Future ATM Banking

By 2003, IDC projects the automated teller machine will surpass the branch as the highest volume U.S. banking channel, with over 13 billion annual transactions. However, as transactions, and the number of ATMs, grow, IDC believes banks will face increasingly difficult challenges, including rising ATM support costs, identifying new revenue streams, and potential new accessibility regulations under the Americans with Disabilities Act. Together, these factors make this a compelling time for banks to consider Web-enabled ATMs.

“Web-based strategies have begun to impact the entire retail banking delivery system,” said Ian Rubin, IDC’s director of online financial services research. “The availability of Web-enabled ATMs signifies an opportunity to cross-pollinate online banking and ATM services, which can have significant implications on banking products, customer relationship management, and customer acquisition strategies.”

IDC believes this is also an opportune time for banks to review Web-based ATMs in the context of a larger multichannel delivery strategy. “All significant channel investments going forward will be scrutinized for leverage across other channels, including Internet, ATM, call center, and branch,” Rubin said. “Banks that are contemplating a multichannel delivery strategy may well find a Web-enabled ATM fleet to be the logical first phase.”

IDC’s study Web-Enabled ATMs: Implications for Online Banking and Multichannel Delivery (IDC #25694) examines strategies behind the consideration of Web-enabled ATMs. It discusses the primary business drivers and cost considerations for deploying Web ATMs, reviews current ATM bank pilots, and selected vendors providing solutions.

About IDC

IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and ebusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in-depth analysis, and client interaction, IDC forecasts worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC’s customers comprise the world’s leading IT suppliers, IT organizations, ebusiness companies and the financial community. Additional information can be found at [www.idc.com][1].

IDC is a division of IDG, the world’s leading IT media, research and exposition company.

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



A common model to
evaluate the security of smart cards, based on the Common Criteria for
Information Technology Security Evaluation, has been recognized by the
financial services industry. The Common Criteria is an international standard
for conducting security evaluations.

The model, called the Smart Card Protection Profile, has been developed by the
Smart Card Security User Group (SCSUG) and defines the security
requirements of
the financial services industry. The Protection Profile has been successfully
evaluated and recognized by the sponsors of the Common Criteria. This means
that the Protection Profile is complete, consistent, and technically sound
as a
statement of requirements for smart cards.

Members of the SCSUG, which include American Express, Europay International,
JCB, MasterCard International (which includes Mondex International a
wholly-owned subsidiary of MasterCard), NIST (National Institute of Standards
and Technology) and Visa International, worked with major governmental bodies
to develop the Protection Profile.

Sponsors of the Common Criteria include government agencies in Australia,
Canada, Finland, France, Germany, Greece, Israel, Italy, Netherlands, New
Zealand, Norway, Spain, the United Kingdom, and the United States.

The Common Criteria, also known as ISO 15408, defines a process for conducting
security evaluations. The Protection Profile specifies the security
requirements that smart cards should meet to address the needs of the
services industry, and identifies the framework for verifying compliance to
those requirements. The Protection Profile will influence future smart card
product development efforts. Smart cards will be evaluated in accredited
laboratories that determine whether or not the design specifications and
implementation meet the security requirements.

‘The evaluation and certification of this Protection Profile is significant
important to the Common Criteria project sponsors,’ said Dr. Stuart Katzke,
chairman of the international committee that manages the development of the
Common Criteria and the associated mutual recognition arrangement between
participating countries. ‘It earmarks the first time that an entire industry
sector, the financial services industry, has worked together to use the Common
Criteria to articulate and define their common security needs.’

The Protection Profile, which has received extensive international review, was
independently evaluated under four Common Criteria evaluation schemes in
Canada, France, Germany and the United States.

‘The Protection Profile was found by the evaluating schemes to be a very
comprehensive specification, thanks in no small way to the efforts of the
members,’ said Dr. Katzke. He also stated that he hopes other industry
sectors will follow the lead and share the success of the financial services
industry in using the Common Criteria to specify their security needs.

Industry-wide security standards result in economies of scale and
interoperability. Card issuers do not have to deal with two or more different
security standards and developers can manufacture products to one standard,
reducing their costs.

‘This is a significant development in the use of smart cards by the financial
services industry,’ said Dr. Kenneth Ayer, chair of the SCSUG. ‘For the first
time we have industry-wide agreement on security standards for smart cards,
which will lower costs for banks, make market introductions faster, and
simplify the evaluation process for financial institutions and the vendors who
supply them. This could not have been achieved without the Common Criteria.’

The Smart Card Security Users Group Smart Card Protection Profile is available
http://www.scsug.org/ or


FCNB Sept Response

The Spiegel Group said yesterday that due to the interruption in the postal service and the impact on people’s lives, the company’s credit card bank, First Consumers National Bank, extended its grace period for assessing finance charges and fees to avoid unfairly penalizing customers. In fact, FCNB backdated payments received the week following the terrorist attacks and waived certain fees, including late-payment fees. FCNB also temporarily suspended outbound marketing programs and collection activities following the terrorist attacks. FCNB’s charge volume was off by more than 5% for 3Q/01 compared to 3Q/00. Spiegel also reported that its private label credit card business was directly impacted by decline in credit sales during the third quarter as well as rising charge-offs.

3Q/01 3Q/00 CHANGE
RECV: $1,257,487,331 $ 932,488,070 +34.8%
Q-VOL: $ 400,902,209 $ 422,492,200 – 5.1%
ACCTS: 1,701,960 1,322,130 +28.8%

Source: CardData (www.carddata.com)



Oberthur Card Systems this week announced the launch of its comprehensive
of new card solutions based on Proton World’s Proton Prisma technology. The
spectrum spans from entry-level mono-application Proton Prisma SP/EMV cards
right up to multi-application RSA-equipped Proton Prisma DP cards, with
dynamically-downloadable applications in Java? applets.
As is the case with all Proton Prisma cards, the new range from Oberthur Card
Systems is based on the CALC platform (Proton World’s implementation of
GlobalPlatform card specifications 2.1) and on DFM (Data File Management).
There are four main card packages in the new range. The Proton Prisma SP
(Single Profile) card features a single EMV debit/credit application, the
Proton Prisma BP (Basic Profile) card adds a domestic e-purse application,
while the Proton Prisma EP (Embedded Profile) card includes both the domestic
e-purse application and one which is compliant with CEPS (Common Electronic
Purse Specifications), as well as EMV credit/debit. The Prisma EP card also
comes equipped with RSA technology, to enable Public Key Infrastructure
(PKI)-based identification applications to be included. The top-of-the-range
Proton Prisma DP (Dynamic Profile) cards contain a Java Virtual MachineÔ for
the dynamic downloading of applications such as loyalty, e-commerce,
e-ticketing etc.

Oberthur Card Systems, a long-time professional partner of Proton World, is
currently the number one supplier of Proton chip cards, a position which is
confirmed by this decision to support the new Proton Prisma range. Banksys,
Proton licensee for Belgium and a leading secure electronic payment
has just selected Oberthur as a key supplier for the next generation debit and
credit cards based on the Proton Prisma technology.
Didier Serodon, Head of the Payment Division at Oberthur Card Systems
commented, “Proton is a great success story: it is indisputably the most
spread secure payment smart card solution available today. We at Oberthur have
worked closely with Proton World over the years, and look forward to
to combine our expertise in the card field, to achieve more success together.
Winning the contract with Banksys can be taken as a very positive sign for
things to come.”

Armand Linkens, CEO at Proton World said “The main goal in designing the
Prisma range was to achieve flexibility, in terms of target markets, desired
solutions and cost. The Proton Prisma range achieves this: there are solutions
to suit different types of issuers, with the ability to upgrade or mix
different card products in the same card population. Oberthur Card Systems
embodies the word ‘flexibility’ for us, we have worked with them for a long
time and they remain one of the principal suppliers to our licensees,
particularly in the Belgian market. We are delighted to welcome Oberthur into
the Proton Prisma family of partners.”
For further information on Oberthur’s relationship with Proton World, and
for a
demonstration of the full range of Proton Prisma card solutions, visit the
Oberthur Card Systems stand (R46, Hall Curie) and the Proton World stand (P44,
Hall Curie) during Cartes 2001, 23-25 October 2001 at CNIT, La Défense, Paris.

Oberthur Card Systems (Paris Stock Exchange – SICOVAM 12413), a global leader
and the innovator in the smart card industry, is shaping the future through
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
Championing EMV migration, Oberthur is the World’s N0 1 supplier of MasterCard
and Visa cards, and a leader in the banking, e-commerce, m-commerce and pay-TV
sectors, and in Java? and GSM technologies.
Oberthur Card Systems has an international reach ensured by an industrial and
commercial presence in 21 countries across the five continents. Oberthur Card
Systems had sales of 451.1 million euros in 2000.


LendingTree 3Q/01

LendingTree reported Tuesday third quarter revenue of $17.2 million, nearly double the revenue in the third quarter of 2000. The Company posted a EBITDA loss of $2.6 million compared to $13.6 million for 3Q/00. The company says the number of loan requests transmitted to the banks and lenders on the LendingTree Exchange increased to 350,000 in the third quarter, representing growth of 65% over the same period last year. All loan products experienced strong demand, including growth in loan transmits over the previous quarter of 19% for auto, 16% for mortgage, and 8% for home equity loans. For complete details on LendingTree’s 3Q/01 and previous performance please visit CardData ([www.carddata.com][1]).

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



Givex Corporation, a leading gift certificate management provider, and
Ingenico, the worldwide leader in secure transaction solutions, announced the
launch of the Elite 510, a standalone point-of-sale gift certificate and
transaction processing device.

This announcement builds upon a strategic alliance between Givex and IVI
Checkmate that began in May of this year. Initially the two companies
to provide merchants with the eN-Touch 3000 – an all-in-one touch screen
solution for processing gift certificates and points programs along with
credit card and debit card transactions. Shortly thereafter, IVI was acquired
by Ingenico.

Under this latest agreement, the Elite 510, a counter-top EFT POS terminal,
will be released with gift card, frequent user card and e-gift certificate
functionality. In the new year, enhancements will include points program
capabilities along with credit card and debit card transaction processing.
According to Barry Thomson, president of Ingenico Corp, “we forged some new
ground with the eN-Touch 3000. The Elite 510 is the next step in our plan to
ensure that all merchants, large or small, can increase revenue and brand
loyalty and with Givex’s gift certificate management technology and Ingenico’s
transaction processing we have the perfect solution.”

“Credit card and debit card processing features are ‘must haves’ for all
merchants. Likewise, gift cards, frequent user cards, e-gift certificates and
points programs are also becoming basic necessities. By bringing together
Givex’s and Ingenico’s expertise we are able to offer a cost-effective and
gainful all-in-one solution to merchants,” according to Don Gray, president
chief executive officer of Givex Corporation.

Merchants using the eN-Touch 3000 and Elite 510 also receive real-time
and reporting features. The Givex application tracks each gift card, frequent
user card, e-gift certificate and point in real-time across all sales channels
and allows merchants to view numerous up-to-the-second online transaction
reports, receive real-time support and expand marketing opportunities. These
features also mean customers can purchase and redeem their gift certificates
through any sales channel – physical or virtual.

Live demonstrations of the eN-Touch 3000 and Elite 510 will be held October 22
– 24, 2001 at the Foodservice Technology Exposition. Drop by the Givex booth
(#1238) at the Dallas Convention Center to see the devices in action.
About Givex Corporation

Givex Corporation
(http://www.givex.com) is North America’s premier gift certificate solution provider for
retail and hospitality sectors. Givex seamlessly integrates point-of-sale
devices – LAN-based registers, credit card terminals, kiosks and the telephone
– with the Internet to create a secure real-time gift certificate management
system. Givex technology provides turnkey solutions for tracking and managing
gift cards, frequent user cards, e-gift certificates and points programs
multiple sales channels. Patents are pending for the Givex technology in the
United States and Canada.

About Ingenico

Ingenico S.A. is a leading provider of smart card secured transaction products
and systems with subsidiaries and partnerships all over the world and
in over 70 countries and territories. It’s subsidiary Ingenico Corp. provides
hardware, software and services to the ever-expanding transaction needs of the
North American marketplace, which demands quality and requires flexible and
robust payment solutions. Our solutions include the Elite? terminal family,
which is built upon the Unicapt? architecture for optimum application
portability and secure multi-application acceptance, and was the first to be
EMVco approved. See
http://www.ingenico-us.com for more information.

Givex Corporation –
Givex Enabled Elite 510

This new standalone terminal is an all-in-one solution for processing gift
cards, frequent user cards, e-gift certificates and points programs alongside
credit card and debit card transactions. The new terminal is the result of a
joint effort between Ingenico, the worldwide leader in secure transaction
solutions and Givex Corporation, North America’s premiere gift certificate
solution provider. The initial release of the terminal will include gift card,
frequent user card and e-gift certificate functionalities. In the new year,
enhancements will include point program capabilities along with credit card
debit card processing.

Elite 510
IP capable point-of-sale payment terminal that combines Givex’s gift
certificate technology and Ingenico’s payment processing and hardware

Features & Benefits:
Integrated, all-in-one design
* Processes gift cards, frequent user cards, e-gift certificates
* Firewall capabilities between Givex application and credit/debit
* Slim form occupies little counter space
* Faster transaction throughput
* Pre-print and pre-dial capabilities
* Simple keyboard with large colorful keys
* Large easy-to-read display
* Five line-per-second thermal printer
* Inherent investment protection
* 1Mb memory is standard
* Up to two secure access modules
* 2RS232 ports
* Thermal Printer Technology
* Prints crisp, legible receipts for customer and merchant
* Simple and quick to load paper
* No messy ribbons to replace
* Lower operating costs than impact printers
* Meets California Bill 930 that requires customer bankcard account number not
be printed on customer receipt
* Full-featured keyboard
* Cognitive touch response speeds transaction and increases operator

* Reliability and longevity
* Magnetic stripe reader track read head is designed for 1 million reads
* Thermal bar of the printer is designed for 18.64 miles of print outs
* Life-span of 5 to 10 years

Available: November 2001


WildCard Funding

WildCard Systems, the leader in delivering stored-value e-payment solutions, announced it has received $14.5 million in venture capital funding. Sutter Hill Ventures lead the equity investment in this latest round of funding with participation from management and other existing investors including WW Ventures, Cleveland Pacific Equity Ventures, LLC, and Meriken Nominees. With this round of financing, WildCard Systems is well capitalized to continue both the development of new product solutions and the build-out of its infrastructure to meet the demands of its rapidly growing business.

“With this solid backing from our investors, WildCard Systems can continue to enhance the scalability, reliability, and security of our systems,” said Larry Park, CEO of WildCard Systems. “WildCard has seen outstanding adoption of stored value programs across a broad range of vertical markets. We expect our recent innovations in risk management, customer service and program enrollments to fuel future growth.”

WildCard Systems is a technology leader in complex financial transaction processing for stored-value cards, web-based applications and custom software development. The company’s software delivers scalable solutions that enable its customers to leverage “host-based” smart card applications in a wide variety of vertical markets. WildCard’s proprietary software delivers a full range of stored value services from authorization and settlement to administration and marketing. “WildCard Systems has the largest and most diverse penetration of the rapidly growing `open network’ stored value payments market,” said Tench Coxe, Managing Director, Sutter Hill Ventures. “WildCard’s technology platform and management team are well positioned to bring the scale and product sophistication required to capitalize on the robust growth potential of the market.”

The new capital will be used to continue to enhance WildCard’s transaction processing platform and develop product features for its wide variety of commercial and consumer stored value products. WildCard Systems offers stored-value products for insurance, retail, membership, student and employer markets. Well known for its development of Visa Buxx, a consumer-facing stored value product, WildCard Systems has implemented sophisticated end-to-end solutions in the government and commercial sectors as well. WildCard’s new payroll product offering, for example, is considered the most robust available.

“WildCard’s clients require stored-value solutions that are delivered on a platform that is scalable and 100% available,” said Wallace P. Whitley, former CEO of NaBanco and Managing Director of WW Ventures. “This team includes individuals who have built and managed systems that support some of the highest-level payment transaction processing demands in our industry.”

About WildCard Systems

WildCard Systems is an e-payments company that is the technology leader for electronic stored-value accounts and related Web-based software. Stored-value (prepaid) type products, particularly those designed to make purchases on the Internet, represent one of the biggest untapped markets for consumer payments. WildCard’s secure e-transaction platform is supported by a full range of services to deliver a complete host-based stored-value solution for a wide range of vertical markets. The company has been selected by Visa, USA as a Preferred Processor for stored-value payment systems. WildCard’s clients include leaders in each of its vertical markets and some of the top financial institutions in the country. Founded in 1997, WildCard Systems is a privately held, venture capital backed company. The company is headquartered in Sunrise, Fla. with offices in Silicon Valley, Orlando and Atlanta. For more information, visit [http://www.wildcardsystems.com][1].

About Sutter Hill Ventures

Sutter Hill Ventures has financed technology-based start-ups and assisted entrepreneurs in building market-leading companies since 1962. Through their decades of experience, they have developed strong industry networks, considerable operating and venture capital experience, and an understanding of the challenges that early-stage and high-growth companies face. Sutter Hill Ventures offers expertise in developing business strategy and partnerships, building management teams, and financing companies in both public and private markets. For more information, visit [http://www.sutterhillventures.com][2]

[1]: http://www.wildcardsystems.com/
[2]: http://www.sutterhillventures.com/


New Senior Consultant

Omid Tofigh has joined First Annapolis as a Senior Consultant. He will focus on clients in the firm’s management consulting and financial advisory businesses.

Previously, Mr. Tofigh was a vice president with the Corporate Finance Advisory Group of Stern Stewart & Company in New York. At Stern Stewart & Company, he advised companies on a wide range of financial management issues including implementing the discipline of Economic Value Added (EVA)®. He also advised clients with mergers and acquisitions, divestitures, litigation matters, financial strategy, valuations, and fairness opinions.

First Annapolis President and CEO William J. Westervelt, Jr., states “The addition of Omid reinforces our commitment to continually provide high caliber advice to our client base. Omid’s experience in advising clients on complex financial management matters will be an asset to First Annapolis and our clients.”

Mr. Tofigh earned a Bachelor of Arts degree from Brown University and a Masters Degree in Business Administration from the Colgate Darden Graduate School of Business at the University of Virginia. Mr. Tofigh resides in Columbia.

First Annapolis is a management consulting and investment banking firm with a primary focus on the financial services industry. The firm’s principal specialties lie in advising clients in payment-related industries – credit/debit/stored value issuers, transaction processing, electronic banking, and emerging payment mediums such as the Internet. The firm’s clients include leading domestic and international companies in the financial services, retail, technology, and consumer goods industries. First Annapolis also advises the largest trade associations and affinity groups.


FDR & Smart Cards

First Data Resources has become the first U.S. processor certified to personalize MasterCard smart cards on the ‘MULTOS’ operating system. FDR has also become the first U.S. service bureau to join the ‘MULTOS Issuance Partner Program’ in which First Data will help smart card issuers register applications on a card through the ‘MULTOS’ key management authority. Yesterday, MasterCard and Europay reported they have issued more than 100 million MasterCard-, Maestro-, Mondex-, and Clip-branded smart cards to their customers globally.


AmEx & Zeborg

Zeborg, Inc., the online procurement partner of Fortune 250 companies, announced that American Express has made a strategic investment in the company. Terms of the investment were not disclosed. The new agreement, effective immediately, extends the customer relationship that American Express began with Zeborg in September of 2000.

“Zeborg’s global procurement software offers companies comprehensive, cost-effective solutions for executing their purchasing strategies, re-engineering their procurement processes, and driving down their purchasing costs,” said Pierric Beckert, Senior Vice President, Investments and Business Development, American Express. “Our investment reflects our confidence in Zeborg’s business strategies, its products, and its commitment to generating measurable costs savings for its customers.”

“American Express brings financial strength, stability and a worldwide reputation that will help us accelerate the roll-out of Zeborg’s additional products,” said Arnab Gupta, chairman and co-chief executive officer of Zeborg, Inc. “As a customer for more than a year, American Express’ global procurement department has had first-hand experience in Zeborg’s capabilities as well as in our third generation solution that applies expertise to create savings. The company’s investment in Zeborg demonstrates valuable support of our business model.”

American Express employs Zeborg’s full software offering to support its global procurement strategies. Zeborg ExpenseMap(SM) is the first analytic software that offers an intelligent, cost-effective means to profile indirect spending and identify significant savings opportunities across an organization. Zeborg Advanced Sourcing(SM) is comprehensive sourcing software, with built-in intelligence and proven processes around each indirect spending area so companies can quickly negotiate new best-in-class contracts at significant savings. Zeborg MarketPort(SM) is day-to-day procurement software that delivers hard-dollar savings by enforcing supplier contracts and automating purchasing in the most complex indirect spending areas.

About Zeborg

Zeborg delivers permanent hard-dollar savings of over 20% in complex indirect spending areas such as print, distributed computing, labor, media and shipping. Zeborg maximizes savings and ROI by addressing the entire procurement cycle, providing customers with a strategic way to control and manage their purchasing. Zeborg’s software suite, Zeborg ExpenseMap, Zeborg Advanced Sourcing and Zeborg MarketPort, combines robust technology with 1,000 cumulative years of procurement expertise. To date, the technology and expertise that underlie Zeborg have saved the world’s leading corporations more than $5 billion on total purchases of $30 billion. Based in New York, with offices in Los Angeles and Boston, Zeborg’s investors include Willis Stein and Partners and American Express. For more information, please visit [http://www.zeborg.com][1]

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



Datacard Group introduced an applet
development kit (ADK) for its Aptura Smart Card Operating System today at
Cartes 2001 in Paris. The kit includes all the software and hardware tools
needed to develop and debug Java Card applets intended to run on Aptura,
and is fully compliant with Java Card 2.1.1 and Open Platform 2.0.1′

According to Martin Kearsley, senior vice president and managing director of
Datacard’s software solutions division, the new ADK will allow smart card
developers and integrators to more accurately assess the quality and
performance of their smart card applications before they are released to

“The new Aptura ADK adds to the breadth of our smart card portfolio,” Kearsley

“The Aptura ADK is a more advanced development kit adding an important
capability that smart card developers and integrators will not find in other
development kits currently on the market. It contains unique diagnostic
capabilities, which are essential for a successful smart card program.”
Kearsley added.

“The Aptura ADK provides developers with greater confidence in the applet
debugging process.” Kearsley said. “It includes development cards that have
same functionality as the Aptura operating system used in production cards, so
applets can be moved from development into production with confidence.”
The Aptura ADK contains four Aptura development smart cards, a smart card
reader, development software and complete user documentation. The software
offers a number of key features, including applet debugging, application
loading and management tools.

“In addition to the Aptura ADK, Datacard offers everything smart card issuers
need for a successful program.” Kearsley said. Offerings include the Aptura
smart card operating systems, server-based smart card personalization
a full range of card personalization systems, multi-application smart card
cycle management systems and a full range of consultative services, including
chip security evaluation and life cycle management.

The Aptura OS for production cards comes pre-installed on a chip ready to drop
into card plastic. Aptura is based on the Hitachi(R) AE45C smart card
microprocessor with 32k bytes EEPROM.

Datacard Group provides financial institutions, corporations, consumer
marketers, governments, schools, healthcare providers, service bureaus and
other enterprises with the software, systems and professional services they
need to build successful card programs. The company’s portfolio includes the
world’s best-selling smart card solutions and card issuance systems, as
well as
a complete line of digital identity systems. Consultative services include a
smart card security laboratory that serves the world’s leading smart card
issuers. DataCard Corporation, doing business as Datacard Group, is privately
held and based in Minnetonka, Minn. Datacard Group serves customers in more
than 200 countries. www.datacard.com


ATM Card Payout

Customers who now use Western Union’s direct access platform have the option to receive payout in the form of a ‘Western Union ATM Card’. This card can be used at ATMs in the MAC and PLUS networks. The ATM Card payout option is currently available in select agent locations throughout the United States. By end of year, more than 1,500 Western Union agent locations are expected to offer ‘Western Union Direct Connect’ which enables the ATM Card payout option.