Pay-Direct

Move over VISA and MasterCard, Yahoo! this morning launched ‘Yahoo! PayDirect’. The new, online person-to-person payment solution was created in cooperation with CIBC National Bank and through Yahoo!’s acquisition of Arthas.com. The new free service enables U.S.-based Yahoo! consumers to request, receive, send and make payments over the Internet. The new Yahoo! payment service enables individuals to electronically send and receive money via email by linking their credit cards, debit cards or bank accounts to their secure online Yahoo! ‘PayDirect’ account. Registered Yahoo! consumers who are 18 years or older with a credit card or debit card and a U.S. billing address can establish a Yahoo! PayDirect account. CIBC National Bank will provide the banking and fund transfer capabilities that enable the secure movement of consumer money through Yahoo! ‘PayDirect’.

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Discover Platinum

Teaser rates are declining again despite the uptick in general interest rates. This week Discover is flooding mailboxes with offers of a modified 2.9% APR. Depending on the solicitation the new offer for the ‘Discover Platinum Card’ varies from 0% to 1.9%. The 0% intro APR offer applies to new purchases through the Jan 2001 billing statement. The 0$ APR offer also includes a 5.9% intro APR on balance transfers. Meanwhile, according to CardWatch (www.cardwatch.com), the 1.9% APR offer applies to both purchases and balance transfers through the Jan 2001 billing statement. Both offers carry a go-to APR of 14.99% fixed and the two-cycle average daily balance method of calculating interest charges.

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Bank Profits

The nation’s 10,157 commercial banks, savings banks, and savings and loans posted a record quarterly profit of $22.5 billion in the first quarter of 2000, according to Weiss Ratings. Favorable economic conditions lifted the industry’s profits $1.8 billion, or 8.9%, over those of the first quarter 1999 and $326 million, or 1.5%, over the previous record quarterly profit set in the third quarter of 1999. Despite the rising trend in interest rates, banks are committing to longer-term loans carrying fixed rates. Loans maturing or repricing in five years or more comprised 20.9% of the industry’s loans outstanding at March 31, 2000, up from 20.4% at year-end 1999 and 17.8% in 1998.

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Accesspoint ASP

Accesspoint Corporation, and its subsidiary, Processing Source International, are preparing to launch during the month of August the first Application Service Provider service which integrates transaction processing software with transaction settlement services for merchants nationwide.

These solutions will provide software services designed to service both the traditional brick & mortar and Internet sides of each business. Until now, merchants have had to purchase expensive software solutions separately from their merchant processing services. Accesspoint and its subsidiary are now bundling this software solution as part of a complete merchant services program. This software solution is exclusive to the Accesspoint/Processing Source combination, so merchants will be more likely to remain loyal in the face of intense price based competition. Merchants will continue to pay total fees on their transactions equal to existing industry standards while receiving the benefits of Internet commerce without the added software service costs.

This shift to an integrated business concept in which Accesspoint processes financial transactions as an acquiring bank and supplies state-of-the-art secure payment processing, credit verification, identity verification, risk management, e-commerce and e-marketing automation tools opens lucrative new revenue channels for Accesspoint.

“Up until now only the largest merchants have had access to these types of services at great cost; with the overwhelming response we have had from some of the nation’s largest businesses looking to access our new bundled product line, we may have opened the gates to some tremendous growth potentials for Accesspoint,” states Tom Djokovich, CEO of Accesspoint. “Only the establishment of banking relationships limits international replication of these services and we are currently working in the Asia Pacific and South American arenas to establish the necessary relationships for future worldwide expansion,” adds Djokovich.

“Since January of this year both Accesspoint and Processing Source have focused on establishing in-house transaction banking/processing, credit information and risk management services and integrating these services into our existing e-commerce capabilities,” states Al Urcuyo, President of Processing Source.

A newly formed Processing Source division in Chicago, IL will handle merchant account underwriting and risk management capabilities. This new division will have the capacity to provide merchant account underwriting services to hundreds of sales groups across the country. These sales groups market merchant banking services to nearly 10,000,000 small to medium enterprises (SME’s) throughout America. With this new integrated Merchant Service package, Processing Source anticipates this mature distribution channel to eventually generate thousands of new merchant account customers monthly.

With the successful roll out of this new transaction ASP model, Processing Source anticipates processing over $1.3 billion dollars in credit payment transactions and $8.3 million dollars in electronic check transactions for the fiscal year ending December 31, 2001.

Accesspoint is already an established, mature player among the emerging new breed of ASP’s. Recently, many market analysts, including Forrester Research, have predicted the ASP services sector to experience exponential growth over the next three to five years. By delivering software and the underlying information as a managed service to businesses, the Accesspoint ASP model provides for the elimination of the high up-front costs of traditional packaged software licenses, a significant reduction of in-house IT human and hardware resources, and the integration of transaction information services into an automated business process.

The Accesspoint concept is simple — transaction processing and software delivered as a fully outsourced, bundled service.

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CyberSentry Acquisition

CyberSentry, Inc. confirmed that it has notified LibertyOne Limited (LibertyOne) that it intends to continue with its offer in compliance with Corporations Law.

In a letter dated July 26, 2000 to the LibertyOne Chairman, Nicholas Whitlam, Chairman and CEO of CyberSentry, Frank Kristan stated, “We are presently reviewing our options and addressing your concerns such that you will be able to recognize the value to all LibertyOne Shareholders. This would provide you with the opportunity, after your detailed review, to recommend the offer to your shareholders.”

CyberSentry has until September 17, 2000 to file its offering statement with the Australian Stock Exchange and LibertyOne Limited.

CyberSentry owns Digital Rights Management software that permits global E-commerce distribution on the Internet. CyberSentry provides value added services that distinguish CyberSentry from competitors like InterTrust Technologies, Inc., Baltimore Technologies and Entrust Technologies, Inc. because of CyberSentry’s ability to bill the transaction directly to its CyberSentry E-commerce Card, conventional credit cards or the customer’s phone bill. CyberSentry is licensed and in 47 states, enabling it to provide bundled services of local, long distance, Internet connection, calling cards and E-commerce credit cards to its existing 7,000 customer accounts.

CyberSentry, Gateway to E-Commerce, is a multi-format Digital Rights Management software and micro-billing provider. The company is licensed and in 47 states, enabling it to provide bundled services of local, long distance, Internet connection, calling cards and E-commerce credit cards to its existing 7,000 customer accounts.

Information on LibertyOne Limited is available at libertyone.com and information on CyberSentry is available at cybersentry.com. The new company would have investments in China.com, Excite Asia Pacific, Zivo and Ubid Asia Pacific a unit of CMGI. It would also have Excite@home, Worldcom, Qwest and Sprint as shareholders.

For further information on CyberSentry or its proposed takeover bid, please contact: Frank Kristan, Chairman and Chief Executive Officer CyberSentry Inc.

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MC Beijing Online

Xianzai Ltd. ([http://www.xianzai.com][1]), a leading provider of lifestyle and entertainment information to users and businesses across China, announced a strategic collaboration with MasterCard to provide a wireless “engine” of MasterCard Beijing businesses to mobile users. Wireless devices hooked up to Xianzai.com information are able to search MasterCard’s Beijing database of restaurants, bars, shops and entertainment venues.

According to Blair Burns, CEO of Xianzai Ltd., the new collaboration expands Xianzai.com’s offerings. “As Xianzai.com has grown over three years, so has our user base. Our relationship with MasterCard in Mainland China will expand on the wireless front and we’re pleased to have them as a partner.”

Burns added, “Xianzai.com’s capabilities allow Beijing users to search the MasterCard database to find entertainment prices, locations and discounts. They can immediately react to the information to make purchases.” Xianzai.com is a first mover in the wireless China market and provides information and sought after services for the business-to-business and consumer markets.”

Mr. Weiquiang Han, the Country Manager for MasterCard, comments that the Xianzai.com cooperation has opened another channel for MasterCard cardholders to fulfill their needs and interests and to enjoy benefits while staying in Beijing and using the latest technology.

About Xianzai.com

Xianzai Ltd. was one of China’s first Internet companies, beginning Beijing operations in 1997. With email newsletters as one of its core models, it has grown to include over 40,000 English-language users and 185,000 Chinese-language users for its daily and weekly information offerings. It currently produces 10 email newsletters and is set to add eight more by the end of Q3 2000. internet.com’s Venture Fund II, part of internet.com’s (NASDAQ: INTM) affiliated venture capital arm, is an investor in Xianzai Ltd.

About MasterCard International

MasterCard International has the most comprehensive portfolio of payment brands in the world. More than 1 billion MasterCard, Cirrus and Maestro logos are present on credit, charge and debit cards in circulation today. An association comprised of 22,000 member financial institutions, MasterCard is the leader in quality and innovation, offering a wide range of payment solutions in the virtual and traditional worlds. With more than 18 million acceptance locations, no card is accepted in more places and by more merchants than the MasterCard Card is. In 1999, gross dollar volume exceeded U.S. $727 billion.

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

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Paymentplus & i3

Paymentplus, a fast-growth company offering high capacity payment processing for online merchants, and i3 Solutions, a company that develops scalable applications specifically customized for individual businesses, are forming a strategic partnership to offer Web companies a direct, efficient way of processing online payments.

Paymentplus’ LiveProcessor provides fast, reliable, and real-time interface to payment services offered by Paymentech, First Data, NDC, and a direct connection to American Express Merchant Services. “We are very excited to offer Paymentplus’ robust, high-volume online payment processing solution to our clients. LiveProcessor provides both a turnkey payment solution, as well as a flexible application programming interfaces (APIs) for customizing and integrating with our customers’ legacy systems,” said Steve DeVoir, Partner Channels Manager at i3 Solutions. LiveProcessor is located on the merchant’s server, so there is no middleman, allowing the merchant real-time access to customer’s data for transactions and support.

“Paymentplus provides our enterprise and dot.com clients a high-end, real- time means of facilitating their payment processing needs,” added Randal Dewey, Director of Business Development at i3 Solutions. “Their ability to manage high volume, mission critical payment processing separates them from other Web-based solutions that have limited, concurrent transaction processing capabilities.”

“Paymentplus has been the choice for direct marketers and dot.coms for over five years now and our client list speaks for itself,” said Jeff Foster, Vice President of Business Development, “but to have an integrator like i3 single out our product is a terrific boost. i3 has been working for years with top name clients across many industries and the chance to help them integrate payment processing into their current solutions is a great privilege.”

About Paymentplus

Paymentplus creates electronic payment processing software for the enterprise, combining online, call center, retail and IVR transactions in a central server. The company’s software, LiveProcessor, can complete over 100,000 credit card and electronic check transactions per hour on a single server. LiveProcessor is the only payment processing application in the world to support Visa CVV2 and i3 Solutions partnership Amex CID security codes, procurement level 2 and 3 cards, electronic check processing and foreign currency support in single product.

The company currently has over 90 installations and is completing transactions in 40 countries and 23 currencies on a daily basis. Among the company’s clients are Real Networks, Research in Motion, Nextel Communications, AT&T, Tupperware, Rexall and Prudential Insurance. These companies are completing transactions valued at some $2 billion per month. LiveProcessor completes all of these transactions from a client-side server that avoids the fees charged by transaction service bureaus like Cybercash, Verisign and CyberSource.

About i3 Solutions, Inc.

i3 Solutions provides value-added e-Business consulting services that automate business processes using Internet technologies. The company specializes in the development of portal Web sites, business-to-business applications, Web-enabling databases, custom application development and Web site design. i3 Solutions maintains an open-book reference policy and encourages prospective customers to speak directly with any of its customers. For more information, please email i3 Solutions at sales@i3solutions.com, visit the Web site at [http://www.i3solutions.com][1].

[1]: http://www.i3solutions.com/

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USTT Resellers

USA Technologies, Inc. announced that after the first 90 days of its new Authorized Reseller Program, multiple office equipment dealers across the country have signed on with USA Technologies. Additionally, in excess of 100 other independent and national office products dealers and distributors have responded to USA Technologies new TransAct Authorized Reseller Program.

The most prominent new additions to USA Technologies’ TransAct Authorized Reseller Program include Nevill Business Solutions of Dallas, TX, one of Mita’s top dealers and five year recipient of their Gold Medallion Award, Connected Office Products of Philadelphia, PA, one of Philadelphia’s top office products dealers, with 18 branches located throughout Pennsylvania and Advanced Office System of Cincinnati, OH, a leading dealer of Minolta, Panasonic and Hitachi.

Jeff Zupcic of Connected Office Products of Philadelphia commented, “TransAct had an immediate impact on our business. We incorporated TransAct devices with our Konica copier and fax machine to secure the business of a prominent hotel at the Philadelphia International Airport, and met the hotel’s need of providing their guests with 24/7 business services.”

TransAct(R), which was recently launched at the Business Technology Association Convention, provides industry leaders such as Xerox, Canon, Konica, Minolta, Ricoh, Mita and Sharp the capability to incorporate the TransAct device into their own office equipment solutions. TransAct is a networked solution, when integrated with office equipment, allows for self-service usage, with a secured credit card transaction. USA Technologies’ patented credit card payment system allows for micro-credit card transactions, as low as $1.00, to occur in connection with the use of the office equipment.

“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 Michael Lawlor, Sr. VP of Sales & Marketing for USA Technologies. 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.

TransAct could also bring significant operational benefits to the manufacturers and distributors. TransAct allows for all sales and usage of the office equipment to be remotely monitored, which in turn would allow them to more cost efficiently provide equipment maintenance services and ensure that customers would not run out of equipment supplies. Additionally, because TransAct is activated by a credit card, it provides greater security against vandalism and theft in comparison to coin boxes.

For USA Technologies, the Authorized Reseller Program means greater distribution of its technology, new marketplace opportunities and expanded distribution channels worldwide. 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. Mr. Lawlor added that his company was in negotiations with many of the major manufacturers and distributors in the office equipment and services industry, working to finalize distribution agreements.

TransAct is presently being used across the USA and Canada, with over 1,500 devices in place, primarily as a component of USA Technologies’ Business Express(R) and MBE Business Express. Business Express and MBE Business Express are the world’s first 24-hour, credit card-activated business centers. More than 400 hotels throughout the United States currently offer Business Express and MBE Business Express services to the traveling public.

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

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

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NextCard Up 843%

NextCard reported last night that operating revenue exploded by 843%, receivables by 408%, and accounts by 421% over the past twelve months. During the second quarter NextCard added more than 100,000 accounts and nearly $200 million in receivables. Operating revenue for the second quarter increased to $33.0 million, compared to $3.5 million for 2Q/99. Total managed loans as of June 30 rose to $829.7 million, compared to $163.4 million as of June 30, 1999. Total customer accounts at the end of 2Q/00 stood at 443,000, compared to approximately 85,000 customer accounts at the end of 2Q/99. Meanwhile the net charge-off rate for managed loans increased to 2.2% compared to 1.9% in the first quarter 2000. The delinquency rate (30+ days) on total managed loans increased to 2.7% as of June 30 compared to 1.7% as of March 31. Total yield on the managed loan portfolio for the second quarter 2000 increased to 15.93% from 15.06% in the first quarter of 2000. While NextCard reported a net loss of $24.5 million for the second quarter, the Internet-centric card issuer says it expects to achieve profitability by late 2001. For complete current and historical data on NextCard visit CardData ([www.carddata.com][1]).

NEXTCARD TRACK RECORD
2Q/00 1Q/00 4Q/99 3Q/99 2Q/99
Recv: $829.7m $638.8m $416.3m $268.0m $163.4m
Accts: 443k 337k 220k 134k 85k
IC Inc: $2.9m $2.2m $1.5m $0.7m $0.3m
C-O: 2.21% 1.93% 1.88% 1.72% 1.34%
Del: 2.68% 1.71% 1.48% 1.16% 1.20%

Recv- receivables; Accts- accounts; IC Inc.- interchange income;
C-O-chargeoffs; Del- 30+ day delinquency
Source: CardData (www.carddata.com)

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

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Blue Smarts

American Express has added its second application to the translucent ‘Blue’ smart credit card. Using the smart chip, ‘Blue’ cardholders purchasing “Summer Concerts in Blue” tickets with ‘Blue’ at ticketmaster.com will pick up the tickets the night of the show at a special ‘Blue Will Call’ window.” These box office windows will be equipped with the ‘AmEx Blue’ smart card reader which verifies the cardholder’s order. Upon confirmation, the concert tickets are printed and handed to the cardholder by the box office attendant. The first application introduced with the card’s launch in Sept. 1999 involves online security. The smart chip application on ‘Blue’ is used to provide extra security while shopping online by using AmEx’s smart card reader that plugs into the user’s PC. The personal card readers are available free to new cardholders through August. Yesterday American Express, SFX, and Ticketmaster, jointly launched the “Summer Concerts in Blue” program. Under the special program, participating cardholders receive a free compact disc featuring the artists who perform the concerts they are attending. The promotion, which runs until October 15th, is valid for concerts at SFX amphitheaters in 12 markets nationwide.

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Fargo’s Flat 2Q

Fargo Electronics, Inc., a leading manufacturer of systems for the personalization of plastic identification cards, reported net sales of $14,060,000 for the second quarter ended June 30, 2000, vs. net sales of $13,873,000 for the second quarter of 1999. Net income available to common stockholders for the second quarter of 2000 was $598,000, or 5 cents per diluted share, compared to $651,000, or 9 cents per diluted share, in the second quarter of last year.

Gary R. Holland, president and chief executive officer, said, “Results in the second quarter were in line with the expectations we reported in mid-June. As previously announced, our new line of High Definition Printer(TM) (HDP) systems had not yet come up to desired production levels, and therefore held back our sales growth in the second quarter of 2000. We are currently shipping HDP systems against a solid order backlog, and are continuing our process of ramping up production levels. Our distribution partners and customers continue to be excited about the capabilities of the HDP line which is further strengthening Fargo’s competitive positioning in the plastic card personalization industry.”

For the six months ended June 30, 2000, net sales were $28,677,000, vs. net sales of $25,940,000 for the comparable six-month period of 1999. Net income available to common stockholders for the six-month period of 2000, including an after-tax extraordinary loss of $206,000 for the write-off of deferred financing costs, was $1,148,000, or 11 cents per diluted share, compared to $902,000, or 13 cents per diluted share, in last year’s six-month period. Excluding the extraordinary loss, net income available to common stockholders per diluted share was 13 cents in this year’s six-month period, equal to the 13 cents per share reported for the same period last year.

About Fargo

Fargo Electronics, Inc., founded in 1974, is the world’s leading manufacturer of desktop systems for on-site, instant issuance of personalized plastic identification cards. Personalized identification cards — produced by end users of the more than 35,000 Fargo systems currently installed throughout the U.S. and in 86 countries — provide physical, information and transaction security for a wide variety of applications including retail stores, e-commerce, government installations, schools, sports and recreation facilities, clubs and associations, and correctional facilities. More than 350 million personalized cards have been produced by Fargo systems, utilizing Fargo’s proprietary line of consumable supplies. For more information, visit Fargo’s website at

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New PULSE VP

PULSE EFT Association announced the appointment of Carrie Brown to the post of vice president of information systems.

Brown will coordinate transaction research and will be involved in the integration and implementation of new technologies. Brown has an extensive background in PULSE operations, having served for more than 10 years as manager of switch technical services at Chase Bank of Texas, operator of the PULSE switch.

“The vast firsthand experience that Carrie Brown has in our core business, the switching and settling of millions of transactions each day, combined with her insights into innovative ways to use electronic payment technology to anticipate and meet consumer demand, will be of great benefit to the network and its members,” said Stan Paur, PULSE president and CEO.

PULSE EFT Association serves more than 2,000 banks, credit unions and savings and loans in a nine-state primary service area including Alabama, Arkansas, Colorado, Louisiana, Mississippi, New Mexico, Oklahoma, Tennessee and Texas. The network processes in excess of 45 million transactions monthly and features more than 46,500 ATMs and 260,000 point-of-sale (POS) terminals across the country.

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