Debt Uptick

Revolving consumer credit continues to grow briskly for the fourth month in a row. However the rate of increase nudged down a bit compared during April. According to preliminary figures released Friday afternoon by the Federal Reserve, Americans added nearly $6.0 billion in outstanding revolving credit during April. This translates into an 11.4% annual growth rate for April 2000. One year ago revolving consumer debt grew a mere 5.6%. Over the past twelve months consumers have added more than $51 billion to revolving credit. Approximately 80% of revolving credit is bank credit card debt. Overall consumer credit is now growing at a 7.8% rate, according to the FRB. At the end of April, American consumers were $1.439 trillion in debt, exclusive of home mortgages.

REVOLVING CREDIT HISTORICAL
Apr00 Mar00 Feb 00 Jan 00 Dec99 Nov99 Oct99
%GRWTH: 11.4% 13.8% 9.4% 18.5 12.5 10.2 -0.5
$OWED: $621.4 615.5 608.5 605.0 595.8 589.8 584.3

Sep 99 Aug99 Jul99 Jun99 May99 Apr99 Mar99
%GRWTH: 0.0 2.5 12.1 13.8 4.5 5.6 -0.9
$OWED: 584.5 584.5 584.6 578.5 572.2 569.9 567.3

Source: Federal Reserve; revised figures as of 06/07/00; For complete
historical data visit www.carddata.com.

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Proton World Award

At a gala dinner at the National Building Museum in Washington DC on 5 June, a Computerworld Smithsonian Award (CWSA) in the Finance, Insurance & Real Estate category was awarded to Proton World.

Proton World was nominated as a CWSA candidate by Mr George McNeil, Executive Vice-President of Bull Americas, for innovative use of information technology to benefit society in its electronic purse systems. Bull is a long-standing technology partner of Proton World, and helped to develop the first Proton cards that were launched in Belgium in 1995.

The Award was presented by Mr Patrick J. McGovern, founder and Chairman of International Data Group, Mr Spencer Crew, Director of the National Museum of American History and Ms. Maryfran Johnson, Editor-in-chief of Computerworld magazine.

The Award was accepted on behalf of Proton World by Mr Daniel Skala, Executive Vice-President, Sales, who said, “We at Proton World firmly believe that technology is making everyone’s lives better, easier and more secure, and I thank you for recognising our contribution, and that of smart cards in general, to this. With our industry partners, such as Bull, we are actively developing useful smart card applications to solve people’s everyday problems.This award has encouraged Proton World to further strengthen its presence in North America, which we see as a key long-term market for our products and those of our partners.”

The electronic purse (e-purse) was the first application to be developed using the Proton technology, which now offers a full multiple application range, all with the world-renowned Proton high security features. Bull, with its unparalleled experience in the development of the first smart cards in the 1970s in France, has been a technology partner of Proton World since Proton World’s creation in 1998.

“Proton-based smart cards supplied by Bull are in use in Belgium, Malaysia, Mexico, the Netherlands, Sweden and Switzerland” said Mr Philippe David, Vice-President , Sales & Marketing, Banking Sector at Bull Smart Cards & Terminals “Clearly the well-known strengths and flexibility of the Proton technology are responsible for this success.”

“One of our challenges and goals for the year 2000 is to convert this overwhelmingly positive international response into commercial success in the United States,” said Mr George McNeil, Executive Vice-President at Bull, Americas. “We hope that this success for Proton World will encourage the accelerated deployment of their extraordinary range of smart card-based applications, including secure e-commerce, telecommunications, transportation and loyalty.”

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ATM/Debit Card Protocols

UTM Systems announced the completion of project designed to provide a framework for evaluation of ATM/debit card payment protocols for Internet payments. The project is summarized in a report that outlines a comprehensive evaluation process for online ATM/debit transaction protocols. The report that was released cites ten categories of evaluation criteria to assess the viability of various ATM/debit card transaction solutions. These categories include security, privacy, branding, convenience/functionality, financial model implications, legal issues, protocol independence/compatibility, state of the art technology usage, transition to other technologies like wireless communications, and integration with existing payment systems and infrastructures. KPMG was commissioned to develop the evaluation framework. The project was completed in cooperation with several members of the NACHA Internet Secure ATM Payments workgroup.

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Student Advantage & AT&T Renew

Student Advantage, Inc. announced that it has restructured its membership and marketing agreements with AT&T, scheduled to terminate in June 2001, through a new integrated marketing agreement extending through May 2003.

The new agreement provides Student Advantage with an opportunity to transition its marketing efforts from the AT&T College Calling Card to a much broader offering of AT&T services. “The original AT&T/Student Advantage agreements have been very successful in terms of customer acquisition, product awareness and general visibility on college campuses nationwide,” said Raymond Sozzi, Jr., CEO and President of Student Advantage, Inc. “We are excited to leverage our marketing expertise and proprietary distribution channels to promote a brand new set of AT&T products and services.”

The new agreement also modifies the terms of AT&T’s membership commitment. Under the previous two agreements, AT&T agreed to purchase 1,250,000 Student Advantage Memberships during the 2000-2001 academic year. Under the new agreement, AT&T’s minimum membership purchase is lowered to 900,000 during the same period, at a reduced membership fee. However, the agreement minimally commits AT&T to a contract value of $9 million for the upcoming academic year by including multi-million dollar purchases of on- and off-line media, on- campus events and other marketing services from Student Advantage. In addition, Student Advantage will have the opportunity to generate acquisition bounties on AT&T services, which were not incorporated into the prior agreements. The new agreement also reduces certain exclusivity restrictions, thus allowing Student Advantage to execute valuable membership distribution agreements with other major college marketers that do not compete with AT&T.

“We look forward to building on Student Advantage’s success at signing up AT&T Calling Card customers, by broadening the array of AT&T services sold to students through Student Advantage’s unique and powerful marketing channels,” said Brian Sullivan, AT&T’s director of college marketing.

Addressing the new opportunities afforded by this agreement, Mr. Sozzi said, “This new agreement allows Student Advantage to expand our sales capabilities in high growth product and service categories for AT&T as well as accelerate our additional development of alternative partnerships for the distribution of the Student Advantage membership. We believe strongly that with our new relationship with AT&T, the pre-eminent brand and marketer in the student market, Student Advantage will continue to grow its leadership position and build upon the mutual successes we’ve had together.”

About Student Advantage

Founded in 1992, Student Advantage, Inc. (Nasdaq: STAD) is the leading offline and online portal to the higher education community. Student Advantage, Inc. reaches its constituents through its Student Services, University Services and Business Services groups. The overall mission of Student Advantage is to help students save money, work smarter, and make more informed life decisions.

Today, Student Advantage, Inc. reaches millions of students and counts over 1.85 million members enrolled in the Student Advantage(R) Membership Program. The Company has proprietary commerce relationships with more than 50 national retailers and 15,000 local participating locations in 125 cities throughout the country, including AT&T, Amtrak(R), Staples, Textbooks.com and Tower Records.

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AmEx CTO

American Express Corporate Services confirmed this morning it is introducing this month its newest Web-based corporate travel booking system, ‘American Express Corporate Travel Online’. The pilot caps a joint effort by AmEx and GetThere.com and follows an intensive test with four companies. ‘CTO’ combines GetThere’s online booking systems with AmEx travel expertise and experience in providing implementation and operations support for interactive travel technology to more than 200 companies. AmEx has also integrated its advanced travel operations technology into ‘CTO’, including its ‘Speedy Low-Fare Search’ engine, negotiated fare and rate database and back-office agency quality-assurance systems.

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First of Omaha Gets the Works

First of Omaha Merchant Processing and Works.com, the leading Internet business purchasing service, announced a strategic partnership to deliver online purchasing management and volume buying power to First of Omaha’s 65,000 merchant customers. Under the agreement, Works.com becomes the premier purchasing solution in First of Omaha’s e-Business offerings. By using Works.com, First of Omaha customers can increase control and reduce the cost of purchasing and access a marketplace of over 30,000 business products, including computer software and hardware, business machines, telecommunications devices and plans, office supplies, furniture, and maintenance and janitorial supplies. The online purchasing service is accessible to customers through the [http://foomp.works.com][1] Web site.

As part of the agreement, First of Omaha customers can also join the Works.com Cooperative Buying Program, which aggregates the buying power of member companies to secure volume discounts on hundreds of the business products they use most. This program can help members save up to 30 percent off their monthly supplies bill.

Nick Baxter, president of First of Omaha, commented on the significance of this partnership. “Partnering with Works.com allows First of Omaha to expand our suite of products, which enhance and add convenience to our merchant clients. Merchants will now be able to realize purchasing efficiencies that were never possible before. We are excited to offer yet another cost-saving opportunity for our merchant clients.”

“Businesses of all sizes increasingly look to their financial institutions as critical sources of strategic business information and services,” said Bo Holland, co-founder and CEO of Works.com. “First of Omaha is leading the charge to fill this need through a powerful collection of e-Business offerings. By adding Works.com as its premier purchasing solution, First of Omaha is giving customers a powerful service for reducing purchasing costs and improving the way their businesses are run.”

For more information about this agreement, visit [http://www.works.com][2] or [http://www.foomp.com][3].

About Works.com ([http://www.works.com][4])

Works.com is an Internet business purchasing service that automates the purchasing process and gives small and midsize companies volume purchasing power. With Works.com, companies can increase buying efficiency and control spending more effectively by automating and streamlining their purchase process — from purchase request and approval to ordering, tracking, and reporting. Works.com’s wholesale marketplace offers discounts and fast delivery on 30,000 business products, including computer software and hardware, business machines, cellular communication devices and services, office supplies, furniture and maintenance and janitorial supplies. And, Works.com cuts up to 30 percent off customers’ monthly supplies bill by combining customer purchasing power to secure even deeper volume discounts on hundreds of their “most-used” products. Headquartered in Austin, Texas, Works.com is funded by Bowman Capital, Hummer Winblad, Merrill Lynch, Presidio Venture Partners, and Trellis Partners. Bill Gurley of Benchmark Capital is a member of the Works.com board of directors.

About First of Omaha

First of Omaha is a premier payment processor specializing in providing service to both the traditional and Internet direct marketing industries, 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, lodging merchants, petroleum marketers, associations/franchise groups and banks in both the business to consumer and business to business marketplaces. Known for 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 [http://www.foomp.com][5].

[1]: http://foomp.works.com/
[2]: http://www.works.com/
[3]: http://www.foomp.com/
[4]: http://www.works.com/
[5]: http://www.foomp.com/

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ACE Earnings

ACE Cash Express, Inc., the nation’s largest check-cashing chain and a significant provider of related retail financial services, announced that it expects to report lower- than-anticipated earnings for its fourth quarter and fiscal year ending June 30, 2000. The Company expects to report revenues of approximately $36 million for the fourth quarter, with diluted earnings per share expected to range from $0.12 to $0.16 for the quarter. Though the expected fourth quarter revenues would be an increase of 14% over the fourth quarter revenues for the last fiscal year, the diluted earnings per share would be less than the analysts’ estimates of $0.25 to $0.27 per share for the quarter.

For the fiscal year ending June 30, 2000, the Company expects to report revenue of approximately $140 million, which would be an increase of 15% over the revenues for the fiscal year-ended June 30, 1999. Diluted earnings per share for fiscal 2000 are expected to range from $0.86 to $0.90, which would be an increase of 7.5 % to 12.5% over the diluted earnings per share of $0.80 for fiscal year 1999.

The Company plans to announce its full financial results for the fourth quarter and the fiscal year ending June 30, 2000 during the week of August 14, 2000.

“We are disappointed with our expected earnings for the fourth quarter,” said Jay B. Shipowitz, president and chief operating officer. “Earnings per share for the quarter are expected to fall short of the analysts’ estimates. Most of that difference is attributable to the pending settlement of a class action lawsuit, increased costs associated with the rollout of the new Goleta National Bank loan product, greater than expected costs related to self- insured medical claims, and lower bill payment transactions from several billers.”

As previously disclosed, the Company is defending various purported class- action lawsuits regarding its “payday loan” activities. The Company has tentatively reached a settlement in one of those lawsuits and plans to expense the cost of the settlement in the quarter ending June 30, 2000.

“Based on our belief that the Goleta National Bank loan product will bring significant revenues to ACE, we have invested in technology and training to further the program,” stated Jay B. Shipowitz. “We accelerated the rollout, which resulted in higher costs than anticipated in the fourth quarter. But, based on initial consumer demand, we expect that this accelerated rollout will benefit ACE in fiscal 2001. In addition, we had a number of unusually large medical claims that resulted in higher than expected medical expenses.”

Shipowitz also explained, “Several of our large bill payment vendors have aggressively added other agent locations, which has reduced the number of transactions processed at ACE locations. We have, however, added new payment relationships with US West, Oklahoma Natural Gas, Baltimore Gas and Electric, Air Touch Cellular, Verizon Wireless, BellSouth Cellular, and GTE Wireless, which we believe will position the Company well for fiscal 2001.”

Donald H. Neustadt, chief executive officer, stated, “Although our fourth quarter earnings are less than expected, we are confident about fiscal 2001 and feel that our relationship with ePacific.com and Goleta National Bank will provide ACE a platform to dramatically increase our fee revenue from short- term loans and to permit the Company to offer other bank-like services in the future.”

ACE Cash Express, Inc. is headquartered in Irving, Texas and is the largest owner, operator and franchiser of check-cashing stores in the United States. Founded in 1968, the company currently has a network of 1,041 stores, consisting of 885 company-owned stores and 156 franchised stores in 32 states and the District of Columbia. ACE offers a broad range of financial and check-cashing services and is one of the largest providers of MoneyGram wire transfer transactions. In addition, ACE offers money orders, small consumer loans, bill payment services, and prepaid local and long distance telecommunication services. The company’s website is found at [http://www.acecashexpress.com][1].

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

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NextCard Ratings

NextCard continues to dominate credit card marketing on the Internet. For the week ending June 4, banners ads for the ‘NextCard VISA’ reached 19.9% of the at-home audience and 23.8% of the at-work audience. Nielsen/NetRatings reported that nearly 80 million NextCard ad impressions were delivered to at-home users while more than 52 million impressions were delivered to at-work users. Among the top banner ads for the week of May 29 – June 4, were ads for Providian’s ‘GetSmart’ and ‘Aria’ products. Nielsen says the universe of at-home users is now 135 million while the number of at-work users totals 34.1 million. The average click rate for top banners is now 0.29% for at-home users and 0.23% for at-work users.

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KeywareCards

Keyware Technologies announced the acquisition of Alacarte Engineering, one of Europe’s foremost suppliers of smart card applications. The acquisition is part of an aggressive growth strategy designed to bring biometric solutions to mainstream applications.

The acquisition will form a new business unit, KeywareCards, which will focus on integrating biometric authentication systems into Alacarte’s smart card software. Keyware believes that smart cards will become a significant platform for biometric authentication technologies, playing a major role in the protection of confidential transactions.

Alacarte currently specializes in electronic payment and customer loyalty smart card systems. The company designed and developed the SIS smart card system that manages every Belgian citizen’s social security entitlements. The cards also keep track of health and medication records under the Belgian public health care system. Alacarte also provides most Belgian citizens with the popular Delhaize card; a smart card that gives customer reward points to people who purchase groceries from Delhaize stores. The accumulated points are exchanged for a choice of gifts from a catalog.

“Smart cards hold vast amounts of information that magnetic strip cards can’t. They’re an important medium in conducting day-to-day functions such as banking transactions, phone calls and health care identification,” said Jean Claeys, president and CEO of Alacarte Engineering. “Biometric technology is a security application ideally suited for smart cards. When a smart card carries its rightful owner’s bio-prints, carriers can identify themselves before using the card. This means both users and organizations distributing the cards are protected from fraud-related activities.”

“The formation of the smart card business unit through our agreement with Alacarte is part of our strategy to bring biometric authentication technology to mainstream markets,” added Francis Declercq, president and CEO of Keyware Technologies. “We foresee a diverse range of applications utilizing the combined knowledge and experience of the two companies.”

KeywareCards joins Keyware’s two other business units, KeywareB2B, which integrates biometric solutions for ASPs and electronic commerce applications and KeywareID, which integrates biometric solutions for physical access and time and attendance applications.

About Alacarte

Alacarte Engineering is Belgium’s leading chip card systems development center and manufacturer. Alacarte Engineering develops and manufactures a comprehensive range of programmable proximity card terminals, chip card terminals, magnetic stripe card terminals and electronic sub-assemblies. With a wide variety of products, Alacarte is able to satisfy the needs of retail organizations requiring electronic payment and customer loyalty systems; banks, businesses and security system suppliers requiring card based computer and physical access security systems; equipment manufacturers requiring programmable electronic assemblies capable of reading and writing to proximity cards, chip cards and magnetic stripe cards for integration into their own products; companies requiring expertise, training and development support in card technology based systems. For more information regarding Alacarte, please visit [www.alacarte-engineering.com][1].

About Keyware Technologies

Founded in 1996, Keyware Technologies is a pioneer in the field of biometrics, the technology of verifying an individual’s identity by means of personal characteristics such as voice, face and fingerprints. Co-headquartered in Belgium and Woburn, Mass., Keyware is the world’s leading provider of intelligent biometric solutions for real-world business applications. The solutions optimize security and convenience for physical locations, e-commerce, network and telecommunications applications. Keyware’s award-winning technology is sold globally through an extended network of OEMs, system integrators and VARs. For more information, please visit Keyware’s Website at [www.keyware.com][2].

Keyware Technologies, Keyware, the Keyware logo, Layered Biometric Verification, LBV and LBV Internet Toolkit are all trademarks of Keyware Technologies, Inc. All other product names, service marks and trademarks mentioned herein are trademarks of their respective owners.

[1]: http://www.alacarte-engineering.com/
[2]: http://www.keyware.com/

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iVerify

Brooklyn, NY-based iVerify announced this morning a new service for Internet merchants to confirm that a customer truly can be reached at the telephone number he or she has supplied. ‘iV-Caller’ inserts an additional user verification and security step prior to approval of an online credit card transaction. An automated call to the telephone number furnished by the buyer requires him or her to punch in a six-digit code he or she selected at the site. Upon doing so, the order is verified and confirmed. If the buyer is using that phone line to connect to the Internet, or the phone is busy for some other reason, ‘iV-Caller’ keeps trying the number to complete the verification procedure. For merchants who prefer that the phone number supplied be a landline phone, the verification process can include a step that requests someone who provided a cellular or pager number to give a regular phone number instead. ‘iV-Caller’ covers all buyers in the USA and Canada, and costs $29.95 a month plus 9 cents per verification.

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Wireless MasterCard

Citigroup’s e-Citi unit announced Friday it will join MasterCard’s ‘Global Mobile Commerce Forum’. The forum, which now has more than 200 participants, was established last November to foster knowledge exchange between MasterCard’s and Europay International’s member financial institutions, network operators and mobile technology companies. The last ‘Mobile Commerce Forum’ meeting was co-hosted by Europay International, and was held in March in Genval, Belgium and attracted more than 150 participants from around the world. A variety of mobile commerce solutions were discussed, ranging from “dual slot” approaches with a separate bank payment chip (either on a plastic card or as another SIM card) to remote wallet solutions. The group estimates that by 2001, 50 million consumers will own a commerce-capable wireless phone.

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CIBC Funds SLMsoft

SLMsoft.com announced that it has entered into a strategic banking relationship with the Canadian Imperial Bank of Commerce, one of Canada’s largest banks. CIBC is providing $22 million of operating line, term loan and mezzanine financing.

“We are enthusiastic about our partnership with SLMsoft.com and have great confidence in the company’s ability to achieve its goal to become one of the top three e-commerce suppliers to the financial services market,” said Mauro Spagnolo, Vice President of CIBC’s Knowledge-Based Business. “Prior to entering this relationship, we conducted an extensive study of SLMsoft.com — its strategic direction, management, products and technology, market positioning and financial performance. Our conclusion was that a banking relationship with SLMsoft.com would evolve quickly into a strategic customer- supplier partnership that will benefit both organizations.”

SLMsoft.com intends to use the proceeds to consolidate banking relationships, to provide additional working capital to fund its ongoing transition to an e-commerce application service provider (ASP), to finance additional research and development expenditures and to increase resources on the sales and marketing team. As part of the financing agreement, SLMsoft.com provided CIBC with 250,000 warrants at $8.00 to enable their equity participation in the success of the relationship.

“SLMsoft.com invested a significant amount of time assessing banks on both sides of the border. We were most impressed with CIBC’s commitment to the knowledge-based industry sector, and their innovative approach to assembling a comprehensive financing package while also validating our technology strategy and product architecture,” said Govin Misir, Chairman and CEO of SLMsoft.com. “We’re delighted to have CIBC as SLMsoft.com’s banking partner, and look forward to a long and mutually rewarding relationship. This partnership is especially exciting because of our shared goals for growth and profitability, and our synergistic visions for the future of electronic and wireless Internet banking.”

About CIBC

CIBC is a leading North American financial institution offering more than 8 million personal banking and business customers a full range of products and services through its comprehensive electronic banking network, branches and offices across Canada, in the U.S. and around the world.

About SLMsoft.com, Inc.

SLMsoft.com is a leading provider of end-to-end open system e-commerce solutions to financial institutions, governments and healthcare organizations. Founded in 1986, SLMsoft.com delivers the world’s broadest array of electronic transaction management solutions to customers in 53 countries around the globe. SLMsoft.com provides all the software, services and infrastructure businesses need in order to offer complete B2B and B2C e-commerce services to their customers. The Company is a single-source provider of in-house and outsourced solutions through its EC-street(TM) network of e-commerce products and services. The EC-street network includes Internet banking, ATM and kiosk networks and services, core banking systems, check imaging, telephone banking, electronic bill presentment and bill payment, point-of-sale and point-of- service management, debit and credit card solutions, web site design and hosting, and e-financial portal development. EC-street’s real-time connectivity is facilitated through SLMsoft.com’s ESP-Link(TM) middleware. The Company has over 650 employees in 22 offices worldwide.

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