SPYRUS & VISA Team

SPYRUS, the Internet ID company for secure e-business, announced a strategic development agreement with Visa International enabling SPYRUS to develop Public Key Infrastructure products that support the Open Platform, a comprehensive system architecture for rapid development of globally interoperable smart card systems. SPYRUS and Visa will also work cooperatively in promoting and marketing Open Platform products to Visa member financial institutions.

The agreement is a natural extension of SPYRUS’ smart card and PKI business, which targets the high-assurance auditable requirements of financial risk management operations. By providing comprehensive integration of the installation and operation of the Open Platform smart cards with its Internet Enabling Security (IES) PKI systems, SPYRUS will provide a one-stop solution to Visa members, enabling more rapid, secure and economic deployment of business applications to the members’ customers. SPYRUS, a leading supplier of public key-based products and solutions that provide the critical foundation for secure Internet commerce, has been a primary contributor in defining security specifications for the Open Platform architecture since 1997.

“The Open Platform provides financial institutions with a broad choice of application suppliers so that Visa cardholders can be offered a range of different products and services on their smart cards, such as credit and debit functions, electronic purse, identification, and network and building access,” said Jim Lee, senior vice president, Emerging Technologies, Visa International. “Key to the success of the Open Platform is high-assurance smart card security. SPYRUS, as a leader in PKI and smart card technologies, will be able to offer our member institutions a totally integrated high-assurance solution for Open Platform transactions.”

“Smart cards will become ubiquitous as personal, portable financial services tools across all global institutions,” said Sue Pontius, President and CEO of SPYRUS. “By delivering technology based on the Open Platform, SPYRUS will offer financial institutions the most secure and complete method of integrating smart cards and PKI solutions into their business environment.”

User Security for Multiple Services

Smart cards will allow financial institutions to offer customers secure “anytime, anywhere” access to financial and value-added services. The Open Platform provides Visa member institutions the ability to implement a wide variety of applications, including

— Credit card services,

— Debit services,

— E-purse services, and

— Unique value-added services such as mass-transit applications, loyalty programs, and identification services.

The Open Platform eases development of smart card solutions by providing a rapid development environment, including card specifications, terminal specifications, and workbench tools. For example, Visa Cash will allow financial institutions to pre-load money onto a customer’s smart card; the smart card can then be used for transactions such as pay phone calls, bridge tolls, and Internet purchases, with the amount being debited from the cash stored on the card. To protect a customer’s money, the smart cards and the supporting PKI system require the highest level of secure authentication and authorization using digital signatures and certificate management technologies. SPYRUS delivers these capabilities to VISA member institutions with its IES solution.

High-Assurance SPYRUS Smart Card Solutions

With delivery scheduled for the third quarter of this year, Visa member institutions will also be able to use SPYRUS’ plug-and-play Portico product solution for the Open Platform. This bundled product application, which extends the ease and convenience of installation and integration of the smart cards with the PKI system, includes SPYRUS Personal Access Readers for secure Personal Identification Number (PIN) entry on Open Platform-based smart cards, and browser-based software components to securely support Internet transactions.

SPYRUS’ integrated Open Platform solution is also complemented by the SPYRUS SmartStation, an IES system component that combines Open Platform smart card issuance and management with digital certificate registration. To provide the most secure environment for deploying Open Platform smart cards, the SmartStation securely loads each customer’s digital identity onto the smart card without PC or browser software involvement. The Portico bundle adds to these features by providing a stand-alone Personal Access Reader that securely authenticates a user’s identity before communicating with the Internet browser.

“SPYRUS IES support of Open Platform smart cards with the SmartStation and Portico products will allow financial institutions to deploy the highest level of personal and portable security in the industry,” Pontius noted. “We will offer a single vendor responsibility for Visa members wanting to rapidly deploy highly secure smart card system solutions and the enabling PKI system solutions to enforce a robust chain-of -trust to all of their customers.”

About SPYRUS

SPYRUS, the Internet ID Company, is the leader in securing the Internet as a medium of exchange for valued data and transactions for businesses and their customers, and for federal and local governments. SPYRUS’ public key system solutions are designed for organizations that have unique business policy management requirements, valued digital information content and transactions to protect and operations that require auditable risk/liability management. SPYRUS Public Key Infrastructure (PKI) solutions have been deployed in health care, utilities, government, financial and law enforcement markets, with operational systems scalable to millions of users worldwide.

The company’s flagship product line is the SYRUS Internet Enabling Security (IES) solution. SPYRUS IES is an integrated public key product suite comprised of its SPYRUS PKI, Rosetta smart cards, PAR smart card readers, cryptographic tool kits and professional services. The SPYRUS IES provides timely and cost-effective deployments with customizable public key solutions to meet unique customer and industry requirements.

SPYRUS, Inc. is headquartered in Santa Clara, California, with offices across the United States, Canada, Europe and Australia.

SPYRUS has recently been named in the latest Deloitte & Touche “Technology Fast 500” technology growth company list. For more about SPYRUS and its public key system solutions, please visit our web site at [www.spyrus.com][1].

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

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Active-Charge Deal

IVI Checkmate Corp. announced an agreement with ShopNow.com Inc., to re-market ShopNow eBusiness Division’s Active-Charge payment application to value added resellers and distributors serving the upper and middle tier retail marketplace.

ShopNow eBusiness Active-Charge is a robust and proven payment management application based on Microsoft’s ActiveStore(TM) Framework. In addition to supporting credit, debit, and electronic benefit payment transactions, Active-Charge also supports check guarantee and check verification services, making it a total payment application solution for retailers that are either using or migrating to Windows-based point-of-sale systems.

Per a 1998 Retail Automation Research Office report, there are approximately 693,000 store locations in the U.S. middle tier retail market that are potential users of Windows-based in-store application software. These retailers are migrating their point-of-sale installations from proprietary software to “open system” based solutions that reduce their cost of ownership while enabling them to implement new and innovative value-added applications which increase customer loyalty. The key to this migration is Microsoft’s ActiveStore, a development framework that defines standards of interoperability for the diverse number of applications, database and communication methods found in a store system environment.

“Retailers want store automation applications that work together and interface easily with payment terminals, scanners and other in-store peripherals as well as their enterprise applications. Microsoft has responded to this need by enhancing the Windows NT platform with ActiveStore. The combination of ShopNow’s Active-Charge software and IVI Checkmate’s payment terminals provide an open, yet robust, solution that has enormous benefits for retailers,” stated Bill Pittman, Executive Vice President and Chief Technical Architect, of ShopNow’s eBusiness Division.

Jim Troy, Vice President, of IVI Checkmate’s Integrated Transaction Solutions business unit stated, “ShopNow eBusiness’ Active-Charge payment application provides IVI Checkmate with a superior payment management application based on Microsoft ActiveStore. The ActiveStore framework is fast becoming the standard by which point-of-sale applications are developed.” Troy continued, “The largest processors, debit providers, and check services providers in the U.S. have certified ShopNow’s Active- Charge application, positioning IVI Checkmate with a comprehensive and simple-to-integrate payment solution for our VAR and distributor network.”

About ShopNow.com

ShopNow.com Inc. is a leading e-commerce enabling company for business-to-business and business-to- consumer e-commerce. ShopNow.com operates an e-commerce network known as the ShopNow Network, which is comprised of online access to over 40,000 businesses and over 6 million shoppers. The ShopNow.com portal ([http://www.shopnow.com][1]) is an online marketplace for connecting buyers and sellers worldwide and provides a range of business-to-business e-commerce products and services. ShopNow.com Inc. is headquartered in Seattle, Washington, with additional offices in Georgia, Arizona, Kansas and California.

About IVI Checkmate

IVI Checkmate is the third largest electronic transaction solutions provider in North America. The Company designs, develops, and markets innovative payment and value-added solutions that optimize transaction management at the point-of-service in the retail, financial, travel & entertainment, healthcare, and transportation industries. For more information on IVI Checkmate, visit its web site at [http://www.ivicheckmate.com][2].

[1]: http://www.shopnow.com/
[2]: http://www.ivicheckmate.com/

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Hypercom Up 8%

Hypercom reported Wednesday record net revenues for the quarter ending Dec. 31, 1999 of $76.6 million. This compares to $70.6 million recorded in the year-ago period. However net income was $2.0 million compared to $6.6 million in the same period last year. The company attributes the reduction in earnings principally to a delay in transferring Hypercom Network Systems technology and resources to Cirilium Corp., the joint venture it recently formed with Inter-Tel Inc., Phoenix. Earnings were also depressed by the deferral of $1 million in Brazilian revenue. Cirilium will target the worldwide ‘Voice over Internet Protocol’ telephony system and equipment market. During the latest quarter Hypercom introduced ‘ePic’ and acquired CT-based Golden Leasing. For complete current and historical data on Hypercom please visit CardData ([www.carddata.com][1]).

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

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Metris Rolls On

The Metris steamroller is doing double speed as the company reported last night that net income grew 100%+ for the fourth quarter and for full year 1999. Metris Companies earned $34.0 million for the fourth quarter and $115.4 million for full year 1999. During the fourth quarter, the Metris credit card portfolio added $596 million in receivables, 330,000 new accounts and produced $2.0 billion in card volume. At year-end Metris had about $7.3 billion in card receivables and 3.7 million accounts. For the fourth quarter, the managed net interest margin was 13.2% compared with 13.3% for the third quarter and 12.3% for the fourth quarter of 1998. For the year ended Dec. 31, 1999, the managed net charge-off rate was 9.0% compared to 10.1% for 1998. The managed delinquency rate (30+ days) was 7.6% at year-end 1999, compared to 7.5% at Sept. 30, and 6.8% at Dec. 31, 1998. Besides its sub-prime credit card portfolio, Metris continued to plow forward in fee-based services for its own customer base as well as other third party portfolios. At year-end, combined active fee-based members totaled approximately 4.9 million, with approximately 1.1 million new fee-based relationships formed in the fourth quarter. Combined fee-based services revenues increased to $51.6 million for the fourth quarter, a 16% increase over the third quarter. This increase was driven by the hot performance of Metris’ debt waiver product and its ‘PurchaseShield’ product. For complete current and historical data on Metris Companies please visit CardData (www.carddata.com).

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UA Signs NPC

National Processing Company announced Wednesday that it has entered into an exclusive long-term agreement with United Airlines, the largest air carrier in the world, to process its Air Travel Card transactions worldwide. National Processing is the nation’s second largest provider of credit and debit card transactions for merchants and the largest processor of airline tickets in the world.

United Airlines will replace its in-house system with the NPC InControl(TM) system to address Air Travel Card billing needs and offer additional corporate programs tailored to its customers’ needs. InControl is a comprehensive solution that processes Air Travel Card receivables and account billing information — the main financial functions required for issuing the card. The InControl service is a consortium of The Air Travel Card Association, NPC and QSP Inc, (Quality Software Products).

The system will allow United to tailor its marketing programs to expand the Air Travel card franchise. Additionally, the flexible real-time reporting capabilities of InControl will allow United Airlines’ clients to analyze their travel activity by passenger, route segment, corporate customer and other variables.

“After an extensive review of various alternatives, United Airlines is very pleased to have selected NPC as its business partner for this important function,” said Lynn Hughitt, Vice President and Controller of United. “We believe NPC and InControl offer the most cost-effective and comprehensive billing solution in the marketplace.”

InControl is the first non-airline affiliated system to provide airlines with a complete solution for their Air Travel Card billing needs. InControl gives airlines direct access to valuable market information, allowing airlines to build customer loyalty to increase market share. InControl has multiple advantages over competitive solutions including: cross-platform architecture which allows it to run natively on mainframe as well as client/server environments commonly used by airlines; full service processing capabilities; interline accounting and settlement processing. InControl also has the added advantage of being offered by a third party vendor unaffiliated with any airline, which is extremely important in the highly competitive airline industry.

“We are delighted to have the opportunity to provide this state of the art billing service to United Airlines and its cardholders,” said Clif Valentine, Senior Vice President of NPC. “InControl gives airlines the flexible infrastructure they require to access valuable marketing information, increase market share and reduce operating costs.”

About United

As the largest air carrier in the world, United Airlines offers more than 2,300 flights a day to 135 destinations in 27 countries and two U.S. territories. United also is an industry innovator with breakthroughs such as E-Ticket Service, United Connection, Airport Gate Readers, Mobile Airport Chariots, United Shuttle, and the introduction of the technologically advanced Boeing 777. More information about United Airlines and its parent company, UAL Corporation (NYSE: UAL), can be found at [http://www.ual.com][1].

About NPC

NPC is the operating company of National Processing, Inc. (NYSE: NAP) and is a leading provider of merchant credit card processing services and corporate outsourcing solutions. NPC serves as the processing and settlement agent for approximately 80 percent of all airline tickets sold in the U.S. It is also a major provider of other travel related services. In addition, one out of every six Visa and MasterCard transactions are processed by NPC’s Merchant Card Services Division. Approximately 88 percent of NPC is owned by National City Corporation (NYSE: NCC), a Cleveland based $87 billion bank holding company.

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

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Netscape MasterCard

AOL’s Netscape Communications and Citibank’s affinity credit card unit joined up yesterday to rollout the official ‘Netscape Platinum MasterCard’. The program comes with the choice of two enhancements: ‘Netscape Values’ and ‘Netscape TravelerMiles’. The no-annual-fee ‘Netscape Values’ card offers cardholders one reward point for each dollar charged with redemptions available for electronics, sports equipment, music, books and apparel. For 21,000 points cardholders can obtain a free copy of Windows 98. Netscape ‘TravelerMiles’ card, which has a $39 annual fee, offers air mileage good toward travel on over 140 airlines worldwide. Cardmembers earn a $100 travel certificate for every 8,000-points they receive. Both programs feature a six-month 0% APR on purchases followed by a prime +5.9% APR thereafter. The Netscape card was created as part of the broader relationship between Citigroup’s e-Citi unit and Netscape Communications. Citigroup has been an anchor tenant in Netscape Netcenter’s Personal Finance Center since August 1998.

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TSYS & FT Extend

Total System Services, Inc. announced a five-year extension to their processing agreement with First Tennessee Bank, N.A. to provide its consumer credit card processing. TSYS has processed the First Tennessee portfolio since 1995.

First Tennessee’s portfolio represents approximately 1.4 million consumer cardholder accounts, including credit and debit cards.

TSYS President Phil Tomlinson said, “First Tennessee continues to stay at the top of the banking industry, and we are delighted to play a part in the success of this company. This renewal is a sign of our positive relationship with First Tennessee, and we look forward to a long and prosperous association.”

Ralph Rolen, Executive Vice President and Manager of the Retail Credit Division, First Tennessee, said, “We have developed great confidence in TSYS’ ability to continue to help strengthen First Tennessee’s position in the marketplace. This extension allows First Tennessee to continue providing its customers with first-rate quality, value, and customer service.”

About First Tennessee

First Tennessee, headquartered in Memphis, Tennessee, is a nationwide, diversified financial services institution and is one of the 50 largest bank holding companies in the United States in asset size and market capitalization. Banking and other financial services are provided through the regional banking group and three national lines of business: FT Mortgage Companies, First Tennessee Capital Markets, and transaction processing. Transaction processing includes credit card merchant processing, MONEYBELT(SM) (automated teller machine network), and First Express (nationwide check clearing operation and our retail lockbox products).

The corporation’s common stock is traded on the New York Stock Exchange under the symbol “FTN.” It is listed in the financial section of most newspapers as “FstTN Ntl” and is included in the Standard & Poor’s MidCap 400 index. More information is available at First Tennessee’s Web site at [http://www.firsttennessee.com][1].

About Total System Services, Inc.

TSYS is one of the world’s leading processors of data and transactions for domestic and international issuers of credit, debit, commercial and private- label cards. TSYS’ sophisticated systems offer online accounting, data processing, electronic commerce services, portfolio management, account acquisition, credit evaluation, risk management and customer service. With more than 206.2 million accounts on file, TSYS and its family of companies service the entire lifecycle of card accounts, making it possible for 288.6 million consumers to use their cards anytime, anywhere. Headquartered in Columbus, Ga., TSYS ([http://www.totalsystem.com][2]) is an 80.8 percent owned subsidiary of Synovus Financial Corp. (NYSE: SNV) ([http://www.synovus.com][3]), named one of “The 100 Best Companies To Work For In America” by FORTUNE magazine in 2000.

[1]: http://www.firsttennessee.com/
[2]: http://www.totalsystem.com/
[3]: http://www.synovus.com/

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Household Recovery

After a sluggish start last year and some remodeling, Household posted its best quarter and year in the company’s history. During the fourth quarter HH added more than $800 million in receivables to its credit card portfolio, surpassed 500,000 nonprime card accounts, and scored a success with its UK Internet card, ‘marbles’. The credit card portfolio reported its strongest results from the GM Card and Union Privilege portfolios. Within the first few weeks of the ‘marbles’ launch, HH picked up $90 million in receivables. Household reported to CardData this week year-end U.S. card receivables of $13,290,149,000 and 15,030,000 gross accounts. For the full year, Household reported record net income of $1.5 billion, a 29% increase over the prior year’s operating net income. The company’s net interest margin widened to 8.23% from 7.86 in 1998, resulting from increased pricing in the unsecured and MasterCard/VISA portfolios coupled with lower funding costs. The company’s full year chargeoff ratio improved 16 basis points to 4.13%. For complete current and historical data on Household please visit CardData ([www.carddata.com][1]).

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

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U-Check in the Black

UT-based International Automated Systems revealed yesterday that its pilot U-Check store in Salem, Utah, which opened officially to the general public in March, has captured approximately 50% of the local grocery market and is now profitable. The U-Check store is the world’s only fully self-cashiering supermarket. It features 12 of IAS’s automated check-out lanes.The store, which has doubled its in dollar volume since its first quarter of operation, also offers its customers a biometrically secured debit card, the ‘U-Check Card’. The magstripe card contains personal banking data, cross-referenced to the individual’s real-time three-dimensional fingerprint. The ‘U-Check’ debit card has been available for only four months, and already approximately 30% of the households in Salem utilize one. IAS says its system reduces labor costs for traditional supermarkets from 14% to 2%.

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Diebold 4Q/99

Diebold reported net income of $35,516,000 on revenue of $365,920,000 for 4Q/99. Diebold says its fourth quarter total incoming business increased in the double-digit range due in part to a $105 million from Brazil for 200,000 election terminals. Total self-service terminal hardware business increased in the low double-digit range. Excluding Procomp, orders declined 5% for 4Q/99 due to a drop-off in Y2K orders and Canada, which experienced a large order cancellation. Other 4Q/99 highlights for Diebold: installation of 870 cash dispensers with Card Capture Services totaling nearly $7 million; approximately 450 ATMs to Industrial and Commercial Bank of China valued at $11 million; and nearly 600 new tax return self-service terminals in Argentina totaling nearly $3 million.

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4Q/99 Portfolio Update

Wells Fargo reported today that its credit card yield for 1999 was 13.58% compared to 14.67% for 1998. Wells also reports credit card loans grew during the fourth quarter from $5.3 billion to $5.5 billion. MN-based U.S. Bancorp reported strong growth in credit card fee revenue. Fee revenue for 4Q/99 was $166.3 million compared to $144.3 for 4Q/98. USB also reports average card loans of $4.1 billion for 4Q/99 and net chargeoffs of 3.67%. Chargeoffs for 4Q/98 were 4.16%. Meanwhile CardData shows that Household ended 1999 with $13,290,149,000 in card receivables, a strong rebound from 3Q/99’s $12.6 billion. HH also added 500,000 accounts during the fourth quarter, growing from 14,458,000 gross accounts to 15,030,000 gross accounts. For the latest statistics and historical data on more than 350 major card portfolios, visit CardData ([www.carddata.com][1]).

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

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