Arcot & PEMCO

Arcot Systems, Inc., and PEMCO Technology Services, Inc., announced a strategic partnership. PEMCO Technology will deliver Arcot’s TransFort solution as part of its award winning PowerLink processing system for card issuing financial institutions offering the Visa Authenticated Payment service — Verified by Visa. In support of Visa’s Authenticated Payment initiative, PEMCO Technology is making Verified by Visa available to more than 225 financial institutions nationwide and, in turn, to more than 2 million cardholders. Visa Authenticated Payment is the basis for Verified by Visa, an Internet payment authentication process designed to increase consumer and merchant confidence in e-commerce by reducing fraudulent Internet transactions. The Arcot TransFort solution supports Visa Authenticated Payment and provides merchants with the ability to initiate the authentication of an online Visa transaction, resulting in lower transaction costs and offering protection from fraud losses. Arcot TransFort has been recognized as fully compliant with the 3-D Secure interoperability standard by the Visa Interoperability Lab, and has been adopted by over 20 banks around the world.

“We selected Arcot because of its clear leadership in developing solutions for the Visa Authenticated Payment Program and its history of innovation in the payment security market,” said Brad Campbell of PEMCO Technology. “This service is a clear win for our current and prospective customers. It reduces their chargeback costs, it provides a value-added service to their cardholders, and the improved security will result in a more confident and more active online shopper.”

“Bringing together PEMCO Technology’s award winning PowerLink service with our market leading TransFort solution for the Visa Authenticated Payment Program is a great combination,” said Chet Silvestri, CEO and president of Arcot Systems. “We are pleased to offer a fully compliant Visa Authenticated Payment service to hundreds of card issuers that look to PEMCO to provide card processing services.”

About Arcot TransFort

Arcot TransFort strongly authenticates and digitally signs transactions in real-time, providing for the secure, non-repudiation of online payments. Scalable to hundreds of millions of transactions, Arcot TransFort allows companies to grow the volume and value of their online transactions and provide their customers with an added level of confidence and security in the business relationship.

Arcot TransFort is a multi-platform solution capable of authenticating transactions across Web, Virtual Private Network (VPN), and wireless environments. In addition, Arcot TransFort can comply with a variety of business rules or procedures that govern online payments and support multiple authentication methods including username/password (pass-code), physical smart cards (or “chip cards”), and the ArcotID(TM) Software Smart Card. The ArcotID is a means of strong authentication based on patented Arcot technology. It offers a similar level of protection as a physical smart card, but with the convenience of software. It protects a user’s digital credentials in a tamper-proof software container. If any attempt is made to compromise the credentials, the attempt is promptly identified and the credentials are neutralized.

About Arcot

Arcot Systems, Inc., is the leading provider of authentication and access control solutions for securing e-business in Internet-scale, transactional and wireless environments. Only Arcot provides cost-effective, scalable, software-based solutions for strongly authenticating users and transactions and managing access for payment systems, B2B extranets, Web portals and virtual private networks. Arcot solutions meet the business need for strong transactional security while providing the customer a user-friendly experience with anytime, anywhere convenience. Leaders in financial services, healthcare, and e-commerce are using Arcot solutions to protect their customers’ privacy and reduce fraud. For more information, visit [www.arcot.com][1].

About PEMCO Technology Services

PEMCO Technology Services provides flexible solutions for financial institutions’ in-house Visa, MasterCard, and ATM programs. PEMCO is a technology leader, offering online authorizations via a Virtual Private Network, FTP, the latest neural network fraud tools, flexible cardholder loyalty programs, and reliability that’s won seven Visa USA awards. For more information, visit us at [www.pemcotech.com][2].

[1]: http://www.arcot.com/
[2]: http://www.pemcotech.com/

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Hypercom 4Q/01

After 16 months of restructuring, Hypercom returned to profitability in the fourth quarter and beat analysts’ projections. The company reported this morning 4Q/01 net income of $1.5 million compared to a net loss in the year-ago period of $4.2 million. Net revenue was $74.5 million for 4Q/01 compared to $84.5 million in the same period a year ago. Fourth-quarter sales were below previously stated guidance of $80 million due to the company’s decision to receive product back from one of its customers for the purpose of providing additional features. During 4Q/01, Hypercom was awarded a 10,000 unit ‘ICE’ contract by Merchant Services and was selected by the CVS drugstore/pharmacy chain to deliver the ‘ICE 6000’ with value-added services. For the first quarter 2002, the company anticipates revenues of approximately $70 million and a slight loss for the quarter. For complete details on Hypercom’s 4Q/01 performance visit CardData (www.carddata.com).

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Account Base Expansion

All of the nation’s top issuers expanded their customer base last year, at an average annual growth rate of 9%. Capital One led the pack with a 30% surge in net new accounts, while Bank One/First USA got a major boost from its acquisition of the Wachovia portfolio. Chase Manhattan and Providian also posted above average growth rates of 15.4% and 17.2%, respectively. Household and Citibank posted the weakest account growth among the top ten issuers. For complete EOY 2001 portfolio details on the top 350 U.S. issuers visit CardData ([www.carddata.com][1]).

ISSUER 2001 ACCTS 2000 ACCTS CHANGE
1. Citibank 92.9m* 90.8m* +2.3%
2. MBNA 50.9m* 47.9m* +6.3%
3. Discover 45.7m* 42.6m* +7.3%
4. First USA 39.4m 34.6m +13.9%
5. Capital One 38.9m* 29.9m* +30.1%
6. American Express 27.1m 26.0m + 4.2%
7. Chase 24.0m 20.8m +15.4%
8. Providian 19.1m 16.3m +17.2%
9. Household 17.9m 17.6m + 1.7%
10. Bank of America 14.5m 13.3m + 9.0%
TOTAL 370.4m 339.8m + 9.0%

* Citibank includes data from Canada and Mexico; Capital One may include some
international data; MBNA includes international; Discover data as of 11/30/01;
Source: CardData (www.carddata.com) RAM Research Group’s Bankcard Barometer

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

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Credit Store Restatement

Sub-prime specialist The Credit Store revealed last night it made a mistake in calculating the value of its interests in credit card securitizations. The adjustments were necessary due to an error made in the calculation of fair market value of the retained interests, which resulted in an overstatement of assets, equity and the resulting income tax benefit at June 30, 2001. The adjustments write down the valuation of the retained interests by $4.1 million, decrease unrealized gain from retained interests in securitized credit card receivables by $2.7 million, and reverse a $1.4 million tax benefit from the original valuation. The company expects to release results for the quarter ending Dec. 31, 2001, early next week. The company’s stock is trading around 65 cents per share. Sioux Falls, SD-based The Credit Store acquires portfolios of non-performing consumer receivables and offers a new credit card to those consumers who agree to pay all or a portion of the outstanding amount due on their debt. The new card is issued with an initial balance and credit line equal to the agreed repayment amount. After appropriate seasoning, the Company seeks to sell or securitize these credit card receivables.The Credit Store, reported a net loss of $630,000 for the quarter ending Sept 30, compared to a net loss of $1.6 million for the same three month period last year. The company has 90,028 accounts at the end of the third calendar quarter, according to CardData ([www.carddata.com][1]).

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

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TSYS & Thoughtmill

Thoughtmill Corporation, an Atlanta-based provider of software design, engineering and assessment services for technology companies and enterprise organizations has been selected by TSYS to finalize requirements and provide a design to automate key customer service processes for TS2, the company’s flagship product.

TSYS, a subsidiary of Synovus Financial Corp., provides software and services for worldwide electronic payments and is the largest third-party processor of international card payments, including credit, debit, commercial, private-label, stored-value and chip cards.

TS2 is the world’s most advanced and most sophisticated payments system, serving many of the world’s largest financial institutions and retail companies. The power of TS2 makes it possible for hundreds of millions of consumers to use their payment cards anywhere, any time and through any device.

TS2 brings TSYS clients cost savings, improved customer service, unsurpassed speed-to-market and efficient workflow. “TSYS invests about $40 million a year in new developments for TS2, to make sure the system remains the gold standard for payment technology in the financial industry,” says Stephen W. Humber, group executive for application systems at TSYS. “We are continuing to improve how our clients and their customers interact with TS2, how the system delivers information and the environment in which it operates. “The TS2 enhancement project at TSYS is ideally suited to Thoughtmill and we’re thrilled to be working with another one of the top technology services companies in Georgia,” said Heath Thompson, President and CEO of Thoughtmill. “Our deep technical strength and relevant experience with financial services systems will be highly advantageous to TSYS as we work with them to address their customer-centric objectives and help them meet their time-to-market needs.”

Design of the TS2 enhancement will conclude in early 2002 at which time the project will continue with engineering, testing and deployment.

About Thoughtmill

Thoughtmill Corporation provides software design, engineering and assessment services for technology companies and enterprise organizations. We thrive on the leading edge of innovation, continually designing new technologies and applications that enable our clients to attack new markets or dramatically alter their business models. Unlike web design firms and traditional consultancies, Thoughtmill experience is rooted in the engineering methodology, architecture, user-oriented design, and quality standards of commercial-grade software systems. A sample of industry-leading companies, that turn to Thoughtmill when they have to get it right the first time, includes: IBM (NYSE: IBM), DoubleClick (NASDAQ: DCLK), Internet Security Systems (NASDAQ: ISSX), Clarus Corporation (NASDAQ: CLRS), ecPayments, AFLAC (NYSE: AFL), Roche Diagnostics, and Scientific Atlanta (NYSE: SFA).

About TSYS

TSYS ([www.tsys.com][1]) brings integrity and innovation to the world of electronic payments. TSYS serves as the integral link between buyers and sellers in the rapidly evolving universe of electronic payments. With more than 218 million accounts on file, TSYS makes it possible for millions of consumers to use their credit, debit, stored value, commercial, smart and retail cards any time, anywhere through any medium or portal. TSYS and its family of companies offer a full range of acquiring and issuing services from accepting and settling electronic payments for goods and services, to credit applications, bankruptcy and collections. Based in Columbus, Ga., TSYS processes for 23 countries, in 14 currencies, in four languages and maintains operations in Canada, Mexico, Japan, and the United Kingdom. TSYS is an 81.1-percent-owned subsidiary of Synovus Financial Corp. (NYSE: “SNV”) ([www.synovus.com][2]), No. 8 on FORTUNE magazine’s list of “The 100 Best Companies To Work For” in 2001. For more information, contact news@tsys.com.

[1]: http://www.tsys.com/
[2]: http://www.synovus.com/

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Metavante Drives EPP

Metavante Corporation, the financial technology subsidiary of Marshall & Ilsley Corporation, has launched a comprehensive adoption-marketing program to assist its Electronic Presentment and Payment clients and partners in achieving higher customer adoption rates, speed-to-market advantages, and cost-efficiencies. The program supports Metavante Electronic Presentment and Payment clients in marketing business-to-consumer, business-to-business, and electronic payment (“pay anyone”) solutions to their customer base and prospects.

Metavante now offers an array of premium-based adoption-marketing support, ranging from all-inclusive marketing planning guides to personalized consulting services, that supplies strategic, flexible, and effective marketing solutions tailored to a client’s specific marketing needs. A Metavante adoption-marketing specialist works with each client to identify adoption marketing needs specific to its organization.

“We partner with our clients to leverage their marketing resources, provide strategic direction, and assist them in integrating the promotion of their Metavante Electronic Presentment and Payment solution with current marketing initiatives – all to increase awareness and accelerate end-user adoption,” explained Nancy Langer, president and general manager, Metavante Electronic Presentment and Payment.

“We realize the critical factor employees play in the success of an organization’s Electronic Presentment and Payment service and Metavante adoption-marketing programs provide strategies and tactics for employee education, communications, and involvement,” said Langer.

According to Gartner, a leading research and advisory firm, 2001 year-end estimates show considerable growth in Electronic Presentment and Payment consumer adoption, with approximately 32 million Americans who viewed bills online, compared to 20 million in 2000.

“The number of consumers using online account management and e-bill applications will steadily rise this year to 46 million, representing 22 percent of the adult population in the United States,” said Avivah Litan, vice president and research director, Gartner Financial Services. “So far most consumer adoption has been in the credit card sector but other billers are also noting increased adoption that they expect to accelerate to about 20 percent of all bills viewed by year end 2005. According to new Gartner research, Metavante continues to gain market share in the EBPP sector with both banks and billers, and this latest adoption program will help them retain a leading position.”

Metavante Electronic Presentment and Payment adoption marketing programs are currently available for B2C solutions, comprehensive Electronic Presentment and Payment solutions that operate as a seamless extension of financial institution or biller web sites without disruption to current receivable processes; B2B solutions, complete solutions that integrate with existing biller systems to help suppliers and buyers streamline their unique business transactions; and the Electronic Payment solution, a convenient tool that enables consumers to make online payments to anyone in the United States.

“Metavante has the only complete, single-source Electronic Presentment and Payment solution in the marketplace. Nearly 40 years of industry expertise and experience clearly makes partnering with Metavante an advantage for our clients,” said Langer. “Combined with our thorough, customizable adoption marketing programs, our clients have all the support necessary to keep them at the leading edge of e-commerce technology.”

Serving nearly 2,500 clients, Metavante Electronic Presentment and Payment offers a comprehensive, fully scalable, end-to-end solution that allows companies to electronically prepare bills and statements, and enables their customers to receive them and make payments on the Internet. The Metavante Electronic Presentment and Payment solution provides billers with the industry’s leading technology to automate and streamline bill delivery, payment, and customer care processes, and with market-leading document composition software. It gives consumers a bill management service that allows them to view, pay, manage and automate all of their bills – paper or electronic – online. Metavante Electronic Presentment and Payment also delivers a powerful “pay anyone” electronic bill payment engine for businesses and consumers.

About Metavante

With more than 3,500 clients, including the largest 20 banks in the United States, Metavante Corporation is a leading financial services enabler, delivering virtually all of the technology that an organization needs to offer financial services. Metavante offers financial technology solutions that drive customer relationship management, electronic banking, electronic funds transfer and card solutions, electronic presentment and payment, financial technology services, private label banking, and wealth management. Headquartered in Milwaukee, Wis., Metavante is wholly owned by Marshall & Ilsley Corporation (NYSE: MI). For more information, see [www.metavante.com][1].

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

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FDR Signs Dunlap

Global payments leader First Data Corp. announced that its card issuing services subsidiary, First Data Resources, has signed a five-year agreement to process retail private-label cards for The Dunlap Company, a Fort Worth-based department store chain. Under the agreement, First Data will provide a full range of transaction processing and portfolio management services, including call center support, for The Dunlap Company.

“As First Data continues to expand our retail presence, we look forward to working with The Dunlap Company,” said Eula L. Adams, senior executive vice president and head of worldwide card operations for First Data. “We’re pleased that The Dunlap Company recognizes the competitive edge that First Data provides to help retailers build customer loyalty and increase profits.” The Dunlap Company, which also receives merchant processing services through First Data Merchant Services, has more than 50 stores nationwide.

“We selected First Data because of their commitment to the retail industry and the strong retail-specific functionality they offer,” said Eddie Martin, executive vice president of The Dunlap Company. “First Data’s business solutions will help Dunlap’s centralize operations and deliver robust credit options for our customers.”

About The Dunlap Company

Headquartered in Ft. Worth, Texas, The Dunlap Company is a specialty department store chain with over 50 locations throughout Alabama, Arizona, Arkansas, Colorado, Kansas, Louisiana, Maine, Michigan, New Mexico, Oklahoma, Texas and Virginia. The Dunlap Company’s department stores operate under the name Dunlaps and 16 other names.

About First Data

First Data Resources, the card issuing services subsidiary of First Data Corp., processes for 312 million accounts on file around the world. First Data Corp. (NYSE: FDC), with global headquarters in Denver, powers the global economy. As the leader in electronic commerce and payment services, First Data serves approximately 2.8 million merchant locations, 1,400 card issuers and millions of consumers, making it easier, faster and more secure for people and businesses to buy goods and services using virtually any form of payment. With 29,000 employees worldwide, the company provides credit, debit, smart card and stored-value card issuing and merchant transaction processing services; Internet commerce solutions; Western Union® money transfers and money orders; and check processing and verification services throughout the United States, United Kingdom, Australia, Canada, Mexico, Spain and Germany. Its money transfer agent network includes approximately 120,000 locations in more than 185 countries and territories. For more information, please visit the company’s Web site at [www.firstdata.com][1].

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

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Chilean Navy MasterCard

MasterCard International and Banco Edwards del Banco de Chile announced that the Chilean Naval training ship Buque Esquela Esmeralda successfully utilized MasterCard Corporate cards issued in Santiago, Chile to finance their seven-month voyage through the Asia/ Pacific region. The ship’s officers accessed funds in various ports in Peru, Mexico, Japan, Korea, People’s Republic of China, Australia, Hawaii and New Zealand. In the past, the Esmeralda had to operate as its own bank. The MasterCard Corporate cards issued to the naval ship’s top officers enabled them to access funds at various ports to pay wages and payroll for the crew as well as purchasing supplies, fuel and other requirements during the journey.

For details on this story visit The RAM Report ([www.ramreport.com][1]).

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

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CreditCards.com

Boston-based marketing firm DealJam LLC announced this week it has acquired 1-800-CREDITCARDS and has launched the Creditcards.com Web site in conjunction with FL-based sub-prime MasterCard issuer Net First Bank. The Web site, which launched February 1st without editorial content, is a collection of banner ads representing 60 credit related products. Deal Jam specializes in acquiring/marketing domain names and has been pitching its creditcards.com domain name to industry players for the past year. The company, led by Andrew Miller and Peter Hubshman, also provides direct sales and marketing as well as product distribution to its affiliates and clients through partnerships and strategic alliances which utilize direct email, online marketing, direct mail, telemarketing, as well as direct response television. The firm launched Marketvision Direct in 1995. The company is also involved with Airline Promotions, Inc., and owns and operates moviegoods.com. DealJam is also a partner with shop.com and college.com. The firm said this week it is preparing to implement its proprietary search engine placement technology to achieve a higher placement among on Internet search engines for its new credit card site. Net First National Bank charges consumers a one-time reservation fee, up to $500, which fully utilizes the credit limit of its sub-prime MasterCard. Cardholders create available credit on their accounts by making payments on the balance. There is also a $99 processing fee to establish the account, a $96 annual membership fee billed monthly to the account, and a zero interest rate on the outstanding balance. The card is issued with no credit check on the applicant. (CF Library 11/8/01)

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VODAFONE I-PIN

Vodafone UK, part of the
world’s largest mobile community, announced that it has selected iPIN, the
premier provider of e-Payment technology, to provide a payment platform for
its
new Vodafone m-pay bill service. iPIN’s e-Payment platform will enable
Vodafone
UK subscribers to make online purchases safely and securely over the Internet
or WAP. Vodafone’s m-pay bill will be available next month.

Using the new service, Vodafone UK subscribers will be able to charge low
value
digital content to their mobile phone accounts from companies offering
Vodafone
m-pay bill as a payment mechanism.

The iPIN solution is used for end-to-end electronic payments, managing the
transaction from the consumer payment to the clearing and settlement and
customer care. The application will incorporate several iPIN e-Payment
business
rules and security features, including delegation of authentication and single
sign-on guidelines as well as content-based authorization rules. iPIN’s
technology is also device agnostic, so that the service can be accessed via
Web
or WAP channels as well as other interfaces such as SMS and IVR. The
benefit to
consumers is that the XML based user interface (UI) gives consumers a
consistent look and feel when making purchases in different environments.
“With additional market segments coming online, and a growing consumer base
accessing the Internet and the wireless Internet and paying with their mobile
phones, Vodafone m-pay bill will enable those new consumers and the already
m-commerce savvy groups to pay for digital content safely and securely, in a
user-friendly environment,” said Alexandre Gonthier, CTO of iPIN.

About iPIN

iPIN (www.ipin.com) is a leading provider of e-Payment
software. iPIN’s
e-Payment software offers convenience and security to consumers as they make
Web and wireless purchases. Capitalizing upon the established infrastructure
that processes credit and debit card payments, iPIN complements existing
payment card channels by providing a wider selection of e-Payment options.
With
iPIN, payments can be made through bank accounts, stored value accounts, and
wireless bills using devices such as cellular phones, computers, smart cards,
and automotive transponders. iPIN’s products have been implemented
worldwide by
financial institutions, telecommunications operators, automotive OEMs, and
ISPs
who want to drive additional revenues and become more involved with their
consumers as they make purchases beyond the existing customer or billing
relationship. iPIN customers include British Telecom, Hong Kong and Shanghai
Banking Corporation Limited, and France Telecom among others.

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Volume Cranks Down

It’s no surprise that credit card charge volume dropped sharply last year, especially following the 9/11 attacks. Among the top ten U.S. issuers, volume was up a mere 7.9%, compared to 13.2% for 2000. American Express posted its worst year for volume growth in a decade. During 1991, AmEx volume declined 1.2% in the face of a full blown recession. Last year, AmEx volume inched up by only 1.4%, compared to an 18.8% gain in 2000, and a 12.6% gain in 1999, according to CardData (www.carddata.com). The AmEx gain is remarkable given the collapse of corporate spending in the first half of 2001, and the collapse of travel spending in the second half of last year. Bank One/First USA was also impacted last year, posting a 1.4% decline in charge volume. Above average attrition and weak travel sales were to blame. Meanwhile, Capital One lead the top ten with a 35% jump in charge volume. However, if international volume is discounted, Cap One’s volume was up an estimated 20%. Chase was the surprising runner-up, with an 18.5% volume growth rate. For the first time in the industry’s history, charge volume topped $1 trillion among the top ten issuers.

ISSUER 2001 VOL 2000 VOL CHANGE
1. American Express $ 224.6b $221.6b + 1.4%
2. Citibank $ 218.5b* $195.5b* + 11.8%
3. MBNA $ 142.3b* $125.7b* +13.21%
4. First USA $ 140.4b $142.4b – 1.4%
5. Discover $ 93.3b* $ 90.1b* + 3.6%
6. Chase $ 71.9b $ 60.7b + 18.5%
7. Capital One $ 50.6b* $ 37.5b* + 34.9%
8. Bank of America $ 48.9b $ 45.4b + 7.7%
9. Household $ 34.9b $ 33.0b + 5.8%
10. Providian $ 30.5b $ 26.3b + 16.0%
TOTAL $ 1055.9b $978.2b
+ 7.9%
* Citibank includes data from Canada and Mexico; Capital One may include some
international data; MBNA includes international; Discover data as of 11/30/01;
Source: CardData (www.carddata.com) RAM Research Group’s Bankcard Barometer

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Block Terminals

The single largest rollout of check conversion technology ever is underway as H&R Block deploys VeriFone ‘Omni 3200’ terminals and ‘CR 600 MICR’ check readers to most of their 10,400 offices, using NPC as the acquirer. Currently, over 5,000 terminals have been installed in the corporate offices, with additional terminals to be installed on an ongoing basis. The installation will enable H&R Block to offer the credit card option to all their customers, including services such as tax preparation fees, mortgage origination, debt consolidation, and financial planning. H&R Block also recently doubled its number of check cashing machines. ACE Cash Express installed 100 automated self-service machines in select Block offices in 21 states. The machines enable Block clients to cash their tax refund checks in most instances in less than one minute. (CF Library 1/18/02)

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