Edgar Dunn Re-Launched

San Francisco-based Edgar, Dunn & Company said this morning it has re-established itself as an independent firm following a management buyout from its former parent, Commerce One. However, EDC will continue its work with Commerce One on the development and implementation of B2B e-marketplaces. EDC’s financial services practice develops and implements strategies both for providers and users of financial services. Service offerings include business strategy and organization development, marketing and brand strategy, e-business and Internet payment strategy, new product development, and customer care strategy. The company was founded in 1978 by Peter Dunn and James Edgar.

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QualTeq Execs

QualTeq Inc., a leading Visa/MasterCard card manufacturer, announced today the addition of account executives, Lori Ricci* and Les Zeichner*. Ms. Ricci and Mr. Zeichner will play a key role as QualTeq Inc. responds to growth in financial markets and commercial markets such as loyalty, gift cards, and security markets (government identification and access control).

“This expanded sales force will allow us to reach our customers on a more personal level¾with market-specific expertise¾as we serve the growing card market segments,” said Scott Magnacca, executive vice president of sales and marketing. “Ms. Ricci and Mr. Zeichner will complement the efforts of our existing sales force, and continue to provide our customers with the high level of service and sales consultancy they expect from QualTeq. We are very pleased to have recruited these two experienced card sales professionals.”

Lori Ricci, based in New Jersey, will focus on commercial markets and personalization. She previously worked on behalf of Grafika Commercial Printing and brings seven years of sales and customer service experience in the plastic card industry. Ms. Ricci can be reached at 908-429-0041 or lricci@qualteq.com.

Les Zeichner, also of New Jersey, will expand QualTeq’s sales scope in specific commercial segments such as gift cards and in personalization. Mr. Zeichner, experienced in magnetic cards and RFID (contactless) applications, recently worked with Panasonic Industrial Company and will also contribute to QualTeq’s business development and sales of contactless smart cards. Mr. Zeichner can be reached at 732-238-5779 or lzeichner@qualteq.com.

QualTeq Expanded Sales Team

For more information, contact Scott Magnacca, executive vice president of sales and marketing, QualTeq, Inc., at (908) 668-0999, Ext. 213, smagnacca@qualteq.com or visit the Web site at .

About QualTeq Inc.

Based in South Plainfield, NJ, QualTeq has been a leader in secure card manufacturing for almost 20 years, producing over two billion cards since its inception. QualTeq is a single source supplier of card products and services from card design and manufacturing to personalization and card issuance-receiving recent International Card Manufacturer Association (ICMA) Élan Awards for Card Design Excellence. QualTeq is also the first fully integrated secure North American company to offer dual interface cards incorporating contact and contactless technology.

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USWD CTO

U.S. Wireless Data, Inc., the leader in transaction delivery and gateway services for the payment-processing industry, has appointed Daniel Lane to the position of chief technology officer.

In his new position, Lane will chart the future direction of the company’s technology platforms and new products. He will report to Heidi R. Goff, president and chief operating officer.

Prior to this promotion, Lane served as the company’s vice president of product research and definition, a position he has held since U.S. Wireless Data acquired NXT in January of 2001. Lane has been responsible for the management and technological enhancement of the NXT processing network, which processes more than 600 million transactions each year. Lane led the development of the network while serving as NXT’s vice president of technical services, a position he held for four years. He also served as vice president of technical services for Merchant-Link, Inc., where he directed the technical growth of Merchant-Link’s point of sale help desk business. Lane has held various technical positions at Digital Radio Networks and Tymnet, both value-added telecommunications companies. He holds a B.S. in computer science from The College of William and Mary.

“Dan Lane has been the architect of much of NXT’s transaction-delivery infrastructure,” said Chairman and CEO Dean M. Leavitt. “He is a key addition to the new team of seasoned professionals leading our company in both wireless and landline technology initiatives. I am confident that he will continue to create services that our customers find innovative and valuable.”

“I am looking forward to playing a larger role in the strategic direction of this pioneering company,” said Lane. “The unique combination of wireless and landline technologies at U.S. Wireless Data offers creative new ways to serve the payment-processing industry and other transaction-based businesses as well.”

ABOUT U.S. WIRELESS DATA

U.S. Wireless Data, and its subsidiary NXT, make credit card and ATM transactions work faster and more economically. USWD connects credit card processing companies to their merchant clients. Using wireless and landline technology, USWD provides improved transport, data translation, and value-added processing. In addition, by enabling wireless point of sale terminals, USWD adds speed and mobility that has been unachievable in the past. USWD now handles more than 500 million transactions each year through its centralized computer center and nationwide network. Further information is available at [www.uswirelessdata.com][1].

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

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$1 Trillion Processed

There’s a bright new star shining in banking and financial industry skies these days as San Francisco-based BankServ recently processed its trillionth dollar in Fedwire transfers since the company’s inception five years ago.

Since its startup in September 1996, BankServ has risen to become one of the nation’s leading providers of Federal Reserve Wire Network (Fedwire) and Automated Clearing House (ACH) electronic payments processing for financial services companies and businesses. With a staff of 45, it has grown from two employees to become one of the top 100 largest private employers in San Francisco.

“We are now processing nearly $3 billion a day in wire transfers on behalf of more than 100 U.S. financial institutions,” says David F. Kvederis, president and CEO at privately held BankServ. More than a million Fedwires a year and nearly two million electronic checks (eChecks) a year are now being processed by the company, he notes.

Kvederis says that the recent downturn in the economy actually has benefited BankServ in two important ways. One, he says, is the recent departure of the many “dot.com” payments processing companies that were attempting to become competitors. “Their presence clouded our own sales efforts. Now that only a few remain, our nationwide sales staff is reporting a definite upswing in inquiries coming to our Web site ([http://www.bankserv.com][1]) for information on Fedwire and ACH electronic payments processing.”

He says the second way his company has benefited from the economic downturn is “because we have a number of cost-reduction products. Just a few years ago, when times were flush, many banks and brokers were not at all interested in talking to us about outsourcing their funds transfer activities to a non-bank company like BankServ. They’d simply add more personnel and equipment to process transactions.

“Now that the economy has stumbled, everyone is looking for ways to save on time, personnel, and overall costs. As a result, we have become more attractive because we can eliminate the need for entire wire transfer computer departments, the need to handle and move paper checks, and we can turnkey a bank’s entire wire funds transfer business through our GFXN (Global Funds Transfer Network) product.

“In some cases,” Kvederis says, “where a bank is unwilling to give up its investment in hardware, we can still reduce a bank’s costs by offering sophisticated funds transfer software (known as GFX). As everyone knows, there is a lot of competition among banks for customers these days — and low-cost providers are winners.”

In its short five-year existence, BankServ has piled up some impressive business statistics:

— half of the top ten most profitable banks in the U.S. now use BankServ electronic payments products;

— one-quarter of the nation’s 12 Federal Home Loan Banks have adopted BankServ’s GFX system to provide their automated wire services;

— BankServ has become the only non-bank company with coast-to-coast Fedwire access;

— BankServ has customers operating in 11 of 12 Federal Reserve Districts in the country.

Still another trend-setting product recently introduced by BankServ is “Just-in-Time Payments (JIT-Pay)” for consumers. “Just-in-Time Payments” allows businesses to create, clear, settle and reconcile eChecks no matter how the consumer interfaces with the business. Customer Service Representatives can satisfy consumer needs by creating eChecks over the phone. Or, consumers can go to the business’ Web site to create the eChecks on-line. The service is comprehensive with extensive risk management, reconcilement and returns-handling features, and it can be fully integrated with legacy accounting systems, according to Kvederis.

Aside from its banking-related business, BankServ’s star also is shining in the business community, including Internet markets. It serves more than a million consumers through various companies that may require payments, check conversion, payrolls, redeposited checks, mortgage loan payments, student loans, funds transfer, accounts payable and accounts receivable.

It was also one of the first U.S. companies to offer point-of-sale electronic check conversions and automated clearing house (ACH) item processing for merchants.

Over the past few years, BankServ has steadily invested millions in developing world-class ACH payments software. This was done in anticipation of the growing market for advanced, enterprise-wide ACH payments systems. In addition, President Kvederis says, the company has continued to make substantial investments in its Fedwire product line including the addition of book entry securities processing, S.W.I.F.T. (international funds transfer), and many feature enhancements. He notes that further investments were made in data centers by adding additional site, data and telecommunications redundancy.

“We sustained significant operating losses during that buildup period,” he said; “but that’s all behind us now, and we have moved solidly into full production phase. We have five new client companies set to go online and are negotiating with 50 or 60 other companies for our electronic payments processing products,” Kvederis beams, “and for us it means there’s nowhere to grow, but up.”

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

Details

Discover Shopping Center

The first credit card-named shopping center will open tomorrow in Atlanta. The Discover Mills is the result of a 10-year co-marketing, multi-million dollar partnership between The Mills Corporation and Discover Financial Services. The deal to create the first-ever naming rights partnership in the shopping center industry was signed in February 2000. Discover Mills is a 1.3 million square foot retail and entertainment center located in Gwinnett County, GA, 25 minutes north of downtown Atlanta. The new shopping and entertainment complex, formerly known as Sugarloaf Mills, will feature approximately 200 retailers. Under the terms of the partnership, ‘Discover Card’ will become the preferred payment method of Discover Mills, which is anticipating $400 million in annual retail sales. Discover will also have its own storefront within the mall and will also develop marketing programs, including special offers, in-mall promotions and ‘Cashback Bonus’ award promotions with selected merchants. (CF Library 2/17/00)

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VISA Acceptance EVP

Financial services industry veteran Angela L. Brown has been appointed to the position of executive vice president of Acceptance for Visa U.S.A. Brown has more than 19 years of corporate sales, marketing, product development and payments experience, including 13 years with the Canadian Imperial Bank of Commerce.

Most recently, she held the post of senior vice president of Amicus Payments, a wholly owned CIBC start-up that entered the U.S. retail market. In her new role, Brown has responsibility for Visa U.S.A.’s Acceptance division that has been formed to continue Visa’s commitment to addressing the specific needs of Visa’s Acquirer, merchant and processor customers. She will serve as Visa’s chief acceptance strategist and will explore the potential to open new acceptance markets and ways that Visa can support customers by providing back office and physical point of sale services that are available through existing and future technologies, products and services. In addition, Brown will serve on Visa U.S.A.’s executive management committee.

“We are delighted to have Angela here to drive our acceptance strategy. Angela’s track record will serve our Acquirer, merchant and processor customers well,” said Carl F. Pascarella, president and chief executive officer, Visa U.S.A., Inc. “Her appointment represents Visa’s commitment to serving these critical customers.”

During her tenure with CIBC, Brown held a variety of management and executive positions in the marketing, savings and investment, card product and merchant acquisition divisions. In 2000, Angela was appointed to the position of senior vice president of Amicus Payments. Prior to assuming that post, Brown held the positions of vice president, Personal Lending Products, and senior vice president, Payment Products. From 1996 – 1999, she served as vice president, Merchant Acquiring, where she led the stand-alone merchant acquiring business unit responsible for providing merchant card processing services to bank and non-bank customers.

Brown holds a bachelor of arts degree in Honours Economics from the University of Toronto (1981), and a master’s degree in Business Administration from York University, Toronto (1983).

About Visa U.S.A.

Visa is the world’s leading payment brand and largest consumer payment system, enabling banks to provide their consumer and merchant customers with a wide variety of payment alternatives. More than 14,000 U.S. financial institutions rely on Visa’s processing system, VisaNet, to facilitate over $835 billion in annual transaction volume – including roughly half of all Internet payments – with virtually 100 percent reliability. U.S. consumers carry 353 million Visa-branded smart, credit, commercial, stored value and check cards, accepted at approximately 22 million locations worldwide. Visa has long led the industry in developing payment security standards, and has been named the most trusted payment brand online. Visa’s people, partnerships, brand and payment technology are helping to create universal commerce – the ability to safely conduct transactions anytime, anywhere and anyway. Please visit [http://www.visa.com][1] for additional information.

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

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Bear/RamBucks Card

Mercer University in Georgia, and Virginia Commonwealth University have chosen the ‘Student Advantage Cash Program’ to add off-campus capabilities to stored-value cards for their students, faculty and staff. The SA Cash feature on the Mercer ‘Bear Card’ and the ‘RamBucks Card’ will enable students, faculty and staff to buy food, necessities and entertainment at off-campus businesses. Students currently use their ‘Bear Cards’ and ‘RamBucks Cards’ for on-campus purchases at vending machines, the bookstore, to buy lunch in the co-op and cafeteria, and at residence hall laundry facilities.

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TSAI 3Q/01

Transaction Systems Architects, Inc., a leading global provider of enterprise e-payments and e-commerce software, announced that revenue for the fourth quarter of fiscal 2001 was $75 million. Pro forma earnings per diluted share were $.08. The company’s guidance for the quarter was revenue of $72 to $75 million and EPS of $.03 to $.08. Operating cash flow was $8.6 million and the cash balance for the company was $32 million.

“Our fourth quarter performance was solid given a difficult environment,” said Larry Fendley, interim CEO. “Even with the unfortunate events in early September, we were able to deliver revenue and earnings that met our expectations. We added 15 new customers in our ACI Worldwide subsidiary, including seven new customers for our eCourier secure document delivery and payment product. We added two new countries to our geo portfolio; we now have customers in 81 countries. We were able to continue our focused R&D efforts while still reducing our overall expense levels. One result of our performance is that our annualized revenue per employee increased to its highest level in two years.

“We had another strong quarter of operating cash flow,” added Fendley. “Our balance sheet continues to improve, as we have now raised our cash level to $32 million and we have reduced the balance of our operating line of credit from $15 million to $12 million. With our expense run-rate reduced and our strengthened balance sheet, we are well prepared to emerge from the current economic environment even stronger than before.

“During the fourth quarter, we noted several significant developments for the company,” added Fendley. “First, we began shipping release 6.0 of our market-leading BASE24 enterprise e-payments product. We continue to invest in this best-of-breed software, and we continue to add market share, with seven new BASE24 customers added during the quarter. New BASE24 customers included two of the largest e-payment processors in North America, both of whom purchased our software to help them manage increasing e-payment volumes, with stringent requirements for system reliability and scalability. “Second, we announced our Enterprise Payment System, to be shipped on the IBM z-series platform. We believe that this will extend the company into even more markets than before, and will effectively double the market opportunity for our more traditional e-payment solutions.

“Third, we continued our push into new markets for the company with our eCourier software. With seven new licenses for eCourier, across multiple geos and industries, we are beginning to extend the company into a completely new market sector, creating an incremental growth opportunity for TSA. “Our newly-named Intranet subsidiary, focused on the global corporate banking sector, licensed its Money Transfer System to Fortis Bank NV, a top 50 global bank in Belgium,” said Fendley. “Intranet continues to solidify its leadership position at the high end of the corporate banking e-payment software marketplace.”

Pro forma results are computed by excluding acquisition-related charges (amortization of goodwill and software). Pro forma results for the quarter exclude $6.3 million of software and goodwill amortization from the acquisitions of SDM International, Inc., Insession Inc., WorkPoint Systems, Inc. and MessagingDirect, Ltd.

The company completed the fourth quarter of fiscal 2001 with $183 million in backlog, consisting of $50 million in non-recurring revenue and $133 million in recurring revenue. Recurring revenues include all monthly license fees, maintenance fees and facilities management fees that the company expects to recognize over the next 12 months. Non-recurring revenues are composed of all other fees, including initial license fees, specified in software and services contracts the company expects to recognize in the next 12 months. “Looking forward to the first quarter of 2002, we expect revenue in the range of $70 million to $75 million, and pro forma EPS of $.06 to $.12,” said Fendley. “The December quarter has historically been our weakest quarter. We believe that our pipeline is strengthening, but that it is prudent to take a conservative outlook given market uncertainty. For fiscal 2002, we are expecting revenue between $300 million and $320 million, and pro forma EPS of $.50 to $.72. As we have noted, our work in improving the financial health of the company positions us to deliver much better earnings even if we experience modest revenue growth.”

About Transaction Systems Architects, Inc.

Transaction Systems Architects’ software facilitates electronic payments by providing consumers and companies access to their money. Its products are used to process transactions involving credit cards, debit cards, secure electronic commerce, mobile commerce, smart cards, secure electronic document delivery and payment, checks, high-value money transfers, bulk payment clearing and settlement, and enterprise e-infrastructure. Transaction Systems Architects’ solutions are used on more than 3,600 product systems in 81 countries on six continents.

TRANSACTION SYSTEMS ARCHITECTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited and in thousands)

September 30, September 30,
2001 2000
————– ————–

ASSETS

Current assets:
Cash and cash equivalents $ 32,252 $ 23,400
Marketable securities 2,650 8,106
Billed receivables, net 50,277 63,556
Accrued receivables 50,932 51,659
Prepaid income taxes 1,911 2,710
Deferred income taxes 8,700 11,208
Other 10,990 13,134
———– ————
Total current assets 157,712 173,773

Property and equipment, net 14,580 19,614
Software, net 27,954 26,757
Intangible assets, net 82,327 65,254
Long-term accrued receivables 24,916 27,018
Investments and notes receivable 1,309 6,146
Deferred income taxes 13,627 2,958
Other 5,028 8,632
———– ————
Total assets $ 327,453 $ 330,152
=========== ============

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Current portion of long-term debt $ 12,559 $ 18,396
Accounts payable 13,542 16,023
Accrued employee compensation 9,030 7,472
Accrued liabilities 23,369 20,003
Deferred revenue 35,857 43,373
———– ————
Total current liabilities 94,357 105,267

Long-term debt 761 532
Long-term deferred revenue 12,610 13,993
Other 1,057 –
———– ————
Total liabilities 108,785 119,792
———– ————
Stockholders’ equity:
Class A Common Stock 184 165
Additional paid-in capital 222,501 170,946
Retained earnings 42,016 85,033
Treasury stock, at cost (35,258) (35,258)
Accumulated other comprehensive
income (10,775) (10,526)
———– ————
Total stockholders’ equity 218,668 210,360
———– ————
Total liabilities and
stockholders’ equity $ 327,453 $ 330,152
=========== ============

TRANSACTION SYSTEMS ARCHITECTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited and in thousands, except per share amounts)

Three Months Ended Year Ended
September 30, September 30,
————————————-
2001 2000 2001 2000
——– ——– ——— ———
Revenues:
Software license fees $44,454 $48,036 $173,796 $176,295
Maintenance fees 18,474 17,498 70,246 68,727
Services 12,074 16,623 55,759 58,543
——– ——– ——— ———
Total revenues 75,002 82,157 299,801 303,565
——– ——– ——— ———
Expenses:
Cost of software license fees 9,919 12,207 43,466 45,967
Cost of maintenance and services 16,457 18,673 73,490 70,681
Research and development 8,883 10,279 40,528 38,832
Selling and marketing 17,848 20,937 76,273 75,539
General and administrative 18,318 16,434 77,008 62,416
Amortization of goodwill and
purchased intangibles 3,860 2,418 13,933 8,388
——– ——– ——— ———
Total expenses 75,285 80,948 324,698 301,823
——– ——– ——— ———
Operating income (loss) (283) 1,209 (24,897) 1,742
——– ——– ——— ———

Other income (expense):
Interest income 1,132 832 4,397 3,481
Interest expense (287) (599) (2,004) (912)
Other 1,039 215 (22,307) (718)
——– ——– ——— ———
Total other income (expense) 1,884 448 (19,914) 1,851
——– ——– ——— ———
Income (loss) before income taxes 1,601 1,657 (44,811) 3,593
Income tax benefit (provision) (5,147) (729) 1,794 (1,482)
——– ——– ——— ———
Net income (loss) $(3,546) $ 928 $(43,017) $ 2,111
======== ======== ========= =========

Earnings per share information:

Weighted average shares
outstanding:
Basic 35,170 31,610 34,116 31,744
======== ======== ========= =========
Diluted 35,170 31,864 34,116 32,117
======== ======== ========= =========

Earnings per share:
Basic $ (0.10) $ 0.03 $ (1.26) $ 0.07
======== ======== ========= =========
Diluted $ (0.10) $ 0.03 $ (1.26) $ 0.07
======== ======== ========= =========

TRANSACTION SYSTEMS ARCHITECTS, INC.
Reconciliation of Actual Results to Pro Forma Results
For the Quarterly Period Ended September 30, 2001
(unaudited and in thousands, except per share amounts)

Three Months Ended
September 30, 2001
———————————

As
Reported Amortization Pro Forma
——– ———— ———

Revenues:
Software license fees $44,454 $ – $44,454
Maintenance fees 18,474 – 18,474
Services 12,074 – 12,074
——– ——– ——–
Total revenues 75,002 – 75,002
——– ——– ——–

Expenses:
Cost of software license fees 9,919 (2,461) 7,458
Cost of maintenance and services 16,457 – 16,457
Research and development 8,883 – 8,883
Selling and marketing 17,848 – 17,848
General and administrative 18,318 – 18,318
Amortization of goodwill and
purchased intangibles 3,860 (3,860) –
——– ——– ——–
Total expenses 75,285 (6,321) 68,964
——– ——– ——–
Operating income (loss) (283) 6,321 6,038
——– ——– ——–

Other income (expense):
Interest income 1,132 – 1,132
Interest expense (287) – (287)
Other 1,039 – 1,039
——– ——– ——–
Total other income (expense) 1,884 – 1,884
——– ——– ——–
Income (loss) before income taxes 1,601 $ 6,321 7,922
Income tax benefit (provision) (5,147) – (5,147)
——– ——– ——–
Net income (loss) $(3,546) $ 6,321 $ 2,775
======== ======== ========

Earnings per share information:

Weighted average shares outstanding:
Basic 35,170 35,170
======== ========
Diluted 35,170 35,373
======== ========

Earnings per share:
Basic $ (0.10) $ 0.08
======== ========
Diluted $ (0.10) $ 0.08
======== ========

Details

OBERTHUR 3Q/01

Oberthur Card Systems remains focused to achieve its full year sales growth
objective of between 7% and 9%

Paris, 30 October, 2001 – 17:35

Third quarter 2001 revenue amounts to 111.1 M EUR, representing a 2% reduction over the second
quarter 2001.

* Microprocessor card sales, down 2%, present a wide mix of differing trends across segments: the
26% increase in SIM cards, due to delivery of the first inter-operable JavaTM cards, partially
compensates for the slowdown in the sales of payment cards resulting from lower renewal
volumes over the summer, as well as network security cards;

* Third quarter sales in Other Cards, Services and Solutions are at a comparable level to the
previous quarter.

Third quarter activity is down 4% compared to the same period in 2000, amounting to a revenue increase
of 12% for the first nine months of 2001 (10% excluding the impact of exchange rate fluctuations and 10%
on a comparable basis).

2001 Outlook

During the fourth quarter, a slight upturn in SIM card sales is expected, as well as strong activity in the
banking sector, although there is a risk of a slowdown in the North American loyalty cards market.
Oberthur Card Systems remains focused to achieve its full year sales growth objective of between 7% and
9%.

About Oberthur Card Systems :

Oberthur Card Systems (Paris Stock Exchange – Code SICOVAM 12413), a global leader and the innovator in the
smart card industry, is shaping the future by offering the ultimate in SIM, WAP, 3G (IMT-2000/UMTS), e-wallet
technologies & Internet-based card management services coupled with a firm commitment to open standards.
Championing EMV migration, Oberthur is the World’s number one supplier of MasterCard and Visa cards, a
leader in the banking, e-commerce, m-commerce and pay-TV sectors, and in JavaTM and GSM technologies.

Oberthur Card Systems has an international reach with an industrial and commercial presence in 21 countries
across the five continents. Oberthur Card Systems had sales of 451.1 million Euros in 2000.
http://www.oberthurcs.com

Details

Personas Enhanced

NCR has significantly increased the currency-handling capacity of its bunch-cash-accepting ‘Personas 73’ ATM. The solution provided by the new ‘Personas 73e’ validates currency and enables a bank to offer real-time credit for cash deposits or bill payments at an ATM. The ‘Personas 73e’ has a scaleable capacity of 8,000 bills and represents a fourfold increase in storage. The ‘Personas 73e’ also enables multi currency deposit with sorting capabilities.

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NextCard 3Q/01

NextCard announced this morning it has decided to explore opportunities for the sale of the Company to a larger and better-capitalized entity. The decision was attributed to newly imposed regulatory limitations on NextBank and the current worsening economic situation. The news sent NextCard’s stock down to the $1.00 level in pre-market trading. NextCard reported a third quarter net loss of $53.1 million compared to $20.3 million for 3Q/00. Total loan charge-offs for the third quarter were 7.89% compared to 2.67% one year ago. The delinquency rate (30+ days) on total managed loans increased to 5.90% as of September 30, compared to 3.30% for the third quarter of 2000. Following consultation with banking regulators, NextCard has increased its reserves for loan losses and has tightened its underwriting criteria to limit new account originations to FICO scores above 680, suspended originations of secured credit cards, and suspended or limited certain line management programs, re-pricing programs, and fee-based product strategies. Effective in the third quarter NextCard said it will classify as credit losses certain loan losses which were previously recognized as fraud losses and reflected as other expenses in the Company’s financial statements. The Company believes that a substantial portion of these losses are related to fraudulent account origination activity specific to the Internet channel. Regulators have notified the NextBank that, as a result of the change in treatment of certain losses on loans sold through the Bank’s securitization activities as fraud losses rather than credit losses, as described above, they have determined that the Company’s securitization activities do not qualify for “low-level recourse treatment” under applicable regulations. The Bank is now considered “significantly undercapitalized” under applicable federal banking regulations because its risk-based capital ratio has dropped below 6%. For the latest details on NextCard’s 3Q/01 results and prior performance visit CardData (www.carddata.com).

NEXTCARD’S TRACK RECORD
3Q/01 2Q/01 1Q/01 4Q/00 3Q/00
Recv: $2.010b 1.789b $1.595b $1.312b $1.093b
Accts: 1200k 1016k 881k 708k 577k
C-O: 7.89% 4.92% 3.99% 3.10% 2.67%
Del: 5.90% 5.25% 4.75% 3.92% 3.30%
Recv- receivables; Accts- accounts; C-O-charge-offs; Del- 30+ day delinquency
Source: CardData (www.carddata.com)

Details

Vital & Certegy Sign Deal

Vital Merchant Services, a leader in terminal management and point-of-sale support services and wholly owned subsidiary of Vital Processing Services, announced the signing of a multi-year agreement with Certegy Check Services, Inc., a subsidiary of Certegy Inc. Certegy’s agreement with Vital is for full POS equipment management and world-class help desk support for its merchant customers.

With more than 46,000 existing merchants, Certegy Check Services continues its solid growth in all aspects of merchant point of sale applications, including electronic check, a growing payment preference. Certegy Check Services provides check risk management, authorization and loss prevention and credit card processing services to retailers, supermarkets, e-Commerce, gaming and check cashing establishments worldwide.

Vital will provide the full range of POS equipment management and related services to Certegy Check Services, including terminal equipment procurement, programming and deployment, inventory management, replacement and repair services and merchant supplies replenishment. As part of its services, Vital will support all of Certegy’s new and existing merchants on its 24X7 merchant help desk. Vital’s merchant help desk is recognized in the industry as one of the best because of its educated and knowledgeable help desk associates, quick response times and high level of service. On behalf of its acquiring clients, Vital currently supports more than 800,000 merchants on its help desk.

“Certegy is a winning player in the industry, and Vital is proud to expand our relationship with them to be the single source provider for these critical merchant services. We look forward to partnering with Certegy as it grows its merchant business by providing reliable terminal management services and help desk support,” said Keith Smith, executive vice president of sales for Vital Processing Services.

“As our business continues to grow at a fast pace, it made strategic business sense for Certegy to build on our existing partnership with Vital and utilize more of their merchant services. We are confident that Vital will continue to deliver reliable technology and quality service to our merchants. Having a single point of service is key in our business, and we look forward to achieving success on behalf of our merchants,” said Jeff Carbiener, senior vice president and group executive of Certegy Check Services.

About Certegy

Certegy (NYSE: CEY) provides credit, debit and merchant card processing, e-banking, check risk management and check cashing services to over 6,000 financial institutions, 175,000 retailers and 140,000,000 consumers worldwide. Headquartered in Alpharetta, Georgia, Certegy maintains a strong global presence with operations in the United States, Canada, United Kingdom, Ireland, France, Chile, Brazil, Australia and New Zealand. As a leading payment services provider, Certegy offers a comprehensive range of transaction processing services, credit risk management solutions and integrated customer support programs which facilitate the exchange of business and consumer payments. Certegy employs over 5,800 associates in nine countries and generated $779 million in revenue in 2000. For more information on Certegy, please visit [http://www.certegy.com][1].

About Vital Merchant Services

Headquartered in Sacramento, Calif., Vital Merchant Services is a leader in terminal management and point of sale (POS) support services. The full suite of POS support services includes equipment procurement and deployment, inventory management, replacement and repair services, merchant training and installation, merchant supplies replenishment and world-class help desk support. Its premiere web-based POS equipment management system, VitalSync, enables acquirers the ability to easily and efficiently manage their merchant customer’s terminal portfolios. Vital Merchant Services is a designated Authorized Repair Facility for Hypercom Card Payment Terminals. The company is a wholly owned subsidiary of Vital Processing Services, a recognized leader in technology-based commerce enabling services. For more information, contact Vital Merchant Services’ Sales Department at (800) 686 – 1999 or visit [http://www.vitalps.com][2].

[1]: http://www.certegy.com/
[2]: http://www.vitalps.com/

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