Sydney Payoff

Despite frustration by Australians over VISA’s exclusive Olympic card deal, VISA says its sponsorship of the Sydney Olympic Games has paid off. Overseas VISA cardholder spending in Australia grew 23% year over year to a record US$1.55 billion in 1999, while tourism numbers surged only 7%. VISA says spending by cardholders from the United Kingdom, increased by 31.5% last year. While spending by cardholders from the U.S. was up by 27%. Preliminary data indicates that these trends have continued into 2000 with spending by visiting VISA cardholders growing by 26% in February 2000 compared to February 1999. VISA also noted that since it began its Olympic sponsorship in 1986, more than 20 million VISA cards now bear the Olympic rings. More than 6 million new VISA cards with an Olympic theme were issued in the past two years. VISA will continue as a ‘TOP V’ global sponsor through the 2002 Olympic Winter Games in Salt Lake City, UT and the 2004 Olympic Games in Athens, Greece.

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ICBA Board

ICBA Bancard announced the election of its chairman and treasurer at the group’s recent quarterly meeting. Bill McQuillan, president and CEO of The City National Bank in Greeley, Neb., was elected chairman and George Astrike, chairman of German American Bank in Jasper, Ind., was elected treasurer and director of the Midwest region. Additionally, the appointment of Lynda Messick, president of Delaware National Bank in Georgetown, Del., as the director of the Southeast region and C.R. ‘Rusty’ Cloutier, president of MidSouth National Bank in Lafayette, La., as director of the Southwest region were confirmed. Both Messick and Cloutier were appointed to Bancard’s Board at a meeting of the ICBA Community Banking Network held in June.

Also reelected were David Ballweg, president and CEO of Community State Bank in Union Grove, Wis. and chairman of TCM Bank, N.A. in Tampa, Fla.; Holm Bursum, president, chairman, and cashier of First State Bank in Socorro, N.M., as director of the Western region; Robert Muth, president and CEO of Andover Bancorp, Inc. and the Andover Bank in Andover, Ohio, as director of the Northeast region; Arnie Schultz, chairman of Grundy National Bank in Grundy Center, Iowa, as director of the Northwest region; Thomas Sheehan, chairman, president, and CEO of Grafton State Bank in Grafton, Wis., as the ICBA executive committee representative; Chuck Doyle, chairman and CEO of Texas first Bank, in Texas City, Texas, as special advisor; David Hayes, president of Security Bank in Dyersburg, Tenn., as special advisor; Ken Guenther, executive vice president of the Independent Community Bankers of America; and Linda Echard, president and CEO of ICBA Bancard.

ICBA Bancard is a wholly owned subsidiary of the Independent Community Bankers of America (ICBA). Since 1985, ICBA Bancard has provided more than 3,000 community banks with equitable access to payment system products and services. In addition to ATM, credit and debit cards, banks have access to merchant services, ATM driving, risk management services, Internet banking and marketing services. In 1998, ICBA Bancard created Total Card Management, a risk-free credit card option exclusively designed for community banks. For more information, visit the ICBA Bancard website at .

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Instant Card Rewards

North America’s credit card issuers and merchants will now have the option to offer accelerated rewards to cardholders in real-time, at the point-of-sale. Under the program, the loyalty transaction information is processed in real-time, directly through an ERNEX-enabled POS terminal. The resulting bonus points are immediately shown on the cardholder’s receipt. Ernex Marketing Technologies announced yesterday that Royal Bank of Canada has become the first credit card issuer to use the new loyalty technology. Royal Bank is launching a one-year long pilot program this morning that will take place in Vancouver. From Sept. 1 through November 30, 2000, cardholders will be eligible for special promotions, featuring ERNEX ‘Points Multiplier’, ERNEX ‘Custom Coupon’, and ERNEX ‘Swipe ‘N Win’. The ‘Points Multiplier’ notifies cardholders on their receipts of an incentive to accelerate their points earned for repeat visits to the same merchant. For the Royal Bank program, selected cardholders will receive triple points on their second visit, quadruple points on their third visit, and so on (until ten times the points). ‘Swipe ‘N Win’ is an instant sweepstakes program that will give cardholders an opportunity to win prizes any time a purchase is made with their VISA card. Under the Royal program, cardholders have a chance to win a grand prize for a trip for two to Hawaii at the point-of-sale. ‘Custom Coupon’ enables merchants to customize offers to participating cardholders.

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PaymentTrust

UK-based TrustMarque International and Paymentech have teamed up to jointly provide North American online merchants with a multi-currency payment gateway service. TrustMarque’s ‘PaymentTrust’ combined with ‘RiskGuardian’, provides merchants with enhanced real-time online services to process transactions in 25 different currencies. ‘RiskGuardian’ helps detect suspicious online transactions in real-time by evaluating various parameters unique to an Internet transaction and assigns a risk score. ‘PaymentTrust’ uses digital certificates for authentication between the merchant and TrustMarque’s payment gateway, which provides online, real-time credit and debit card authorization, and electronic cheque processing.

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ChequeMARK Relocates

LML Payment Systems Inc. reports first quarter revenues were $2,145,545, an increase of $2,055,392 or 2,280% compared to revenues for the corresponding period for the previous year. Operating income was $403,196, an increase of $467,095 or 730% compared to an operating loss of ($63,899) for the corresponding period for the previous year. Sales and administrative expenses were $673,308, an increase of $478,237 or 245%, compared to $195,071 for the corresponding period for the previous year. The increase in revenues for the period was primarily attributable to the consolidated financial results of wholly-owned subsidiaries CF Data Corp. and Check Center, both of which were recently acquired by the Corporation.

There was a loss before interest, tax, depreciation and amortization (“EBITDA”) of ($52,204) or ($0.00) per share, compared to an EBITDA loss of ($267,445) or ($0.02) per share for the corresponding period for the previous year. Interest expenses were $82,048. Non-cash amortization expenses of $425,246 were primarily attributable to recent corporate acquisitions. There was a net loss of ($559,498) or ($0.04) per share compared to a net loss of ($433,149) or ($0.04) per share for the corresponding period for the previous year.

During the quarter, the Corporation retired $1,201,117 of long term debt. At the end of the quarter, the Corporation had working capital of $13,561,503 compared to a working capital deficiency of ($1,137,132) for the corresponding period for the previous year. The Corporation had cash and short term investments on hand of $14,393,577 at the end of the quarter.

The Corporation also announces subsidiary, ChequeMARK, Inc. has relocated its Jacksonville, Florida offices to Dallas, Texas where the Corporation presently maintains offices through subsidiaries CF Data Corp. and Check Technologies(TM) Inc.

Subsequent to the quarter end, the Corporation announced the acquisition of Phoenix EPS, Inc., a company that engineers and markets host-based software products that provide centralized gateway services for electronic payment authorization traffic between store registers and authorization networks. Phoenix EPS’ flagship product REPS (Retail Electronic Payment System) provides real-time transaction monitoring, authorization and selective routing of debit card, credit card, EBT and check verification transactions. Phoenix EPS plans to incorporate the Corporation’s check verification, Electronic Check Conversion (ECC), Electronic Check Re-presentment (RCK) and traditional check collection modules into the REPS IBM OS/390 platform. The Corporation is presently establishing a new primary data processing center in Phoenix, Arizona with plans to augment the existing processing facilities in Dallas, Texas to form a fully redundant secondary data center. “We plan on making significant investments in these facilities,” said President and CEO, Patrick H. Gaines.

“Overall, we are pleased with our progress. We believe these first quarter results indicate we are moving in the right direction. Phoenix EPS gives us strength and technical capabilities we never had before. Our challenge now is to combine these capabilities with our existing services. Successful integration, prudent capital investment, coupled with the advantages afforded by our expanding intellectual property estate, should position us well for electronic transaction processing, particularly electronic check transactions,” said Gaines.

LML Payment Systems is a financial payment processor specializing in providing end-to-end check processing solutions for national, regional and local retail merchants. The Corporation’s processing services include traditional check verification and collection along with electronic processing services including Electronic Check Re-presentment (whereby returned paper checks are represented for payment electronically) and Electronic Check Conversion (whereby paper checks are converted into electronic transactions right at the point of sale). The Corporation’s intellectual property estate will include a recently allowed patent application regarding internet checking transactions, in addition to U.S. Patent No. 5,484,988. U.S. Patent No. 5,484,988, describes a “Checkwriting point of sale system,” which, through a centralized database and authorization system, is capable of providing and administering various electronic payment services for customers and businesses.

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USTT in Hawaii

USA Technologies Inc., Thursday announced it was taking TransAct, its unique swipe card technology, offshore after signing a major dealer and distributor in Hawaii under its TransAct Authorized Reseller Program.

The latest company to become a TransAct Authorized Reseller is Video Vend of Honolulu. Video Vend is already installing TransAct in one of Hawaii’s premier hotel chains, Outrigger Hotels. Two other companies also recently became authorized resellers – Paterson Products of Sacramento, Calif., and Xerox Sales and Service of Bloomington, Ind. TransAct is now being sold and distributed in 48 states throughout America.

USA Technologies is a nationwide leader in credit card and cashless transaction technology. TransAct is a key component of USA Technologies’ flagship offering Business Express(R) and MBE Business Express, the world’s first 24-hour, credit card-activated business center. USA Technologies also has developed e-Port(TM), its next generation credit card payment terminal which offers the capability for public access e-commerce and interactive advertising. e-Port is currently undergoing pilot testing and is scheduled for distribution by the end of the year.

“These latest partnerships significantly expand our market reach and, for the first time, take our product and solutions offshore,” said Michael Lawlor, Senior Vice President of Sales & Marketing, USA Technologies. “A core strategic initiative is to build a nationwide, and ultimately a global distribution network beginning in 2001, not just for TransAct, but for all of our e-Business products and solutions including e-Port,” he said.

The TransAct Authorized Reseller Program was announced only three months ago and already seven major national office equipment dealers and distributors have signed on. Lawlor said many more were currently under negotiation and his company’s target was to sign five a month.

“More than 100 independent and national office products dealers and distributors have registered interest, and it is our intention to aggressively pursue these kinds of partnerships,” he said.

The TransAct technology is a cashless transaction-enabling terminal that allows customers to use office equipment quickly and simply with the swipe of a major credit card. Once the transaction is concluded, the customer receives a printed, itemized receipt. Offering TransAct through independent dealers and distributors means that industry leaders such as Xerox, Canon, Minolta and Konica will be able to incorporate the TransAct device into their own office equipment solutions worldwide.

“The new TransAct Authorized Reseller Program was a result of significant, positive feedback from the major office equipment manufacturers and distributors who wanted to use TransAct and incorporate it into their own products and solutions,” said Lawlor. “For manufacturers and distributors of office equipment it means the ability to locate and operate their equipment in public environments and high traffic areas such as hotels, convenience stores, travel & transportation facilities and other public buildings,” he said.

USA Technologies will provide the technology and integration expertise to allow manufacturers and distributors of office equipment and services to easily attach the TransAct device to any brand of product, whether a fax, copier or PC.

TransAct is presently being used across the United States and Canada, with more than 1,500 devices in place, primarily as a component of USA Technologies’ Business Express(R) and MBE Business Express.

About USA Technologies

With patented technology, new distribution partners and channels and a rapidly expanding product line, USA Technologies is a leader in providing credit card-activated business services for professionals and consumers needing to communicate or conduct business outside the home or workplace. Visit the USA Technologies home page at [www.usatech.com][1]

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

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Poor Customer Service

A new survey has found that 35% of credit card users have changed issuers due to poor service. More than 60% of consumers polled by Mobius Management Systems, said they had cancelled accounts with their banks, citing frustration due to poor customer service. Mobius also found that 36% had changed insurance providers, 40% had changed telephone companies, and 37% had changed Internet service providers for the same reasons. The firm found eight out of ten consumers prefer speaking with a live customer service representative instead of an automated system and they also prefer to speak with a customer service representative on weekends. More than 90% wanted to be transferred to another customer service representative no more than once.

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In The Black

American Bank Note Holographics, Inc. announced this week the repayment of all outstanding bank debt to Foothill Capital Corporation.

With the repayment of the Term Loan and Revolving Credit Facility to Foothill Capital Corporation, ABNH now has no bank debt.

As a result of the recent $9.3 million equity investment by Crane & Co. Inc., and after paying all of the outstanding debt to Foothill plus related fees, expenses and interest, ABNH now has a cash balance of approximately $7 million.

Kenneth Traub, President and CEO of ABNH commented, “We are proud to announce another major milestone. We now have the financial strength to invest in our future. We are focused on extending our leadership position, and developing new and better holographic design, security and authentication products to serve our customers.”

American Bank Note Holographics is the leader in the origination, production, and marketing of mass-produced holograms. The Company’s products are used for security applications, such as counterfeiting protection for transaction cards, identification cards and documents of value, authentication of consumer and industrial products and tamper resistance as well as for packaging and promotional applications.

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Smart Face

The U.S. Government is moving rapidly to adopt facial recognition technology in conjunction with smart cards. MA-based eTrue confirmed Wednesday that its ‘TrueFace’ solution will be used in the GSA’s $1.5 billion government-wide ‘Smart Access Common ID Program’. The technology is being provided through Logicon and SAFLINK Corp., both contractors under the GSA program. Through the contracts awarded, GSA’s ‘Smart Access Common ID Program’ will deliver common, interoperable, multi-application smart cards to be used as employee ID cards for all Federal agencies. Technology requirements include an electronically generated photograph for visual identification, a biometric reference template for use in logical and physical access control, and digital certificates for use in electronic transactions. TrueFace-enabled products and solutions have been deployed by a number of U.S. Federal government agencies, including the DOD, NSA, and the DOE. In addition, local U.S. law enforcement agencies and the governments of Israel, England, and South Africa, among others, use the technology.

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M2 Card Brand

New York City-based M2card, Inc. is adopting the M2 “mobile money” brand and identity for its payment card system. This fall, M2 will launch the ‘M2 VISA card’, a pre-funded card for teenagers. The company says its branding is meant to underscore the M2card’s anywhere/anytime capabilities and its flexible features which include funding from multiple sources, multi-level parent monitoring options, real-time account updates, wireless balance inquiries and person-to-person payments. The brand, logo and identity package was developed with Frankfurt Balkind, whose design clients include ESPN and About.com. The company says its branding emphasizes that teens can now be more mobile, responsible and independent.

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Vital Mag-Tek

Mag-Tek Inc., an internationally known card reader and MICR check reader manufacturer since 1972, announced that Vital Processing Services has selected Mag-Tek to integrate its five different card readers and MICR check readers with Vital’s POS-partner 2000 software.

POS-partner 2000 is a PC-based point-of-sale (POS) software product that enables retailers and direct marketers to accept and process many kinds of payment vehicles from multiple POS venues, and to capitalize on the information gathering as part of the process.

![][1] POS-partner 2000, in concert with Mag-Tek’s IntelliPIN, MICR Plus check reader and the card reader, facilitate the processing of card or check transactions at POS locations using a PC.

“We are very honored to be selected by Vital to work with their POS-partner 2000 software product lines,” said Mag-Tek President Tom McGeary. Barb Gregg, senior vice president of product marketing for Vital Processing Services, said: “Our goal is to make POS-partner 2000 easy to navigate at the merchant point of sale. Utilizing Mag-Tek card readers and MICR check readers is as simple as connecting the reader to the keyboard and the keyboard port on almost any PC, and a merchant is ready to swipe magnetic stripe cards.” Arizona-based Vital Processing Services(R) (Vital(R)) is a leader in technology-based commerce enabling services. Vital’s clients include acquirers and merchant service providers that offer electronic payment processing services to merchants, such as POS products, electronic authorization and data capture; VirtualNet(R) Internet- commerce services; clearing, settlement and exception processing; accounting, billing and reporting; operational fulfillment services; risk management; and customer service.

Vital is a merchant processing joint venture of Visa(R) USA and Total System Services Inc.(R) (TSYS) (NYSE:TSS). Mag-Tek () manufactures an ever-expanding line of magnetic stripe and smart card readers, encoders and MICR check readers for financial institutions, retailers and OEMs. Mag-Tek also offers comprehensive solutions for card issuance, customer-selected PINs and ATM/debit card activation.

Mag-Tek has headquarters in Carson, Calif., with sales offices throughout the United States, Europe and Asia, along with an international distribution network in more than 40 countries.

Mag-Tek technology is used in millions of financial and point-of-sale (POS) transactions utilizing debit cards, credit cards and checks; at banks and other financial businesses, retail checkouts, automated gas pumps, kiosks, pay phones and airplane seat phones throughout the world. For more information on Mag-Tek and Mag-Tek products, call 888/624-8350 or visit . For more information on Vital, visit its Web site at .

[1]: /graphic/vital/vital.jpg

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