For The Defense

Another nonprofit, nonpartisan citizen group has joined the support of VISA and MasterCard in its antitrust defense. The VA-based 300,000-member National Taxpayers Union issued a press release Wednesday calling for federal officials to stop “mauling the marketplace” by ending involvement in the ongoing feud among credit card companies. The NTU says “The government’s case against VISA and MasterCard has the same troubling signs for taxpayers as the ill-founded foray against Microsoft.” NTU also maintains that American Express worked closely with federal prosecutors in bringing this case in order to avoid expensive private litigation.

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Korea Money Tx

MoneyGram International and Hanvit Bank have signed an agreement to provide international money transfer service to Korea, marking the first time a money transfer company has been introduced to millions of South Koreans.

South Koreans can receive funds with the well-known MoneyGram money transfer service at all 791 Hanvit Bank branches located in major cities all over the country. In addition, the agreement lets customers transfer money within 10 minutes to virtually anywhere in the world from 25 bank branches.

According to Iain Blackwood, CEO of MoneyGram International, the new service is an immediate benefit for many South Koreans.

“Now those people living and working in other countries such as the U.S., China and India can remit funds back to their families quickly, conveniently and safely,” he said.

Blackwood said other customers expected to use the service are students living abroad, foreign travelers in need of emergency funds and South Koreans who need to transfer funds domestically.

The announcement was made at the Radisson Seoul Plaza Hotel by both companies’ key officers — Jin-Man Kim, CEO of Hanvit Bank and Iain Blackwood of MoneyGram International. Also present at the announcement were Mohit Davar, COO and CFO of MoneyGram International and Andrew Tse, managing director Asia Pacific of Thomas Cook Group.

As South Korea’s largest financial institution and one of the top 100 banks in the world, Hanvit Bank has total assets of more than 100 trillion won and offers a full range of banking services and products for both individuals and corporations. Hanvit Bank was created from the merger of The Commercial Bank of Korea and Hanil Bank on January 4, 1999.

MoneyGram Payment Systems, Inc., a subsidiary of Viad Corp (NYSE:VVI), is a leading money transfer services company with more than 30,000 locations in more than 130 countries around the world.

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Fenimore on Pedestal

Pedestal Inc., the leading Internet-based secondary mortgage marketplace, announced that Philip Wood and William M. Fenimore, Jr. have been elected to the Board of Directors.

Mr. Wood, 45, is Managing Director, Business Development for Reuters Trading Solutions. Reuters recently made a $35 million investment in Pedestal as part of a $45 million round of funding. The two firms have also entered into a global marketing and product development agreement.

Previously, Mr. Wood was Deputy CFO of the Reuters Group PLC. A graduate of Balliol College, Oxford University, he is also a non-executive director of TIBCO Software Inc., and until this year was a director of Instinet Corporation. Mr. Wood is a fellow of the U.K. Institute of Chartered Accountants.

Mr. Fenimore, 56, is currently a strategic advisor to Internet companies on technology issues. Previously, he was CEO of Integrion Financial Network, a start up company owned by 16 large financial institutions, VISA and IBM established to build and operate a common Internet technology infrastructure to serve the e-commerce needs of financial services companies. Prior to Integrion, Mr. Fenimore served as Group Executive Vice President, Chief Technology Officer and Strategic Planning Officer for Meridian Bancorp. He holds a Bachelor of Arts in Business Administration from Lenoir Rhyne College and an MBA from Drexel University. Mr. Fenimore is also a member of the Board of Advisors of Future Technologies Venture Fund.

“We are delighted to welcome Philip and Bill to the Pedestal Board,” said Stuart A. McFarland, President and CEO of Pedestal Inc. “Their understanding of how innovative technology is transforming industries like the secondary mortgage market will significantly contribute to Pedestal’s expansion as the leading platform for trading mortgages and other financial assets. We welcome their experience as we continue to develop specialized value-added services for our customers through our alliances with Reuters, Deutsche Bank and other institutions.”

Other members of the Pedestal Board are: Chairman and Founder Yung Lim; Mr. McFarland; Michael Brown, Senior Associate, Battery Ventures; Joel Horne, Managing Director and Head of ABS/MBS e-Commerce at Deutsche Banc Alex. Brown; Desoto Jordan, private investor and co-founder Perot Systems Corporation; William H. Lacy, former Chairman and Chief Executive Officer of MGIC Investment Corp; Donald E. Lange, President and Chief Executive Officer of Pacific Financial Services, Inc.; and R. David Tabors, Principal, Battery Ventures.

About Pedestal

Through its neutral, proprietary Internet-based trading platform, pedestal.com, Pedestal provides enhanced liquidity, expanded market access, lower transaction costs, and integrated customer service to both buyers and sellers in the secondary mortgage marketplace, the largest financial market in the world in terms of trading volumes.

Pedestal currently offers online platforms in two markets: whole-loan one- to four-family residential mortgage loans and TBA-MBS (To-Be-Announced Mortgage-Backed Securities).

Pedestal’s experienced team of secondary mortgage market professionals is currently concentrating on the development of two additional target markets: commercial and multifamily mortgage loans and securities; and asset-backed securities (ABS) and CMOs (collateralized mortgage obligations and other derivative mortgage products).

Headquartered in Washington, DC, Pedestal has over 1,800 users representing approximately 1,000 institutions. For additional information, please visit their website at [http://www.pedestal.com][1].

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

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Debt Doubling

Revolving consumer credit continues to grow at about double the rate of one year ago. The month of May is historically a slower month for US revolving consumer credit, which includes mostly credit card debt. According to preliminary figures released this week by the Federal Reserve, Americans added nearly $4.6 billion in outstanding revolving credit during May. This translates into an 8.9% annual growth rate for May 2000. One year ago revolving consumer debt grew a mere 4.5%. Over the past twelve months consumers have added more than $54 billion to revolving credit. Overall consumer credit is now growing at a 9.8% rate, according to the FRB. At the end of May, American consumers were $1.450 trillion in debt, exclusive of home mortgages.

REVOLVING CREDIT HISTORICAL
May00 Apr00 Mar00 Feb 00 Jan00 Dec99 Nov99
%GRWTH: 8.9% 12.7% 13.8% 9.4% 18.5 12.5 10.2
$OWED: $626.6 622.0 615.5 608.5 605.0 595.8 589.8

Oct99 Sep 99 Aug99 Jul99 Jun99 May99
%GRWTH: -0.5 0.0 2.5 12.1 13.8 4.5
$OWED: 584.3 584.5 584.5 584.6 578.5 572.2

Source: Federal Reserve; revised figures as of 07/10/00; For
complete historical data visit www.carddata.com.

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FVS Register

Evolv Adaptive Technology, providers of the Skipjack Internet payment gateway, announced its strategic alliance with FleetBoston Financial Corporation, the nation’s eighth largest bank holding company, to offer merchants a Virtual Cash Register. The Fleet Virtual Cash Register (VCR)SM, secured by Skipjack, combines a private-label, secure Internet-based payment gateway from Evolv, with a merchant account package designed for fast and reliable payment processing. With the Fleet VCR, merchants can accept, authorize and process all major credit, debit and purchase cards directly from their website.

“We selected Evolv’s Skipjack Internet payment gateway because of its robust reporting features and high level of fraud detection and risk mitigation capabilities,” said Brian J. Connolly, Senior Vice President and Manager of Fleet Business Payment Solutions. “Together, we can provide merchants with a single solution to manage their transactions in a secure, online environment.”

Fleet will market the Skipjack-powered Virtual Cash Register to its customer base and will offer integration with its network of Preferred Web Site Developers. In addition, Evolv will be working with its other technology and service partners to assist Fleet in offering an entire suite of offerings, including an array of storebuilder, online mall, shopping cart, and other ancillary services.

“We are extremely pleased that Fleet has decided to work with us to bring this technology to their customers. We know that security always comes first with Fleet and we are proud to be the technology behind Fleet’s Virtual Cash Register,” said Brad Hoeweler, Evolv President and Chief Executive Officer. “Our alliance with Fleet further validates what we believe is the best payment processing technology in the marketplace.” Fleet’s Business Payment Solutions group provides merchant credit card processing and e-commerce payment processing services to businesses. Through its own capabilities, as well as its network of partners and strategic alliances, Fleet offers best-of-class solutions for its customers. For additional information, visit the Fleet web site at [www.fleet.com/buspppsso.html][1] or call Fleet Business Payment Solutions at 1-800-896-6512.

About Skipjack Merchant Services

A service of Evolv Adaptive Technology, Skipjack Merchant Services was created to address the needs of merchants, merchant acquiring organizations and financial institutions wanting to take advantage of the exceptional opportunities in ecommerce. An Internet payment gateway that performs the function of a standard credit card authorization terminal in a secure, real-time environment, Skipjack enables merchants to automatically accept, authorize and settle credit card payments on their Web site. Platform and browser independent, Skipjack features real-time authorization and settlement as well as e-mail receipts for customers and fulfillment entities. The service can be private-labeled for customized use by financial institutions, acquirers and third-party processors. Skipjack supports Visa, MasterCard, American Express, Discover card, Diners Club, JCB and debit cards. Bradley Madison Co. dba Evolv Adaptive Technology is headquartered in Cincinnati. For additional information, visit the Skipjack Web site at [www.skipjack.com][2].

About FleetBoston Financial

FleetBoston Financial is the eighth-largest bank holding company in the United States. An $187 billion diversified financial services company, it offers a comprehensive array of innovative financial solutions to 20 million customers in more than 20 countries and territories. Among the company’s key lines of business are: retail banking, with over 1,250 branches in the Northeast; commercial banking, including capital markets/investment banking and commercial finance; investment services, including discount brokerage; and full-service banking through more than 250 offices in Latin America. FleetBoston Financial is headquartered in Boston and listed on the New York Stock Exchange (NYSE: FBF).

[1]: http://www.fleet.com/buspppsso.html
[2]: http://www.skipjack.com/

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Sector Growth

Among bank credit card market segments, the sub-prime credit card segment continues to lead the pack. According to CardData (www.carddata.com), receivables growth in the sub-prime sector, which includes secured cards, hit 38% between the first quarter 1999 and first quarter 2000. Meanwhile issuers focused in the co-branded and affinity segments continued to fade, posting a 6% annual growth rate. Among high growth sub-prime issuers is SD-based First Premier Bank, which posted a 111% increase between 1Q/99 and 1Q/00. OR-based First Consumers Bank posted a 59% growth rate while Providian and Direct Merchants posted a 55% and 45% growth rate, respectively. Low rate issuers continued to struggle while credit unions posted an above average annual rate of receivables growth. Powerhouse MBNA continued to lead the industry with an average balance per active account of $3351.

SECTOR MONITOR
SECTOR GROWTH ADB 1Q-VOL
Co-Branded/Affinity 6% $2460 $1052
Secured/Sub-Prime 38% $1228 $ 390
Low Rate > $3B 3% $2275 $1024
Low Rate

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Powerpay PartnerAdvantage

Powerpay.com, a Ceridian company, has joined Visa Business’ PartnerAdvantage, a new program created exclusively for Visa Business’ over four million cardholders. With this agreement, Powerpay.com becomes one of eight leading companies to offer Visa Business cardholders ongoing benefits and savings on services and products that are key to the success of small businesses.

“We are excited to include Powerpay.com in the Visa Business PartnerAdvantage program,” said Michael Souza, vice president of small business products and services at Visa U.S.A. “In developing alliances, we look for industry leaders that offer solutions designed for the special needs and service requirements of small businesses.”

“PartnerAdvantage presents a great opportunity to team up with other companies that, like Powerpay.com, work with small and emerging businesses,” said Bob Kudla, director of marketing and business alliances at Powerpay.com. “The success of many small businesses depends on their ability to stay ahead of the marketplace by taking full advantage of products and services that have been designed for them.”

Powerpay is a Web-based solution that enables small businesses to complete payroll transactions via the Internet from anywhere, at any time. Designed specifically for companies that recognize the potential of the Web to streamline business processes, Powerpay enables those companies to transmit data to Powerpay.com via the Internet, making payroll processing easier and more convenient for small business owners. Powerpay also provides small businesses with access to services such as new hire reporting, tax filing, direct deposit, optional benefits programs, unemployment filing, and special reports, services that were previously enjoyed only by larger companies. Current and potential Visa Business cardholders can access additional information about Powerpay Internet payroll service by visiting ( [http://www.powerpay.com/visa_jp.html][1] ) or call 800-WE-PAY-YOU (800-937-2996).

Other companies participating in the Visa Business PartnerAdvantage program include Compaq; Maintenance Warehouse, a Home Depot Company; Choice Hotels International; Pep Boys; AAA (American Automobile Association); eWausau.com, a business unit of Wausau Insurance Companies; and PitneyWorks.com, a division of Pitney Bowes Inc. PartnerAdvantage offers Visa Business cardholders exclusive, ongoing benefits and savings on products and services from the most popular and respected companies in the world simply by owning and using a Visa Business card. To learn more about PartnerAdvantage, visit ( ).

Powerpay.com Inc., a Ceridian company, is a business unit of Ceridian Employer Services. Powerpay.com provides payroll and tax filing services to companies with up to 200 employees. For more information about Powerpay.com and Ceridian Powerpay Internet Payroll Service, visit [http://www.powerpay.com][2] or call 800-WE-PAY-YOU (800-937-2996). Ceridian Employer Services is a provider of HR/payroll and tax filing services and a business unit of Minneapolis-based Ceridian Corporation (NYSE: CEN), a leading information services company that serves the human resource, media and transportation markets. Ceridian’s human resources businesses offer HR/benefits solutions that support organizations’ complete employment life cycle and maximize their investment in people.

Visa U.S.A. is the leading payment brand and the largest payment system in the United States, with more volume than all other major payment cards combined. Visa plays a pivotal role in advancing new payment products and technologies to benefit its more than 14,000 U.S. member financial institutions and their cardholders. There are more than 330 million Visa credit, commercial and check cards, which generate more than $720 billion in annual transaction volume. Visa-branded cards are accepted at over 17 million locations worldwide, including some 625,000 ATMs in the Visa/PLUS Global ATM Network. Visa’s Internet address is [http://www.visa.com][3]

[1]: http://www.powerpay.com/visa_jp.html
[2]: http://www.powerpay.com/
[3]: http://www.visa.com/

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NetBank 2Q

NetBank announced that new account growth during the bank’s second quarter exceeded all previous quarters, even outpacing the record-breaking number posted last quarter. Further, account acquisition costs for the year 2000 continue to be lower than costs associated with new account acquisition during third and fourth quarters of 1999.

“Our quarterly account growth rate has more than doubled since the last half of 1999, and our account acquisition cost remains well below $200 per account,” said D.R. Grimes, NetBank CEO. “This is far less than the industry norm and well below our cost during the last half of 1999.”

Between April and June 2000, more than 22,000 net new accounts were opened, 38 percent more than the number added in the first quarter and double the number opened in second quarter a year ago. As of June 30, 2000, NetBank reported more than 104,000 total active deposit accounts.

“Over the last two years, NetBank’s account growth has risen each successive quarter, while at the same time we’ve reported eight consecutive quarters of profitability,” said D.R. Grimes, chief executive officer of NetBank. “Our continued growth in customer accounts and our ability to remain profitable clearly demonstrate the viability of our web-based business model.”

Grimes continued, “We surpassed an important milestone this quarter when we reached our 100,000th account. To reach this mark in just three years is an amazing accomplishment within the banking industry. All of us who work at NetBank are extremely proud of how far we’ve come, but, at the same time, we are concentrating on building an infrastructure to service significant account growth in the future. NetBank’s distinctive offering — higher rates, lower fees, and innovative online financial services — affords us the opportunity to greatly benefit from the rapidly growing number of consumers going online.”

About NetBank

NETBANK, Inc, (Nasdaq: NTBK); ([http://www.netbank.com][1]), is a financial services company whose sole subsidiary, NetBank, member FDIC, is the first profitable pure Internet bank in the country, having achieved profitability in the past eight consecutive quarters. With over $1.5 billion in assets and customers in all 50 states and 20 foreign countries, NetBank was recently ranked as a Money.com pick for “Best Online Banks.” With its low-cost, branchless business model, NetBank is able to reward its customers with high interest rates on deposits with low or no-fee banking services. Products and services include free online account access, free checking, free unlimited online bill payment and presentment, free checks, free unlimited ATM use, VISA(R) Check Card, VISA(R) credit cards, online brokerage services, mortgage lending, home equity lines and loans, insurance, IRAs, and business equipment leasing services. NetBank is a member of the AFFN, Cirrus, Honor/Star, and NYCE ATM Networks. For more information on NetBank, its products and services, visit the Web site at [http://www.netbank.com][2], or call 1-888-BKONWEB (256-6932).

[1]: http://www.netbank.com/
[2]: http://www.netbank.com/

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Greenpoints Card

S&H greenpoints.com confirmed this morning it has plans to launch a rewards credit card later this year. S&H greenpoints.com is the digital reinvention of The Sperry & Hutchinson Company. The company first introduced ‘S&H Green Stamps’ in 1896. In early 1999, S&H was re-acquired by a group of investors led by a member of the founding Sperry (Beinecke) family to launch the company into the digital version of ‘S&H Green Stamps’. This week S&H greenpoints.com announced a partnership with ServiSense, a bundler of household utilities services, such as electricity, fuel oil, natural gas, local and long distance telephone. Under a five-year contract S&H will issue greenpoints to ServiSense customers on a monthly basis. Customers will automatically receive an introductory offering of 6,000 S&H greenpoints just for joining ServiSense. Customers will then earn 10 S&H greenpoints for every dollar they spend on ServiSense’s energy and telephone bundle. Furthermore, by paying their household bills with a credit card, to be offered by S&H greenpoints later this year, consumers can earn even more rewards. ServiSense customers will be able to redeem or donate their points through either the online rewards catalog or by mail. S&H greenpoints offers more than 1,000 rewards.

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EPOST Deal

Canada’s EPOST, an electronic post office, now offers a single access point for EBPP with any Canadian financial institution. The solution was developed through a partnership between EPOST and TelPay. EPOST users can pay bills via electronic debit in their secure electronic post office box, and also choose to receive all of their mail in the same place. TelPay has existing relationships with 1,200 billers from across Canada, including all major retailers, utilities, telecommunications, and credit card companies.

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Vital Merchants Services

Vital Processing Services announced Tuesday the formation of Vital Merchant Services, a unit specializing in POS terminal management services. Vital recently completed purchasing the assets and business of AMS and its subsidiary SupplyXpress, and VMS will be built on that base. Keith Smith has been appointed president and CEO of Vital Merchant Services. Smith formerly served as EVP of Vital Processing Services, and before that served as VP of sales and marketing for Gibbs Management Group, a terminal services provider. Vital Merchant Services will remain headquartered in Sacramento, CA, with offices in San Diego.

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EVP Educate

Fair, Isaac and Company , the leading provider of decision technology, has named Eric Educate to the newly created position of executive vice president of worldwide sales. Reporting to President and CEO Tom Grudnowski, Educate will hold responsibility for growing global sales of Fair, Isaac’s analytics, decision systems, and data management services and consulting across multiple industries, including financial services, insurance, telecommunications, and retail. In fiscal 1999, the company recorded revenues of $277 million.

“We welcome the strong sales leadership experience that Eric brings to our team,” said Grudnowski. “His proven record of growing sales in fast-paced, high-tech environments, and leading large, global sales organizations will allow us to further drive our solutions into a broader marketplace, both on the Internet and in bricks-and-mortar environments.”

Grudnowski added, “Fair, Isaac has a deep history of delivering the highest levels of predictive power and analytics available to help our clients make better business decisions. Our focus now is on resourcing our sales organization to accelerate momentum in our revenue growth.”

Educate has over 20 years of high-technology sales and senior-level sales management experience. Most recently, he held the position of vice president of global sales for Imation Corporation, an Oakdale, Minnesota-based data storage and information management company, where he led a sales force of 200 and achieved annual sales in excess of $1.4 billion. Prior to Imation, Educate was a key sales executive at EMC Corporation in Hopkinton, Massachusetts, where he was instrumental in growing sales of the company’s information storage products five-fold. Previously, Educate spent more than 10 years at Silicon Graphics Inc. (SGI), a Mountain View, California, provider of workstations, where he served as area vice president during a period of explosive sales growth, achieving annual growth rates of over 35 percent. He holds a B.S. in finance from the University of Illinois.

“I’m excited about this opportunity,” said Educate. “Fair, Isaac has unique predictive software offerings and CRM tools which are backed by deep intellectual capital and proprietary technology. I’m looking forward to broadening our level of sales support to our current clients and introducing our proven solutions to new customers across vertical markets.”

Fair, Isaac (NYSE: FIC) is a global provider of customer analytics and decision technology. Widely recognized for its pioneering work in credit scoring, Fair, Isaac revolutionized the way lending decisions are made. Today the company helps clients in multiple industries increase the value of customer relationships. Fair, Isaac has made the Forbes list of the top 200 U.S. small companies seven times in the last eight years, and was named by InformationWeek as one of the top 50 application service providers. Headquartered in San Rafael, California, Fair, Isaac has 21 offices worldwide.

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