FRAUD CONSULTING GROUP

HNC Software Inc. announced the expansion of its Fraud Consulting Group into
Europe to help
companies reduce fraud losses by optimizing business practices.
Consisting of former fraud managers and strategists from around the world, the
team will focus its payment card and e-commerce consulting efforts throughout
the region to help customers achieve the full potential of their fraud
management systems.

HNC’s fraud consultancy services will include several fraud response modules,
including health checks, fraud reduction workshops, fraud reduction reports
and
fraud reduction partnerships. Each of these modules offers a different
level of
service to card issuers so they can respond appropriately to fraud problems.
Since HNC fraud consultants have worked with more than 25 issuers worldwide,
they’re experienced in understanding the unique fraud trends of different
markets.

“As society’s reliance on cards becomes more widespread, the losses from card
fraud grow, too,” noted the U.K.-based Association for Payment Clearing
Services (APACS) in a recent report. “So while the rate of fraud growth as a
percentage of turnover remains low — less than half the 1991 peak level of
0.33 per cent — it is vital that fraud prevention methods are continually
developed and reviewed as criminals try to evade them.”

“Fraud losses in the U.K. and Europe are rising at more than 50 percent every
year, and many issuers are only achieving a fraction of their fraud prevention
potential,” said Ruud Nijs, managing director of Europe, the Middle East and
Africa for HNC. “Many payment card issuers are waiting for ‘smart’ or chip
cards to resolve their fraud problems — but HNC can help companies optimize
their fraud management systems and reduce their fraud losses now.”
Half of the fraud consulting team has been deployed to Europe to help the card
payment industry reduce fraud over the next year. HNC initially launched its
fraud reduction consulting services in 1999, with efforts primarily
concentrated in Canada. By the end of 2000 card fraud losses in Canada, which
were projected to increase by more than 33 percent in the year, actually
declined by more than 25 percent.

Verifying this trend, Visa Canada reported 1999 credit card losses at $150
million (Canadian), and had projected losses in 2000 to top the $200 million
mark. Instead, losses from card fraud dropped approximately 40 percent for the
year.

“We will partner with European card issuers and show them that implementing
proven industry best practices will substantially curb the growth in fraud and
help them reduce their losses just as Canadian issuers experienced last year,”
said Frank McKenna, principal consultant of the Fraud Consulting Group.
“With a
good strategic plan and proper execution, there is no reason why European card
issuers can’t be achieving reduced fraud losses by this time next year.”
HNC is a leading provider of high-end analytic and decision management
software
that enables global companies to manage customer interactions by converting
data and business experiences into real-time recommendations. HNC’s proven
software empowers Global 2000 companies in the financial services, insurance,
telecommunications, health care, and other industries and governments to make
millions of the right mission-critical customer decisions, and take action in
real time, substantially improving financial performance, reducing costs and
decreasing risk. For more information, visit
http://www.hnc.com.

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ACI/IBM Interface

ACI Worldwide (Nasdaq:TSAI), a leading international provider of enterprise e-payment solutions, announces an integrated software product on IBM eServer z900 and S/390 mainframes that automates the day-to-day management of consumer e-payments.

ACI Payments Manager automates e-payment settlement functions and integrates transaction and customer account management to help users reduce costs and improve customer service. Financial institutions, e-payment processors and retailers can use the solution to integrate their customers’ transaction and account data, automate manual settlement processes, and monitor transaction data in near real time. The system operates in virtually any e-payment environment, including traditional card-based, Internet and mobile commerce systems. It provides alarms to warn of user-defined alert conditions and offers executive analysis reporting to interpret and analyze transaction data. “We’ve drawn on the experience of our customers–and the experience we’ve gained through 25 years of providing e-payments software–to introduce a new generation solution that can help our customers automate back office functions and improve their competitive position,” said Mark Vipond, president of ACI Worldwide. “ACI Payments Manager offers the tools necessary to grow and manage e-payments processing and adapt to new market and revenue opportunities.” ACI Payments Manager operates on the IBM eServer z900’s z/OS and S/390’s OS/390 operating systems and takes full advantage of IBM’s DB2 relational database architecture for enhanced data management and system scalability. ACI also supports the IBM Framework for e-business, a roadmap for integrating Internet technologies with traditional information technologies, and has embraced the Framework as its underlying technology for delivery of e-business solutions on IBM platforms.

“Our work with ACI has recently led to a number of ACI banking solutions for those banks running on our secure z900 and S/390 mainframe platforms,” said Morten Nygaard, director, eServer Marketing, Global Financial Services at IBM. “ACI Payments Manager shows their continuing mainframe support and provides our customers with yet another state-of-the-art e-payment management tool.”

Modular Design

ACI Payments Manager comprises four major modules:

— Transaction warehouse is a central depository of e-payment transaction information for the entire system. The information is updated in near real time to provide up-to-date transaction detail.

— Information management reviews and analyzes e-payment transaction data to provide configurable transaction monitoring and analysis.

— Settlement provides automated, continuous cycle pre-processing for reconciliation, funds management, fee calculation and exceptions processing.

— Account management offers a comprehensive view of a customer’s relation to their transaction instruments and funding accounts activity. It allows users to link customers, issue traditional and emerging e-payment transaction instruments, and maintain a comprehensive view of customers’ transaction and administrative activity.

The modules take full advantage of a relational database model and are configured in a hierarchical structure. This enables the user to configure their unique business structure for institutions, regions and branches to meet reporting, monitoring, settlement, funds movement, issuance and marketing program management needs. The database is designed to enhance the sharing of data tables so that common functions and access to data are not duplicated between applications. All ACI Payments Manager modules are built from a global perspective, providing multicurrency, multilanguage and other international features. The modules are presented in a richly detailed, workflow-enabled graphical user interface (GUI) with both Web browser and desktop applications, and share common security and audit logging components.

Part of the ACI Commerce Framework

ACI Payments Manager is part of a broad suite of application software products developed by ACI. These products–extended to operate on IBM eServer zSeries, pSeries and xSeries hardware platforms–use IBM e-business infrastructure software such as WebSphere and the DB2 Universal Database to provide a common framework for managing all phases of a payment transaction lifecycle. ACI’s commerce framework includes software to enable transaction initiation through Web and wireless channels, process transactions in real-time, and automate the back office functions associated with settlement, dispute processing, fraud detection and account service. Among application software providers, ACI is unique in its ability to act as the single-source provider of software that spans the length of the commerce value chain.

About ACI Worldwide

Every second of every day, consumers are initiating electronic payment transactions–getting cash at ATMs, using debit and credit cards to make purchases in stores and on the Internet, banking by phone and PC, paying bills online. Twenty billion times a year, ACI software is used to process these transactions, powering the world’s online payment systems. ACI was founded in 1975 and pioneered the development of applications and networking software for online transaction processing. Today more than 530 customers in 79 countries use ACI supplied software. Visit ACI Worldwide on the Internet at [http://www.aciworldwide.com][1].

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

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SMART CARD PLANT

Samsung SDS announced this week a deal to form a joint venture smart card
manufacturing company in China. Samsung will establish the company with a
public Chinese electronics company, established by China’s construction
ministry. The Beijing-based joint venture will focus on manufacturing smart
cards to be used in transportation cards, which will collect transportation
fees for buses, subway, taxis and highways.

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SSB Prepaid MasterCard

CT-based Southington Savings Bank has become a prepaid card issuer for the ‘MasterCard Bonus Card’, a reward option of the MasterCard ‘Business Bonuses’ program for small businesses. The program enables cardholders to earn points for every dollar spent on their MasterCard ‘Business Bonuses’ card. These points, in return, may be redeemed for a prepaid MasterCard ‘Bonus Card’, a prepaid MasterCard. This expansion of MasterCard ‘Business Bonuses’ is being supported by MasterCard by print, television, Internet and radio advertising campaigns in the U.S. market. MasterCard added the ‘Bonus Card’ feature in May of this year. Originally launched in 1999, ‘Business Bonuses’ allowed MasterCard ‘BusinessCard’ cardholders to redeem rewards points on any airline at any time, without blackout periods. (CF Library 1/9/01; 5/11/01; 5/24/01)

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Verified by VISA

VISA U.S.A. officially rolled its ‘Verified by VISA’ service yesterday which enables participating card issuing banks to validate a cardholder’s identity through the use of a password during the online checkout process. The new service was first reported by CardFlash in September 2000. For merchants the new program guarantees they will not be held liable for unauthorized card usage when the cardholder has been authenticated and prevents unauthorized card usage before it occurs, reducing the number of cardholder disputes and chargebacks. For card issuers it reduces chargebacks, unauthorized card usage and exception item processing system-wide. Card issuers participating include: Bank of America, First USA, Providian, Fleet, SouthTrust, SunTrust, and US Bank. Acquirers and processors participating include: Certegy, Chase Merchant Services, Fifth Third Bank, First Data, First of Omaha Merchant Processing, Global Payment, National Processing Company, Paymentech, TSYS, and Vital Processing Services. Some of major merchant participants include: 1800Flowers, Bed Bath and Beyond, CDNOW, Comp USA, Crutchfield.com, Dell, OfficeMax, Target.com, and Zales.com. (CF Library 9/28/00)

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Discover/Mills Xmas Promo

Discover Financial Services, Inc. a business unit of Morgan Stanley (NYSE:MWD), today announced the launch of a consumer promotion to increase DiscoverÒ Card usage at participating Mills retail and entertainment destinations (NYSE:MLS).

From November 19-December 24, 2001, Discover Card will give free “Rudolph the Red-Nosed Reindeer and The Island of Misfit Toys” VHS tapes to Discover Cardmembers who spend $250 or more in a single day with their Discover Cards at participating Mills shopping centers across the country*. Cardmembers immediately can obtain their videos by bringing their receipts to the information booths located in the Mills shopping centers.

“We are rewarding Discover Cardmembers for making holiday purchases using their Discover Cards,” said Rich Lalley, vice president of advertising and brand management for Discover Financial Services. “This program leverages our existing partnership with The Mills Corporation and enables us to provide real value for our Cardmembers.”

“Rudolph the Red-Nosed Reindeer and The Island of Misfit Toys” is produced by GoodTimes Entertainment and features the voiceovers of Richard Dreyfuss, Rick Moranis and Jamie Lee Curtis and a musical soundtrack from Tony Bennett.

The promotion will be supported with in-mall marketing materials including posters, table tents, counter cards and commercials on MillsTV. Information about the program will also be sent to Discover Cardmembers via statement inserts.

Discover Financial Services, a business unit of Morgan Stanley Dean Witter & Co., operates the Discover Card brands and the Discover Business Services network for its more than 50 million Cardmembers. Discover Business Services is the largest independent credit card network in the United States with approximately 4 million merchant and cash access locations. For more information about Discover Card, please visit [www.discovercard.com][1].

The Mills Corporation is a self-managed real estate investment trust (REIT) based in Arlington, Va., that owns, develops, leases, manages and markets a portfolio of 13 market dominant retail and entertainment destinations (12 Mills and one Block) totaling approximately 18 million square feet in 11 states. Currently, the company has five projects under construction and/or development in the United States and two internationally: Toronto, Canada and Madrid, Spain. The company’s Internet address is [www.millscorp.com][2].

*This promotion is valid at participating Mills locations between November 19, 2001 and December 24, 2001, or while supplies last. Purchases must be made with a single Discover Card Account. Cardmembers will receive one video for every $250.00 spent in a single day with original receipts only. Limit four videos per Discover Card Account.

[1]: http://www.discovercard.com
[2]: http://www.millscorp.com

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HEALTH CARDS

The joint venture between Giesecke & Devrient and Teco Electric &
Machinery is
gearing up to deliver 2.6 million national health insurance smart in July
2002. Teco executives said the joint venture will begin production of the
cards
in February or March next year. In September Teco and G&D formed a US$50
million joint venture to manufacture smart cards. The first initiative was to
upgrade the identification cards for Taiwan’s national health insurance
program. The venture has projected annual sales of NT1.5-2.0 billion after
mass
production starts in early 2002.

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Holiday Spending Update

Holiday purchases between Friday, Nov 23 and Sunday, Dec 2, continue to run about 2.1% over last year’s figures. As of 9:00 a.m. this morning, overall consumer credit card activity is up by 5%, with more than $45 billion charged in nearly 475 million transactions since Nov 23, according to CardWeb.com’s homepage tracker. TeleCheck Services says same-store retail sales, based on consumer checkwriting, were up 1.9% in November, but have edged up slightly since. Sales in the Southeast region increased 2.5%, while the Northeast jumped 2.4%, and in the Southwest region, sales were up 2.1%. TeleCheck says a strong, promotional buying climate, which is being sustained by low interest rates, low inflation and declining gasoline prices could help retailers this holiday season. Meanwhile, in a setback, the Mortgage Bankers Association reported yesterday that delinquency on mortgages hit a 10-year high during the third quarter.

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Cap One-ESPN

Capital One’s one-year old, high impact, “What’s in Your Wallet?” campaign is picking up more exposure this week in conjunction with its sponsorship of ESPN’s ‘Bowl Week’ and the ‘Florida Citrus Bowl’. The company has snagged ESPN’s SportsCenter anchors Kenny Mayne and Trey Wingo to create a TV spot spoofing Cap One’s commercials. The ad features characters from previous Cap One commercials such as visigoths, pirates, gladiators, cowboys, scurrying through a supermarket, passing shopper Trey Wingo, on their way to a family’s home, where an unsuspecting football fan fumbles his Capital One credit card. He is attacked by the hoard of characters. Kenny Mayne appears at the end saying “don’t fumble your Capital One card; watch Capital One Bowl Week on ESPN.” The new ESPN ad began appearing yesterday on the sports network. ‘Capital One Bowl Week’ on ESPN begins December 27 and concludes January 1. To review the new Cap One/ESPN ad as well as previous “What’s in Your Wallet?” television commercials visit CardWatch ([www.cardwatch.com][1]).

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

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LanTran Accelerator

Datacap Systems yesterday announced ‘NETePay!’ support for its recently released PC-based version of ‘LanTran’, enabling interfaced POS systems to achieve 1-2 second authorizations via DSL or other IP Internet and VPN connections. With this new release of ‘LanTran’, ECRs from NCR, Sharp, Casio, Samsung, Vectron, TEC America and others will have fast authorization capability. The new ‘LanTran’ also supports ‘WinDSU!’ for authorization access via traditional communication links such as dial-up, wireless, satellite and ISDN technologies.

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CARD CONFERENCE

UAE’s largest multi-participant loyalty program, ‘Air Miles’, with over
115,000 UAE residents as members, will be presented as one of the
highlights of
the Cards Middle East event, in a case study by Steve Lobb, Managing Director
of Rewards Management Middle East – Air Miles. The benefit-driven Cards Middle
East business conference will cover the latest developments in smart card
technology and mobile commerce, and will be coupled with a technology showcase
featuring leading smart card suppliers and solution providers, including ACI
Worldwide, IOCard, Prism, Omnipay, RS2 Software, First Data, DZ Card, Narboni
and many more. The conference will be held at the Crowne Plaza in Dubai on
May
13th – 15th 2002. For more information:
http://www.cards-worldwide.com/cardsme2002.

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First ETC Deployed

ACE Cash Express, the country’s largest owner of retail financial service stores, is first to deploy the new Expanded Transaction Center by Diebold, Incorporated. The ETC sidecar pairs with certain Diebold advanced-function automated teller machines or cash dispensers to transform them into highly functional, self- service destinations where ACE customers can cash checks.

The ETC allows deployers to offer customers additional services through a convenient delivery channel, while also increasing opportunities for fee revenue. In addition to the services already offered through the cash dispenser or ATM, the ETC transforms the terminal into a unit that can cash checks and dispense stored-value cards. The unit is designed around Diebold’s flexible open-architecture, which gives deployers the option of adding products and services to the sidecar that are in line with their overall marketing strategies.

“We were looking for a way to deploy multiple products in a cost-effective manner to increase customer convenience and allow our customer services associates to focus on more complex transactions at the window,” said Brent Turner, assistant vice president, Self-Service at Ace Cash Express. “The ETC provides the vehicle for us to meet those goals.”

ACE Cash Express has ETC units deployed in 71 store locations throughout the United States and expects to have an additional 171 units deployed by the end of the year. According to Turner, the company plans to expand the deployment to locations in ACE stores and other retail marketplaces. “Our customers are responding well to the self-service delivery system, evidenced by the high repeat usage statistics we have experienced,” said Turner. Turner added that the company plans on expanding services to include pre-paid wireless telephone cards and wire transfer products.

“ACE Cash Express is a leader in product delivery and new product development in the retail financial services industry,” said David Bucci, senior vice president, Customer Solutions at Diebold. “We are pleased the ETC has proven a valuable addition to their delivery channels, and are looking forward to continuing to add functionality to these terminals in order to continue satisfying the needs of ACE Cash Express customers nationwide.”

The ETC can be manufactured in a variety of fascia colors to reinforce the customer’s brand. The unit’s modular design and compact footprint (16.5in x 31.75in) makes it simple to add to the existing ATM without taking up valuable floor space.

A representative from ACE Cash Express will be demonstrating the expanded transaction center in Diebold booth #900 at BAI’s Retail Delivery conference, December 11-13, 2001, in Anaheim, Calif.

ACE Cash Express is headquartered in Irving, Texas and is the largest owner, operator and franchiser of retail financial service stores in the United States. Founded in 1968, the company has a total network of 1,163 stores consisting of 988 company-owned stores and 175 franchised stores in 34 states and the District of Columbia. ACE also maintains automatic check- cashing machines, which provide financial services without the need for a service associate, at 71 locations. ACE offers a broad range of financial and check-cashing services, and is one of the largest providers of MoneyGram wire transfer transactions. In addition, ACE offers money orders, bill payment services and prepaid local and long distance telecommunication services. Under ACE’s agreement with Goleta National Bank (GNB), GNB currently makes small consumer loans available to customers at various ACE company-owned stores. The company’s Web site is found at [http://www.acecashexpress.com][1].

Diebold, Incorporated is a global leader in providing integrated self- service delivery systems and services. Diebold employs more than 12,000 associates with representation in more than 80 countries worldwide and headquarters in Canton, Ohio, USA. Diebold reported revenue of US $1.7 billion in 2000 and is publicly traded on the New York Stock Exchange under the symbol ‘DBD’. For more information, visit the company’s Web site at [http://www.diebold.com][2].

[1]: http://www.acecashexpress.com/
[2]: http://www.diebold.com/

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