Tax Incentives

American Express announced yesterday it will award double air miles to cardholders charging individual federal taxes this year. AmEx also announced a new third-party payment processor to handle the income tax transactions on its cards. Under a special promotion, holders of ‘Classic’, ‘Gold’ or ‘Platinum’ ‘Delta SkyMiles’ credit cards will earn double ‘SkyMiles’ when they use their card to pay individual federal taxes from Feb 15-Apr 16. Corporate cardholders and holders of the ‘Delta SkyMiles Options’ card will not be eligible for the extra miles. Participants in ‘Membership Rewards’ will likewise not receive bonus points for tax payments. AmEx also announced yesterday it has added a new third party payment processor for credit card tax payments. CT-based PhoneCharge, Inc. will be used for the first time this year by AmEx. Since 1999, AmEx has exclusively used Official Payments Corp. as its third party payment processor. In addition to charging federal tax payments AmEx cards can be used to charge state income taxes in 17 states and the District of Columbia, nearly double the number of states that accepted AmEx cards for tax payments last year.

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NestorCommerce Nabs Williams

NestorCommerce, a division of Nestor, Inc., announced that Elizabeth Williams has joined the Company as Director of Business Development. Ms. Williams’ appointment is part of a new business initiative to pursue alliances for the Company’s pattern-recognition technology in emerging, high-growth markets of financial services, telecommunications, Internet commerce and insurance.

“We’re very excited to have Elizabeth on our team,” says Sushmito Ghosh, President of NestorCommerce. “Her wide experience establishing successful business partnerships in North America and Europe will be instrumental in helping us to grow our distribution channels, alliances and resellers in the global marketplace. Elizabeth’s background in analytical modeling solutions will help us to add value to our partners’ offerings and replicate the successes we’ve achieved with our existing partners.”

“I’m delighted to join Nestor at such an exciting time,” Ms. Williams says. “Nestor has a premier reputation in applying its neural network-based fraud prevention solutions in electronic banking, and I look forward to helping to drive further growth in the market through alliance development. At the same time, the wealth of new opportunities that have presented themselves in the telco, e-commerce and insurance verticals are also very exciting, and I look forward to contributing to the Company’s success in these new verticals.”

As Director of Business Development, Ms. Williams is responsible for identifying revenue-generating opportunities for Nestor’s fraud detection and customer loyalty solutions. Prior to joining Nestor, Elizabeth served as the Sales and Marketing Manager for Math Consulting Group AG, based in Zug, Switzerland. In this capacity, Elizabeth helped launch, position, and sell algorithmic-based decision-support software for the fixed income market, as well as seeking out viable partnerships within the European financial community. Elizabeth holds a Bachelor of Arts in English from University of California, Davis, and has earned numerous awards for sales excellence in her professional career.

About NestorCommerce

NestorCommerce is a division of Nestor, Inc., a leading provider of intelligent decision-support solutions for the financial services and e-commerce industries. Nestor’s client/server products incorporate innovative pattern-recognition technologies ideally suited for data-intensive, real-time decision applications. The company’s products provide predictive fraud detection and case management for e-commerce fraud, credit, debit, retail and commercial card fraud, as well as merchant fraud, money laundering and customer relationship management. Nestor products are sold direct and by selected partners worldwide. For more information, call 401-331-9640 or visit [www.nestor.com][1].

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

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MIST Sale

Toronto-based MIST announced Monday the completion of the sale of NBS Card Services, a Mississauga-based card manufacturing facility, to Metaca Corporation. MIST said it will use the $5.7 million generated from the sale to repay debt and to focus on the development of wireless transaction solutions and payment gateway opportunities. With facilities in Toronto and Montreal, MIST has an installed base of more than 550,000 POS terminals.

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EDS EFT

EDS confirmed Monday it has acquired all of TransAlliance as part of an aggressive growth strategy for its EFT processing division. WA-based TransAlliance managed client relationships and delivered EDS EFT services for ATM, POS and interbank transaction processing throughout 13 western states. EDS was a 50-50 joint venture partner in TransAlliance with 21 financial institutions for the past five years. Following yesterday’s acquisition, EDS indicated it will continue to provide the same services to approximately 475 TransAlliance clients and network members. The TransAlliance acquisition also includes the ‘Northwest Exchange’ ATM network and the ‘ACCEL’ POS debit network. EDS Consumer Network Services handles more than 200 million ATM/debit transactions each month, operates about 14,000 ATMs and serves 3,000 client end points. EDS says day-to-day operation for former TransAlliance clients and a data center operations facility will remain in Bellevue, Washington, as well as support offices in California. More than 100 TransAlliance employees will be transferred to EDS.

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YouthPulse Survey

Online US kids, teenagers, and young adults aged 8 to 21 spent $2.4 billion on gifts for others during the 2000 holiday period. Girls were more generous in their gift giving than boys, and although Generation Y expresses a keen interest in buying online, online shopping has yet to take a firm hold among the nation’s youth.

These are among the findings of the most recent wave of Harris Interactive YouthPulse. The study, conducted online twice yearly by Harris Interactive, the global leader in Internet-based market research, measured responses of 3,139 young participants in January 2001.

The study found that holiday spending grows significantly with age: Eight to nine year olds spent about $15 on average, while 18-21 year olds spent about $130 during the same period. And, girls spent more than boys did – across all age ranges.

“It is clear that young girls are more generous than young boys when it comes to gift giving,” stated John Geraci, Harris Interactive’s Vice President for Youth Research. “The gap between girls’ and boys’ holiday spending actually widens with age. This is surprising in that we have also shown that boys have larger discretionary incomes than girls.”

Boys were more likely to buy holiday gifts online than girls were. “Boys seem more comfortable with the concept of ecommerce,” added Geraci, “and YouthPulse(SM) has consistently finds that Generation Y wants to spend more online but doesn’t feel enabled to do so. On the whole, before age 19, kids and teens buy online by using their parent’s credit cards, and this probably suppressed online holiday spending by young people as it is awkward to borrow parents’ cards to buy gifts for them. We expect online shopping among youth to grow significantly as enabling strategies such as eWallets, online purchase cards and online bank accounts, debit cards targeted to teens, are adopted.

Median Amount Spent on Gifts for Others During Holidays

8-9 10-12 13-15 16-17 18-21
— —– —– —– —–
Boys $14.92 $26.64 $34.11 $67.29 $103.53
Girls $16.08 $33.70 $47.75 $97.20 $156.03

Harris Interactive YouthPulse(SM)
3,139 online interviews conducted January 2001

% of Holiday Shopping Done Online

8-9 10-12 13-15 16-17 18-21
— —– —– —– —–
Boys 3% 3% 2% 6% 18%
Girls 2% 6% 2% 3% 7%

Harris Interactive YouthPulse(SM)
3,139 online interviews conducted January 2001

About the Study

Harris Interactive YouthPulse(SM) is a multi-client study conducted online covering a variety of topics, from the market power and influence of youth, to their technology adoption and views, their brand and category usage, and their hopes and dreams for the future. The study is conducted quarterly (January and July) by Harris Interactive with a minimum of 6,000 completed interviews annually. Data in this release were collected between January 14 and 21, 2001. Completed interviews are weighted to reflect the characteristics of the proportion of Generation Y that has accessed the Internet at least once in the past month. Complete data from these studies are available on a subscription basis. For more information about Harris Interactive YouthPulse(SM), go to [www.harrisintera ctive.com/about/vert_youthteen.asp][1]

About Harris Interactive

Harris Interactive (Nasdaq: HPOL), the global leader in online market research, uses Internet-based and traditional methodologies to provide its clients with information about the views, experiences, behaviors and attitudes of people worldwide.

Known for its Harris Poll, Harris Interactive has 45 years of experience in providing its clients with market research and polling services including custom, multi-client and service bureau research, as well as customer relationship management services. Through its U.S. and Global Network offices, Harris Interactive conducts research around the world, in multiple, localized languages. Harris Interactive uses its proprietary technology to survey its database of more than 7 million online panelists. For more information about Harris Interactive, please visit our website at [http://www.harrisinteractive.com][2].

[1]: http://www.harrisinteractive.com/about/vert_youthteen.asp
[2]: http://www.harrisinteractive.com/

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Sema Sale

Immediately following its acquisition of the Bull CP8 smart card business, Schlumberger announced Monday it has reached agreements to purchase the IT firm, Sema plc, for $5.2 billion. The Company said the Sema deal will enable it to accelerate existing information technology strategy and enhance capabilities and critical mass in systems integration. Sema is an IT and technical services company with 21,700 employees in 28 countries, with most of its business centered in Europe.The firm had slightly more than $2.2 billion in revenues last year. Schlumberger expects to complete this transaction in the second quarter.

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Card Bond Outlook

Standard & Poor’s ABS credit card unit said yesterday that the outlook for credit card securities is largely positive. S&P says it anticipates credit card ABS issuance to surpass 2000 levels and break the $60 billion mark this year. The growth is being driven by flexibility in issuance terms and liquidity. S&P also pointed out that the performance of the underlying credit card receivables is the best it has been. Delinquencies and losses are at their lowest levels ever. In fact, charge-offs are down 250 basis points from one year ago. However, personal bankruptcies are trending upward, personal debt levels are high and personal savings rates are low, which means consumers are in a much more vulnerable position if the economy does experience a downturn.

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Diebold RPM Deal

Diebold, Incorporated announced it has been named the exclusive supplier of InnoVentry Corp.’s RPM branded automated financial service kiosks. The exclusivity agreement will last for three years or until a minimum of $100 million in Diebold equipment has been purchased, which ever comes later. Diebold will also provide a comprehensive service program, which includes first- and second-line maintenance on all of InnoVentry’s Diebold machines, representing additional revenue. The $100 million sales target does not include the lease agreement for 1,400 machines, which InnoVentry awarded Diebold in November 2000.

“The relationship between Diebold and InnoVentry provides an excellent opportunity to expand cutting-edge technology and value-added services to the marketplace,” said Walden W. O’Dell, chairman, president and CEO at Diebold.

InnoVentry has gained a strong foothold into the self-banked market as the need for secure check cashing and other self-service financial transactions continues to proliferate. To date, InnoVentry has deployed more than 900 RPM machines in many of the nation’s top retail stores, including Albertson’s, Circle K, HEB Pantry Foods, Kmart, Kroger, Texaco and Wal-Mart. Most recently, The Kroger Co. agreed to place 1,500 additional Diebold-equipped InnoVentry RPM machines in its stores throughout the United States.

“Our continuing work with InnoVentry emphasizes Diebold’s complete solutions approach to our business,” said Wesley B. Vance, president, Diebold North America. “We are pleased to have the opportunity to play a key role in InnoVentry’s rapid expansion into this exciting market.”

RPM(TM) machines provide secure check cashing and other financial transactions by utilizing biometric facial recognition technology to identify the customer, eliminating the need for a bank card or personal identification number (PIN). The machine, equipped with Diebold hardware and InnoVentry software, scans the user’s face upon each visit and InnoVentry’s proprietary systems confirm identity by comparing the most recent picture against an ongoing file of digital photographs.

InnoVentry machines are currently located in 20 states.

About InnoVentry

Serving the needs of more than 40 million working Americans who do not use traditional banks for routine financial transactions, InnoVentry Corp. provides fast, easy and private access to electronic financial services. A privately held company based in San Francisco, backed by strategic partners that include Capital One Financial (NYSE: COF) and Wells Fargo & Co. (NYSE: WFC), InnoVentry has enrolled more than 1 million customers and cashed more than $1 billion worth of checks. For more information, visit [http://www.innoventry.com][1].

About Diebold

Diebold, Incorporated is a global leader in providing integrated self- service delivery systems and services. Diebold employs more than 11,000 associates with representation in more than 80 countries worldwide and headquarters in Canton, Ohio, USA. Diebold reported revenue of $1.7 billion in 2000 and is publicly traded on the New York Stock Exchange under the symbol ‘DBD.’ For more information, visit the company’s Web site at [http://www.diebold.com][2].

[1]: http://www.innoventry.com/
[2]: http://www.diebold.com/

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GPT Profitability

Global Payment Technologies, Inc. , a leading manufacturer and innovator of currency acceptance systems used in the worldwide gaming, beverage, and vending industries, announced its fiscal 2001 first-quarter results.

Summary of Financial Highlights
(in 000s, except per share data)
Three Months Ended December 31,

2000 1999 Change

Net Sales $6,589 $6,850 (3.8)%
Net Income $111 $461 (75.9)%
Net Income Per Share
Basic $0.02 $0.09 $(0.7)
Diluted $0.02 $0.08 $(0.6)

Thomas McNeill, GPT Vice-President and CFO, stated, “We are pleased to announce that we have achieved a major financial milestone this quarter, `a return to profitability’. Even though results were down from the prior year period, this was our second sequential increase in net sales and net income. Further, next quarter we expect to achieve substantial improvement over this quarter as well. For this quarter, net income decreased $350,000, to $111,000, as compared to the same prior year period, however, sequentially it is improved from a loss of $268,000 last quarter. This decrease in net income was primarily the result of a $269,000 reduction in the recognition of GPT’s share of the gross profit on intercompany sales that have been recognized by its affiliates, and was the result of inventory reduction initiatives taken by our affiliates over the last several quarters to meet current demand, culminating, as previously stated, in the resumption of shipments in August 2000. In addition, GPT experienced lower margins as a result of inefficiencies associated with lower sales and production. Offsetting these occurrences was a $204,000 reduction in operating expenses, primarily a result of a reduction in workforce implemented in May 2000 and which will positively impact future quarters. With respect to our financial condition, we are pleased to have achieved better utilization of assets and reductions in bank debt over the last several quarters, culminating December 31st with $5.2 million available on our six million dollar revolving line of credit.”

Stephen Katz, Chairman and CEO, said, “Our current financial results, when compared to the prior three quarters, have substantially improved. Further, we anticipate continued improvement in the near future with increased sales, disciplined asset management and prudent expense control which we expect will result in increased profitability in our second fiscal quarter. In fact, all of this while continuing development and deployment of our Synergy product line for both the gaming and beverage and vending industries.

In South Africa, we are excited about GPT’s opportunity to sell additional validators into the newly approved route market, which will accommodate as many as 50,000 slot machines. Each of these newly deployed slot machines in South Africa is anticipated to utilize validators. GPT currently has an 80+% market share for the sale of validators in the South African casino market.” Further, as described in our press release dated January 18, 2001, GPT’s affiliate will benefit from recurring revenue derived from being a route operator.

Global Payment Technologies, Inc. is a United States-based designer, manufacturer, and marketer of automated currency acceptance and validation systems used to receive and authenticate currencies in a variety of payment applications worldwide. GPT’s proprietary and patented technologies are among the most advanced in the industry.

For more details on GPT’s performance visit CardData ([www.carddata.com][1]).

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

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VendTek 2000

VendTek Systems Inc. (CDNX: VSI) today announced its fourth quarter and year-end financial results for the period ended October 31, 2000.

The Company is pleased to report record sales of $6,506,111 for the year ended October 31, 2000, an increase of 62% over 1999. Loss for the year 2000 declined to $349,947 or ($0.04) per share from $603,734 or ($0.07) per share in 1999. Gross margins for the year grew to 31.5% compared to 20.7% in fiscal 1999.

The Company also reported record sales of $3,094,447 for the fourth quarter ended October 31, 2000, an increase of 89% over the third quarter of 2000 and 455% better than the fourth quarter of 1999. Earnings for the fourth quarter of 2000 grew to $346,434 or $0.04 per share, compared to a loss of $205,939 or ($0.02) per share in third quarter of 2000 and a loss of $437,754 or ($0.05) per share in the fourth quarter of 1999. Gross margins for the quarter grew to 37.2% compared to 18.8% in the third quarter of 2000 and 11.9% in the fourth quarter of 1999.

“Year 2000 revenues received a tremendous boost from the shipment of a $2.7 million order to ROK Communications Ltd. for our e-Fresh network stations in the fourth quarter,” said VendTek President Paul Brock. “Sales of network system products now comprise 55% of annual revenues, up from 0% in 1999. This result is confirmation that our strategy and substantial investment in new technologies are paying off. Moreover, we expect revenues from our network technologies to grow significantly in the coming year as the expansion of the UK e-Fresh network continues.”

Sales for the fiscal year 2000 are comprised of: e-Fresh sales of $3.5 million; pre-paid phone card machines, $1.2 million; break-open (pull tab) machines, $1.1 million; parts, $0.5 million; and other, $0.2 million. Sales for 1999 were wholly comprised of traditional product sales and parts. Margins for 2000 grew nearly 11%, reflecting the impact of product mix that includes 55% of electronic network products, benefit of scale of production, and the continuing benefit of a high US dollar as over 75% of sales in 2000 were invoiced in US dollars. General and administration expenses grew $549,756 over 1999 as a result of new expenses associated with a public listing (2000 being the first year) and growth in overhead and infra-structure to support the substantial growth in sales and investment in technology personnel. Product development expense grew by $354,799 as engineering personnel more than doubled and e-Fresh travel substantially increased as a result of the launch in the UK. Selling expense grew $52,769 ($137,244 after adjusting for a write-down of demonstration inventory in 1999) with increased personnel, sales trips to Europe and South America, and increased attendance at trade shows.

Fourth quarter 2000 sales are principally comprised of a $2.7 million sale to ROK Communications Ltd. in the UK in advance of the network going live on October 23, 2000. Gross margins for the quarter grew to 37.2% including a one-time 2.2% margin benefit from recovery of a prior-year sales volume discount accrual. General and administration, product development, and selling expenses together increased $285,765 compared to the previous quarter and increased $292,549 over the fourth quarter of 1999 ($377,024 after adjusting for a write-off of demonstration inventory in 1999). The increase in expense reflects the ramp up in overhead, engineering personnel, and travel to support the sales growth and to development, launch and sales activity associated with e-Fresh.

About e-Fresh

The e-Fresh Network enables cellular service providers to distribute prepaid cellular time electronically to consumers via a proprietary real time network and self-serve kiosks called e-Fresh Stations. The e-Fresh Network consists of a central server running VendTek’s transaction processing software connected to multiple e-Fresh stations. The network can support tens of thousands of stations within a single country. The system includes proprietary encryption technology for securing the transmission of the transactions and significantly reduces the operating costs for telecom companies, improving efficiencies and profits.

About VendTek

VendTek uses its expertise in payment and self-serve technologies, smart cards and networking to develop systems for transaction automation. VendTek’ s e-Fresh Network provides electronic distribution of prepaid services such as cellular and e-cash to consumers via self-serve ATM style kiosks and a central server. VendTek’s electronic funds transfer technologies provide a more efficient way to distribute services electronically to banked and unbanked consumers using self-serve cash or credit-based payments. VendTek’ s secure proprietary system reduces shrinkage, improves access for consumers, increases the number of selling outlets and selling hours, and enhances overall security making the system superior to traditional distribution and alternative channels.

For more details on VendTek’s performance visit CardData ([www.carddata.com][1]).

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

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Card Debt Brakes

American consumers added a mere $2.0 billion in revolving debt during December compared to $6.0 billion for Dec 99. The dramatic slowdown in revolving debt, which is 95% credit card debt, hit during the critical holiday shopping season. During November and December consumers racked up $8.0 billion in new card debt compared to $11.5 billion for the same period last year, according to preliminary data released last week by the Federal Reserve. Since the beginning of this year, American consumers have increased total revolving consumer debt by $67 billion. Overall, consumer credit is now growing at a 3.6% rate compared to 12.5% for Dec 99, according to the FRB. At the end of December, American consumers were $1.525 trillion in debt, exclusive of home mortgages.

REVOLVING CREDIT HISTORICAL

Dec00 Nov00 Oct00 Sep00 Aug00 Jul00 Jun00
%GRWTH: 3.6% 11.0 4.7 7.8 12.6 6.7 11.2
$OWED: $662.8 660.8 654.8 649.3 645.1 638.2 634.7

May00 Apr00 Mar00 Feb00 Jan00 Dec99 Nov99
%GRWTH: 12.7% 13.5 13.8 9.4 18.5 12.5 10.2
$OWED: $628.9 622.5 615.5 608.5 605.0 595.8 589.8

Source: Federal Reserve; revised figures as of 02/07/01;
For complete historical data visit www.carddata.com.

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Dining Gift Cards

Salt Lake City-based Gift Check Solutions said last week it has signed agreements to provide electronic gift card services to 75 restaurants nationwide. Among the chains signed last week: Maxx Doogan’s, Boston Beanery, Boston Beanery-owed AJ’s and Presto Grille, and all restaurants owned by the Claremont Restaurant Group, including Prime Sirloin, Sagebrush, and Western Steer. GCS will manage the gift card ordering, processing, credit card billing, security and site maintenance. The firm uses mag stripe cards with existing POS equipment.

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