Catuity 4Q Forecast

Catuity, Inc. announced that it expects to achieve profitability for at least one month in the fourth quarter 2001, positive cash flow for the fourth quarter and continues to project operating profitability for the full fiscal year 2002. Catuity projects fourth quarter 2001 gross revenues to be approximately $1.1 million. The gross revenue projection represents an increase of 132% over third quarter gross revenues of $475,000, which was an increase of 190% over second quarter gross revenues of $164,000.

The fourth quarter gross revenue projection excludes a non-refundable license fee payment expected in the fourth quarter 2001. This license fee will be recorded as deferred revenue on the Balance Sheet until the license fee can be recognized, which is planned for second quarter 2002.

On-going operating costs are expected to be consistent and in line with previous quarterly results. These operating results are projected to be approximately $1.5 million in the fourth quarter.

All projections and figures referred to in this release are subject to non-cash adjustments for U.S. GAAP treatment of stock warrants issued by the company in the fourth quarter and stock compensation as previously reported (“non-cash adjustments”). Overall, Catuity expects to report a quarterly operating loss of $1.1 million before non-cash adjustments in the third quarter 2001 and expects to significantly improve its bottom line excluding non-cash adjustments in the fourth quarter as a result of its increased revenue growth. Catuity expects to generate positive cash flows from operating activities for the fourth quarter 2001. Cash at the end of the third quarter 2001 is in excess of $4 million.

Catuity revenue is generated from product development services, training, technical consulting, license fees and maintenance fees. The license fees Catuity charges are based on: per card issued, per card issued activated to a loyalty program, per transaction, per POS terminal or Internet POS deployed, or a flat fee for access to certain intellectual property rights. The basis of the fees, the fee rates and the number of cards, terminals and/or transactions to which these fee rates apply for any customer are confidential at the request of these customers.

As of October 31, 2001, Catuity has signed agreements with customers from which it expects to receive more than $4 million from operations in the period from October 1, 2001 to December 30, 2002. A number of these existing agreements have significant potential for additional revenue in 2002 and beyond in the form of additional license and maintenance fees as well as from additional system development and technical consulting fees requested by our clients. Catuity is currently finalizing its strategic business plans and budget for 2002 and beyond. Management continues to anticipate a modest operating profit for the full fiscal year 2002. Development work, integration and customer customization will continue to precede additional on-going license fee revenue.

As a result, revenue is expected to grow quarterly in 2002. Further details of Catuity’s plans and forward projections will be released when these plans are finalized.

Michael Howe, President and CEO of Catuity, commented, “We set a plan in place more than a year ago and we believe we are delivering on this plan. We have demonstrated our products and our service are superior to other offerings in our market. We have won the most strategically important loyalty contracts awarded to date in the smart card loyalty software business. As the world rolls out new card systems, Catuity will become an increasingly important player. With the growth of smart cards and the development of new loyalty software systems to assist merchants, many new opportunities are emerging in the U.S. market. We are confident our market leadership position, our relationships with Visa and other leading payment industry stakeholders will lead to more business with retail merchants, card associations, card issuers and transaction processors in the U.S. and around the world.”

Catuity, Inc. ([][1]) is a leading provider of loyalty software systems. The Catuity software includes an integrated suite of applications that provide loyalty, ticketing, access control and membership. The Catuity Loyalty System is ubiquitous in that it can operate on any device, any card program and with any payment process, including stored value, smart cards and wireless applications. Catuity unites the brick-and-mortar retailer with the Internet to enable cross-sell capabilities with consistent brand imaging across all channels.




ZeitControl provides the admittance control system Access 2000 which allows the
effective protection of doors against unauthorized access.

Access is only granted when authorized persons use a previously registered
magnetic card or creditcards. If desired, the cards can be checked against a
secret number (PIN).

Access 2000 is delivered in a small stable cast housing with a keypad, two LEDs
and a built-in card reader. The power can be supplied by a standard door bell
transformer; an electric door opener can be directly connected.

Access 2000 can be mounted and configured quickly and easily. It can store up to
500 magnetic cards. As keys, magnetic cards with LoCo magnetic bands and DIN/ISO
compatible data on track 2, e.g. credit cards are used.

Access 2000 can thus be employed where sectors are only to be accessible to
certain persons or groups of persons.

More information can be found on the web at


BofA Olympic Cards

Bank of America introduced this morning two stored-value card products for the Olympic Games. The ‘VISA Olympic Money’ and ‘Gift Card’ provide prepaid spending as well as reloadable features. For Olympic family members, BofA is offering ‘VISA Olympic Money’, a commercial card program that gives athletes, sponsors and suppliers and their guests and staff more control and security over their 2002 Games expenses.



VeriFone, Inc., the
worldwide leader in electronic-payment solutions, announced that Global
Payments Inc., a leading provider of electronic processing
services, has signed a multi-year agreement with VeriFone to offer VeriFone’s
Omni 3300 terminals, SoftPay credit and debit software, and SC 550
PINpads in Canada. To support these devices, Global Payments has also
VeriFone’s VeriCentre Appliance Management Suite to perform fast downloads and
manage its terminal population.

“The VeriFone Omni 3300 terminal package will provide significantly enhanced
feature functionality and choice to our Canadian customer base,” said Barry W.
Lawson, CIO, Global Payments Inc. “The solution offers a solid foundation from
which to deliver even more value-added features and services that Canadian
merchants can use to help grow their businesses.”

“Canada is an extremely important market for VeriFone – one that clearly
recognizes the value of a true multi-application, point-of-sale solution,”
Douglas Bergeron, CEO, VeriFone. “Global Payments holds enormous influence in
Canada. We are delighted to be helping them meet their customers’needs by
providing merchants with a point-of-sale solution that allows them to maximize
multiple business opportunities. Global Payments’ decision also gives VeriFone
a strong base to expand the adoption of Verix across Canada.”
The Omni 3300 is equipped with a 32-bit processor and a 14.4kbps modem to
deliver exceptional performance. Global Payments has selected VeriFone’s SC
PINpad, which meets Canada’s strict Interac Direct Payment (debit) standards
for PIN-entry, to accompany the Omni 3300. The Omni 3300’s intuitive ATM-style
interface minimizes clerk training.

The Verix multi-application architecture supported on the Omni 3300 will allow
Global Payments and its customers to run a variety of value-added
such as loyalty, on the same terminals used for payment. Delivering these
applications to the merchant’s countertop is fast and easy with the VeriCentre
Download Management Module. New software can be quickly downloaded and the
merchant can be taking advantage of new features or entire applications in

About Global Payments

Global Payments Inc. is a leading provider of electronic transaction
services to merchants, Independent Sales Organizations (ISOs), financial
institutions, government agencies and multi-national corporations located
throughout the United States, Canada and the United Kingdom. Global Payments
offers a comprehensive line of payment solutions, including credit and debit
cards, business-to-business purchasing cards, gift cards, check guarantee,
check verification and recovery, terminal management and funds transfer

About VeriFone, Inc.

VeriFone, Inc., ( is the
leading global provider of
secure electronic-payment solutions for financial institutions, merchants and
consumers. VeriFone has shipped more than nine million electronic-payment
systems, which are used in more than 100 countries. VeriFone, Inc. is held by
Gores Technology Group, an international acquisition and management company.

About Gores Technology Group

With headquarters in Los Angeles, Gores Technology Group (GTG) is a privately
held international acquisition and management firm that pursues an aggressive
strategy of acquiring promising high-technology organizations and managing
for growth and profitability. GTG has a proven track record of acquiring and
successfully managing companies – including many divisions acquired from large
publicly traded companies – through its commitment to customers, employees and
continued development of intellectual property. GTG has acquired and managed
approximately 35 interrelated but autonomous technology-oriented companies
locations throughout the world. Those companies provide a broad range of
technology-based products and services to a substantial customer base
representing millions of active users worldwide. Visit the company’s Web site


San Francisco Earthquake

The stunning fall of NextCard yesterday, in the wake of Providian’s collapse, spilled over to other issuers. Metris/Direct Merchants lost nearly 10% Wednesday, while Capital One, MBNA and CompuCredit lost about 5%. The slide in Metris stock prompted its CEO to speak out to distance the company from the problems plaguing NextCard and Providian. Metris Chairman and CEO Ronald Zebeck said Metris Companies has equity to managed assets of 9.6%, and Direct Merchants Bank currently has a capital ratio of 13.8%. Zebeck reiterated that Metris, unlike NextCard, does not securitize loans out of the Bank, and is not subject to additional capital requirements for residuals associated with Asset Backed Securities. Zebeck also noted that Metris has a reserve coverage of 8% percent of its managed loan portfolio.



OTI announced that its wholly owned subsidiary, OTI Africa,
together with BP Africa, has signed commitments with four prominent
fleet companies to join the FuelMaster network in South Africa that is
to significantly increase the on going revenues and transaction the system
generates. FuelMaster is BP’s chosen brand name for OTI’s Gasoline Management
System in the African market.

The four fleet companies joining the FuelMaster network, spanning a range of
industries from public transportation to packaged goods, have each enrolled
over 600 company vehicles, for a total of approximately 2,750 vehicles
added to
the system. In particular, a pilot involving 1,000 vehicles of a major
in South Africa, if successful, has the potential to expand to an additional
18,000 vehicles. Additional pilots are underway with a prominent rental car
agency and a large furniture and appliances retailer, which not only expand
set of fleet companies participating in the FuelMaster network, but also
greatly increase the number of vehicles fueling exclusively at BP stations.
a result of the FuelMaster system, BP has increased its market share in these
African markets. OTI receives transaction fees based on fuel volumes through
the FuelMaster system, in addition to on-going service fees.
‘We are extremely pleased to welcome these new fleet companies to the
FuelMaster network,’ said Charlotte Hambly-Nuss, Managing Director of OTI
Africa. ‘We have proven the business case to customers which were not
previously contracted to BP for their fuel supply, thereby demonstrating how
OTI’s superior technology drives key core business to BP.’
OTI has been appointed by BP to provide encoding, installation, driver
training, maintenance, repair, quality control, customer care, technical
support, and development services for the FuelMaster program.

‘Our relationship with BP South Africa exemplifies our objective of
participating in multiple revenue streams of projects, including support fees
and transaction fees,’ said Ohad Bashan, responsible for Global Marketing at

How FuelMaster Works Each FuelMaster vehicle is fitted with an antenna
around the fuel tank inlet, connected to a smart card installed in the

The smart card provides unique identification for each vehicle, and is also
capable of recording information such as odometer readings. A matching
installed on the pump nozzle, is connected to the site computer. When the
nozzle enters the fuel inlet, the smart card communicates with the site
computer. Once the computer is satisfied that a legitimate driver is
to fuel an authorized vehicle with the proper fuel grade, the pump will begin
dispensing fuel. During refuelling, operating data from the smart card is
transmitted to the computer for reporting purposes. Removing the nozzle will
immediately stop the flow of fuel. Comprehensive fuel management reports are
generated and provided to fleet operators on a regular basis.

A network of over 600 FuelMaster sites in 11 African countries from South
Africa to Kenya provide convenient fueling for over 20,000 fleet drivers
assisting fleet managers in providing a new level of accuracy in fuel records
and route tracking for fleet traffic. Petroleum solutions offered by OTI are
installed around the world including sites in Turkey, Europe, South America,
the United States, and more.

About OTI
Established in 1990, OTI (On Track Innovations) designs and
contactless microprocessor-based smart card technology to address the needs
a wide variety of markets. Applications developed by OTI include products for
mass transit, parking, gas management systems, loyalty schemes,
and secure campuses. OTI has regional offices in the US, Europe, Asia
and Africa to market and support its products. The company was awarded the
prestigious ESCAT Award for smart card inno­vation in both 1998 and 2000.
OTI on the Internet at
OTI Africa, a subsidiary of OTI Limited, is responsible for the distribution,
installation and maintenance of OTI’s products and technology in the African
market. Users of the OTI technology have access to an experienced and
professional management team who lead and guide dedicated functions in sales,
marketing, installation, technical, development and support services.


Citi Commerce Solutions

Citibank’s initial ownership of SPS Payment Systems has come full circle. Citibank Cards said Wednesday the name of its private-label credit division has been changed to Citi Commerce Solutions. The unit previously operated under the name Associates Commerce Solutions. Citi Commerce Solutions was founded in 1985 as SPS Payment Systems, a division of Sears, Roebuck and Co. In 1989 the company became part of Dean Witter Discover. In late 1998, the company was sold to Associates First Capital Corporation, which was acquired by Citigroup in late 2000. Among the CCS clients: RadioShack, Staples, Goodyear, Texaco, Gateway, BP Amoco, Office Depot, OfficeMax, Dell Computer, Shell, Zales and Citgo.



ERG Announces Acquisition of Proton World
The ERG Group announced the full acquisition of Belgian-based Proton
World International (Proton World), the leading, global, high-security
and identity smart card technology company.
In consideration, ERG will issue the former shareholders of Proton World –
American Express, Banksys, Interpay Nederland and Visa International – with
approximately 75.5 million shares (representing 8.4 per cent of ERG’s

In addition, ERG has agreed to pay cash consideration of approximately A$58.8
million. The shares will be subject to escrow agreements. The agreements with
American Express and Visa International also provide for an entitlement to 8
million ERG options that are exercisable if certain performance criteria,
will enhance the value of Proton World, are achieved.

The sale agreements call for long-term (5-7 year) service level agreements to
be executed by American Express, Banksys and Interpay Nederland. The
are expected to generate revenue in excess of A$200 million.

Proton World was formed in 1998 as a joint venture between ERG, Banksys (a
joint venture between the Belgian banks), American Express, Interpay
(a joint venture of the Dutch banks), and Visa International. There are now
more than 35 million Proton-based smart cards in circulation worldwide and
than 500 banks have deployed the technology.

ERG’s Chief Executive, Mr Peter Fogarty, said the full acquisition of Proton
World would enhance ERG’s strengths in the smart card arena.
“ERG’s existing MASS technology is the world’s leading transport smart card
technology. The combination with Proton Prisma technology means that ERG will
now have the ability to deliver full multi-application smart card solutions,
including high-level security for the financial services and identity

“In addition, the ERG Group is very pleased to have American Express,
Interpay and Visa as investors in ERG and the benefit of long-term recurring
revenue contracts with American Express, Banksys and Interpay.”
The parties to the transaction made the following comments:
Proton World, Chief Executive Officer, Dr Armand Linkens: “Proton World has
made a name for itself with its security architecture and smart card
in the financial industry. Our know-how is very complementary with the
achievements of ERG in Mass Transit. The commonality of vision and cultures
the two companies assure me of an even greater worldwide success of the ERG
Group and its subsidiary Proton World in the key markets of transit, finance,
mobile telephony and identity.”
American Express, President, Northern Europe, Mr John de Trafford: “American
Express has been actively involved in the development of the Proton platform
and has recently committed to use their upcoming Proton Prisma product for
future issuances of smart cards worldwide.”

Banksys, Chief Executive Officer, Mr Chris Lebeer: “We fully support ERG in
moving Proton World forwards to new markets and customers. As an early
mover in
applying new technologies we will remain an important customer for ERG’s
financial products. We are happy to conclude this deal.”

Interpay Nederland, Director, Mr Antoon Kuijpers: “Our commercial
with Proton World and new shareholding in ERG ideally complements the joint
venture established with ERG in the Netherlands earlier this year. As a
company, we have positioned ourselves to ensure we participate in our country
and indeed the world’s adoption of smart cards.”
Visa International EU, Chief Operating Officer, Mr Philippe Menier: “Many
Members are already significant users of Proton technology and we are
that they are. Visa is proud of the part that it played in the creation of
Proton World and is happy to support ERG in this next phase of the company’s
development. As we continue with our programs designed to change Europe’s
cards to use the chip, we are confident that our Members will expand their
of the Proton technology. We look forward to continuing to work with Proton
a member of the Visa Smart partner program.”

ERG Group

ERG Group is a world leader in the development and supply of integrated fare
management and software systems for the transit industry and technologically
advanced smart card systems and services. In 2000/2001, ERG’s revenue
A$299.9 million. The Group has established market leadership for its
multi-application smart card management technology. ERG is an
company listed on the Australian Stock Exchange and is ranked in the
Standard &
Poor’s-Australian Stock Exchange Top 100 index.
For more information visit:

American Express

Founded in 1850, American Express Company is a global travel, financial and
network services provider. It is a global Proton licensee, and a leader in
smart card development and issuance. In 1999, the company launched Blue from
American Express in the first wide-scale rollout of smart cards in the US.
company has since launched Blue in several international markets.
For more information visit:

Banksys was founded in 1989 with the merger of two debit card networks
(Bancontact and Mister Cash). In 1995, Banksys launched Proton, the
inter-sector electronic purse smart card, which became the world’s first
e-purse to be rolled out on a national scale in 1996. In 1998, Banksys spun
its international smart card activities to form Proton World in association
with four other shareholders and became the Proton licensee for Belgium.
For more information visit:

Interpay Nederland

Interpay Nederland is a major service provider in payment processing and
related services. It processes large transaction quantities and thus
an important link in the flow of payments in the Netherlands. Each day it
processes more than 6 million payments that are made through giro collection,
direct debit authorization, funds transfers, Eurocard/MasterCard and Visa
credit cards, PIN cards, Chipknips and SET. In 1996, it became the first
international Proton licensee and launched the Chipknip e-purse card.
For more information visit:

Visa International

Visa is the world’s largest payment system, with more transaction volume than
all other major payment cards combined. Visa has 21,000 member financial
institutions, more than 80 smart card programs in 35 countries and on the
Internet, and over 1 billion cardholders worldwide, which generate an annual
transaction value of more than US$1.97 trillion. Visa-branded cards are
accepted at over 22 million locations worldwide.
For more information visit:


ABNH 3Q/01

American Bank Note Holographics reported Wednesday that revenues for the third quarter increased 12% to $5.2 million, compared with $4.7 million for the third quarter of 2000. However net income of $103,000 for 3Q/01 and $115,000 for 3Q/00 was flat. ABNH is the leader in the origination, production and marketing of mass-produced holograms for transaction cards. The company anticipates the current increased security environment to expand its business.


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.


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

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

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, 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.



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.”


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 [][1].