Gift Cards

The Polling Company says a recent survey showed 48% of consumers are planning to buy at least one pre-paid card or gift certificate this holiday season and 29% will buy three or more. Of those planning to purchase a pre-paid card or gift certificate, 25% will spend $50 or more while 35% will spend $25-$30 on each card. The research firm says 10% of 18-24 year olds will buy more than 10 pre-paid card and gift certificates this season and that 50% of Hispanics and Latinos said they plan to purchase pre-paid cards or gift certificates, more than any other ethnic group. A First Data survey, released last week, showed that 76% of consumers are aware of gift cards as a retail product. Nearly 50 million adults have purchased gift cards and more than 63 million adults have received gift cards in the past 12 months. Among the three-quarters of consumers aware of gift cards, 44% said they were “very” or “somewhat likely” to purchase as many as four gift cards in the next 12 months with an average value of $44. (CF Library 11/16/01)

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W-OS

Smart Card Integrators, Inc. and Sagem announce their joint development
efforts
on the W-OS Operating
System. W-OS is an open smart card operating system offering worldwide
interoperability and third party licensing opportunities. The new W-OS is
derived from Microsoft Windows for Smart Cards (WfSC) v2.0 operating system.

W-OS is the culmination of Sagem’s GSM and security expertise and SCI’s
extensive ePurse development. SCI and Sagem have teamed together to provide
one operating system that can be used globally to meet their clients’ needs,
with ongoing development and support to be shared by both companies.

“Microsoft welcomes and supports this initiative, that builds upon our
Microsoft Windows for Smart Cards v2.0 technology. It will create a truly
interoperable operating system standard for the entire smart card industry,”
declares Francois Nouaille, Embedded System Group Manager, at Microsoft
France.

“Other customers that will derive extraordinary benefit from W-OS will be
the GSM mobile phone operators, who put Subscriber Identity Module chip cards
in their handsets. Our open licensing scheme for smart card players worldwide
will eventually provide the first truly interoperable platform for all
SIM-based applications and services, which they’ve been looking for until
now,” explains the Director of the Security Business Unit, at Sagem.

“Having been one of the first Windows for Smart Cards licensees, and using
version 1.1 for our e-Purse v1.2 in such successful programs as NavyCash and
MarineCash, it has been a natural progression for us to base future
development on the greatly improved WfSC v2.0,” explains Francois Allal,
President of SCI. “We feel privileged partnering with Sagem to use an
innovative and affordable licensing strategy to offer W-OS globally. All
smart card manufacturers and developers will have access to this platform,
which will ultimately benefit the end user by providing the long awaited jolt
to the smart card industry.”

W-OS has been chosen by JPMorgan Chase to support commercial and
government smart card applications.

SCI and Sagem are concentrating their engineering efforts on making W-OS
an extremely secure, efficient, and fully interoperable smart card operating
system. Meeting Open Platform specifications, as defined by smart card
standards organization, GlobalPlatform, will make W-OS a valuable
interoperable operating system along with Java. The next phase of W-OS joint
development will focus on enhanced security, PKCS#11 integration, EMV and OP
compliance, and FIPS 140-level 2 certification.

SCI and Sagem are currently working on agreements with smart card industry
leaders, including Datacard and Incard, to license the new W-OS, which is
already available on all ATMEL secure micro-controller chips.

“Datacard is a passionate supporter of open standards based, card
independent smart card operating systems. We look forward to supporting the
W-OS and welcome it into the family of Aptura, JACOP, and MULTOS,” states Bob
Beer, VP Business Development, at Datacard Group.

“Consistent with company policy, Incard endorses the Open Standards
approach. Along with Java, W-OS would represent the right answer to the
increasing demand for interoperability in today’s smart card market,” explains
Marco Mauro, Strategic Account Manager, at Incard.

About SCI

Smart Card Integrators, Inc. is a leading North American smart card
technology company that develops and markets systems and software integration
services for the smart card market. The company’s core competencies and
capabilities allow it to provide end-to-end integrated system solutions for
smart card and cashless payment markets. SCI has become one of the fastest
growing smart card technology companies in North America.
http://www.sci-s.com

About Sagem

Group SAGEM is an internationally based high technology group. The second
largest French group in the field of telecommunications and the third largest
European company in electronics for defense and security, SAGEM maintains a
presence in more than twenty countries.
http://www.sagem.com

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NON-BANK ISSUERS

The Bankcard credit card group has adjusted its restrictions to membership to
permit non-financial institutions to enter the credit card market. Currently
only approved deposit-taking institutions are allowed to issue credit cards on
behalf of VISA, MasterCard and Bankcard in Australia. The new membership rules
will require approval from only three, instead of four, of the major banks to
become a Bankcard member. Reportedly, Bankcard’s move will likely to be warmly
received by the Australian Competition and Consumer Commission and the Reserve
Bank of Australia.

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Online Shopping

Online shopping far exceeded projections during the holiday weekend. Yahoo! reported an increase of more than 75% over the same post Thanksgiving Day weekend one year ago. Yahoo! Shoppings’ said top sellers this weekend include the ‘X-box Game Cube’ and ‘PlayStation 2’. Other popular items include the ‘Olympus C-3000 Canon PowerShot’ and ‘Nikon Coolpix’ digital cameras. Yahoo! has more than 18 million unique visitors.

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Providian CEO

Industry veteran Joseph Saunders has been hired as Providian president and CEO, succeeding Shailesh Mehta, who announced last month that he would step down following the company’s weak third quarter earnings report. Since 1997, Saunders has been Chairman and CEO of Fleet Credit Card Services. Prior to that, he spent 12 years at Household Finance where he became the head of the Private Label Credit Card Business. Prior to joining Household in 1985, Saunders spent one year at Bank of America as VP in credit card operations. Saunders previously served as Chairman of the Board of MasterCard International. Providian also announced this morning it has named Saunders to the board of directors. David Grissom will continue as Chairman of Providian’s board. Providian recently announced it is cutting jobs, suspending dividends, withdrawing earnings guidance, and is seeking to sell-off about $3 billion of its credit card portfolio. For complete details on Providian’s latest earnings report visit CardData ([www.carddata.com][1]). Providian’s stock was trading up about by 10% this morning on the news. (CF Library 10/22/01; 11/1/01; 11/15/01)

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

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Payless & Walgreens Card Deal

Payless ShoeSource, Inc. announced a year-long agreement with Walgreens that will make Payless gift cards available in more than 3,500 Walgreen stores across the nation, giving consumers an easy, convenient way to pick up a needed gift, as well as prescriptions and other needed household and personal care items — all in one stop.

Payless said that this is the first time its gift cards have been available through another retailer and that the partnership is expected to broaden Payless’ reach in the marketplace, to increase the visibility and awareness of its brand and to drive more traffic into its more than 4,900 stores throughout the United States. The gift cards will be available beginning tomorrow in select Walgreen stores, with full availability by the end of the weekend — just in time for holiday shopping.

“Gift cards are very popular — especially around the holidays. Payless gift cards make it easy to give the gift of footwear; they make great gifts for a wide range of people from the paper carrier to that hard-to-buy-for relative,” said John Haugh, chief marketing officer and senior vice president of business development for Payless. “We are extremely excited to partner with Walgreens — a pioneer in the gift card arena — to make Payless gift cards available through Walgreens extensive nationwide store network, where over one billion people come through its doors each year.”

The Walgreens gift-card initiative is part of Payless’ new corporate sales strategy that focuses on partnership sales and distribution programs to supplement the footwear retailer’s traditional and strong direct-to-consumer sales approach. Payless gift cards, available in $10 and $20 denominations, will be part of Walgreens in-store point-of-purchase displays.

Payless said that it has had gift cards available at its own stores for about three years. This will continue and the company said it is currently looking at similar partnerships with other general retailers.

Payless ShoeSource, Inc. is North America’s largest family footwear retailer. The company operates a total of 4,964 stores offering quality footwear and accessories at affordable prices. In addition, customers can buy shoes over the Internet through Payless.com(SM) at [http://www.payless.com][1].

Walgreen Co. is the nation’s largest drugstore chain, with fiscal 2001 sales of $24.6 billion. The company operates 3,571 stores in 43 states and Puerto Rico and plans to open approximately 475 new stores this fiscal year. Payless.com are service marks of Payless ShoeSource Worldwide, Inc.

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

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BAI Goes On

BAI will hold its annual Retail Delivery Conference, the financial services industry’s premier retail banking conference and leading source of information on retail financial services strategy and technology, in Anaheim, California on December 11-14, 2001. The conference will focus on the importance of identifying and adopting business models that will enable financial services companies to better serve their customers, while maintaining profitability. The event will take place at the Anaheim Convention Center.

“We made a conscious decision to move forward with our Retail Delivery Conference this year in spite of the obvious economic and environmental conditions,” said Thomas P. Johnson Jr., President and CEO of BAI. “Feedback from industry executives indicates a great need for information and idea sharing right now. Financial services companies are struggling to generate new revenue, adopt new technology and serve their customers better, and they are looking for innovative ways to this. BAI’s Retail Delivery Conference offers them the opportunity to help achieve these goals because it brings together industry thought leaders, as well as major solutions providers,” he added.

The conference agenda will feature financial services experts such as David Coulter, Vice Chairman, JPMorgan Chase, who will deliver the conference keynote presentation on improving financial services retail business models. Other highlighted speakers will include Meg Whitman, President & CEO, eBay, Inc.; Janet Crane, CEO, BillPoint – Vice President, eBay; Clayton M. Christensen, Professor, Harvard Business School; Richard K. Davis, Vice Chairman, U.S. Bancorp; and Richard C. Hartnack, Vice Chairman, Union Bank of California.

New research will be a major part of the agenda and includes BAI/First Manhattan Consulting Group research on profitability challenges in retail banking; findings from Forrester’s Technographics research, which looks at how technology impacts customer attitudes, behavior and adoption; insights from research by BAI and Clayton Christensen on disruptive innovations in financial services. Findings from a BAI/Unisys/The Wharton School study on a new approach for generating and assessing strategic options within the financial services industry will be shared and BAI/The Cambridge Group’s consumer research, Competing on Supply, Winning on Demand, will be the basis for conference sessions on branding and cross-selling opportunities for financial services companies.

In addition to the general sessions, the agenda includes 22 concurrent sessions led by financial services executives who will discuss issues such as aggregation; new payment options; Internet banking; CRM and eCRM; cross- selling opportunities; wealth management; channel integration; new delivery networks; and performance and profitability strategies.

15 pre-conference workshops will cover issues such as customer and employee retention and loyalty; sales leadership in banking; privacy; new growth opportunities offered by technology; customer segmentation and branding.

The conference exhibit hall will feature more than 300 of the industry’s leading providers, showcasing the latest in retail delivery technology solutions. The exhibit hall will be open from December 11 – December 13. Premier sponsors of BAI’s Retail Delivery 2001 are Intel Corporation and Willey Brothers.

To register for BAI’s Retail Delivery 2001, please contact Customer Service at 800-224-9889 or register online at . Complimentary press registrations are available by emailing Alison Estrada at aestrada@bai.org .

BAI is the leading professional organization devoted exclusively to improving the performance of financial services companies through strategic research and information, education and training. BAI provides a comprehensive range of end-to-end solutions to address strategic and operational problems facing financial services organizations. Offerings include conferences and seminars, graduate schools, in-house education, and a full range of online and text-based training courses. BAI provides extensive market, employee, customer, and operational benchmarking services and tackles complex strategic issues in the financial services industry through strategic research and Banking Strategies magazine.

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BROKAT DISPOSITION

eONE Global,
LP, an innovator in
identifying and developing emerging
payment technologies, has completed its acquisition of the assets that
comprised the M-Business division of Brokat Technologies. eONE Global’s
newest operating unit, Encorus
Technologies, will focus on
driving the acceptance and usage
of mobile payments worldwide.

The assets of the acquisition provide the foundation for Encorus
Technologies GmbH (Encorus-Germany), located in Stuttgart, which provides
flexible and open mobile payments software and infrastructure for Encorus’
processing services business. Encorus Technologies Limited, which will base
executives and primary operations in Ireland, offers efficient payment
processing services to customers worldwide. Most of the existing management
of the M-business unit team will join Encorus-Germany in their current roles
and report to eONE Global Managing Director John Duncan.

“Encorus-Germany is poised to play a significant role in the next
generation of payment innovation — secure, standard and simple mobile
payments via any type of mobile device — from cell phones to Palm devices,”
said Duncan. “Encorus-Germany’s solutions provide merchants, carriers and
consumers with universal, convenient and instant mobile transaction payment
processing services available to anyone, anywhere, at any time. The addition
of Encorus as eONE Global’s third operating unit positions us to take full
advantage of the migration to mobile payments.”

“We’re very excited to be part of the eONE Global family,” stated Stephan
Kruppa, executive vice president of Encorus-Germany. “We now have a more
complete value proposition by combining our leading mobile payment software
with eONE Global’s superior processing capabilities. This is indeed an
exciting new step in building a community of mobile operators and merchants
powerfully connected through a global standard for mobile purchasing.”

Encorus will initially focus on facilitating digital content micropayments
(smaller transactions of less than one US dollar or one euro), and secure
Internet macropayments with debit or credit cards, expanding into
person-to-person payments and point-of-sale macropayments. Implementations
have begun in Europe, and will then move into Asia and the United States. By
2005, the Tower Group expects the number of mobile payment users in Europe and
Asia to exceed 54 million.

Among the assets acquired in this transaction is Brokat’s secure,
convenient and flexible PaymentWorks product family. Encorus’ PaymentWorks
software solution uses open standards and enables mobile operators to offer
customers secure, easy-to-use mobile payment services. Easy to implement,
PaymentWorks handles both micropayments and macropayments, and provides
authentication and authorization services.

Beyond those mobile payment capabilities, Encorus will be extending its
software business into a broader payments processing platform. As an
operating company of eONE Global, which is majority owned by First Data Corp.
(NYSE: FDC), Encorus benefits from First Data’s global processing scale and
infrastructure as well as extensive distribution channels: 2.6 million
merchant locations, 1,400 financial institutions and other card issuers and
millions of consumers. First Data also owns Western Union, a money transfer
network with 117,000 agent locations in more than 185 countries and
territories. By leveraging First Data’s scale and assets, Encorus has
tremendous opportunity in point-of-sale payments and will also focus on
efforts to establish direct routing and settlement for these transactions.

About Encorus Technologies GmbH

Encorus Technologies
(http://www.encorus.com), an
operating company of eONE
Global, LP
(http://www.eoneglobal.com), is focused
on building a flexible and open
infrastructure and offering efficient payment processing services to drive the
acceptance and usage of mobile payments worldwide. Encorus connects operators
and merchants with a universal payment infrastructure that’s easy to use and
secure, while providing consumers with a more convenient, cashless payment
alternative. Encorus was founded in November 2001 by eONE Global through an
acquisition of the assets of Brokat Technologies’ former M-Business Unit.

About eONE Global

As the leading source for accelerating payment innovation, eONE Global, LP
(http://www.eoneglobal.com) identifies, develops,
and operates emerging payment
systems and related Internet and wireless technologies spanning the business,
government and mobile markets. Its operating companies include SurePay, LP
(http://www.surepay.com), which creates trusted
global
end-to-end electronic business
payment solutions that complete the financial supply chain for corporations
and trading networks; govONE Solutions, LP
(http://www.govonesolutions.com), which
enables businesses and consumers to calculate taxes and make payments to
government and businesses electronically; and Encorus Technologies
(http://www.encorus.com) which is focused on
building a
flexible and open
infrastructure and efficient payment processing services to drive the
acceptance and usage of mobile payments worldwide. eONE Global is owned by
global e-commerce and payment services leader First Data Corp. (NYSE: FDC)
(http://www.firstdata.com) and iFormation Group,
(http://www.iformationgroup.com) a company
founded by The Boston Consulting Group, General Atlantic Partners, LLC and The
Goldman Sachs Group, to build technology-enabled businesses in partnership
with the Global 2000.

About Brokat

Brokat Technologies AG (Neuer Markt: BRJ, Nasdaq: BROA) is a leading
provider of software and services for flexible e-finance solutions. Based on
standardized software components, Brokat develops customized solutions for
banks, insurance companies and other financial services providers offering
online services to their customers. The advanced multi-channel capabilities
allow financial institutions to provide high levels of service to customers on
the Web, on wireless devices, via ATMs, through call centers, and in person in
branch offices. Brokat was founded in 1994 and is among the pioneers in the
sector of electronic financial services. Over 2,000 companies use Brokat
solutions. Among these are Allianz, ABN Amro, Advance Bank, LBBW, MLP, and
SE-Banken. Further information is available at
http://www.brokat.com.

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BofA Ingenuity Gift Cards

Celebrating its 200-year heritage of innovation, Bank of America is introducing “Heritage of Ingenuity” gift cards to commemorate the achievements and contributions of its legacy banks. The Bank of America Visa Gift Card is a prepaid, stored-value card that customers can purchase either online or by telephone in any amount from $25 to $600. It provides a safe, secure way to send a gift and can be used at more than 22 million locations worldwide.

Initially, Bank of America will introduce card designs that feature the following legacy banks — Barnett, Boatmen’s, Citizens & Southern and Seafirst — for their creative approaches to banking and their unwavering commitment to customers and communities. Other legacy banks may be commemorated in the coming months. The Heritage of Ingenuity gift card designs were created to celebrate the unique role each legacy bank has played in building today’s Bank of America.

“In 1998, Bank of America became the first nationwide bank,” said Gus Lejano, Gift Card Manager, Card Services, Bank of America. “But, our roots span 200 years and encompass many thousands of hardworking and innovative individuals whose ingenuity built the banks that form our foundation today. With the Heritage of Ingenuity Gift Cards, we are recognizing the achievements and contributions of these organizations.”

Each legacy bank contributed to the Bank of America heritage and its spirit of ingenuity:

* During a devastating fire, Barnett Bank invited other banks to keep their safes in the vault (1901) and later created an innovative department designed exclusively for women (1927).

* Boatmen’s Bank enhanced the lives of the working men who operated the riverboats by offering banking services tailored for their needs. Later, Boatmen’s pioneered banking services for women (1850s).

* Citizens & Southern Bank ensured the future of historic Stone Mountain (1950s) and helped attract more than 300 manufacturers to the state of Georgia (by the 1960s).

* Seafirst Bank began as a “barrel” in a general store (1845) and later installed the largest number of online cash machines in the nation (1974).

Benefits of the Bank of America Visa Gift Card:

* More choices — Unlike store gift certificates that are limited to only one store, a customer can make multiple purchases at various retailers as well as with online merchants.

* Safer than cash — If the Gift Card is lost or stolen, the unspent amount can be replaced.

* Quick activation — Rather than taking the time to deposit a check, the Bank of America Visa Gift Card can be used as soon as the card is activated. Cards can be activated 24 hours a day, seven days a week.

* Personalization — The recipient’s name is embossed on the card and may include a personal message from the gift-giver.

Beginning December 15, 2001, Heritage of Ingenuity Gift Cards can be ordered at or calling toll free 1-866-261-3594.

One of the world’s leading financial services companies, Bank of America is committed to making banking work for customers like it never has before. Through innovative technologies and the ingenuity of its people, Bank of America provides individuals, small businesses and commercial, corporate and institutional clients across the United States and around the world new and better ways to manage their financial lives. The company enables customers to do their banking and investing whenever, wherever and however they choose through the nation’s largest financial services network, including approximately 4,400 domestic offices and 13,000 ATMs, as well as 38 international offices serving clients in 190 countries, and an Internet Web site that provides online access for more than 3 million customers, more than any other bank.

Bank of America stock (ticker: BAC) is listed on the New York, Pacific and London stock exchanges. The company’s Web site is [http:/www.bankofamerica.com][1] News, speeches and other corporate information may be found at

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

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On Target 3Q

Target yesterday confirmed it surpassed the one million mark in total cardholders for its new ‘smart VISA’ card within the first six weeks of launch. As of Nov 3rd, Target had signed up 1.4 million VISA cardholders with credit limits ranging from $2,500 to $10,000. Target told analysts Tuesday it expects to have 2.0 million active VISA accounts on-file and more than $1 billion in VISA receivables by year’s end. Company executives estimate that average balances will range between $3,000 and $5,000 when the portfolio matures. Target has been soliciting the upper tier of its ‘Guest Card’ private label program for the new ‘smart VISA’ card since September. The retailer has now moved to in-store and on-line promotion of the new product. Target said smart card applications will initially be limited to downloading coupons across its platforms, such as downloading special offers from the Company’s Web site for use in-store and vice versa. Target intends to expand the loyalty applications of the card and may consider partnerships with outside companies. According to its third quarter report, about 25% of Target’s profit is generated by its credit operations. Target is issuing the new smart cards through its Retailers National Bank subsidiary. For complete details on Target’s 3Q/01 report visit CardData ([www.carddata.com][1]). (CF Library 6/20/01; 10/05/01)

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

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