Fee Income

![][1] Fee income among credit card specialists grew three times faster during 2001 than overall fee income for banks. CA-based R. K. Hammer says fee income last year comprised 31% of total income for credit card companies, compared to 50% for banks. In the year 2000, bank fee income was 49% of total income. Fee income among credit card companies in 2000 was 28% of total income. During 2001, late payment fees, the major consumer fee revenue stream, rose 4.4%, from an average of $27.10 to $28.29, according to CardData ([www.carddata.com][2]). Over-limit fees rose 3.4%, from an average of $25.99 to $26.88.

FEE INCOME (as a % of total income)
1995: 35% 18%
1996: 36% 19%
1997: 38% 21%
1998: 41% 23%
1999: 45% 24%
2000: 49% 28%
2001: 50% 31%
Source: R.K Hammer Investment Bankers (Thousand Oaks, CA)

[1]: /graphic/carddata/carddatamoving_good.gif
[2]: http://www.carddata.com


Hypercom Milestone

Hypercom Corp. confirmed this morning the company has shipped its 5 millionth POS information and transaction terminal. The ‘ICE 5500’ terminal was shipped to the Europe’s alphyra Group. Hypercom’s ‘epic ICE’ terminals are compact, high-performance, touch screen information and transaction platforms. ‘ICE’ terminals integrate firewall-protected, multi-tasking, multi-applications functionality, along with EMV chip card capability, a secure PIN pad, secure software downloading, built-in HTML/HTTP Web browser, and integrated receipt printer. The ‘ICE’ platforms also support electronic signature and receipt capture, e-mail, on-screen advertising, interactive electronic coupons, and cash management reporting through a standard browser.


Trintech 4Q/01

Ireland-based Trintech Group reported this morning that revenues for the quarter ending 1/31/02 remained flat at $15.5 million compared to the corresponding quarter last year, and that its quarterly net loss declined from $7.9 million one year ago to $3.1 million for the latest quarter. Trintech also announced that Cyril McGuire has been appointed CEO and John McGuire has been appointed President. Cyril McGuire will continue to serve as Executive Chairman. Trintech noted that it recorded an impairment write off of acquisition related goodwill and certain purchased intangible assets during the quarter amounting to $38.1 million. The impact of the market retreating for technology companies and the performance of the related acquisitions led the Company to write these assets down to their fair value. Trintech also announced today that it will incur a restructuring charge of $3.5 million in the current quarter. The Company expects that the restructuring will improve the performance of the organization by reducing costs, consolidating locations and combining operations and other activities. Trintech, founded in 1987, offers a wide range of payment software products for credit, debit, commercial and procurement card applications. For complete details on Trintech’s latest results visit CardData ([www.carddata.com][1]).

[1]: /cardata/main.html


Instant Marketing Response

Australia’s Optus has partnered with Columbia TriStar, MasterCard, games developer Two Way TV, and design studio TVMates to offer a range of new services to participants in their ‘iTV’ trials in Sydney. Optus selected the ‘Liberate TV Platform’ software suite to deliver the services over its hybrid fibre coaxial networks. During the current Australian summer (Dec-Mar), Optus offers a direct response advertising campaign with MasterCard International that offered viewers in the trial an escape to a dream vacation. MasterCard cardholders who registered their MasterCard purchases got the opportunity to win a week on Daydream Island with nine friends plus weekly chances to win weekend getaways to a tropical location. Through synchronized broadcasting technology, viewers who clicked on a button during a MasterCard commercial were taken directly to a MasterCard web site to register for the promotion.


Gelco Multi Card

MasterCard International and Gelco Information Network, a leading travel expense management company, announced an alliance to help support MasterCard’s public sector and middle market payment solutions.

Through the alliance, MasterCard issuers and their public sector and mid-sized business customers will be able to fully automate expense processing by using MasterCard’s Multi Card program and Gelco’s expense management solutions. “MasterCard’s alliance with Gelco allows member financial institutions and their customers the ability to fully automate expense processing by combining the power of MasterCard’s Multi Card program with a leading web-based expense management system,” said Philip Philliou, vice president, e-Business and Emerging Technologies (eB2B), MasterCard International. “With Gelco’s unmatched expertise in travel expense management and MasterCard’s state-of-the-art Central Data Repository, we can offer comprehensive solutions that combine efficiency with more control over an organization’s expense-related data.”

Public Sector

Combining MasterCard’s suite of public sector payment solutions, including the MasterCard Public Sector Multi Card, with Gelco Travel Manager(R) will provide public sector companies with timely and accurate expense management information to gain increased controls. Furthermore, the combined solution will assist in identifying spending trends, realizing potential cost savings and enabling customers to make better financial decisions. Gelco Travel Manager, an enterprise expense management solution, is the recognized industry standard for public sector organizations including federal, state and local governments, universities and government contractors.

By implementing the Gelco/MasterCard solution, these organizations can:

— Improve cost reduction and policy compliance

— Drive savings through supplier negotiation

— Enforce supplier contracts and discounts

— Maximize their card program

— Focus strategic resources

Benefits to MasterCard issuers include improved speed to pay, centralized aggregated payments, reduced delinquencies, and when bundled with other card offerings, opportunities to grow sales. It also simplifies the charge process and has the potential to increase card spend.

Mid-Sized Businesses

For mid-sized businesses, Gelco ExpenseLink(R) offers a complete, outsourced end-to-end expense management solution for cost-effectively automating expense processing, auditing, reimbursement, and expense analysis. ExpenseLink empowers organizations to harness true expense processing expertise, gain economies of scale by outsourcing, leverage a demonstrated technology infrastructure and provide business travelers with an easy-to-use responsive system. Gelco’s expense management services coupled with MasterCard’s suite of corporate programs offers commercial customers an immediate, measurable and sustainable return-on-investment by:

— Realizing savings in total travel expenditures

— Improving supplier negotiations, savings and performance

— Reducing administrative costs and gaining efficiencies

— Improving cash management

“Gelco is committed to providing its customers with the resources and tools they need to manage expenses,” said Jon Klem, president and CEO, Gelco Expense Management. “Working with MasterCard, we can deliver a powerful combination of global payment solutions and e-business efficiencies to our public sector and corporate customers. The Gelco and MasterCard alliance increases traveler and back office productivity while enhanced data provides clearer travel spending trends and improved card program compliance.”

MasterCard is at the forefront of today’s e-Business initiatives, and is a leading provider of purchasing, fleet, and travel payment solutions for public sector and middle market entities. Using leading-edge technology, the MasterCard Multi Card has the ability to combine purchasing, fleet and T&E data on one payment platform. The new alliance with Gelco builds on MasterCard’s long history of innovation. MasterCard was the first payment solutions provider to launch a purchasing card program, the only organization to offer a fuel and maintenance fleet card solution, as well as offering the only true “one card” solution in the market.

About MasterCard

MasterCard International is a leader in global e-business. The association is focused on providing its member financial institutions with customized, meaningful global e-business solutions that connect them to their accountholders. Through its investment in industry innovation, participation in standards development and business alliances, MasterCard is staying in the forefront of technology integration to enable anytime, anywhere payments across multiple channels and various devices. MasterCard’s global e-business solutions include Internet security, smart cards, mobile commerce/wireless, business to business electronic commerce, and numerous emerging technologies.

MasterCard International has a comprehensive portfolio of well-known, widely accepted payment brands including MasterCard(R), Cirrus(R) and Maestro(R). More than 1.7 billion MasterCard, Cirrus and Maestro logos are present on credit, charge and debit cards in circulation today. An association comprised of more than 20,000 member financial institutions, MasterCard serves consumers and businesses, both large and small, in 210 countries and territories. MasterCard is a leader in quality and innovation, offering a wide range of payment solutions in the virtual and traditional worlds. MasterCard’s award-winning Priceless(R) advertising campaign is now seen in 80 countries and in 40 languages, giving the MasterCard brand a truly global reach and scope. With more than 22 million acceptance locations, no card is accepted in more places and by more merchants than the MasterCard Card. At September 30, 2001, gross dollar volume exceeded US$704 billion. MasterCard can be reached through its World Wide Web site at [http://www.mastercard.com][1].

About Gelco

Gelco Information Network is the largest and most experienced provider of e-business expense management and reimbursement programs. Since 1896, Gelco has been providing a comprehensive expense management solutions to help organizations realize travel and expense cost savings by enforcing policy compliance, gaining processing efficiencies, and capturing comprehensive travel data for enhanced supplier negotiations and spending analysis. The Gelco solution empowers organizations, federal agencies along with state and local governments with a complete suite of services for cost effective web-based expense reporting, auditing, reimbursement, and analysis services. In 2000, Gelco processed over $11 billion in expense payments and serviced over 1200 organizations with 1.2 million users. For more information, visit [http://www.gelcoexpense.com][2].

[1]: http://www.mastercard.com/
[2]: http://www.gelcoexpense.com/


Cap One Training Rank

For the second year in a row, Capital One Financial Corporation ranked as one of the best companies in America for training and developing its employees according to Training magazine’s listing of the Training Top 100. Capital One ranked second this year after topping the list in 2001. This honor comes on the heels of Capital One’s fourth consecutive year in Fortune’s listing of the “100 Best Companies to Work for in America.”

“In large measure, we owe our success at Capital One to our ability to hire talented people, give them challenging work in an entrepreneurial environment, and constantly push them to reach beyond their limits,” said Dennis Liberson, Executive Vice President for Human Resources.

The Training Top 100 ranks companies according to their level of investment in workforce development. The ranking is determined by assessing a range of qualitative and quantitative data including financial investment in employee development, the type and scope of training and development programs provided to employees, the quality of these programs and how closely such development efforts are linked to business goals and objectives.

“Even in these less-than-stellar economic times, Capital One is among those select companies that has raised the bar with its training initiatives,” said Tammy Galvin, executive editor of Training magazine. “Capital One has embraced training and workforce development as a mission-critical strategy, and accordingly, has dedicated significant resources to its training efforts.”

Capital One employs more than 20,000 associates worldwide. Among the programs that differentiate the company from other employers are the associate selection process; a number of ongoing training and development courses; outstanding benefits, including three weeks vacation; and performance-driven entrepreneurial compensation.

Capital One has operations in Richmond, Fredericksburg and Falls Church, Virginia; Dallas, Fort Worth and Plano, Texas; Tampa, Florida; Federal Way, Washington; Boise, Idaho; San Francisco, California; and Boston, Massachusetts; as well as London and Nottingham, United Kingdom and Paris, France.

Headquartered in Falls Church, Virginia, Capital One Financial Corporation ([http://www.capitalone.com][1]) 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/


Priceless Edge

MasterCard International has created a cutting-edge internship program, “Priceless Edge,” designed to give college students the chance for real-life work experience in the highly competitive music industry. The internship promotion, open to college students 18-25, will feature the opportunity to be selected for an industry-specific curriculum and real-world experiences for select candidates. MasterCard has aligned with Fearless Entertainment on the 2002 “Priceless Edge” program to create an entertainment business-based curriculum, featuring an internship with the production company’s “Music In High Places” series, which airs on MTV and DirecTV.

Select candidates will have the opportunity to work at the Music In High Places production office in Los Angeles in several disciplines, including production, business affairs, artist relations and management. Interns will focus on a specific production of “Music In High Places” and travel with the production team to the taping of the episode, scheduled for Yellowstone National Park.

“The youth market segment is an important audience for MasterCard, because we see it as the first opportunity to develop a life-long relationship with our brand,” said Larry Flanagan, chief marketing officer, MasterCard. “The values of these young consumers fits right in line with those of the MasterCard brand. They work hard to establish themselves and with ‘Priceless Edge,’ we can provide them with an opportunity to win a real-life experience that can put them on the road to establishing a solid career, and ultimately, financial independence.”

From March 1 to April 23, students can go to MasterCard.com and click on the “Priceless Edge” icon to participate in the first phase of the program, an optional online distance-learning course developed in conjunction with the Grammy Foundation and the Leonard Bernstein Center for Learning. As part of the online offering, students will have the opportunity to apply for the “Priceless Edge” program by completing an online essay question.

At the conclusion of the entry period, a panel will select 50 eligible students for Phase II of the program: a five-week course on business entertainment held at Vanderbilt and Belmont Universities (homes of the prestigious Blair School of Music and Mike Curb School of Music Business, respectively) in Nashville, TN. Course instructors will review all facets of the entertainment industry, including business affairs, production, A&R, entertainment law, etc. Students will receive a free tuition, as well as all transportation, room and board and classroom costs.

Following the five-week course, the ‘hands-on’ phase of the program begins as a panel of instructors will select 12 of the students to participate in the on-site Fearless Entertainment internship program, based in Los Angeles. This two-week, real-world work experience will begin in early August and culminate with the live production of “Music In High Places” at Yellowstone.

“This is a particularly challenging time for college students — economic uncertainty has magnified the obstacles students face as they take steps to start their careers,” said Larry Lieberman, president, Fearless Entertainment. “MasterCard has taken the initiative with ‘Priceless Edge’ to help some of the most creative and motivated students take those first steps in the business of entertainment.”

Marketing Support

MasterCard will roll-out an extensive integrated marketing campaign to support “Priceless Edge.” Among the components will be:

— A :30 TV ad, scheduled to debut during the February 27th CBS telecast of the Grammy Awards

— Print and radio advertising

— A dedicated “Priceless Edge” web page, accessed via MasterCard.com Online banner advertising

— Grass-roots local advertising

— Student-focused public relations campaign

“We wanted to create a program that was both meaningful and relevant to college students, creating an environment where our brand can not only interact with our audience but can impact their lives,” said Flanagan. “‘Priceless Edge’ is all about empowerment. This unique learning experience can provide ‘real-world’ opportunities for students to gain practical knowledge in their specific field of interest. Fearless Entertainment provides the ideal program venue for students wanting to gain actual value from their internships. They’ll be on the front lines, doing and learning.”

About Music In High Places and Fearless Entertainment

Music in High Places is an international television and Internet series that bridges the new Millennium — bringing top recording artists to the most ancient sites on Earth, marrying great music and adventure with the wonders of lost civilizations. The show is designed to be the ultimate music and travel adventure, a “National Geographic Explorer for the MTV & VH1 generations” — capturing each artist’s unique journey to these rarely seen areas of the world with acoustic performances at each site. Music in High Places is and Earth Escapes Production. Contact: Larry Lieberman, Fearless Entertainment, 212/475-7551, press@fearless-entertainment.com.

About MasterCard

MasterCard International has a comprehensive portfolio of well-known, widely accepted payment brands including MasterCard, Cirrus and Maestro. More than 1.7 billion MasterCard, Cirrus and Maestro logos are present on credit, charge and debit cards in circulation today. An association comprised of more than 20,000 member financial institutions, MasterCard serves consumers and businesses, both large and small, in 210 countries and territories. MasterCard is a leader in quality and innovation, offering a wide range of payment solutions in the virtual and traditional worlds. MasterCard’s award-winning Priceless advertising campaign is now seen in 80 countries and in 40 languages, giving the MasterCard brand a truly global reach and scope. With more than 22 million acceptance locations, no card is accepted in more places and by more merchants than the MasterCard Card. At September 30, 2001, gross dollar volume exceeded US$704 billion. MasterCard can be reached through its World Wide Web site at [http://www.mastercard.com][1].

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



Worldwide, Inc., a leading provider of secure electronic
financial transaction solutions, and Deutsche Bank 24 S.A have agreed to a
second five-year contract for ATM outsourcing to manage the bank’s entire
network in Poland. Under terms of the agreement, Euronet will provide all ATM
driving, transaction routing, settlement/reporting and card management tasks
for the bank’s in-branch and off-premise ATMs.

This new multiyear agreement continues to provide Deutsche Bank 24 customers
with access to Euronet’s network of 430 ATMs in Poland. Deutsche Bank 24 also
expanded the scope of the services, providing its customers with value-added
transactions at each ATM, including bill payment solutions and prepaid airtime
recharge from all three mobile operators in Poland – Plus GSM, ERA GSM and

“This market demands a modern financial services provider offering multiple
banking channels and a customer-oriented combination of products, services and
expert advice,” said Dr. Friedhelm Herb, President of the Board and CEO at
Deutsche Bank 24 S.A. “Our customers want integrated solutions and freedom of
choice in their banking as well as access to branch-based, mobile and online
services. Our ongoing relationship with Euronet, therefore, is integral to
expanding our customers’ ability to choose as we introduce bill pay and other
new services to Poland.”

Launched in Poland last July, Deutsche Bank 24 S.A. currently provides
to a large number of personal banking customers, as well as small and
medium-sized companies. Euronet already outsources card services for Deutsche
Bank 24 S.A., managing the daily issuance of debit and charge card
transactions, providing the bank with a gateway to the Visa network, as
well as
communication with local card organizations such as Polcard.

“We’re honored to support Deutsche Bank 24 S.A.’s growth as an integrated
financial services provider, as they empower their customers with new
electronic bill payment capabilities,” said Daniel R. Henry, Euronet Worldwide
President and Chief Operating Officer. “Poland is a growing market with
enormous potential, where an increasing number of institutions are choosing to
outsource the management of their ATM networks. Since introducing our ATM
network to Poland in 1995, we have become the leading provider of secure
financial transaction solutions in the country.”

About Euronet Worldwide

Euronet Worldwide is an industry leader in providing secure electronic
financial transaction solutions. The company offers financial payment
middleware, financial network gateways, outsourcing and consulting services to
financial institutions and mobile operators. These solutions enable their
customers to access personal financial information and perform secure
transactions – any time, any place. The company has processing centers located
in Europe, Asia and the United States, and it owns and operates the largest
independent ATM network in Europe. With corporate headquarters in Leawood,
Kansas, USA, and European headquarters in Budapest, Hungary, Euronet serves
more than 200 clients in 60 countries. Visit our Web site at

About Deutsche Bank 24 S.A.

Deutsche Bank 24 S.A., formerly known as BWR (Bank Wspolpracy Regionalnej),
currently has more than 40 outlets in Poland. Deutsche Bank Group provides
banking services to over 12 million personal banking customers in Germany,
Italy, Spain, Portugal, Belgium and Poland under the Deutsche Bank 24 brand
name and business model.


Instant Redemption

Vancouver-based Ernex Marketing has launched ‘Real-Time Redemption’, a new capability that enables credit cardholders to instantly redeem their credit card points for rewards at any participating merchant point-of-sale. The solution is used in tandem with Ernex’s ‘Loyalty Database Hosting’ service, an integrated real-time points management system. Earlier this month, 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. RBC cardholders are now 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. For the ‘Classic II’ pilot, Ernex-enabled devices – Moneris Solutions’ SmartSelect and Transelect systems provide the connectivity at the point-of-sale for Home Hardware and RadioShack locations.


Wal-Mart Risk Management

NJ-based Retail Decisions said this morning that Walmart.com has selected ‘ebitGuard’ for global e-commerce fraud detection. ‘ebitGuard’ incorporates neural technology, with a number of other sophisticated processes, databases and CNP experience. The company currently protects nearly 10,000 retail sites globally. In 2000, Retail Decisions processed more than 1.25 billion card transactions, stopping an estimated $113 million in fraudulent purchases. The company has more than 16 years of card fraud prevention experience.


Distribution Card

Europay International yesterday launched the ‘Eurocard-MasterCard Distribution Card’, a B2B for distributors and retailers. The ‘Distribution Card’ is issued to the retailer by the distributor in association with the bank. The new card simplifies the collection of low-value frequent payments, and provides payment guarantees. The card also provides a platform to build loyalty schemes and special offers. The card was recently rolled-out in Turkey as the ‘Ortak Kart’ by Garanti Bank. The bank say it is aiming to issue 10,000 ‘Ortak’ cards by the end of this, with a US$6 million in volume.


Rapid Rewards Adds Partner

Internet service provider EarthLink joins the list of preferred partners Southwest Airlines frequent flyers can use to earn credits as part of the carrier’s 15th Anniversary of the Rapid Rewards program.

In January, Southwest announced the extension of the double credit offer on southwest.com for travel purchased and flown before Dec. 31, 2002. The promotion makes it possible for Rapid Rewards members to earn a free ticket after just four roundtrip purchases on Southwest’s web site, [http://www.southwest.com][1]. Rapid Rewards also unveiled a new look for the member card and announced wireless provider Nextel as a new partner.

“With our long-time local and long-distance partner MCI, the recent addition of Nextel for cellular, and now our new Internet provider and partner, EarthLink, we are meeting all our members’ telecommunications needs,” said Debra Benton, Southwest’s director of loyalty marketing. “As an industry leader in Internet access, EarthLink is the natural choice to complete our telecommunications offerings to our Customers.”

Rapid Rewards members who sign up for EarthLink services beginning today will receive four credits; a member who signs up for all three telecommunications services (MCI, Nextel, and EarthLink) would earn 10 credits. For more information on the EarthLink offer, go to [http://www.southwest.com][2].

“We are pleased to team with Southwest Airlines in offering Southwest Customers credits when they sign up for EarthLink service,” says John Kortier, EarthLink’s vice president of channel sales. “Because Southwest Customers are constantly on-the-go — and they need an Internet service that can keep up with them — EarthLink is an ideal Internet service provider for them to use wherever they are, through the access device of their choosing.”

EarthLink joins other preferred partners: Southwest’s own First USA Rapid Rewards VISA card, Alamo, American Express, Budget, Diners Club, Dollar, Hertz, Hilton, Hyatt, Marriott, Nextel and MCI as ways to earn credits in the Rapid Rewards program.

How the program works: Southwest Airlines Rapid Rewards members earn credits by flying or doing business with the program’s preferred partners. A roundtrip equals two credits (one-way ticket equals one). Members must fly eight roundtrips or earn 16 credits in a 12-month period to receive an award ticket. Once the ticket is earned, then the ticket is automatically sent to the Customer — free travel fast with no hassle. Plus, Southwest allows the member to transfer the award ticket to anyone with no additional paperwork!

Additionally, Southwest offers members who fly 50 roundtrips (or earn 100 credits) within 12 months a Companion Pass, which allows a member to designate a traveler to fly with him/her for 12 months free of charge. Again, with double credit for booking online, it would take only 25 roundtrips! Based on the average Southwest Airlines trip length of 600 miles, it takes just 9,600 miles to earn a free ticket on Southwest. It takes an average of 25,000 or more miles to earn a free domestic ticket on other airlines. Travelers feeling pinched by hard-to-get frequent flyer award seats on the nation’s airlines have overwhelmingly referred to Southwest Airlines’ Rapid Rewards program as the most generous in its offerings to busy travelers.

“Southwest, unlike any other program in the industry, has no capacity controls in its frequent flyer program,” said Susan Kirkelie, senior director of marketing programs. “That means, other than limited blackout dates, a member can redeem an award ticket for a seat on any flight as long as there is a seat — no waiting six months or dealing with limited seats.”

The easy-to-use Rapid Rewards program also has been recognized by InsideFlyer magazine as giving its members great Customer Service, outstanding bonus promotions, and incredible redemption. The airline has won seven “Freddie Awards” by InsideFlyer and been given high marks for many program elements. The Rapid Rewards program in 2001 walked away with Freddie Awards for Best Bonus Promotion (for its online double credit offer) and for Best Award Redemption (a winner three out of three times). It also received second place in the Best Web Site, Best Customer Service, and Program of the Year categories.

Southwest (NYSE: LUV) is the nation’s fourth largest carrier in terms of Customers boarded. The airline currently operations nearly 2,700 daily flights to 59 airports in 58 cities in 30 states. Southwest employs more than 33,000 people nationwide.

[1]: http://www.southwest.com/
[2]: http://www.southwest.com/