, Scan After PrintÔ in all of the machines manufactured by TEKBILT INC. In the agreement, Coinless Systems grants TEKBILT

INC. a non-exclusive license to use devices within the scope of Coinless Systems’s U.S. Patent No. 6,012,832 entitled “Cashless Peripheral Device for a Gaming System” for limited purpose of making, using, offering to sell, and selling TEKBILT INC. machines incorporating devices within the scope of (the’832 patent) so long as such devices are acquired from Coinless Systems or a licensed manufacturer or Coinless Systems.

TEKBILT INC acknowledges the validity and enforceability of Coinless Systems ‘832 patent,”Scan After Print” Technology and will endorse this technology through its sales and advertising materials for its Coinless Machines.

ABOUT TEKBILT INC

TEKBILT Inc was founded in 1986 by George (Buzz) M. Bruner, Jr. The company originally started as a distributor of currency acceptors and various components throughout America. Today Telbilt is a recognized designer, manufacturer and worldwide distributor of touch screen Gaming Machines and money handling products to the Gaming Industry.

TEKBILT Gaming is known for superior quality products. Buzz Bruner feels it is important to provide products and machines that are customer initiated and suited to their market and/or cultural requirements. That philosophy along with ongoing support of in-house technical, engineering, and service support has succeeded in providing a strong following that has proved profitable.

TEKBILT’s manufacturing facility is located in Huntingdon Valley Pennsylvania-a suburb of Philadelphia. The 24,000 square foot facility has been TEKBILT’s home since 1991. Recent renovations have increased our capabilities and the efficiency of our manufacturing processes. The TEKBILT team is skilled in high volume production. We are committed to “Doing It Right the First Time” in all areas of engineering, manufacturing, quality, shipping and customer services. TEKBILT is committed to providing a professional, educational, instructional, and ethical environment for our products, employees, partners and customers at all times. We will provide value that exceeds the investment in all our business activities.

About Coinless Systems, Inc.

Coinless Systems Inc. is a Las Vegas, Nevada based developer, manufacturer and supplier of coinless technology and products for the gaming industry. Its principle products are tickets for coinless gaming machines and Scan After Print(TM), a patented process that instantly verifies and ensures the accuracy of bar coded tickets at the slot machine as well as the cashier cage.

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Ohio CU Expands Free ATMs

CME Federal Credit Union, serving city, county and municipal employees in Central Ohio, announced it has entered into an agreement with Cleveland-based KeyCorp to provide CME Federal Credit Union members surcharge-free access to Key’s nationwide network of approximately 2,400 automated teller machines.

Through this partnership with Key, CME Federal Credit Union enhances the convenience it provides to its members without incurring the high cost of building or expanding its own network. Members essentially go from having access to 3,000 surcharge-free ATMs to 5,400 overnight.

CME Federal Credit Union is among several regional financial institutions to contract with Key. Although Key usually competes with smaller banks, savings and loans, and credit unions, in this arrangement, Key acts only as an ATM distributor, and is therefore not a competitor.

“We are pleased to partner with Key to provide expanded ATM access to our members,” said James M. Riederer, president/CEO of CME Federal Credit Union. “This partnership is another way for us to meet one of our members’ most important needs — convenience.”

“Key’s expansive ATM network and its keen understanding of the depth and breadth of the transaction management process, can help fill a critical need for smaller financial institutions,” said Daniel J. Neistadt, executive vice president, Key Consumer Payment Sales. “In CME Federal Credit Union’s case it will really help increase their ability to give their members 24-hour convenient service at more locations at a reasonable cost.”

CME Federal Credit Union is a member-owned, financial cooperative serving city, county, and municipal employees and their families throughout central Ohio. In business since 1935, the credit union has assets of more than $136 million and has more than 24,500 members. CME Federal Credit Union offers its members a variety of affordable family financial services including checking accounts, debit cards, credit cards, consumer loans and real estate loans, as well as access to full range of investment services. The credit union also offers an extensive network of surcharge free ATMs, a 24-hour loan hotline, and a Web site, [http://www.cmefcu.org][1] , that offers 24-hour fee-free on-line account access and bill payment.

KeyCorp is one of the nation’s largest bank-based financial services companies, with assets of approximately $81 billion. Key companies provide investment management, retail and commercial banking, retirement, consumer finance, and investment banking products and services to individuals and companies throughout the United States and, for certain businesses, internationally. The company’s businesses deliver their products and services through KeyCenters and offices; a network of approximately 2,400 ATMs; telephone banking centers (1.800.KEY2YOU); and a Web site, Key.com(R), that provides account access and financial products 24 hours a day.

[1]: http://www.cmefcu.org/

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INSTANT REDEMPTION

Ernex Marketing Technologies Inc., a provider of real-time marketing
solutions,
announced it has launched Real-Time Redemption, a new capability that allows
credit cardholders to instantly redeem their credit card points for rewards
at
any participating merchant point-of-sale.

ERNEX Real-Time Redemption provides the cardholder immediate access to their
rewards by enabling the merchant’s point-of-sale device with connectivity
to a
centrally hosted cardholder database at Ernex. This solution will be used in
tandem with Ernex’s Loyalty Database Hosting service – an integrated
real-time
points management system. These two solutions combine to provide reward
program
operators with efficiencies in the call center workload and streamline
fulfillment and reconciliation processes.

On February 11, 2002, RBC Royal Bank became the first credit card issuer to
pilot this capability for select Royal Bank Visa Classic II cardholders in
four
cities in Ontario: Cambridge, Guelph, Kitchener and Waterloo. Using Ernex’s
Real-Time Redemption technology, RBC cardholders are able to redeem their
Classic II points in real-time at 12 participating Home Hardware locations
and
13 RadioShack Canada locations during the five-month pilot program. The pilot
targets approximately 5500 Classic II cardholders in the Ontario region
through
a direct mail campaign. Point-of-purchase materials will be displayed at
participating Home Hardware and RadioShack locations to drive awareness.
Ernex
will provide RBC Royal Bank with ongoing business analytical reports to
assess
the success of the pilot program for a national launch across Canada.
The Ernex Real-Time Redemption technology is available today to credit card
issuers and membership organizations that operate multi-merchant coalition
loyalty programs.

STRATEGY

This new real-time capability is another innovative solution that Ernex is
offering credit card issuers and large membership organizations that operate
reward programs. The RBC Royal Bank pilot program, leveraging Ernex’s
Real-Time
Redemption technology, is the first of its kind to offer credit cardholders
instant payment using points across a multi-merchant network.

Traditionally, credit cardholders had to initiate a long rewards-fulfillment
process before they could redeem rewards because there was no direct linkage
between the points that they had earned and the many independent merchants
who
provided the rewards. A typical process was to request a gift certificate or
reward through a call center, which would then mail out the reward. In the
case
of a gift certificate reward, the cardholder would then have to visit the
participating merchant to utilize the gift certificate value against
merchandise. ERNEX Real-Time Redemption would eliminate the need for call
centers to order, track and manage physical gift certificates or reward
merchandise.

With the addition of Ernex’s Real-Time Redemption solution to Ernex
Accelerator
and Ernex Loyalty Database Hosting, Ernex now offers credit card issuers and
large membership organizations a real-time end-to-end rewards management
system.

— Ernex Accelerator: utilized by reward program operators to increase
cardholder retention by delivering real-time value-added marketing promotions
at the point-of-sale. Real-time promotions include instant Swipe ‘N Win
sweepstakes, custom coupon offers and bonus points campaigns.

— Ernex’s Loyalty Database Hosting: a service that provides large loyalty
program operators with complete management of points data including
transactions from the point-of-sale, call center and Internet channels. This
service provides program operators with powerful tools to efficiently manage
the administrative, help-desk, partner redemption and rewards catalogue
management tasks associated with the accrual, redemption, fulfillment and
reconciliation of loyalty points.

DETAILS AND HIGHLIGHTS

Benefits of Ernex Real-Time Redemption include:

1. Point-of-sale neutrality: Ernex is able to interface its software and
connectivity to a majority of point-of-sale devices in the market to provide
real-time redemption capability plus Ernex’s full suite of real-time
marketing
solutions. For the Classic II pilot, Ernex-enabled devices – Moneris
Solutions’
SmartSelect and Transelect systems
(http://www.moneris.com/)
provide the connectivity at the point-of-sale for Home Hardware and
RadioShack
locations.

2. Streamlining fulfilment and logistics: Ernex provides cardholders with
immediate access to their rewards directly at the merchant’s point-of-sale,
thereby providing an immediate, electronic fulfilment instead of a physical
fulfilment taking days or weeks. The card issuer experiences a lower call
volume in the call center, and no longer requires the administration of
ordering, inventory management, tracking and the management of outstanding
gift
certificates.

3. Streamlining reconciliation and settlement: Ernex provides business and
analytical reports to reconcile points-redemption costs between the card
program operator and participating merchants. With electronic fulfilment,
reconciliation and settlement can be enacted immediately since there are no
physical gift certificates to reconcile prior to settlement.

4. Opportunities to increase store traffic and lift sales: By being a
featured
Real-Time Redemption merchant, there will be a significant increase in store
traffic as cardholders recognize the convenience and empowerment of selecting
and redeeming rewards in real-time. The real-time interaction at the
point-of-sale also creates opportunities for sales clerks to up sell higher
margin or higher priced merchandise, as a cardholder’s points may already
cover
a major portion of the purchase price.

ABOUT ERNEX MARKETING TECHNOLOGIES

Ernex Marketing Technologies is a provider of innovative real-time marketing
solutions for merchants, credit card and bankcard issuers, and large
membership
organizations. Its solutions include loyalty programs, stored-value gift card
programs, reward fulfillment services and loyalty database hosting services.
For more information, contact Ernex at 877-GO-ERNEX or visit
www.ernexinc.com.
Ernex is a wholly owned subsidiary of RBC Financial Group.

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PREPAID PHONE CARDS

Verso Technologies, Inc., an integrated switching solutions
company that is adapting the cost savings of IP networks to the unique
requirements of voice, announced it has completed the planning,
installation and testing of a fully integrated, turnkey prepaid solution for
Formula One International, a switch-based provider of prepaid long distance
services.
Verso’s state-of-the-art switching technology will enable Formula One to
launch
the first prepaid long distance services into Bangladesh, the eighth most
populated country in the world, one year after the country’s government
deregulated the telecommunications industry for prepaid service.

Verso’s turnkey solution, which included Verso’s highly scalable intelligent
gateways, integrated provisioning and billing software and a full suite of
configurable prepaid, long distance and calling card applications was tested
and approved by the incumbent provider, the government-controlled Bangladesh
Telegraph and Telephone Board, in January of 2002. Formula One launches
its service on March 7th, just months after being awarded one of only five
prepaid services licenses issued by the Ministry of Post & Telecommunications.
As the first licensee to purchase and install equipment for its
prepaid
network, Formula One underwent rigorous testing of its Verso switch, which
directly interconnects over SS7/C7 with the BTTB network. Formula One plans to
expand its Dhaka City-based network to other cities, such as Chittagong and
Sylhet, using Verso’s integrated platform which includes SS7/C7 signaling to
enable Formula One to seamlessly interconnect to BTTB’s network with no
additional testing required.

“From a business perspective, our decision to take prepaid long distance to
the
consumer-rich, yet completely untapped Bangladesh market was an obvious one,”
said Mazher A. Masud, Chairman of Formula One International. “Still, our
first-mover advantage came with many challenges, in terms of both business and
technology issues. Verso’s experience as the leader in prepaid telephony made
them the clear choice for this venture. Not only were they able to offer a
variety of telephony applications based on a low cost VoIP and TDM
infrastructure, but they had the experience and the expertise to lead us
through the process of launching into a new and untapped market.”
“Deregulation in countries throughout southern Asia and Africa is creating
enormous opportunity for service providers who are willing to navigate
uncharted territory,” said Steve Odom, Chairman and CEO of Verso. “For those
who do, the number one challenge continues to be interconnection with the
local
PTTs – a challenge which our prepaid solution can uniquely address because our
technology includes country-specific SS7/C7 signaling software, something most
of our competitors simply can’t offer.”

To quickly drive new traffic on their network, Formula One finalized an
exclusive distribution agreement with four area-based marketing companies in
Bangladesh, which will resell privately branded calling cards through its
8,000
outlets across Greater Dhaka.

Globally, usage of long distance minutes is experiencing double-digit annual
growth, with prepaid long distance continuing to be the most popular way to
pay
for long distances services outside of North America. 2001 Census figures
report Bangladesh’s population at more than 130 million, while as many as
150,000 emigrate to Asia, Europe and North America each year in search of
better economic and social conditions. Bangladesh’s large population of both
residents and geographically dispersed emigrants make it particularly
well-suited for the benefits of prepaid long distance services.

About Verso Technologies

Verso Technologies provides integrated switching solutions for communications
service providers who want to develop IP-based services with PSTN scalability
and quality of service. Verso’s unique, end-to-end native SS7 over IP
capability enables customers to leverage their existing PSTN investments by
ensuring carrier-to-carrier interoperability and rich billing features.
Verso’s
complete VoIP migration solutions include state-of-the-art hardware and
software, OSS integration, the industry’s most widely used applications and
technical training and support. For more information about Verso Technologies,
contact the company at www.verso.com or by calling
678.589.3500.

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