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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Holiday Spending

Americans plan to spend $1,564 per household during the holidays, down 7% from last year, but $6 more than the average holiday budget in 1999. The ‘2001 American Express Retail Index’ on holiday shopping also found that consumers plan to spend $216 on entertaining this year, up 10% from 2000, and have budgeted, on average, $1,042 for gifts, $139 for holiday travel, $78 for decorations and $88 for miscellaneous holiday expenses. To pay for holiday purchases, 57% of shoppers will use credit cards, up from 52% last year. Shoppers will also use cash (90%), checks (59%) and ATM/debit cards (34%). Forty-two percent of consumers plan to use the Internet in some way this year – to browse, compare prices, shop or send cards or photos electronically – compared to 34% in 2000. While 27% of this season’s online shoppers will browse the Internet for gift ideas, 22% say they plan to make online purchases, up 7% over 2000.

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Catalog Cards

Less than a week after a U. S. District Court, at the request of the Federal Trade Commission, closed down a marketer of gold catalog cards, such cards are re-surfacing for the holiday season with more sophistication. Las Vegas-based CCS launched this week a nationwide mail-drop of a solicitation which includes a pre-issued, personalized credit card attached. The ‘First National Card’ also has an activation sticker attached and is designed in the same format as VISA and MasterCards, according to CardWatch (www.cardwatch.com). The card offers credit purchases of items from a proprietary catalog with a 30% minimum down payment. The card also offers cash advances with a limit ranging from $20 to $150. The card carries a $200 activation fee and a $99 annual fee.

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NAP Signs IBB

National Processing Company, a leading provider of merchant credit card processing and a wholly owned subsidiary of National Processing, Inc., announced the signing of a multi-year agreement with Independent Bankers’ Bank. NPC will provide marketing and merchant processing services to the community banks that IBB serves.

Independent Bankers’ Bank offers a wide variety of traditional and non- traditional correspondent bank services to community banks in the Midwest. The agreement with NPC provides IBB the ability to market credit and debit card processing services to its customers – allowing them to effectively compete in their markets.

“NPC has been very successful in providing merchant processing services to organizations like IBB,” said Randy Sagar, senior vice president of Independent Sales for NPC. “NPC understands the importance of offering competitively priced products with superior service and support for these types of programs. We look forward to working with IBB to market merchant processing services to their bank customers.”

“The agreement with IBB fits right in line with our strategy to package NPC’s processing scale and efficiencies, and deliver them to downstream markets,” said Thomas A. Wimsett, president and chief executive officer of NPC. “The IBB program gives community banks the ability to offer their customers value-added products and unparalleled service at very competitive prices. NPC also brings leadership and processing expertise, as well as the financial stability of one of the largest processors in the world.”

“Independent Bankers’ Bank is known as an innovative financial leader, of a wide variety of financial correspondent services, to the many Midwest communities we serve,” said John D. Schneider, president of IBB. “What matters most to our community banks is the difference we can make in offering valuable products and services that they need to compete in their markets. Our relationship with NPC provides yet another important service we can market to our valued customers.”

About Independent Bankers’ Bank

Independent Bankers’ Bank is a 15-year old commercial Bankers’ Bank with $275 million in assets and owned by 117 community institutions. IBB serves over 500 community banks in Illinois, Indiana, Iowa and Michigan providing traditional and non-traditional correspondent services to community financial institutions.

About National Processing, Inc.

National Processing, Inc. through its wholly owned operating subsidiary, National Processing Company (NPC(R)) is a leading provider of merchant credit card processing. National Processing is 86 percent owned by National City Corporation (NYSE: NCC) ( [http://www.nationalcity.com][1]), a Cleveland based $96 billion financial holding company. NPC supports over 600,000 merchant locations, representing nearly one out of every five Visa(R) and MasterCard(R) transactions processed nationally. NPC’s card processing solutions offer superior levels of service and performance and assist merchants in lowering their total cost of card acceptance through our world-class people, technology and service. Additional information regarding National Processing can be obtained at [http://www.npc.net][2].

[1]: http://www.nationalcity.com/
[2]: http://www.npc.net/

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