April Debt

Despite a sluggish economy, consumer debt continues to grow at faster pace than last year. During April, American consumers added $9.2 billion to total revolving debt representing an annual growth rate of 16%, according to preliminary figures released yesterday afternoon by the Federal Reserve. The sharp rise in credit card debt this year has been mostly driven by the decline in non-revolvers as evident in the declining repayment rates. Since the first of this year, American consumers have piled on $34 billion in revolving credit, mostly credit card debt. Total U.S. revolving consumer credit now stands at $697.4 billion which includes about $670 billion in credit card debt. Overall, consumer credit is growing at a 10.75% rate. At the end of April, American consumers were $1.584 trillion in debt, exclusive of home mortgages.

REVOLVING CREDIT HISTORICAL
($billions)

Apr01 Mar01 Feb01 Jan01 Dec00 Nov00 Oct00
%GRWTH: 16.0% 11.9 20.8 11.6 5.0 10.9 4.7
$OWED: $697.4 688.2 681.4 670.3 663.4 660.6 654.8

Sep00 Aug00 Jul00 Jun00 May00 Apr00 Mar00
%GRWTH: 7.8% 12.6 6.7 11.2 12.7 13.5 13.8
$OWED: $649.3 645.1 638.2 634.7 628.9 622.5 615.5

Source: Federal Reserve; revised figures as of 06/07/01;
For complete historical data visit www.carddata.com.

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Bankrate CEO Moves

William P. Anderson has been named president and chief executive officer of Nationtax Online effective immediately, announced Lee Walthall, chairman of the Nationtax Board of Directors.

“Bringing someone with Bill Anderson’s credentials on board is a very positive step and one I have looked forward to making,” said Walthall. “Nationtax is no longer in a ‘proof of concept’ stage. We know our service is viable and have a VIP list of strategic partners to prove it. Recently we’ve focused on making the strategic changes required to help the company to reach its potential. Bill brings the level of management skill and expertise Nationtax needs to reach its goals, and we’re very excited about that.”

Bill Anderson has managed both small start-ups and large mature organizations, and has vast experience in finance and accounting, acquisitions, restructuring, marketing and technology. Walthall, who started Nationtax Online in 1998, has served as president and CEO of the company. He will now relinquish those titles, but continue as chairman of the Board of Directors.

Anderson has more than 25 years experience as a senior executive in finance, technology and consulting. He recently served as CEO of Bankrate, Inc., working with the company through its initial public offering. Bankrate.com is a leading personal finance online publisher with more than 100 distribution partners, including most of the leading personal finance Internet sites.

He was previously president and CEO of Block Financial Corporation, a subsidiary of H&R Block, Inc. engaged in consumer lending, software and online financial service delivery, building revenues of $110 million. He joined H&R Block in December 1991, as vice president of Corporate Development. He served as chief financial officer of the parent company until September 1995.

Prior to his tenure at H&R Block, Anderson spent 19 years at KPMG Peat Marwick, beginning as an auditor and reaching the role of partner-in-charge of the national corporate finance practice within the management consulting department. Anderson was reared in Birmingham, and is a graduate of Auburn University with a B.S. in mechanical engineering. He holds an M.B.A. from Emory University in Atlanta. He is married and has two children.

About Nationtax Online

Nationtax Online is America’s leading Web-based business tax filing network. The Nationtax Network provides a simple, quick and accurate way for businesses to prepare, file and pay sales tax, income tax withholding and other state, federal and local business taxes completely over the Web for less than $5 per transaction. Nationtax’s service requires only an Internet connection and browser to use. Founded in 1980, Nationtax is a privately held company headquartered in Birmingham, Ala. The service is now available for businesses to file taxes in Alabama, Arkansas, California, Colorado, Delaware, Florida, Hawaii, Idaho, Illinois, Kansas, Louisiana, Minnesota, Missouri, Ohio, Pennsylvania, Rhode Island, Tennessee and Vermont, and with the IRS. To view a demonstration of Nationtax’s Web-based tax filing service, visit [www.nationtax.com][1] .

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

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NPC Promotes Sanders

National Processing Company announced Thursday the promotion of Blair Sanders to Vice President – Regional Sales.

Blair joined NPC in 1997 as a Business Analyst. In 1999, Blair was promoted to Business Manager for Regional Direct Sales. As Business Manager, Blair facilitated the development and integration of standardized business practices, measurement systems and sales focus across NPC’s 35 direct sales offices. Blair’s new responsibilities will be to manage the small to medium market accounts in the Southeast and Florida regions, which consists of ten offices and a sales force of nearly 100 professionals.

“NPC’s phenomenal success would not be possible without the dedication and leadership that individuals like Blair contribute on a daily basis,” said Christopher McNulty, senior vice president of regional sales for NPC. These individuals are what make NPC one of the premier providers of merchant processing solutions and distinguish it from the rest of the industry.”

“NPC has recently noted significant growth in our regional sales channel,” stated Mark D. Pyke, executive vice president of Merchant Services for NPC. “We are actively working to continue putting in place industry-experienced individuals with the drive to excel in this demanding sales channel. Blair is definitely one of those individuals – with four years under his belt at NPC, he has already proven to be a major contributor.”

About National Processing, Inc.

National Processing, Inc. through its wholly owned operating subsidiary, National Processing Company (NPC(R)) is a leading provider of merchant credit card processing. National Processing is 87 percent owned by National City Corporation (NYSE: NCC) ( http://www.nationalcity.com ), a Cleveland based $91 billion financial holding company. NPC supports over 500,000 merchant locations, representing nearly one out of every five Visa(R) and MasterCard(R) transactions processed nationally. NPC’s card processing solutions offer superior levels of service and performance and assist merchants in lowering their total cost of card acceptance through our world-class people, technology and service. Additional information regarding National Processing can be obtained at http://www.npc.net .

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MC Canada

MasterCard International yesterday named Walter Macnee as President of MasterCard Canada. Macnee joins MasterCard from TD, where he had been SVP with full product management and client service responsibility for payment cards and personal lending. In that role, he held the position of Vice Chairman of the VISA Canada Board of Directors, and served as a director of the VISA International board. MasterCard has 16.9 million cardholders in Canada and 600,000 acceptance locations, according the RAM Research ([www.ramresearch.com][1]).

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

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UK Maestro

Europay International – Europe’s leading payments association – this week announced that Barclaycard Merchant Services is to acquire Maestro transactions in the UK. This announcement was made at Europay’s fifth Members’ Meeting in Munich, Germany.

Maestro acceptance in the UK will take a major step forward this August, when Barclaycard Merchant Services – one of Europe’s largest acquirers and processors of card transactions – will acquire transactions for Maestro, the world’s leading debit brand.

![][1] Major retailers in the UK will start to accept Maestro within the next eighteen months as a result of this arrangement and other agreements being progressed with UK acquiring banks. With 374 million Maestro cards in circulation worldwide and over 190 million in Europe, this represents a significant move for the acceptance of Maestro across Europe.

Barclaycard Merchant Services is upgrading its systems in order to accept Maestro in appropriate outlets and will rapidly roll these out to a large part of its point of sale terminal base. The majority of these merchant locations will complete roll-out by the end of this year, with the rest by year-end 2002. Consumers travelling to the UK from abroad will now be able to shop at key retailers with their Maestro debit card. Moreover, retailers accepting Maestro will be in a position to accept an alternative to cash from foreign cardholders. This means they are likely to benefit from cardholders making higher value and impulse purchases.

Tony Slater, Commercial Director at Barclaycard Merchant Services said, “We are delighted to be partnering with Europay International to offer Maestro acceptance to our retailers. This will enable them to offer a greater choice of card acceptance to their customers and benefit from incremental sales, particularly from foreign cardholders.”

“This is a critical move towards completing Maestro acceptance across Europe and further highlights acquirer confidence in this excellent programme,” said John Bushby, Marketing Director at Europay International. “Barclaycard Merchant Services is one of the largest and most reputable acquirers in the world, and we are pleased to work with them to expedite Maestro acceptance in the UK,” he continued.

[1]: /graphic/mastercard/maestro.gif

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McElhatton Gets Ignited

Ignite Sales, Inc. announced yesterday that Jerry McElhatton, President of MasterCard’s Global Technology and Operations has accepted a seat on the Board of Directors joining Bob Mahoney as an outside member. Mr. McElhatton also serves on the Board of Advisors of BMC, a major software developer and Mascon Global Limited, a major Information Technology consulting and development company. He is a trustee of St. Louis University as well as a number of civic organizations.

“Financial institutions globally recognize and highly respect Jerry’s expertise in technology and operations, gained from executive management positions with Ameritrust, Bank One and First Republic (now Bank of America). He brings a welcomed dimension to our board,” stated Al Fleener, board member of Ignite Sales, Inc. and general partner of Seed Capital Partners, an early stage venture capital investor in technology in Texas.

Julie Hamrick, President of Ignite Sales, joins in welcoming Mr. McElhatton, “By contributing his technology and operations knowledge to our board, Mr. McElhatton will significantly strengthen our Company’s strategic direction. His experience is synergistic with Mr. Mahoney’s market knowledge and both are already helping us leverage large, national partnerships and alliances.” (Mr. Mahoney served as CEO of Diebold Corporation.)

Ignite’s Internet service provides real time customer financial planning then promotes appropriate bank products while measurably generating new account leads. New account applications result at unprecedented levels while minimizing costs.

About Ignite Sales, Inc.

Ignite Sales(R) is an online service provider that enables financial institutions (FI’s) to build customer loyalty and retention using interactive and personalized cross-selling methods. The company’s MoneyMatch(TM) and ProductMatch(TM) services allow FI’s to convert their web traffic to immediate revenue by matching consumers with products at the consumer’s time of need, while also predicting future consumer purchases using the powerful, back-end marketing engines. Ignite Sales was named as one of five “Leading Online Financial Planning and Advice Providers,” according to a recent report by IDC, a leading global market intelligence and advisory firm. Ignite’s clients include: Bank One, Citigroup, Frost Bank, Sovereign Bank and Wells Fargo. For more information, visit [www.ignitesales.com][1].

More about Jerry McElhatton

Jerry McElhatton is senior executive vice president for MasterCard International. He is responsible for Global Technology and Operations (GTO), ensuring MasterCard’s technology leadership and quality of operations. Mr. McElhatton also is taking the lead in company wide process change efforts, aimed at improving MasterCard’s fundamental business process, eliminating duplication, reducing costs, and redeploying resources in ways that add maximum value for key customers.

Before joining MasterCard, Jerry was president and chief executive officer of Dallas-based Payment Systems Technology & Consulting. He also served for 10 years as president and chief executive officer of First Republic Bank Services Corporation. In addition, Mr. McElhatton held executive management positions in operations and technology with Ameritrust and Bank One. Mr. McElhatton earned his bachelor’s degree in industrial management from Franklin University, and attended the Western Michigan University graduate degree program.

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

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EastPoint Sale

Marshall & Ilsley’s Metavante Corp. announced yesterday it has signed an agreement to sell its M&I EastPoint Technology subsidiary to a newly formed entity owned by a group of current M&I EastPoint clients. M&I EastPoint will be merged into the new company, EastPoint Technology LLC, which will have its headquarters in NH, from which EastPoint will continue to operate.EastPoint sells client/server-based banking software to the community and small-bank markets. Metavante offers customer relationship management, electronic banking, electronic funds transfer and card solutions, electronic presentment and payment, and other financial technology services.

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PSI-GATE & DIS

Payment Services Interactive Gateway Inc.
announced a strategic alliance with Dominion
Information Services. Dominion will make PSiGate’s card-based transaction
processing services available to its advertiser base in British Columbia.
PSiGate, a leading e-commerce solutions company, will provide online retailers
with mission-critical back-end purchase transaction and credit authorization
systems, Internet Merchant ID’s, industry leading SSL encryption and fraud
protection, and an open, standards-based Application Programming Interface so
that merchants can transform a web site into a powerful source of revenue.

Dominion Information Services(TM) provides one point of contact for
virtual business needs. From site development to e-commerce solutions to
complete web based advertising campaigns for business, the company’s goal is
to be the ultimate virtual link between buyers and sellers, any time,
anywhere. As a leader in the field of online advertising since 1996, Dominion
has been committed to helping businesses exceed their objectives for their
Internet based business ventures. The company provides reach through its
growing network of premium advertising properties and delivery through web
design and development services and e-commerce solutions. With over 70 years
experience in the advertising industry to draw upon, Dominion Information
Services(TM) can provide your business with the assurance that it will be here
in the future to help Canadian businesses with their advertising needs.
PSiGate can now offer Dominion Information Services merchants Internet
gateway services to process and authorize credit card transactions in real-
time, deposit merchant sales into thousands of banks across North America, and
provide industry-leading fraud protection for merchants through extensive
fraud checks, on a 24/7 basis. PSiGate can issue Merchant Accounts for Visa
and MasterCard which support every Canadian bank, which allows retailers to
offer their customers credit card transactions over their web site storefront,
without substantial security deposits or high reference barriers.

“Dominion Information Services recognizes the robust, enabling technology
that PSiGate brings to the e-commerce arena,” said Robert Fenos, VP Sales of
PSiGate. “Merchants setting up their online storefronts with Dominion require
seamless integration, industry-leading fraud protection, and access to the
widest range of credit card/banking institutions. Consumers demand security,
privacy and ease of use for their card-based transactions. PSiGate provides
the optimal back-end solution for all parties involved in the online shopping
experience.”

“Dominion is delighted to partner up with PSiGate for our back-end e-
commerce payment processing requirements, as they provide best of breed
product delivery and have simplified the merchant ID application process in a
significant way. They truly seem to understand the needs of small business and
we are happy to be passing on these benefits to our customer base”, said Paul
Wood, Director of Marketing for Dominion.

About Dominion Information Services

Dominion Information Services(TM) has positioned itself as a leader in
Internet Advertising Solutions for Canadian companies who want to reach the
local, national or North American market and for American companies who want
to reach the rapidly growing Canadian Market. Not only do we provide effective
virtual advertising campaigns for our business partners, we also provide
custom site design and development and e-commerce solutions to help you
service the customers we help you reach.

About PSiGate

Payment Services Interactive Gateway Corp. (PSiGate – www.psigate.com)
empowers businesses on the Internet by providing secure, cost-effective and
trusted e-commerce solutions. PSiGate provides an easy and seamless interface
to new or existing online commerce enterprises, offering a reliable means of
real-time payment collection and financial transaction processing. Management
services include automated shipping calculations, fraud screening, and
financial account reporting. PSiGate also provides VISA, MasterCard and
American Express Internet Merchant Accounts (Merchant IDs) for Canadian-based
businesses and companies wishing to enter into the Canadian marketplace.

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EXECUTIVE BUSINESSCARD

Europay International is launching a new business card that includes the
services of a personal assistant, on-call 24 hours a day. Called the
Eurocard®-MasterCard Executive BusinessCard, it includes a “Personal Assistant”
service available via phone around the clock, to handle travel, entertainment
and meeting services for time-pressed executives and business owners.

Personal Assistant services include

·Travel Safe – for emergency medical and legal assistance

·Time Solve – up to the minute travel information, saving time and money

·Travel Solve – booking facilities for lifestyle and business needs

·Tailored Services – for individual needs, e.g. translation, meeting room
bookings

“The Executive BusinessCard links high credit limits and extensive management
information with concierge-type Personal Assistant services, all on one
business card,” said John Bushby, Marketing Director at Europay International.
“This card saves time and makes life easier for executives and business owners
at home or abroad.”

The dedicated cardholder helpline has staff on line to answer questions in over
140 languages, anytime, any day, anywhere in the world. In addition, it
provides lost and stolen card reporting, emergency cash advance and emergency
card replacement services within two working days.
“Whether a cardholder needs a restaurant in Reykjavik, or translation
assistance in Brussels, the Personal Assistant is there to help,” Bushby added.
In addition, the Eurocard-MasterCard programme offers free access to Norton
Anti-Virus software by Symantec. This software is coupled with the services of
an Internet Protection Centre for technical support and virus-updates.
The Executive BusinessCard offers unsurpassed global acceptance at more than 21
million locations worldwide – three times the usage power of the nearest
traditional business payment solution. It also offers cash flow management
through Smart Data OnLine, an online service that help businesses manage their
travel and entertainment expenditures. Smart Data OnLine is only available to
Eurocard-MasterCard cardholders.

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Barclaycard & Maestro

Barclaycard Merchant Services is to acquire Maestro transactions in the UK.
This announcement was made at Europay’s fifth Members’ Meeting in Munich,
Germany.
Maestro acceptance in the UK will take a major step forward this August, when
Barclaycard Merchant Services – one of Europe’s largest acquirers and
processors of card transactions – will acquire transactions for Maestro, the
world’s leading debit brand.

Major retailers in the UK will start to accept Maestro within the next eighteen
months as a result of this arrangement and other agreements being progressed
with UK acquiring banks. With 374 million Maestro cards in circulation
worldwide and over 190 million in Europe, this represents a significant move
for the acceptance of Maestro across Europe.

Barclaycard Merchant Services is upgrading its systems in order to accept
Maestro in appropriate outlets and will rapidly roll these out to a large part
of its point of sale terminal base. The majority of these merchant locations
will complete roll-out by the end of this year, with the rest by year-end 2002.
Consumers travelling to the UK from abroad will now be able to shop at key
retailers with their Maestro debit card. Moreover, retailers accepting Maestro
will be in a position to accept an alternative to cash from foreign
cardholders. This means they are likely to benefit from cardholders making
higher value and impulse purchases.

Tony Slater, Commercial Director at Barclaycard Merchant Services said, “We are
delighted to be partnering with Europay International to offer Maestro
acceptance to our retailers. This will enable them to offer a greater choice of
card acceptance to their customers and benefit from incremental sales,
particularly from foreign cardholders.”

“This is a critical move towards completing Maestro acceptance across Europe
and further highlights acquirer confidence in this excellent programme,” said
John Bushby, Marketing Director at Europay International. “Barclaycard Merchant
Services is one of the largest and most reputable acquirers in the world, and
we are pleased to work with them to expedite Maestro acceptance in the UK,” he
continued.

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Tidel Creditors

Tidel Technologies, Inc. announced that an agreement had been reached with Montrose Investments Ltd., the holder of $15 million principal amount of Tidel’s 6% Convertible Debentures, to extend the first “put date” from June 5, 2001 until June 26, 2001. The parties agreed to the extension to allow time for continued discussions regarding potential modifications of the terms of the Debentures. The amended date coincides with the first “put date” for the remaining $3 million of Debentures held by the Acorn Investment Trust.

Tidel also announced that it had reached an agreement with its senior debt holder, the Chase Manhattan Bank, to amend the terms of its $10 million Revolving Credit Agreement. The amendment provides for a temporary adjustment to the components of the borrowing base to permit additional credit availability of $1 million through August 31, 2001.

In addition, Tidel reported that yesterday it received a $1.65 million prepayment in full from a customer on two notes receivable originally due in March and May 2002. The notes had been issued pursuant to the Company’s distributor financing program.

Tidel Technologies, Inc. is one of the nation’s leading manufacturers of automated teller machines and cash security equipment designed for specialty retail marketers. In 2000, Tidel was the leading provider of ATMs to non-bank locations in the U.S., and ranked 55th in Forbes’ list of the 200 Best Small Companies in America. To date, Tidel has sold more than 30,000 retail ATMs and 115,000 retail cash controllers in the U.S. and 36 other countries. More information about the company and its products may be found on the Internet at www.tidel.com.

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GEMPLUS FORECAST

Gemplus International S.A. announced that results for its second quarter
and fiscal year would be lower than previously expected. The company
indicated that due to a slowdown in GSM subscriber growth and inventory
issues at operators, it was reducing its expectations for the quarter and
remainder of the year. The company now expects revenue for the second
quarter to be approximately 265 million Euro, which would be down 4% from
the same quarter a year ago. Operating loss for the quarter, excluding
restructuring charges, is expected to be 10-15 million Euro. For the full
year, the company expects revenue to be 1,225 to 1,265 million Euro, or
2-5% growth from FY2000 levels with operating profit, before restructuring
charges, between 5 and 35 million Euro.

“All our businesses are doing extremely well except for the wireless
segment of our Telecommunications division. We are experiencing a softening
in SIM card demand due to a slowdown in GSM subscriber growth and inventory
issues at operators,” said Antonio Perez, president and chief executive
officer, “The wireless segment is approximately 50% of our business and
therefore significantly impacts our total company performance. We believe
this is an industry-wide phenomenon and that we are, in fact, maintaining
if not gaining market share.”

The company indicated that it was experiencing softer SIM card demand,
particularly in Asia. The company also stated that it was receiving weaker
purchasing forecasts for the balance of the year from several of its large
wireless operator customers. “There are two factors at work here,”
continued Perez, “First, we believe that GSM subscriber growth has slowed.
This is consistent with a number of recent announcements made by several
handset manufacturers, component suppliers and market analysts about growth
in the GSM market. Second, many operators have large inventories, which are
taking longer to work through given the slower growth.”

Using statistical analysis of SIM card sales performance versus GSM handset
sales figures over the last 2 years, Gemplus showed that there is a high
correlation between company SIM shipments and the growth in GSM handsets.
As new GSM handset sales have slowed, so too have SIM card sales. Based on
discussions with operators, the company now believes that the market for
global handsets will be about 400 million units, the market for GSM
handsets will be approximately 240 million units (assuming 60% GSM share)
and using a multiplier of 1.35 (the historical relation between SIM cards
and handsets), the market for SIM cards will be approximately 324 million
units. Because Gemplus expects to maintain, and possibly increase, its 42%
market share in SIM cards sales, this implies that the company expects to
ship approximately 136 million SIM cards during 2001. The revised guidance
reflects the reduced SIM card forecast and the expectation of some price
pressure in the second half of 2001, although this has not been experienced
to date.

Turning to inventory levels, Gemplus stated that, after recent discussions
and some physical inventories conducted at some of its key customers, it
now believes that the inventory overhang may last into the fourth quarter.
The company announced that it has begun to implement a series of
operator-specific inventory management programs to improve its visibility
going forward.

In closing, the company reiterated that its revised guidance for 2001 is
due to a temporary slowdown in the GSM market, which is creating SIM
inventory issues at its customers. The company noted that it had already
taken the appropriate short-term actions such as implementing strict
hiring, travel and spending controls to deal with the current business
climate. It was also making the appropriate long-term adjustments to the
cost structure and business model to better position the company for the
future. Moreover, Perez said, “We feel very good about the many long-term
growth opportunities in the wireless industry. And, the success we are
experiencing in Financial Services reinforces our belief that it too will
become a substantial contributor to our growth in the future.”

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