Trial Curtain Closes

Testimony in the government’s antitrust suit against VISA and MasterCard came to a close yesterday as MasterCard presented its final witness. The trial will be in recess until Oct. 16 when all the parties involved will present their final oral arguments. Legal experts speculate it is possible a ruling could be issued immediately following final oral arguments but most likely the judge’s decision will be handed down near the end of the year. Yesterday, MasterCard’s sole expert witness, Robert Pindyck of the Sloan School of Management at MIT, strongly suggested that if the government succeeds at ending the dual governance structure of VISA and MasterCard it will also mean the end of dual issuance. Pindyck also reinforced earlier testimony that the end of duality may also mean the end of MasterCard.


PREDICTA Hits Columbia

Trans Union LLC and DataCredito, Colombia’s largest credit reporting agency, recently announced the availability of the South American country’s first generic, credit bureau-based scoring model called PREDICTA.

Built on local credit bureau data supplied by DataCredito, PREDICTA rank orders the likelihood an account will go delinquent. With this predictive tool, Colombian credit grantors will be better able to manage risk and make faster, more informed and reliable decisions.

‘As Colombian credit grantors strive for greater precision in booking new accounts and more effectively managing existing accounts, they have shown a great deal of interest in PREDICTA,’ said Chet Wiermanski, Vice President of Trans Union’s Analytical Services Group. ‘When the five largest Colombian banks reviewed validation results demonstrating PREDICTA’s effectiveness, they agreed that the process of analyzing an applicant’s creditworthiness and likelihood to repay an obligation will be greatly improved. There is clear recognition that PREDICTA’s features and capabilities can be a valuable tool to prevent delinquencies, reduce losses and increase revenue.’

DataCredito formed an alliance with Trans Union in April 1999 to tap into its proficiency in understanding how credit bureau information is used to predict consumer behavior in emerging world markets.

Trans Union’s Analytical Services Group, based in Chicago, has vast experience in providing both domestic and international customers with credit information, risk assessment products and decisioning services. In 1998, the Analytical Services Group formed the Trans Union Modeling Group (TUMG), which has developed and marketed several generic risk scoring-models for the domestic market, including:

· TransRisk Account ManagementSM A risk model specifically designed for existing accounts. It predicts the likelihood of existing accounts becoming 90 or more days delinquent within 24 months.

· TransRisk AutoSM A risk model specifically designed for non-prime auto accounts. It predicts the likelihood of those types of accounts becoming delinquent within 12 months.

· TransRisk New AccountSM A risk model specifically designed for new accounts. It predicts the likelihood that a new prospect or applicant will become 90 days delinquent within 24 months of opening an account.

· Trans Union’s Income Estimator® (TIE) is an income model that is marketed in both the U.S. and Canada.

About Trans Union

Trans Union is one of the nation’s leading information companies, serving all 50 states through its own sales offices and independent credit bureaus. The company provides a broad range of industries with products and services that include credit reports, risk scoring models, target marketing systems, pre-employment evaluation reports, skip tracing and search tools, customized lists, as well as other information-based products. Trans Union has operations in Puerto Rico, Canada, Mexico, Costa Rica, Chile, Spain, Italy, South Africa, Kenya and Hong Kong. For more information about TU’s products or services, visit the company on the Internet at [][1].

About DataCredito

Bogota-based DataCredito, the first credit information company in Latin America, has emerged as Colombia’s leader in information technology. It’s the only South American Credit bureau providing both positive and negative aspects of consumers’ credit history. The bureau has more than 1,000 institutional customers, including banks, financial service grantors, retailers, cellular and telecommunications providers and auto dealers. DataCredito maintains a database of financial information on more than 25 million consumers and processes an average of 1 million inquiries per month.



DataKay PKI Card Deal

Datakey, Inc., an international leader in smart card solutions for Public Key Infrastructure, today announced that it received an order for 10,000 PKI smart cards from one of its partners for a new and innovative e-commerce application within the financial services industry.

“Datakey is proud to have been selected as the smart card provider for this cutting-edge application, and we believe it has excellent growth potential,” said Carl Boecher, president and CEO of Datakey, Inc.

About Datakey, Inc.

Datakey, Inc. is a leading international provider of smart card solutions for PKI. Headquartered in Minneapolis, Minn., the company offers a family of smart card-based information security and digital signature products under the SignaSURE(R) umbrella. Using state-of-the-art cryptographic technology, these products fill growing market needs for secure, smart card-based user authentication and data privacy for business-to-business e-commerce. Datakey’s smart card-based information security products play an integral role in any PKI system by providing two-factor security — something that is owned (a smart card) and something that is known (a password).

Shares of Datakey’s common stock are traded on Nasdaq under the symbol DKEY. You can find more information on the Datakey Web site at .


Diebold CashPoint Select

CashPoint has signed an agreement with Diebold, Incorporated for the development of automated teller machine software that will enable financial institutions with Diebold ATMs to fully participate in the CashPoint Select network.

CashPoint Select is a comprehensive content management system that allows financial institutions to deliver customer-specific, targeted content for viewing at different stages of the customer’s visit to the ATM.

![][1] The Diebold-developed software will enable ATMs to communicate with the CashPoint Select network and provide real-time multimedia content for the ATM customer along with actionable coupons. CashPoint Select can be used with the bank or credit union’s current ATM network infrastructure and does not affect the flow of financial transactions between the terminal and the host processor.

“This is a major step in facilitating the rollout of CashPoint Select,” said J.J. Manning, CashPoint’s CEO. “Financial institutions with Diebold ATMs can take full advantage of communicating with their customers through innovative marketing programs on their ATMs.”

“The interface to CashPoint Select is another example of the flexibility of the open systems capability that Diebold ATMs provide,” said Bill Aitken, vice president of systems integration and services at Diebold. “Diebold is able to provide the right combination of standard software, custom applications, and services to meet customer requirements.”

CashPoint is currently certifying CashPoint Select in their laboratories for three major financial institutions, with plans to rollout more than 1,000 ATM locations by the end of the first quarter of 2001.

About CashPoint

CashPoint is the nation’s leading provider of advanced communication solutions that bring banks closer to their customers through programs delivered at the ATM. Using audiovisual messaging and actionable coupons allows both the banks and third-party advertisers to communicate with targeted ATM customers on a one-to-one basis.

CashPoint offers the only national network through which advertisers can reach 38 million consumers each month. The CashPoint system was designed to utilize existing ATM technology, along with expanded communication capabilities to reach 149 million Americans over the age of 18 who have an ATM card.

CashPoint is headquartered in Seattle and has regional offices in San Francisco and Chicago. Additional information may be obtained by calling 206-829-0400 or by visiting their Web site at [][2].

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 $1.3 billion in 1999 and is publicly traded on the New York Stock Exchange under the symbol “DBD.” For more information, visit the company’s Web site at [][3].

[1]: /graphic/diebold/diebold.gif


VISA Strategy

To bolster its defense of antitrust charges it was revealed yesterday that VISA funded, provided much of the data, and promoted a book on the credit card industry that directly attacked the work of the DOJ’s expert witness. The book, “Paying With Plastic”, was released in December and was written by a highly paid consultant contracted by VISA. Richard Schmalensee, dean of MIT’s Sloan School of Management and professor of economics at MIT, spent most of his time on the stand yesterday attacking the testimony of Professor Michael Katz of the University of California at Berkeley, an expert witness for the Government. Schmalensee testified that the payment card industry is one of the most competitive industries in the economy with no need to change its current business structure. In cross-examination it was revealed that Schmalensee is paid $800 per hour and has testified in a number antitrust trials, including the Microsoft trial. Schmalensee was previously hired by VISA as an expert witness for the 1992 antitrust litigation with Sears’ Discover, for which he received $400 per hour. Schmalensee’s book was produced by MIT Press and distributed to the news media before this year’s trial by a PR firm hired by VISA. One month before the trial, VISA also founded and funded the Washington, DC-based Americans for Consumer Education and Competition non-profit organization. ACEC issued news releases and ran full page ads in major publications to attack American Express during the trial. The ACEC group is headed by former U.S. Rep. Susan Molinari. The group’s stated mission is “fostering consumer education and financial literacy while promoting competition in the marketplace”.



National Data Corporation announced a two-year transaction processing agreement with U.S. Wireless Data. Under the terms of the agreement, NDC eCommerce will offer wireless, high-speed credit card authorization services utilizing U.S. Wireless Data’s Wireless Express Payment Service, to new and existing merchants of NDC eCommerce through its network of banks and acquirers. Initially, it is expected that more than 3,000 wireless terminals will be activated through WEPS to deliver transactions to NDC eCommerce.

![][1] Commenting on the agreement, USWD Chairman and CEO Dean Leavitt stated, “We are very excited about our relationship with NDC and see this partnership as yet another strong endorsement of our technology, service and distribution model.”

“Clearly, wireless credit card processing technology is generating heightened interest,” said Paul R. Garcia, CEO of NDC eCommerce. “NDC eCommerce is excited about the new opportunities we now have because of the new merchant segments WEPS allows us to address.”

WEPS provides a seamless interface among a merchant’s wireless point-of- sale terminals, wireless carriers, and credit card transaction processors. It enables credit, debit, and other card transactions to be processed almost as fast as cash, without the cost and inconvenience of being tethered to telephone or electricity lines. In fact, WEPS is opening new markets for card payments among merchants and venues for which telephone dial-up is not feasible, by providing both the speed and mobility needed to make card transactions practical. These include taxis and limousines, delivery services, quick service restaurants, home maintenance and repair services, outdoor fairs and markets, sports stadiums and arenas, performance halls, and outdoor recreational facilities such as golf courses and amusement parks.

U.S. Wireless Data, Inc. ([][2]) markets proprietary technology that brings together three large, rapidly growing industries- transaction processing, wireless data transport and the Internet-to enable wireless payment processing. The Company’s WEPS technology enables businesses that require mobility and/or faster transaction speed to accept wireless point-of-sale payments, and provides Internet-based real-time transaction monitoring, remote diagnostics and automated terminal activation.

National Data Corporation is a leading provider of electronic commerce solutions and health information services that add value to its customers’ operations.

[1]: /graphic/uswirelessdata/uswireless.gif


Mondex Venezuela

Mondex announced Monday that ACI Worldwide has been chosen to provide back office and card management solutions for the Mondex smart card processing infrastructure for Venezuela. The Mondex Venezuela includes: Banco Mercantil; Banco Universal, S.A.C.A.; Banco Union; Consorcio Credicard.; Banesco; and InterBank. The ACI system will have the ability to handle Mondex smart card processing through traditional ATM and POS channels, as well as Mondex value transfer and customer service via the Internet. In addition to implementing the core Mondex smart card infrastructure, ACI will upgrade the ‘BASE24’ processing systems of Mondex Venezuela members to enable the processing of Mondex value transfer. This gives members the ability to trade electronic Mondex value utilizing their existing channels.



Digital Courier Technologies, Inc., a leading provider of advanced e-payment services specializing in fraud and risk management, announced that John Hanlon, formerly Sr. VP and CFO at Personic, Inc., has been appointed Chief Financial Officer of the company effective August 21, 2000. Mr. Hanlon will be based out of the San Francisco, CA office.

“We are pleased to welcome John as Chief Financial Officer to our team. John brings a strong portfolio of operational and finance skills from both public and pre-IPO companies that will be critical to managing our continued growth,” said Becky Takeda, COO of DCTI. “He is a powerful addition to our senior management team, and will help DCTI extend its lead in the e-payments space,” continued Takeda.

“DCTI is an exciting company in a rapidly growing space with great opportunities and I’m thrilled to be joining its management team,” said John Hanlon, Chief Financial Officer of DCTI. “I look forward to contributing to the growth of the company, and to helping DCTI reach its full potential as a market leader,” continued Hanlon.

Mr. Hanlon has over 13 years experience as a Chief Financial Officer, and is a Certified Public Accountant with experience in public offerings, private placement activities, acquisitions, mergers, and joint ventures. Prior to joining Personic, Inc. in 1998, Mr. Hanlon was Sr. VP and Chief Financial Officer of MDL Information Systems, a publicly traded company prior to it being sold to Reed-Elsevier in 1997. After overseeing MDL’s IPO in 1993, Hanlon oversaw the finance, legal, contract administration, MIS, Facilities, Investor Relations, Corporate Communications departments.

About DCTI:

DCTI is an emerging e-payment market leader providing an advanced, fully integrated e-payment service for merchants and financial institutions. The DCTI services feature a unique fraud protection and risk management system. DCTI has a growing list of over 600 merchant customers, representing more than $70 million in transactions processed monthly and spanning every e-commerce market segment. DCTI has greatly expanded its sales and marketing reach through reseller relationships and strategic partnerships with ACI Worldwide, the global leader in ATM services; Equifax; Innuity; NDC e-Commerce; Visa International; and others. DCTI is headquartered in Park City, Utah, with offices in San Francisco, California, Clearwater, Florida and in West Sussex, England. For more information, visit DCTI on the Web at .


Discover Shut-Out

U.S. District Judge Barbara Jones issued her “Opinion and Order” last Thursday denying Discover’s request to intervene in the ongoing VISA/MasterCard antitrust trial. Jones says that the government represents the public interest in competition, unless a private party makes an extraordinary showing to the contrary. Jones says that Discover has made no such showing. She also wrote that Discover cannot seek intervention on the grounds of its private interests since Discover’s interests as a competitor are not the subject of this case. Jones concluded her ruling by saying that to permit Discover’s intervention would unduly delay or prejudice the adjudication of the rights of the original parties. She said it would impose additional and unnecessary burdens, in the form of new discovery, evidence, and even legal issues. Jones said, however, the Discover is permitted to make an amicus submission by Sept. 22.


FOM & TeleCheck

First of Omaha Merchant Processing, a wholly-owned subsidiary of First National Bank of Omaha and one of the nation’s leading credit card processors, announced a partnership with TeleCheck Services, Inc. to provide secure, guaranteed electronic check payments to First of Omaha’s merchant customers. With the TeleCheck Electronic Check Acceptance service, First of Omaha merchants will be able to process electronic checks at the point of sale as simply and securely as a credit card transaction. TeleCheck is the world’s leading check acceptance company, and a subsidiary of Atlanta-based First Data Corp.

![][1] At the point of sale, the TeleCheck Electronic Check Acceptance service converts a customer’s paper check into an electronic item, and moves funds through the Automated Clearing House network. The consumer simply signs a printed receipt authorizing the electronic transaction and the canceled paper check, along with a copy of the authorization slip, is returned to the consumer. A complete description of the transaction is included in the check writer’s bank statement for reconciliation purposes. Merchants benefit from the service because the guaranteed funds are delivered directly to the merchant’s account, so they can consolidate bank accounts, streamline operations, improve cash flow and reduce paper handling. Electronic check returns and collections become TeleCheck’s responsibility.

Nick Baxter, president of First of Omaha, commented on the partnership; “The integrated features of ECA(R) combined with guaranteed payment to our merchant clients equates to a more secure and reliable overall process which will undoubtedly provide increased efficiencies for our merchants and their customers-offering more payment flexibility and ease at the point of sale.”

“This partnership marks a significant step for TeleCheck as we continue to expand our presence as an electronic payments processor,” said Jerry Mosbacher, senior vice president of strategic distribution for TeleCheck. “With First of Omaha’s strong market presence, TeleCheck’s products and services will be offered to even more merchants across the country.”

Merchant benefits of the TeleCheck(R) Electronic Check Acceptance(SM) (ECA(R)) service include:

* guarantees payment of all check transactions approved by TeleCheck;

* eliminates returned checks, returned check fees and warranty claims;

* reduces paperwork and trips to the bank;

* improves cash flow through faster closing/balancing and settlement.

About First of Omaha Merchant Processing

First of Omaha Merchant Processing is a premier payment processor specializing in providing service to both the traditional and Internet direct marketing industry, as well as the traditional face to face card acceptance market. First of Omaha provides financial management and payment processing solutions for large and small retailers, restaurants, lodging merchants, petroleum marketers, associations/franchise groups and banks in both the business to consumer and business to business marketplaces. Known for their superior customer service, First of Omaha specializes in providing clients the latest in card processing technologies. Through development of a diversified product line, First of Omaha has become a leader in the merchant processing industry, assisting clients in the reduction of chargebacks and fraud. First of Omaha is a wholly owned subsidiary of First National Bank of Omaha and is one of the few remaining in-house bank processors. First National Bank of Omaha, founded in 1863, is the 32nd oldest nationally chartered bank in existence. First of Omaha’s Internet address is [][2].

About TeleCheck Services, Inc.

TeleCheck is the world’s leading provider of paper and electronic check services, helping more than 228,000 retail, financial institution, grocery and other industry clients to increase their profitability, reduce risk and streamline operations. TeleCheck’s check acceptance and electronic commerce solutions help businesses safely and efficiently accept payment at the point of sale, by telephone, over the Internet, and through recurring ACH payments. TeleCheck services are offered through a sales and service network in more than 90 cities in the United States and in Puerto Rico, Canada, Australia and New Zealand. In 1999, TeleCheck authorized more than $155 billion in checks, representing 3.1 billion transactions. For more information about TeleCheck, visit the Internet site at [][3].

[1]: /graphic/telecheck/telecheck.gif