MBNA has snagged former FBI director Louis Freeh as senior vice chairman for Administration, that includes being a member of MBNA’s ‘Executive Group’. As MBNA’s top security executive, Freeh will be responsible personnel hiring, legal affairs, and facility security. Freeh’s personnel functions include recruiting, hiring, education, compensation and benefits for the company’s worldwide workforce of 26,000 people. Mr. Freeh will oversee all of the company’s legal affairs. He will also be responsible for the company’s facilities, which include more than 6 million square feet of office space at 36 locations throughout the world, and the bank’s security and transportation functions. Mr. Freeh graduated Phi Beta Kappa from Rutgers College and received a J.D. degree from Rutgers Law School and an L.L.M. degree in criminal law from the New York University Law School.


STM 2Q/01

STMicroelectronics reported results for the second quarter and first half ended June 30, 2001.
Net revenues for the second quarter were $1,587.2 million, in line with the Company’s guidance range of
$1.55 billion to $1.6 billion contained in its news release dated June 14, 2001. In last year’s second
quarter the Company reported net revenues of $1,877.3 million.

The Company experienced a significant amount of end-of-period order push-outs and cancellations,
reflecting accelerated weakness in certain of its end markets, particularly telecom and computer
peripherals. As a result, the Company has incurred a second quarter excess inventory pre-tax charge
of $70.7 million. Excluding the effect of this special charge, gross margin for the second quarter of 2001
was 38.0%, as previously anticipated. Including the effect of the charge, gross margin for the period was

At the end of the second quarter, ST took further actions to better align existing resources with
changing market conditions. Consequently, the Company recorded a second quarter impairment and
restructuring pre-tax charge of $311.3 million, primarily comprised of asset impairment charges relating
to certain of its 6″ wafer fabs and to goodwill. This includes the previously-announced charge relating
to the closure of its Ottawa manufacturing facilities, which amounted to $40.3 million.
Pro Forma Second Quarter Results Excluding Restructuring and Excess Inventory Charges
Second quarter net revenues of $1,587.2 million declined 15.5% and 17.4% from last year’s second
quarter and the first quarter of 2001, respectively. Revenues from differentiated products equaled
$1,024.0 million and represented 64.5% of net revenues.

ST maintained its product portfolio, application and geographic balance in the second quarter. With
differentiated products accounting for 64.5% of net revenues, the remaining contributors were Logic &
Memories, which represented 19.1% of second quarter 2001 revenues; Discretes, which accounted for
10.9%; and Standard & Commodities equaling 5.4%. In terms of applications, telecom represented
32.7% of second quarter 2001 net revenues; computer accounted for 20.9%; consumer was 19.3%;
automotive was 11.4%; and industrial, which includes Smart Cards, represented 15.8%. In the 2001
second quarter, the applications showing the best relative performance on a comparative
year-over-year basis were: automotive, up 2.5%; industrial, up 5.2%; and telecom, which declined by a
modest 3.2%. As anticipated, consumer revenues were significantly below second quarter 2000 levels,
declining 40.4% and computer was down by 20.0%.

Automotive was also the best relative performing application on a sequential basis, posting a 4.7%
decrease over first quarter 2001 levels. Conversely, computer, telecom and industrial reported
sequential declines of 21.0%, 20.0% and 13.8%, respectively. The 18.0% sequential decline in the
consumer sector primarily reflected lower sales of non-volatile memories and standard products to this
market. Revenues from the digital consumer market, however, were basically flat on a sequential basis.
Geographically, Europe accounted for 35.9% of second quarter 2001 revenues; Asia/Pacific for 33.4%;
North America was 18.3%; Japan was 7.0%; and Emerging Markets equaled 5.4%. The greatest
year-over-year declines took place in North America, down 35.3% and Asia/Pacific, down 14.8%. The
greatest sequential decline was in Europe, down 23.2%. Asia/Pacific, North America and Emerging
Markets declined 15.5%, 15.2% and 14.9%, respectively, from first quarter 2001 levels, while Japan
grew 3.2% in the same period.

Pasquale Pistorio, President and Chief Executive Officer commented, “Second quarter revenue
performance reflected the very difficult business conditions that have negatively affected several of our
end markets. Within this industry downturn, however, and based upon currently available data, we
believe that ST has continued to perform relatively better than the market and to gain market share.”
Gross profit for the second quarter was $603.3 million compared to $875.7 million in the similar
year-ago period. Gross margin of 38.0% was achieved despite the steep decline in order shipments
and production slowdown in the last part of the quarter. In the 2000 second quarter the Company
reported a gross margin of 46.6%.

Mr. Pistorio said, “As we noted at the time of our June 14, 2001 guidance, the under-utilization of
several of our 6″ wafer fabs, and abrupt pricing changes affecting certain of our product families, took a
toll on second quarter gross margin.”

Selling, general and administrative expenses were $180.2 million for the 2001 second quarter, including
an additional bad debt provision of approximately $14 million. Selling, general and administrative
expenses were nearly flat on an absolute basis, but increased as a percentage of revenues compared
to the year ago quarter.

Research and development expenses totaled $255.7 million, or 16.1% of net revenues. This compares
with $245.1 million, or 13.1% in the comparable year ago period.

Other income of $22.7 million included a $12.5 million investment gain.

Pro forma operating income was $190.1 million, or 12% of net revenues compared to $415.8 million, or
22.1% of net revenues in the similar year-ago period. Pro forma net income for the 2001 second quarter
was $154.5 million. Pro forma fully diluted earnings per share were $0.17 compared to $0.37 reported in
the second quarter of 2000.

Pro Forma First Half 2001 Results

Net revenues for the first half were $3,508.3 million, a decrease of 2.0% from the first half 2000. Gross
profit was $1,459.1 million, or 41.6% of revenues. Operating profit was $602.5 million, or 17.2% of
revenues. Pro forma net income was $495.3 million, or $0.54 per diluted share.
Research and development expenditures were $527.8 million, compared to $480.2 million in the 2000
first half. As a percentage of sales, R&D expenses rose from 13.4% to 15.0%. Selling, general and
administrative expenses were $356.9 million, or 10.2% of net revenues.

Second Quarter and First Half 2001 Results on an As-Reported Basis

Net revenues for the second quarter of 2001 were $1,587.2 million. Gross profit was $532.6 million, or
33.6% of net revenues. The operating loss for the period was $191.9 million. The net loss for the quarter
was $164.5 million, or $0.18 per diluted share.

Net revenues for the first half of 2001 totaled $3,508.3 million. Gross profit for the first half was $1,388.4
million, or 39.6% of revenues. Operating income was $220.4 million, or 6.3% of net revenues. Net income
was $176.3 million, or $0.20 per diluted share.

Balance Sheet Highlights

At June 30, 2001, cash, cash equivalents and marketable securities totaled $2,194.9 million; long-term
debt was $2,573.8 million (89% of which consists of convertible debt). Shareholders’ equity was
$6,156.9 million. Capital expenditures were $497.5 million in the second quarter and $1,227.1 million in
the first half of 2001. This compares with capital expenditures of $808.5 million and $1,430.6 million in
last year’s second quarter and first half, respectively.

Summary & Outlook

Commenting on second quarter results, Mr. Pistorio noted, “The difficult market environment that
persisted during the period was characterized by abrupt changes in end-market demand that
translated into significantly impaired order visibility with shipment postponements and cancellations. In
response to the deteriorating industry conditions, ST took actions designed to further enhance the
Company’s competitive position, both over the short/intermediate term, as well as the longer term and
that are in keeping with the Company’s strategic direction.”

ST has implemented a hiring freeze and has taken corporate-wide measures to reduce SG&A
expenditures. In fact, headcount has been reduced by about 1,500 people since the beginning of the
year as a result of attrition. Additionally, the Company has initiated short-term, temporary shutdowns at
certain of its 6″ wafer fabs.

Looking ahead, Mr. Pistorio continued, “Industry analysts are currently estimating a decrease in
semiconductor revenues for the markets we serve of between 10% and 15% for the first half of 2001
compared to the first half of 2000. ST’s year-over-year first half 2001 revenue decline of 2% illustrates
our continued ability to outpace the market by a meaningful margin.”

“On the other hand, we recognize the unique characteristics of the current industry downturn and the
unprecedented poor visibility of the near term demand that is part of this cycle. Therefore, it is difficult to
provide guidance with respect to subsequent quarters.

“Based upon today’s available information, we believe that the industry will bottom-out in the third
quarter of 2001, and we expect that ST’s revenues for that period will decline sequentially by
approximately 10% to 15% from 2001 second quarter levels. Gross margin for the third quarter of 2001
is likely to be in the range of 32% to 36%, reflecting continued price pressure and lower plant utilization
rates,” Mr. Pistorio said.

Mr. Pistorio noted, “In the fourth quarter of 2001, we expect our revenues and gross margin to improve
on a sequential basis. This projection assumes inventory workdowns in several of our key end markets,
but continued pricing pressures affecting certain product families due to industry overcapacity.
Additionally, we could see improved operating profitability resulting from cost reduction programs
implemented earlier in the year.”

“ST’s management is continuing to assess and evaluate our resources, headcount, operating
expenses and physical assets within the context of the projected timing of an industry recovery. With
future market conditions difficult to project, ST’s strategy is to take those actions necessary to ensure
its competitive position, in terms of products, strategic and key customer relationships and worldwide
manufacturing efficiency,” Mr. Pistorio said.

“At the same time,” Mr. Pistorio added, “the Company is moving forward with its System-on-Chip
solutions which give significant leadership advantages to ST as the convergence of technologies and
applications continues to evolve. The strength of our balance sheet provides ST with important
flexibility. Additionally, the Company has the leading-edge manufacturing infrastructure in place to
respond effectively to developing market requirements.”

Products, Technology & Design Wins

During the quarter, ST sustained its high flow of innovative new products and also entered into a
number of new agreements designed to reinforce its leadership in key areas such as broadband
access and multimedia.

In the digital consumer arena, ST and Alenia Spazio signed an agreement to co-operate in the field of
interactive broadband satellite networks for multimedia applications. ST has become a partner in
Alenia’s EuroSkyWay project, which aims to provide a new generation of satellites for Internet and
interactive TV services.

New products introduced for the digital consumer field included a single-chip demodulator for digital
terrestrial TV, and the world’s most advanced HDTV (High-Definition TV) decoder chip featuring
multiple stream MPEG video decoding.

In the communications field, ST introduced a number of significant products implementing VoIP (Voice
over Internet Protocol), which are a result of ST’s cooperation with Netergy Networks. For cable-based
VoIP, ST began delivering a multi-channel VoIP processor designed to work in conjunction with ST’s
DOCSIS single-chip cable modem. The Company also launched a chipset for enterprise IP phones,
small gateways and other emergent products using VoIP technology.

For the xDSL market, ST introduced an ADSL modem chipset aimed at both laptop and desktop
computers that is the first on the market to employ a controller-less design with USB or PCI interface.
The Company also unveiled a new ADSL central office chipset that integrates eight ADSL channels. ST
also demonstrated a working prototype of its Zipper-DMT VDSL modem technology that will combine
the very high bandwidth of VDSL with ADSL spectrum compatibility.

Other major announcements in the communications field included a new silicon-germanium BiCMOS
process tailored for cost-sensitive wireless applications. The new process provides all the
performance advantages of silicon-germanium at a cost that is marginally higher than that of a
standard BiCMOS process. The Company was also awarded an important design win by a major
customer for a US-TDMA RF transmitter in BiCMOS6M (0.35-micron) technology and a stereo audio
front-end. ST signed an agreement with specialist IP developer IDEX to jointly develop an innovative
biometric module combining fingerprint recognition and on-screen navigation features for mobile
Internet applications. ST also formed an agreement with Onix Microsystems Inc. to co-develop and
manufacture chipsets containing mirrors realized on ST’s micro-electro-mechanical systems (MEMS)
technology for use in Onix’s all-optical switching solutions.

In the computer peripherals field, notable announcements included a new generation of display engine
ICs aimed at the rapidly growing markets based on flat panel displays. ST also began sampling a new
CMOS read/write channel chip for hard disk drives that reduces power consumption increases overall
data transfer speeds and allows drive manufacturers to cut manufacturing costs. In the printer field, ST
started volume production of a digital printer engine in 0.18-micron technology, producing some three
million units in the quarter.

In the field of PC graphics, several manufacturers announced PC add-in boards based on ST’s KYRO
II(TM) 3D graphics accelerator, which is based on Imagination Technologies PowerVR(TM)
technology. Additionally, ST and Imagination also announced an extension of their partnership to
develop next-generation PC graphics technology.

In the automotive sector, ST began to sample a high-power system-on-chip device designed for
‘mechatronic’ applications where the electronics section is physically integrated with mechanical
elements. The first design win for this device is for a turbocharger application to be mounted on cars
manufactured by DaimlerChrysler. ST also won a large volume order for a navigation system for
aftermarket and OEM applications and received the first production orders for the XM Satellite Radio
receiver ICs.

In the industrial field ST, began volume shipments in Japan of smartcard microcontrollers for the first
EMV (Europay, Mastercard, Visa) credit cards.

During the quarter, ST continued the rollout of its innovative application-specific Flash products.
Samples of a 64Mbit device built in 0.15-micron technology and optimized for cellular phones were
delivered to a leading mobile phone manufacturer, while leading automotive manufacturers received first
samples of a 16Mbit device dedicated to engine control applications and new 8Mbit devices for
Firmware Hub PC BIOS were sampled to all major PC players.

Also during the quarter, in the rapidly growing area of e-Business via the Internet, ST further
strengthened its infrastructure by fully automating its RosettaNet-compliant Dynamic Replenishment
Process and completing the set up of a personalized portal that provides ST’s customers with
enhanced supply-chain visibility.

About STMicroelectronics

STMicroelectronics is the world’s third largest independent semiconductor company. The Company
shares are traded on the New York Stock Exchange, on Euronext Paris and on Borsa Italiana, Milan.
The Company designs, develops, manufactures and markets a broad range of semiconductor
integrated circuits (ICs) and discrete devices used in a wide variety of microelectronic applications,
including telecommunications systems, computer systems, consumer products, automotive products
and industrial automation and control systems. In 2000, the Company’s net revenues were $7,813.2
million and net earnings were $1,452.1 million. Further information on ST can be found at www.st.com.

STMicroelectronics N.V.


(See Pro Forma adjustments listed in the table below)

(in millions of U.S. dollars, except per share data ($))


Cyota CEO

Cyota, a leading payment and security company based in New York, announced a restructuring of its management team and board of directors.

The announcement comes on the heels of Cyota’s acquisition of Auripay, another e-payment security provider based in Cambridge, MA. Cyota President and co-founder Naftali Bennett has been named Chief Executive Officer of the joint company, and Gary Heatherington, former CEO of Cyota has stepped down from his operational role. Additionally, Auripay advisor Dr. Ashok Kalelkar is expected to join Cyota’s Board of Directors. Dr. Kalelkar is Managing Director and General Partner of Seed Capital, which is a SOFTBANK affiliate. James L. Bailey will continue to serve as Cyota Chairman. “Gary was crucial to building Cyota’s product suite, signing large North American deals, financing and growing Cyota,” remarked Bailey. “He brought energy and vision to Cyota, and his dynamism and personality will continue to be a part of the Cyota culture.” Bailey welcomed Dr. Kalelkar and added that “Cyota is fortunate to have an individual with his business experience and managerial vision join our board. Dr. Kalelkar has been an outstanding industry leader with unparalleled expertise, and I look forward to the valuable contributions that he will provide to our company as a member of the board of directors.”

“I’ve enjoyed working with the talented and dedicated people at Cyota. I feel confident that Cyota is poised to continue its growth and establishment as one of the world’s leaders in payment and security technology,” commented Gary Heatherington.

Dr. Kalelkar has over 30 years of management experience in the technology industry, and is a leader in the Internet community. Prior to joining Seed Capital, Ashok was executive vice president of operations at Arthur D. Little, Inc. (ADL) the international technology and consulting firm, where he served on their board of directors and was part of the management leadership team. Dr. Kalelkar earned his B.S. degree in engineering and mathematics from George Washington University, an S.B. and S.M. in mechanical engineering from the Massachusetts Institute of Technology and went on to earn his Ph.D. in engineering from Brown University.

“Cyota offers the right business model, the right management team, and the right technology to serve the banking industry in a rapidly changing environment,” says Dr. Kalelkar. “I’m very excited to be working with them.”

Cyota recently announced the launch of Cyota SecureSuite(TM), an integrated online payment security platform designed to seamlessly integrate a wide range of authentication and credit card security products into a single user experience. Additionally, Cyota was selected by Visa U.S.A. as a vendor supporting the Visa Payer Authentication Service – based on the 3D Secure Interoperability standard – and announced the launch of Cyota 3DSecure(TM) a few weeks ago.

About Cyota

Cyota is an innovative technology company that is dedicated to helping financial institutions strengthen their customer relationships through reliable, flexible, easy to use online security, payment and transaction products. Founded in 1999 by leading card and security industry experts, Cyota is headquartered in New York with offices worldwide. Cyota is led by a respected management team with extensive experience in the security, Internet and banking industry and is supported by an international Advisory Board comprised of world-renowned financial and security experts. For more information, please visit our website at [www.cyota.com][1].

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


ACI & Sonera

ACI Worldwide, a leading international provider of enterprise e-payment solutions, announces a partnership agreement with Sonera SmartTrust, Ltd., a leading developer of infrastructure solutions designed to enable secure mobile e-services. Under the agreement, the two will jointly market and promote their software to telecom and financial institutions.

SmartTrust’s solutions enable secure m-commerce services. The solutions provide service and device management tools and allow consumers to store their digital identity on a mobile phone to generate binding digital signatures from their handsets–public key infrastructure (PKI) technology. As a result, the solutions help mobile operators and financial institutions respond to recent legislation in the U.S. and European Union that makes digital signatures as legally binding as written signatures. SmartTrust solutions allow consumers to authenticate purchases and transactions utilizing digital signature technology, while ACI solutions acquire those transactions and route them for authorization to complete purchases. Using the combined solutions, network operators and financial institutions can open new payment channels that give consumers the ability to initiate purchases and transactions on open networks such as the Internet and mobile networks without compromising security. With SmartTrust and ACI solutions in place, a network operator or financial institution can offer m-commerce services to mobile phone users. A consumer using such a service can initiate a payment or purchase via their mobile phone. SmartTrust software on the SIM card in the mobile phone will generate a financial transaction signed by the consumer’s private key and send the transaction to the network operator or financial institution. SmartTrust software at the receiving end will then validate the signature and pass the transaction to ACI software for authorization and payment. Once authorized, ACI software will generate a message that is sent back through the same security process to confirm completion of the purchase. The entire process is fast, secure and transparent to the consumer. “We are always on the lookout for products and partnerships that allow us to couple our strengths with those of other proven providers to offer more complete solutions,” said Jim Tomaney, marketing director of ACI Worldwide’s Europe/Middle East/Africa operation. “In this case, we are able to partner with a provider of solutions that we believe are critical to the future success of mobile e-services. SmartTrust’s expertise in deploying solutions for secure mobile e-services, coupled with ACI’s e-payments experience, supports our goal to help our customers adopt new economy technologies that expand their business opportunities.”

“The Global Partnership signed with ACI delivers strong expertise in the e-payments market, further promoting our efforts to build secure payment networks for transactions conducted in a mobile environment,” said Matti Heikkila, director of Finance Industry segment for Sonera SmartTrust Ltd. “Co-operation with specialized solution and channel partners to develop, offer and implement secure wireless solutions is one of the cornerstones of SmartTrust’s strategy. With every partnership we take a further step towards fulfilling the growing demand for mobile e-services and secure wireless transactions.”

About Smart Trust

SmartTrust is a leading developer of infrastructure solutions designed to enable secure mobile e-services. Through the development of solutions SmartTrust allows organizations within the mobile ecosystem to deliver mobile e-services that inspire confidence and convenience in the sharing and trading of online information, products and services.

By supporting multiple generations of networks and mobile devices, SmartTrust is able to offer the best end-user reach possible to 160 corporate customers and nearly 60 mobile operator customers. SmartTrust is a wholly owned subsidiary of Sonera Corporation (HEX:SRA, NASDAQ:SNRA), an international leader in mobile communications as well as mobile and Internet-based services and applications ([www.sonera.com][1]). For more information, please visit [www.smarttrust.com][2]

About ACI Worldwide

Every second of every day, consumers are initiating electronic payment transactions–getting cash at ATMs, using debit and credit cards to make purchases in stores and on the Internet, banking by phone and PC, paying bills online. Twenty billion times a year, ACI software is used to process these transactions, powering the world’s online payment systems. ACI was founded in 1975 and pioneered the development of applications and networking software for online transaction processing. Today more than 2,000 customers in 78 countries use ACI supplied software. Visit ACI Worldwide on the Internet at [www.aciworldwide.com][3].

[1]: http://www.sonera.com
[2]: http://www.smarttrust.com
[3]: http://www.aciworldwide.com


Dialpad Card

Dialpad Communications, Inc., the market leader in IP telephony, now makes it easy to enjoy the benefits of Voice over Internet Protocol (VoIP) technology with the recently announced Dialpad Prepaid Phone Card. By routing calls using IP telephony, Dialpad’s phone card allows customers to contact family and friends worldwide using any phone and pay long distance rates that are just a fraction of the per minute charges listed by traditional phone companies.

Dialpad recognizes that many Americans have an increased need to stay in touch with family and friends in countries of origin. Now, Dialpad is offering a low-cost alternative to an exorbitant long distance phone bill.

“Everyone has a strong interest in low cost-calling alternatives,” said Martina Ehlers, Senior Director and General Manager, Premium Products for Dialpad. “We are pleased that we can offer a solution to consumers with our prepaid phone card to help alleviate some of the expenses they incur contacting their family and friends outside of the United States.”

The Dialpad Prepaid Phone Card is available in increments of $10, $25 and $50, and costs just 6.7 cents per minute for calls within the U.S., with low cost international rates to telephones and mobile phones in over 200 countries. The card offers great value because there are no monthly fees, connection charges or minimum call lengths, just the same great low rates with every call. For example, when calling Mexico City, customers pay just 10 cents per minute, compared to listed rate charges of up to 39 cents per minute with other phone cards, and calls to Spain through Dialpad’s card are just 11 cents a minute compared to 80-92 cents with other cards. For a limited time, Dialpad is also giving up to a 20% bonus for first-time buyers.

Dialpad also offers Dialpad World, its international PC-to-phone calling service that enables customers to make calls from their PCs to standard telephones in over 200 countries and to mobile telephones in over 100 countries, for a fraction of the cost of traditional long distance calls. Consumers can purchase the Dialpad Prepaid Phone Card or Dialpad World by going to [www.dialpad.com][1].

About Dialpad Communications, Inc.

Dialpad Communications, Inc. is the leading global provider of Voice over Internet Protocol (VoIP) solutions for carriers, businesses and consumers. Leveraging its patent-pending Vega technology, Dialpad enables any IP addressable device to become a phone. Dialpad licenses its platform VoIP technology to a number of partners to bring high quality, reliable and low-cost VoIP dial tone directly to the phones that businesses and consumers use today. Current partners include leading technology companies such as Cisco Systems, Genuity and Level 3, and investors include Serome Technology, Inc., CMGI @ Ventures, Sterling Payot, Mokwon Assets Management Co., LTD and Citizen’s Capital. The company is based in Santa Clara, CA and can be reached at 408/588-4688 or at [www.dialpad.com][2].

[1]: http://www.dialpad.com
[2]: http://www.dialpad.com


Hypercom EMV

Hypercom Corp. Thursday announced that its entire point-of-sale product line is now smart card capable and certified, and that its new ICE family of consumer-activated, tamper-resistant, touch-screen card payment terminals has been EMVCo certified.

“The movement toward smart cards is clearly accelerating. Card issuers, most notably Visa U.S.A. member banks taking advantage of the card association’s `smart Visa’ initiative, are planning large-scale rollouts of smart card-based credit and debit cards.

“In addition to the major card issuers, large national retailers like Target are embracing the technology, and to comply with new card association regulations, processors have begun upgrading their systems to support smart cards,” said George Wallner, chairman of the board and chief strategist, Hypercom Corp. “And Hypercom is proud to be a member of the Visa International Smart Partners 2000 program.” “The conversion to smart cards is being driven by the need to make e-commerce transactions secure, reduce fraud at the point-of-sale, and support new services such as loyalty,” Wallner said. “Furthermore, as U.S. consumers recognize the improved security inherent in smart card-based credit and debit cards, they will very soon demand the ability to use their new cards on the Web and at the point-of-sale in order to protect their transactions, their money and their identities.” “Hypercom’s unique global expertise with smart cards puts us in a very strong position to assist and support this migration,” Wallner stated. “We have been installing smart card systems around the world for over six years — and we now are focusing this expertise squarely on the U.S. market. Our entire family of card payment terminals — including all of our U.S. models — is now smart card capable. “This together with our experience substantially reduces the risks and costs associated with the deployment of a smart card-capable POS environment, which for some time has been cited as a major barrier to smart card adoption. There are more than 9 million terminals in the U.S. that need to be upgraded. There is much work to be done. We are ready to begin.”

Hypercom’s ICE terminals are EMVCo certified at both Level 1 and Level 2 layers. Indeed, Hypercom was the first supplier in the world to pass all of these complex EMVCo Level 2 tests. Hypercom has already rolled out several large smart card programs in Europe, Asia and Latin America. These include smart card-based credit, debit, stored value, loyalty, ticketing and e-coupon applications.

More recently, shipments of smart card-capable ICE terminals have started to accelerate in the United States, where savvy processors have begun preparing for the inevitable arrival of smart cards. Additionally, the company last year remotely upgraded its installed base of card payment terminals in the United Kingdom with the latest EMV-certified software applications.

This remote upgrade was done from Hypercom’s sophisticated and centrally located Term-Master Suite terminal management system — further demonstrating the company’s ability to keep terminals apace with evolving smart card standards — without having to upgrade hardware. Hypercom has also assisted the major acquirers in Brazil with their nationwide conversion to a smart card-based credit/debit card acceptance environment.

In addition to being smart card-ready, Hypercom’s high-performance, high security ICE card payment terminals are web-enabled and incorporate a standard HTML/HTTP web browser and multi-application open-standard operating system with firewalls.

“The issue of smart card adoption in the United States is no longer a question of `if,’ but rather a question of `when.’ The conversion to smart cards is mainly driven by the need for improved security and additional functionality.

“Just as importantly, however, there has been an overall simplification of smart card applications — namely the focus on credit and debit, as well as the decreasing cost of smart cards, and the increasing availability of cost effective smart card terminals,” Wallner said. “It is important to make smart card acceptance straightforward and simple, and we are doing just that.

“We want our customers, and the merchants using our products to know that we are a global leader in the implementation of smart card applications — including the very important EMV standards — and that we can assist them to make the transition to smart cards both smooth and risk free.”

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

Hypercom Corp. 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(TM) (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, Hypercom is independently acknowledged as the leading provider of point-of-sale card payment terminals worldwide. Demand for Hypercom’s terminals surpassed 1 million units last year alone. Hypercom today maintains an installed base of more than 4 million terminals in over 100 countries which conduct over 10 billion transactions annually.

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


BankServ Check Services

Miami-based Insta-Check, the largest independently owned check guarantee company in the U.S., and San Francisco-based BankServ announced the formation of a new joint venture company, BankServ Check Services, Inc., with headquarters in Miami.

“The new firm will combine the world-class point-of-sale electronic check conversion technology that BankServ pioneered over the past five years with Insta-Check’s successful retail check guarantee and check collection services,” said Anil Gajwani, who is president and CEO of both Insta-Check and of the new firm, BankServ Check Services, Inc., in which Insta-Check holds the majority stake.

The two firms previously announced a strategic partnership to market their combined services on October 12, 2000. Insta-Check provides check guarantee services to about 30,000 U.S. retail companies. BankServ provides POS electronic check conversion services to customers of several major U.S. banks for one of the largest U.S. credit card associations. The firm also developed POS check conversion pilot programs for Price Chopper and Wakefern stores.

Gajwani further stated that the operations, technology development and support for BankServ Check Services, Inc. will continue from the San Francisco office, “with people who have been there and have been doing it, and have extensive expertise and talent in the ACH and conversion space.” Marketing and customer service for the new check services firm will be provided from offices in Miami, according to Gajwani.

“The developers who created and managed the automated clearing house processing systems for BankServ will continue to manage these systems for the new combined company,” confirmed Kvederis. “The new BankServ Check Services firm intends to provide a seamlessly integrated, complete electronic check services product line directly to retailers and to the financial institutions who have contracted with BankServ to provide these services to their customers.”

Kvederis added that San Francisco-based BankServ would continue as a provider of Internet payment services for Web-based businesses and of wire transfer services for financial firms.

Gajwani said he believes the point-of-sale market is ready for an integrated offering of check conversion with guarantee and verification, and RCK with collections capability and reporting solutions, that BankServ Check Services will be able to offer.

“BankServ’s unique digital imaging software — which converts checks into linked digital images and ACH-ready transaction code — has made an impression on large retailers around the U.S.,” said Gajwani. “Working together in this new joint venture, we believe Insta-Check and BankServ are uniquely positioned to help large retailers, lockbox operations and other firms that batch process ACH transactions to manage the rising tide of paper checks and reduce their overhead. We will combine our joint technologies with new low-cost point-of-sale hardware and excellent customer service to offer a unique set of services no one else can match.”

About BankServ

Founded in 1996, BankServ is one of the leading U.S. providers of payment solutions for financial services companies and online businesses. The company processes nearly $3 billion a day in wire transfers on behalf of more than 100 U.S. financial firms. BankServ is considered a market leader in straight-through online electronic payment solutions for Internet businesses. Its suite of payment services includes Internet checks, ACH funds transfers, direct online account funding for financial firms, Internet global wire transfers, online credit card processing and numerous authentication and security capabilities. BankServ is headquartered in San Francisco. More information about BankServ can be found online at .

About Insta-Check

Insta-Check, Inc., based in Miami, Fla., provides check guarantee services for more than 30,000 businesses in the U.S. Privately held, the company was founded in 1978 by president and CEO Anil Gajwani. It has been the fastest growing check guarantee company in the U.S. during the last five years, and is the largest independently owned check guarantee company in the country. Insta-Check’s senior management team represents more than 75 years of experience in the check guarantee business. The company prides itself for its position as an innovator in providing leading-edge and customized solutions to the merchant community. More information about Insta-Check can be found online at .



Affiliated Computer Services has signed a deal to acquire the Business Process Outsourcing services unit of National Processing Company. NPC’s BPO services unit represents approximately 65% of NPC’s Corporate Outsourcing Solutions division or approximately $60 million in annual revenue, and is comprised of healthcare claim processing, credit card application processing and airline lift ticket processing. As part of the transaction, ACS will acquire all of NPC’s offshore operations in Jamaica, Dominican Republic and Barbados and approximately 75% of NPC’s Mexican operations. The transaction, valued at $43 million cash, is expected to close by the end of this month.


PULSE Milestone

PULSE EFT Association has crowned the network’s 20th Anniversary by processing its 3 billionth electronic funds transaction and recent acquisitions that have created a national electronic payments system that stretches from the Canadian border to the Gulf of Mexico. As part of a strategic growth plan mapped by its Board of Directors in 2000, PULSE already has carried out one network acquisition and is working on a second one. Earlier this year, it acquired OH-based Money Station, and it recently announced an agreement to merge with the Wisconsin-based pioneer network TYME. On June 24, PULSE processed its 3 billionth transaction, just 24 months after its 2 billionth transaction. It took the network 15 years to reach the 1 billion mark. In 1980, seven of the largest bank holding companies in Texas came together to create a shared system. To facilitate the creation of PULSE, the founding members tendered a $75,000 non-interest bearing loan to the program.


TU Analytic

TransUnion has introduced two new analytic products for online credit decisioning and collections scoring. ‘TransUnion Links’ streamlines the use of credit bureau based scoring systems while ‘TransRecovery’ is the latest addition to TU’s product offerings of risk and collection tools. ‘TransUnion Links’ permits lenders to automatically coordinate their use of multiple credit scoring systems to improve risk assessment and gain processing efficiencies. With ‘TransUnion Links’, credit grantors can incorporate their own sophisticated screening logic, cascading applicants through a series of customized credit score screens. ‘TransRecovery’ is a new model developed by TransUnion to predict the likelihood of collecting $50 or more from severely delinquent accounts within 12 months of scoring. Based upon information within a consumer’s credit file ‘TransRecovery’ scores more credit files returning a reliable score even when a credit file contains minimal or `stale’ credit information.


Avis Into Upromise

Avis Rent A Car, Inc. announced it will contribute five percent of rental charges into college savings accounts with tax advantages for Avis customers who enroll in Upromise, the company that makes college more affordable.

Avis is the only car rental company affiliated with the Upromise network. “A college education is one of the most important promises we make to our children,” said F. Robert Salerno, president and chief operating officer of Avis. “We view our five percent contributions towards college education as an investment in the future as well as another way we seek to customize our service. Now, renting from Avis becomes a way to save for college.”

Avis customers may enroll in Upromise by going to the Upromise Web site, http://www.upromise.com. Once enrolled, Avis renters can receive a five percent rebate on all qualifying rentals, made through a special Avis/Upromise discount number and using one of their designated credit cards. These customers will receive a contribution in their Upromise account approximately 45 days after the completion of each rental, as well as other great rates and discount opportunities.

“Avis has made an important commitment to its customers in helping them realize their dream of a college education for their children,” said June Blocklin, president of partner services, Upromise. “Together with Avis, we will change the way America’s families save for college.”

The five percent contribution is based upon rental charges before taxes, fuel, insurance charges, discounts, or other incidental charges. Avis contributions are available on all classes of Avis cars. All U.S. residents who rent from Avis in the United States or Canada are eligible to take advantage of Upromise, but the program is not applicable to customers residing elsewhere in the world.

To be eligible for Upromise contributions from Avis, reservations must be made directly through Avis, either on the company’s Web Site, http://www.avis.com or through the toll-free reservation number, 1-800-331-1212. Also, customers using the Upromise discount cannot receive a rebate on any other rate, including any corporate affiliation.

Hundreds of top companies in various consumer segments now participate in Upromise, all contributing a portion of their customers’ spending to their Upromise accounts. Avis’ parent company, Cendant Corporation, already participates in Upromise through its CENTURY 21(R), COLDWELL BANKER(R) and ERA(R) real estate brands.

Avis Rent A Car System, Inc. and its subsidiaries operate the world’s second largest general-use car rental business, providing business and leisure customers with a wide range of services at more than 1,650 locations in the United States, Canada, Australia, New Zealand and the Latin/American Caribbean region. Avis is recognized as one of the world’s top brands for customer loyalty and as the industry leader in applying new technologies to grow its business. The company is a wholly owned subsidiary of Cendant Corporation (NYSE: CD), a diversified global provider of business and consumer services primarily within the real estate and travel sectors.

For additional information and news about Avis, please log onto the Avis Web Site at .

To enroll in the free Upromise service, please visit . Brokerage services are provided through Upromise Investments, Inc., a wholly owned subsidiary of Upromise, Inc. and member NASD/SIPC.



Hong Kong’s Legislative Council gave the green light Thursday to The Bank of China Group’s Hong Kong expedited mergers which includes BOC Credit Card International. If all goes according to plan, Bank of China should complete its merger of ten affiliate banks, and affiliates in Hong Kong and Macau by the end of this year. The bank wants to merge its Hong Kong bank with nine of its eleven Hong Kong banking subsidiaries while Nanyang Commercial Bank, Chiyu Banking Corp, and BOC Credit Card-International will become subsidiaries of The Bank of China Group.