MIST 4Q/00

MIST Inc. reported results for the first quarter of the 2001 fiscal year.

Revenue for the quarter was $4.9 million compared to $6.5 million for the same period in 1999. The decline was due to the acceleration of purchases in 1999 in preparation for the Year 2000. In the first quarter of fiscal 2000, the Company was completing a number of certifications required to sell wireless units. Several of the certifications were not completed until late in the quarter, which delayed the Company’s ability to sell its wireless products in the US.

Operating loss from continuing operations for the first quarter was $1,800,000 compared to income of $661,000 for the same period in the prior year. Income from discontinued operations was $928,000, compared to a loss of $390,000 for the same period in the prior year. Discontinued operations includes the results of the US card facility up to November 14, 2000, the date it was sold, the results of the Canadian card facility, which was sold in February 2001 and the results of NBS Holdings Limited. The Company recorded a gain on the sale of the US card facility of $9.3 million during the quarter. Net income applicable to common shares for the quarter was $7.1 million, or $0.21 income per share on a fully diluted basis, compared to a loss of $124,000, or ($0.00) loss per share on a fully diluted basis for 1999.

Operating highlights include:

– The Company focused its efforts on completing wireless network certifications in preparation for the introduction of two new products: FreedomGateTM and MIST Freedom III. MIST Freedom III (“FIII”) is nearing completion and should be available for sale in April of this year. FIII is a desktop, Internet enabled, wireless point of sale transaction terminal with a touch screen. FIII was designed to take full advantage of the features of FreedomGate, our software platform for enabling wireless transactions and eCommerce. FreedomGate should be available to select customers during the second fiscal quarter of this year, and more widely available in the third quarter of this fiscal year. The Company was also successful in certifying MIST Freedom II with several large US based transaction processors. These certifications are essential to sell the product in the US market.

– Development of MIST FreedomSped was completed and will be available for sale during the second quarter of the fiscal year. FreedomSped is a secure pin entry device, or pinpad, that supports smart card transactions. It is available for our wired Turbo product, MIST Freedom III or may be attached to PC based cash registers, allowing customers the opportunity to cost effectively serve the growing smart card market.

Outlook

“It is a very exciting time at MIST. Development of FreedomGate and MIST Freedom III are nearing completion, and customer reaction to our technology has been very positive,” stated Charles E. Lee, President and CEO of MIST Inc. “We look forward to bringing our customers great technology and innovation this year. Our re-organization is nearly complete and our energies are entirely focused on bringing our new wireless products and services to market successfully.”

About MIST Inc.

MIST Inc. (TSE: MIS), a leading global provider of wireless transaction-enabling technologies, is in the business of designing, manufacturing, and distributing wireless and wired Point-of-Sale (POS) solutions, including FreedomGateTM, our wireless enabling gateway platform. MIST’s clients include Canadian and international banks, financial institutions, credit and debit card processors, as well as retail, hotel, restaurant, healthcare, and loyalty customers. The “MIST Freedom” family of wireless transaction terminals was developed to complement its range of existing products. MIST has business offices in Canada, and the United States.

For more details on MIST earnings visit CardData ([www.carddata.com][1]).

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

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FDC Europe

First Data Corp. officially announced Monday that it has changed the trading name of its UK subsidiary FDR Limited to First Data Europe. FDE serves more then 50 financial institutions, 450,000 merchant locations, and 28 million cardholders in the United Kingdom, Germany, Spain, The Netherlands and the Middle East. First Data Europe already processes nearly seven million smart card accounts, which is expected to grow to 10 million by year-end 2001. FDE has provided credit and debit card-processing services in Germany through an agreement with BayerischeHypothekenWechselBank AG (Hypo Bank) since 1996. FDE now processes approximately one million accounts for its six German clients who also include Advance Bank and Dresdner Bank. First Data began its operations in Spain as First Data Iberica in 1997 through a joint venture with Negocios Informaticos, S.A.. Last year, First Data Iberica processed more than 90 million transactions on behalf of merchants and held 360,000 cardholder accounts on file. First Data’s merchant processing operation currently handles all transaction processing for Lloyds TSB and HSBC in the United Kingdom.

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E*Trade ATM

E*TRADE Access Inc., a wholly owned subsidiary of E*TRADE Group Inc., has selected Postilion software by Mosaic to enhance the performance of the E*TRADE ATM network. Postilion’s modular system will enhance efficiencies by providing a more streamlined environment for processing and monitoring transactions. Immediate upgrades also include a new on-screen transaction interface.

In addition, by implementing Mosaic’s Postilion system, E*TRADE Access is taking an important first step to creating the first ATM network that will provide customers with access to both E*TRADE Bank accounts and E*TRADE Securities brokerage accounts(1). Using Postilion’s flexible middleware solution, E*TRADE Access will develop the functionality that allows customers to make withdrawals, perform balance inquiries and transfer funds between their E*TRADE Bank and E*TRADE Securities brokerage accounts. Mosaic’s Postilion system will route transactions in a secure environment, connecting E*TRADE Bank, E*TRADE Securities and the E*TRADE Access ATM terminal. Integration of the Postilion system into the E*TRADE ATM network also lays groundwork for future development of advanced ATM functionality.

“The adoption and integration of Postilion is fundamental to the future of E*TRADE’s ATM strategy,” said Doug Steck, Head of E*TRADE Access. “This transitions the machines into a next-generation network of ATMs with Windows NT-based operating systems. Mosaic has created a dependable application that will allow E*TRADE to continue down its path of delivering unique products and services currently unavailable through other ATMs.”

The E*TRADE ATM network differentiates E*TRADE Group in the market for online financial services. The company plans to use the network to advance overall growth, revenue diversification and profitability while serving as a cost-effective delivery channel for cross-selling the company’s growing range of integrated financial products and services.

“Working with E*TRADE Access represents an exciting opportunity to provide a system that addresses both physical and virtual financial worlds,” said Johan Dreyer, executive chairman of Mosaic Software. “We are proud that the Postilion system was selected to satisfy the growing needs of such a dynamic, ground-breaking and successful organization.”

About Mosaic Software

Mosaic Software is a leading provider of Microsoft Windows NT-based electronic funds transfer (EFT) software. Mosaic’s Postilion product is used worldwide for ATM driving/monitoring, EFT switching and routing, POS credit/debit card transaction processing, Internet/call center payment authorizations, WAP and mobile commerce applications. Mosaic Software has offices in the United States, United Kingdom, South Africa and Australia. With more than 500 installations, clients include ATM owners, financial institutions, retailers, card issuers, Internet service providers, telco data processing servicing providers and some of the foremost players in the emerging online industry.

About E*TRADE Access

E*TRADE Access Inc. is a wholly owned subsidiary of E*TRADE Group Inc. Founded in 1993, the Company is a pioneer of the independent ATM industry and the nation’s largest off-premise ATM network providing a turnkey solution for a growing number of consumer-based businesses. With a network of 35 dealers and more than 10,000 ATMs, E*TRADE Access is the third largest ATM network nationwide based on ABA Data as of July 27, 2000. The company offers a proprietary centralized network operations center providing 24 x 7 remote monitoring and real time distribution of software and services.

About E*TRADE Bank

E*TRADE Bank is a wholly-owned subsidiary of E*TRADE Group, Inc. Deposits at E*TRADE Bank are insured up to $100,000 by the FDIC. Based on FDIC data as of February 5, 2001, E*TRADE Bank is the nation’s largest pure-play Internet bank and is the only pure-play Internet bank to be ranked among the top 19 federally chartered U.S. savings banks based on both assets and deposits. As of December 31, 2000, E*TRADE Bank had over $11.0 billion in assets, more than $5.6 billion in deposits and over 362,000 customer accounts. E*TRADE Bank can be accessed at etradebank.com or 1-800-ETBANK-1.

About E*TRADE

E*TRADE is a global leader in online personal financial services, offering value-added investing, banking and research features, premium customer service and a redundant, proprietary Stateless Architecture(R) infrastructure. In addition to the U.S., E*TRADE presently serves customers in Australia, Canada, Denmark, Korea, Japan, New Zealand, Norway, South Africa, Sweden, and the U.K., through branded web sites. E*TRADE Securities, Incorporated (Member NASD/SIPC) and its parent company, E*TRADE Group, Inc., have offices in Northern California and in other major business centers in the U.S. and worldwide.

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Prism POS

Paymentech’s Prism Processing Services has introduced two new POS offerings for community bankers and their merchant customers. Prism is offering Telecheck’s ‘Eclipse’ terminal, the first integrated payment terminal designed to provide support for electronic check conversion, and a proprietary gift card solution that will integrate gift card transactions with credit card processing. Prism’s solution, featuring the ‘Eclipse’ terminal, offers a comprehensive payment solution that includes the TeleCheck ‘Electronic Check Acceptance’ service. Prism’s gift card solution is processed through Paymentech Network Services and eliminates the need for extra equipment and stand-beside applications when the merchant utilizes Paymentech for authorization and data capture services. Prism gift card services encompass customized plastic, transaction processing, specialized reporting, help desk support and database maintenance

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MPS & Universal

Fifth Third Bank’s Midwest Payment Systems has signed a definitive agreement to acquire 49% of the outstanding common and preferred stock of WI-based Universal Companies. Universal has a client base of over 50,000 merchants comprised of small- and medium-sized merchants. In 2000, Universal Companies processed over $4 billion in transaction volume, up from $3.2 billion in 1999. During its two most recently completed fiscal years, Universal Companies generated net revenues of approximately $73 million and $56 million, respectively.

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Easiest Online Cards

First USA’s ‘E*Trade Platinum VISA’ card ranked as the easiest credit card to apply for online. Based on benchmark data released yesterday by OR-based WebCriteria, E*Trade Bank ranked highest overall among Internet only banks and traditional bank sites, while Fleet Bank led the traditional banks in ease of use. The research firm says Internet only banks easily beat out traditional bank Web sites for the best credit card application process. Other sites ranked included pure-plays Directbanking.com, First Internet Bank and Umbrella Bank, and traditional banks Bank of America, Bank One, and First Union. The sites were ranked in order of the time and effort required to apply for a credit card online according to WebCriteria’s ‘Task Analysis’ service. Internet only banks evaluated had the lowest time and effort with an average of over four minutes, whereas traditional banks had an average of over five minutes to complete the task. The ‘Task Rating’ survey results show: E*Trade Bank and Umbrella Bank with 4 stars; Fleet and Bank One with 3.5 stars; First Internet, Directbanking.com, and First Union with 3 stars; and Bank of America with 2.5 stars.

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NPC 2000

National Processing Company , a leading provider of merchant credit card processing and a wholly owned subsidiary of National Processing, Inc., reported significant gains in merchant card services and corporate outsourcing solutions transaction and sales volumes for 2000.

Merchant card services volumes reached record levels. This business unit authorized and settled approximately 2.8 billion transactions resulting in approximately $127 billion in card-based sales volume. This represented 26 percent and 22 percent increases respectfully. In 1999, merchant card services authorized and settled more than 2.2 billion transactions resulting in more than $104 billion in card-based sales volume.

The corporate outsourcing solutions business unit also achieved record volumes as settled funds totaled approximately $85 billion in 2000. This represents a 15 percent increase from $74 billion in settled funds for 1999.

“We definitely took it up a notch in 2000,” stated Thomas A. Wimsett, president and chief executive officer of NPC. “The total sales volume that we processed and settled on behalf of our clients increased by 19 percent to well over $200 billion in annual sales volume. Clearly, NPC plays a significant role in the payment processing industry. In addition, NPC is well positioned for another year of strong growth — with consolidated revenues projected to increase in the 11 to 14 percent range and EPS projected to increase in the 15 to 20 percent range.”

About National Processing Company

NPC is a leading provider of merchant credit card processing. NPC is 87 percent owned by National City Corporation (NYSE: NCC) ( [http://www.national-city.com][1] ), a Cleveland based $89 billion financial holding company, supporting over 500,000 merchant locations, representing one out of every six 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 NPC can be obtained at [http://www.npc.net][2].

[1]: http://www.national-city.com/
[2]: http://www.npc.net/

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Lynk Hires Paull

Lynk Systems, Inc. announced the addition of Ken Paull to the newly created position of executive vice president of sales and marketing. Paull will take on responsibility for the rapidly growing POS, ATM, Stored Value and Internet Divisions, as well as all marketing functions.

“Ken’s industry expertise and extensive contacts will be invaluable in managing Lynk’s channel strategies and guiding our overall market direction,” said Ed Uzialko, Lynk’s president and CEO. “He will be able to accelerate Lynk’s momentum in key markets including petroleum, grocery, retail and hospitality, where the company has been making significant inroads.”

Prior to joining Lynk, Paull was vice president of sales and marketing for Triton Systems. He built a sales and marketing team that helped move the company into the top tier of major ATM manufacturers. In addition, he helped guide the company’s expansion outside the U.S., positioning Triton as a worldwide market leader for cash dispensers.

Before joining Triton, Paull was national sales manager and then general manager for VeriFone’s retail division. His team was responsible for the product, marketing and sales strategies that enabled VeriFone to capture a majority of the grocery, drug and video markets for payment systems. This group was regarded as a driving force behind the wide scale adoption of integrated, customer activated debit systems in the U.S.

“As a key vendor to Lynk over the past nine years, I have been extremely impressed with the company’s explosive growth, in terms of product diversification, talented personnel and customer accounts,” says Paull. “I’m excited to have the opportunity to enhance Lynk’s sales and marketing efforts in its core ATM and POS businesses, as well as exploit the growth potential of our emerging National Accounts, Internet and Stored Value Divisions.”

About Lynk

Lynk is a proven leader in electronic payment, cash dispensing and e- commerce services. The company processes transactions initiated by credit and debit cards, checks, and other access cards from merchant point-of-sale terminals, ATMs and web sites. Lynk also provides related services such as the issuance of special purpose mag stripe cards, which facilitate electronic funds distribution.

Lynk controls the entire processing sequence, including sales, merchant payment equipment, design and hosting of Internet store fronts, transaction authorization, capture, settlement and customer service. This “in-sourced” model facilitates a truly integrated single-source service that gives Lynk customers one-call support for all their processing needs. Lynk’s proprietary technology and comprehensive network connectivity offer customers of all sizes unsurpassed processing performance.

Founded in 1991, Lynk is located in Atlanta, Georgia and has earned recognition as one of the fastest-growing companies in the industry by Inc. magazine and Deloitte & Touche. Additional information is available at [http://www.lynksystems.com][1] .

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

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Discover Merchant Fees

For the first time in six years Discover is raising merchant fees. The basic discount rates will remain at the same level but Discover is adding a per transaction fee for all merchants. The new 8 cent per transaction fee will take effect April 1. Discover said the new fee represents about 10 basis points for the average ‘Discover Card’ transaction. Discover is also launching a new version of ‘Tran$action Tracker’ later this year which will enable merchants to have free Internet access to transaction reporting, including access to ticket retrieval, and chargeback information. Discover offers the lowest merchants fees of all the major U.S. brands with transaction fees averaging below 2.0% of each sale, versus 2.0% for VISA/MasterCard, and 2.69% for American Express. Discover logged more than $90 billion in transaction volume for 2000, according to CardData ([www.carddata.com][1])

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

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Bankruptcy 2000

While there are mounting concerns that personal bankruptcies will rise this year, the final tally for 2000 shows a 5% net decrease over 1999. According to data released Friday by the Administrative Office of the U.S. Courts, the total number of bankruptcies filed during the 2000 calendar year totaled 1,253,444 compared to 1,319,465 for the previous year. It is the second year in a row that bankruptcies have decreased. The drop in filings was mainly due to fewer chapter 7 bankruptcy filings, particularly chapter 7 non-business filings. Of the total number of bankruptcy filings for the 2000 calendar year, there were 859,220 chapter 7 filings, a 7.3% decrease from the 927,074 filings from the same period in 1999. Chapter 7 bankruptcies represent 69% of all non-business bankruptcies during calendar year 2000. The next largest group of filings in 2000 was the chapter 13 filings at 383,894, which rose 0.4% from 382,214 in the 1999 calendar year. The total number of filings for the fourth quarter of 2000 was 310,169, slightly up from the third quarter 2000 by 0.48% but down 2.7% from the same period in 1999.

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Advanta’s Focus

Advanta Corp. held a conference Friday with analysts and institutional investors to reiterate its increased focus on the business credit card business. Advanta Business Cards ended the year 2000 with managed receivables of $1.66 billion, as compared to $1.53 billion at the end of 3Q/00 and $1.04 billion at year end 1999. According to CardData (www.carddata.com), Advanta currently has about 600,000 MasterCard business card accounts, one of the largest such portfolios in the U.S. Advanta also projected Friday that expects its 2001 fiscal year operating earnings from Business Card and Advanta Partners to be approximately $1.41 per diluted share. Advanta is currently in the midst of selling its mortgage business to Chase. (CF Library 11/27/00; 1/22/01; 1/24/01)

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Top 10 Accounts

The nation’s leading bank credit card issuer also leads all major players with the highest charge volume per active account. According to CardData, First USA/Bank One has the highest average balance per active account. Sub-prime leaders, Capital One, Providian and Household posted the lowest average balances and charge volume.

TOP 10 ANALYSIS
(as of 12/31/00)

RANK/ISSUER Avg Bal Avg YTD Vol
1. Citigroup $3322 $7121
2. MBNA $2488 $3724
3. First USA $3365 $6851
4. Discover $1979 $3786
5. Chase $2742 $4606
6. Providian $2342 $2307
7. BofA $2761 $6193
8. Cap One $1268 $2094
9. Household $1689 $3667
10. Fleet $2774 $3604

Avg Bal – per active account; Avg YTD vol – per active account
Source: CardData (www.carddata.com)

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