UltraCard Raises $3 Million

Upgrade International Corp. announced that it has received an additional $2.5 million in funding from Antares 2 Pension Fund, managed by Fonditel EGFP, SA., and $500,000 from a private European investor.

Fonditel is the manager of pension assets for Telefonica, the global telecommunications operator headquartered in Spain. Daniel Bland, Upgrade’s President and CEO stated the following: “This financing will enable Upgrade and UltraCard to move forward in our efforts to commercialize the UltraCard and deliver many applications including an alternative solution to a central database model for a national ID card system. UltraCard once commercialized will allow for your entire encrypted biometrics identification system to be stored on the card, thereby eliminating the need to store and verify your personal ID from a government-controlled central database. Not only does this solve the `Big Brother is watching’ concern it also has the potential to drastically reduce the cost of building the database infrastructure. Protecting our borders and our way of life without trampling on our civil liberties should be the number one priority in the information technology business today. We will expend a substantial amount of our resources in fulfilling this obligation.”

About Upgrade

Upgrade International Corp. () through its ownership interest in UltraCard Inc. (), Efornet Corp., and cQue Corporation is engaged in the development and commercialization of a patented ultra high capacity portable data storage technology. UltraCard’s patented method for using existing hard disk storage technology provides both highly durable media in a credit card format and an inexpensive read/write device that together will become the next generation in personal portable data storage for a broad range of existing and new markets. Management believes that the UltraCard technology will potentially provide numerous industrial users with a combination of high levels of security and a vastly greater amount of personal transportable data storage at the lowest cost in the industry. In addition the acquisition and development of existing SmartCard solution providers represents a strategic market strategy designed to accelerate the integration of the vastly superior technology inherent in the UltraCard into existing and newly developing markets.

On Behalf of the Board of Directors, Daniel S. Bland President and Chief Executive Officer

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Magna Printers

Datacard Group has added ‘Advanced Imaging Technology’ to its ‘Magna Class’ card printers. The new technology uses optimized print ribbons to improve the sharpness and quality of photos, graphics and logos printed on full-color and monochrome cards. The results include smoother backgrounds, superior reproduction of fine-text characters, better color matching with cameras and scanners, and low ribbon status. The ‘Magna Class’ includes six printer models that personalize up to 650 one-color cards and 180 full-color cards per hour. Meanwhile, DataCard also announced the latest version of its ‘ID Works’ identification software which now offers navigation in English, French, German, Japanese and Spanish for every solution in the software portfolio. For packages in the ‘ID Works Basic Edition’ and ‘Standard Edition’ families, ‘version 3.1’ enables new translated functionality for card and report design and production. It also enables multi-language navigation for several enhancements previously available only in English, such as ghost photo imaging, transparent color options and variable card sizing.

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BART Upgrade

The San Francisco Bay Area Rapid Transit District has contracted with Cubic Transportation Systems to replace fare collection equipment at the transit authority’s five extension stations with Cubic’s new advanced electronic ticketing system. The $5.5 million order is in addition to the $31 million contract awarded to Cubic in 1999 to put new ticket vending machines and faregates in all but the newer BART stations. The new BART equipment uses a processing architecture compatible with Cubic’s ‘Nextfare Solution Suite’ for advanced integrated ticketing. BART is using Cubic’s ‘Tri-Reader’ technology for integration across its fare collection system to easily facilitate an upgrade to smart cards. The Cubic ‘Tri-Reader’ is the transit industry’s first card reader that processes multiple card technologies, including ‘ISO 14443 Types A and B’ and the Cubic ‘GO CARD’ now in use in Chicago and Washington D.C.

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Relocation Card

Wachovia’s First Union National Bank this morning unveiled its new ‘Relocation VISA Card’ for businesses. The bank says the average relocation cost for a home-owning employee was $57,279 and $16,701 for a renting employee, last year. The new prepaid debit card can be used for POS and ATM cash access. Harris Teeter Stores Inc. is the first client to sign up for the new program. Once companies sign a contract for the ‘First Union Relocation Card’ program, they can request new cards for individual employees online. Companies can establish individual dollar limits and a standard expiration date for their cards. They also can customize cards with their company logo. Each card can be sent directly to the employee, along with card activation instructions and a register for tracking transactions, or to the company for distribution. Companies get regular reports on spending activity. The card is sold and marketed centrally by First Union’s Corporate Mortgage Services.

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Paypal IPO

Paypal’s announced IPO will present an increased challenge to existing credit card issuers for Internet payments, such as Citibank’s ‘c2it’ service. NY-based Celent Communications says it expects financial institutions to lose $375 million in credit card transactions because of email payment schemes by 2003. As a result, Celent says Paypal will face direct assaults from credit card networks reacting to the cannibalization of their revenues over the next two to three years. Paypal currently has a 90% market share and expects to handle $3.5 billion in transactions this year. Although the firm began with a focus on payments delivered via PDAs, the firm shifted early last year to providing email payments on auction Web sites. While the stock market is currently not enthusiastic about IPOs, Celent says the slowing economy and technology bubble burst are Paypal’s strongest allies for preserving its market share. To-date PayPal has racked up more than $230 million in losses since it was launched in early 1999. It expects to raise about $80 million in the IPO. (CF Library 3/7/01; 9/7/01; 10/1/01)

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QualTeq Promotes 3

QualTeq Inc., a leading Visa/MasterCard card manufacturer, announced today the promotions of Karen Sodano*, vice president of Human Resources and Administration; Arturo Cardenas*, director of operations; and Robert Flemen*, network administrator.

Karen Sodano – Karen Sodano, of Greenbrook, NJ, has been promoted from director of Human Resources and Administration to vice president of Human Resources and Administration. In her new role, Ms. Sodano will promote organizational growth through comprehensive training programs, organizational support, and employee management programs. Major components of her role include implementing and administering all personnel policies and procedures within the facility, implementing compensation and benefits programs and promoting career development and education.

Arturo Cardenas – Arturo Cardenas, of Bridgewater, NJ, has been promoted from senior development engineer to director of operations. Mr. Cardenas spearheads direction for all manufacturing, personalization and support service operations, including inspection, safety, and product and materials testing.

The scope of his responsibilities includes directing card manufacturing, personalization, inspecting, health safety and environmental issues relating to OSHA and EPA, maintenance including work flow, equipment and facility requirements and research and development of new products.

QualTeq Promotions’2

Robert Flemen – Robert Flemen of Piscataway, NJ, was promoted from vault administrator IT customer support to network administrator. Mr. Flemen installs, configures and maintains the organization’s operating systems. He analyses and resolves problems associated with the server hardware, NT and applications software.

Mr. Flemen also maintains and modifies existing network operating systems, processes all personalization job orders, and updates operating systems. 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

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) Elan 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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MAKO Readers

PubliCARD has created a new minority-owned affiliate to market its smart card reader and related integrated circuit technologies. The new affiliate, MAKO Technologies, includes as shareholders, Troy Casey and Yasuo Izuyama, co-owners of Asian Identification Systems, and a sister company, which are PubliCARD’s current smart card reader contract manufacturing and distribution partners in the Asia-Pacific and Latin America regions. Casey and Izuyama will collectively own an initial 54% stake in MAKO. The new firm’s employees have also been granted the right to receive, in the aggregate, a 27% equity stake after two years. PubliCARD has granted a perpetual license of its reader and chip technology to MAKO in exchange for royalties based on sales over the next two years. MAKO will continue to sell the existing ‘Infineer’ lines of smart card readers and chips for keyboard and set-top box readers.

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OPC in TX

Official Payments Corporation announced that the City of Coppell, Collin County, Hays County, Midland County, Lubbock Central Appraisal District, Midland Central Appraisal District, and Round Rock Independent District, all within the state of Texas, have signed service agreements with the company.

These agreements enable citizens to pay personal property and real estate tax obligations over the Internet by visiting www.officialpayments.com, or via telephone by calling toll-free 1-800-2PAY-TAX. The programs will commence within the next two months.

Combined, these local authorities collected over $1.75 billion in personal property and real estate taxes last year. Tax bills will be distributed October 10, 2001 and are due on or before February 1, 2002. American Express, Discover Card, MasterCard and Visa are the cards accepted by the programs.

Official Payments has increased its Texas client base in 2001 by 312% over the prior year, resulting in an increase in market revenue potential of over $5 billion or 260%. Collins County, which includes part of the City of Dallas, contains more than 190,000 parcels and collects over $850 million in personal property and real estate taxes annually. The other seven clients each have annual revenue market potentials of over $60 million.

“We are making significant progress in our business development within the great state of Texas,” said Thomas R. Evans, Chairman & CEO of Official Payments Corp. “Leading Texas communities are signing with Official Payments at a steady rate because we offer unique technical expertise and a proven track record in the emerging government payments market. By offering our systems, these communities are giving their citizens a enhanced level of service,” added Mr. Evans. Two of the company’s established Texas clients, Bandera County and Brazoria County, were recently recognized by the state’s Comptroller of Public Accounts, Local Government Assistance Section, as providing “Best Practices” for their electronic payments systems.

Official Payments has similar agreements with over 900 government entities within 49 states across the country. The company has contacts with the Internal Revenue Service, 18 state governments, and the District of Columbia to collect taxes, fees, and fines by credit card over the Internet and telephone.

Official Payments charges taxpayers a convenience fee for processing these credit card transactions. The fee schedule can be found on the Internet at www.officialpayments.com. For example, a taxpayer who owed $2,300 in property taxes and charged their taxes would find a total of $2,368 on their credit card statement: $2,300 for the tax bill and $68 for the convenience fee. Taxpayers using credit cards with bonus rewards programs can, depending on their card’s program, earn rewards, points, and cash-back on airline frequent flyer miles for paying their taxes.

About Official Payments Corporation

Official Payments Corporation (Nasdaq: OPAY) is the leading provider of electronic payment options to government entities. The company’s principal business is enabling consumers to pay their government taxes, fees, fines, and utility bills by credit card, via Internet and telephone. The company is unequaled in market penetration and national footprint. Official Payments has agreements to collect and process credit card payments with the Internal Revenue Service, 18 state governments, the District of Columbia, and over 900 county and municipal governments in 49 states across the United States. In 2000, Official Payments collected and processed over $925 million in federal, state and local government payments.

Official Payments was founded in the San Francisco Bay area in 1996. Thomas R. Evans, the former President & CEO of the Internet company GeoCities, became Chairman & CEO of Official Payments in the summer of 1999. Mr. Evans brought Official Payments public in November of 1999, raising $80 million in its IPO on the NASDAQ national market. The company’s success in new client acquisition, increasing business with its existing clients and in building consumer awareness can be attributed to the combination of an enormous market opportunity with a highly skilled and experienced management and staff, aggressive sales and marketing, and a core competency in developing and implementing leading-edge technical systems.

About Official Payments Corporation

Official Payments Corporation (Nasdaq: OPAY) is the leading provider of electronic payment options to government entities. The company’s principal business is enabling consumers to pay their government taxes, fees, fines, and utility bills by credit card, via Internet and telephone. The company is unequaled in market penetration and national footprint. Official Payments has agreements to collect and process credit card payments with the Internal Revenue Service, 18 state governments, the District of Columbia, and over 900 county and municipal governments in 49 states across the United States. In 2000, Official Payments collected and processed over $925 million in federal, state and local government payments.

Official Payments was founded in the San Francisco Bay area in 1996. Thomas R. Evans, the former President & CEO of the Internet company GeoCities, became Chairman & CEO of Official Payments in the summer of 1999. Mr. Evans brought

Official Payments public in November of 1999, raising $80 million in its IPO on the NASDAQ national market. The company’s success in new client acquisition, increasing business with its existing clients and in building consumer awareness can be attributed to the combination of an enormous market opportunity with a highly skilled and experienced management and staff, aggressive sales and marketing, and a core competency in developing and implementing leading-edge technical systems.

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BMS CNP

CyberSource Corporation, a leading provider of risk management
and electronic payment solutions for enterprise businesses, announced it
has established a secure payment processing gateway with Barclaycard Merchant
Services, one of Europe’s largest acquirers and processors of card
transactions. CyberSource worked directly with Barclaycard Merchant Services
to establish a new gateway providing payment processing capabilities
specifically for “credit-card-not-present” (CNP) sales channels, such as
online stores and call centers.

This gateway extends payment solution options for merchants by allowing
them to quickly and securely accept card payments and process transactions
through BMS without having to develop, integrate and maintain their own costly
payment infrastructures or bank connections.

In addition to extending payment processing options for UK-based customers
of BMS, this gateway will allow other global businesses to accept electronic
payments and access CyberSource services to process those transactions through
BMS in Europe.

“This relationship with CyberSource will provide our customers with a
simplified solution to establish a reliable and scalable connection for
securely processing CNP transactions,” commented Tony Slater, Commercial
Director at Barclaycard Merchant Services. “This will be especially valuable
as we head into the holiday shopping season and our customers are keen to take
advantage of the anticipated growth in eCommerce.”

Neil Cook, Managing Director of the CyberSource UK office, stated, “This
direct link is an integral part of our strategy to service the needs of both
European merchants and other global businesses that wish to sell online and
via call centers worldwide using the acquiring services of Barclaycard
Merchant Services.”

He added, “The relationship with Barclaycard Merchant Services
demonstrates CyberSource’s strength in this market as a leading global
electronic payment solutions provider.”

About Barclaycard Merchant Services

Barclaycard Merchant Services is one of Europe’s largest acquirers and
processors of plastic card transactions. It is dedicated to providing a range
of e-commerce solutions to suit all types of business and was the first bank
to launch an Internet payment system, ePDQ. In 2000, 1.2 billion purchases
were made with credit and debit cards in the 131,000 outlets belonging to
Barclaycard Merchant Services’ customers in the UK. Barclaycard Merchant
Services operates the largest on-line, real time bank owned EFTPOS (Electronic
Funds Transfer at the Point of Sale) system in the UK with a PDQ terminal base
of over 123,000. For further information please contact the Barclaycard Press
Office on 01604 251229.

About CyberSource

CyberSource Corporation is a leading provider of risk management and
electronic payment solutions for enterprise businesses selling via multiple
sales channels. CyberSource solutions manage transaction risk and enable
electronic payment processing for Web, call center/IVR, and POS environments.
CyberSource professional services designs, integrates and optimizes
enterprise-wide commerce transaction systems. Over 3,000 businesses use
CyberSource solutions, including over half of the Dow Jones Industrial
companies. The company is headquartered in Mountain View, California, and has
sales and service facilities in Japan, the United Kingdom, and other locations
in the United States. For more information, please visit CyberSource’s web
site at http://www.cybersource.com/ or email info@cybersource.com.

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360 Certifies ICE 6000

Hypercom Corporation, the world’s leading provider of electronic payment systems, and 360Commerce, a leading provider of integrated commerce software, today announced that Hypercom’s secure ICE 6000 touch-screen card payment terminal has been certified to work with 360Commerce Java-based software applications. Effective immediately, service providers and retailers using Java” technology can install Hypercom’s ICE 6000 equipped with JavaPOS signature drivers as part of their end-to-end solution. This combination will give retailers the freedom to choose best-of-breed applications, including 360Commerce’s ExtendYourStore product suite. “Retailers are demanding flexibility and freedom of choice when making purchasing decisions on software and hardware,” said Jerry Rightmer, chief technology officer, 360Commerce. “Enabling 360Commerce’s Point-of-Sale (POS) features on Hypercom’s ICE 6000 terminals further demonstrates our commitment to allowing retailers to take charge of their own destiny by providing them even more options in terms of operating systems, hardware platforms and peripherals.”

“By integrating Java technology with Hypercom terminals we can offer merchants even greater flexibility and more options at the point-of-sale,” said Jairo E. Gonzalez, president, Hypercom Transaction Systems Group. “This step underscores our commitment to develop and bring to market leading-edge payment technologies that enhance the transaction process for everyone involved. We are pleased to team up with 360Commerce in this effort.”

Hypercom’s ICE 6000 is specifically designed to meet the needs of the multi-lane payment terminal and systems market, which generally includes the top 100 US and selected global retailers, including supermarkets, department stores, chain drug stores, mass merchandisers and other retailers. The tamper-resistant terminal interfaces with all major POS systems and peripherals, and supports electronic receipt capture (ERC) as well as secure credit, debit and smart card functions. 360Commerce has been able to provide prospective customers with hands-on demonstrations of their POS signature capture and debit/pin pad features using the Hypercom device.

About 360Commerce

360Commerce software enables consumers to shop seamlessly across all channels by empowering retailers to connect the store and all other channels with the enterprise in real time. Leading retailers on 360Commerce’s customer list include The Home Depot, Apple, KB Toys, Burlington Coat Factory, Circuit City, Cole National and Meijer. 360Commerce’s ExtendYourStore software suite includes CrossReach”, a cross-channel customer service desk; OnlineOffice, a browser-based back office module; Unleashed”, a wireless mobile point-of-sale application; next generation Point-of-Sale; web and kiosk versions of Gift Registry; and Conductor, a channel manager that connects all channels with the enterprise in real time for a 360-degree view of the customer. For more information, visit www.360Commerce.com.

About Hypercom ([www.hypercom.com][1])

Hypercom Corporation (NYSE: HYC) is the leading global provider of electronic payment solutions that add value at the point-of-sale for consumers, merchants and acquirers, and yield increased profitability for its customers. Hypercom’s products include secure web-enabled transaction terminals that work seamlessly with its networking equipment and software applications for e-commerce, m-commerce, smart cards and traditional payment applications. The company’s widely-accepted ePOS-infocommerce (epic) framework of consumer-activated, EMV-certified , touch-screen ICE (Interactive Consumer Environment) terminals enable acquirers and merchants to decrease costs, increase revenues and improve customer retention. Headquartered in Phoenix, Arizona, Hypercom is independently acknowledged as the leading provider of point-of-sale card payment terminals worldwide. Demand for Hypercom’s terminals surpassed one million units last year alone. Hypercom today maintains an installed base of more than 4 million terminals in over 100 countries that conduct over 10 billion transactions annually.

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

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FDC Signs Category 5

Category 5 Technologies, Inc. announced it has entered into a credit card transaction processing account with First Data Corporation. The addition of First Data to the various payment processing platforms offered by Category 5 will enable Category 5 customers to benefit from a decentralized platform that is global and highly reliable.

Through its wholly-owned subsidiary ePenzio, Inc., Category 5’s bankcard processing relationships have expanded to now include this highly scalable platform, which will benefit current and prospective small- and medium-size business clients by allowing them access to more robust and international payment systems. Payment processing is one of several core product and service suites offered by Category 5. In addition to payment processing, Category 5 offers web design, web hosting, e-commerce technology such as shopping carts and payment plug-ins, and marketing and promotions software and services.

“Our new relationship with First Data allows us to further extend our service offering for our customers,” said William Gibbs, CEO of Category 5. “We identified that small- to medium-size enterprises need to be able to process transactions on multiple platforms, and followed through with a full-service package from the premier institution providing this service. We are very pleased with the addition of First Data, since this change allows us to meet the needs of customers who have either a terminal or processing gateway that is platform specific,” he added.

About Category 5 Technologies

Category 5 Technologies is a leader in using technology to make small and medium-sized businesses more efficient in their marketing and profitable in their operations. The Company provides marketing tools and commerce enabling technology and services to small- and medium-sized businesses in the United States and internationally. From e-commerce platforms, web sites, shopping carts, merchant accounts and payment plug-ins, to communications and promotions tools, Category 5 enables both brick and mortar as well as Internet businesses to operate more efficiently and profitably, and to gain and retain new customers. Category 5 continues to seek synergistic companies, technologies and platforms for acquisition.

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Rate Cut

As the Federal Open Market Committee convenes today it is expected that another 50 bps reduction in short-term interest rates will materialize. The rate cuts have pushed average credit card portfolio yields up by nearly 200 bps this year. If the 3.0% federal funds rate is cut to 2.5%, it will be the lowest level since 1962. A 2.5% rate would effectively produce a negative real interest rate, as inflation in August stood at 2.7%. This would also be the ninth rate cut this year, and the second rate change since the Sept. 11 terrorists attacks. Yesterday, the Commerce Department reported that personal income was flat in August, while after-tax income rose slightly due to recently issued tax rebate checks. Personal consumption increased 20 bps in August which pushed up savings for the first time in two years. According to RAM Research’s Bankcard Barometer, average portfolio yields, among issuers with at least $100 million in receivables, have increased from 14.87% in January to 16.81% in August.

PORTFOLIO YIELDS
(Gross Interest income/Average Receivables)
Jan 01: 14.87%
Feb 01: 14.86%
Mar 01: 14.86%
Apr 01: 15.01%
May 01: 15.44%
Jun 01: 15.76%
Jul 01: 16.21%
Aug 01: 16.63%
Sep 01: 16.81%
note: based on previous month’s performance
SOURCE: RAM Research’s Bankcard Barometer

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