ECHO Bank

Electronic Clearing House announced Monday afternoon the filing of an application to charter an online, national bank to provide merchants nationwide with electronic payment services. If the bank charter is approved the bank name will be Electronic Clearing Bank N.A. and will be a wholly owned subsidiary of ECHO. The application process is expected to take approximately four months to complete and, upon approval, ECHO will file an application to become a bank holding company. ECHO intends to name Jack Wilson as president of ECBank. ECBank will provide full deposit account services to merchants and will utilize the Internet as the primary medium for merchants to access banking information, transaction data and funds management services.

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ORC and EEI

Online Resources & Communications Corp., a leading provider of Internet banking services, and Engineering Enterprises, Inc., a leading financial solutions technology provider and systems integrator for major securities firms, announced plans Monday to integrate real-time Internet banking and bill payment services with brokerage services provided by EEI’s EnterpriseFTX technology.

The partnership will enable customers of financial services firms to use the Internet to move money seamlessly among checking, savings and brokerage accounts, pay bills online and initiate securities transactions – all fully integrated and in real-time.

“This partnership is our first step since the recent passage of the banking reform law to help the financial services industry fulfill the law’s promise,” said Online Resources CEO Matthew P. Lawlor. “EEI has an unmatched reputation, especially in the brokerage industry, for delivering integrated software solutions. We plan to work together to mesh brokerage and banking services so that our client financial institutions can offer their customers the online services they’re demanding.”

Online Resources is a leader in the industry in offering integrated real-time banking and bill paying services, said George Anderson, EEI President and CEO. “Online Resources’ patented payment method that allows the merging of the real-time communications of the Internet with the banking industry’s real-time, trusted and secure payments systems offers unprecedented opportunities,” Anderson said. “Customers of our brokerage clients can look forward to investing proceeds from stock transactions in more immediate ways than have been possible before. And with ORCC’s partnerships with other financial services providers, our brokerage clients and Online Resources’ banking institutions can now be the one-stop financial shop our customers say they want.”

This merging of payments and information systems is part of Online Resources’ effort to build the real-time payments infrastructure for e-commerce, Lawlor says. His company hopes to leverage its 10 years of experience in the banking industry with its Internet-based software, systems and services. Online Resources’ patented method involves routing Internet transactions in real-time through the banking industry’s online payments networks, lowering costs and improving security.

These networks, which first enabled the hugely successful ATM machines, are now being used to fuel the escalating growth of debit cards. Next, the networks plan to move into e-commerce. The NYCE Network and the Star Network, both of which have processing agreements with Online Resources, have recently announced plans to explore real-time Internet point-of-sale.

“The world is rapidly moving toward the real-time integration of financial services,” said Lawlor, who has outlined his vision of real-time Internet payments for several financial industry trade publications. “Now, with EEI as a partner, we will move the brokerage industry into the real-time universe and meld it with online banking and bill paying services.”

Online Resources & Communications Corporation ( [http://www.orcc.com][1]) is a leading outsourcer of privately branded Internet financial services, principally for regional and community banking institutions. The McLean, Virginia-based company has more than 400 institutional clients nationwide. It provides consumer bill paying and banking services and aggregates lending, insurance, securities trading and investment services. Online Resources performs real-time processing through its patented EFT gateway and full customer service for client institutions, giving them a comprehensive “hub” solution from a single vendor. Client consumer marketing programs are conducted under the bankonline.com co-brand.

Enterprise Engineering, Inc. (EEI) is a leading provider of enterprise and e-commerce software products for financial services firms. EEI’s product portfolio paves the way for banks, brokerages, and insurers to deliver integrated financial services via the Internet. EEI has created mission-critical systems and provided advanced training and strategic consulting for many Fortune 500 firms. The company’s key areas of expertise include real-time, Web-based delivery of online banking, brokerage and electronic commerce; online bill payment and presentment; creation of back office capabilities; and advanced technology training. EEI’s home page is located at [http://www.joineei.com][2].

[1]: http://www.orcc.com/
[2]: http://www.joineei.com/

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CrediPort

NY-based Creditor Systems announced this morning the availability of a wireless, portable credit card verification system. The patent pending president which has been in development and testing for over a year, consists of a terminal/printer, a three watt phone modem and a rechargeable battery. The terminal, which measures 5.5″ x 11″ x 6″ and weighs 6.5 lbs, is certified. The company’s trademark is “Cell more with a Creditor System”.

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NextCard – Providian

NextCard, Inc. and Providian Financial Corporation announced last week a settlement of a lawsuit that NextCard filed against Providian over Internet banner advertisements for credit card products. In the lawsuit NextCard alleged that a Providian banner ad violated NextCard’s intellectual property rights, which Providian denied. Providian has not run its ad since July 1999.

Both parties described the settlement as a “business decision” to save time and money that would be spent litigating the case. No money changed hands. The parties have also agreed that the remaining terms of the settlement will remain confidential.

NextCard and Providian are financial services companies that offer consumer credit cards over the Internet.

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Klein Chairs People’s

People’s Bank will enter the new millennium with a new chairman when John A. Klein officially assumes that role this morning. People’s leadership transition began in May when Klein was named president. He became chief executive officer Oct. 1.

Klein’s broad management experience over a 28-year career at People’s has included leadership positions in the Legal department, Regional Banking and Consumer Banking. Prior to being named chairman, CEO and president, Klein was head of the bank’s national and international credit card division where he was an architect of phenomenal growth, including People’s recent expansion into the United Kingdom.

Klein’s career at People’s began in 1971 as a management trainee and included assignments in various departments throughout the bank. In 1977, after graduating from law school, he established the bank’s Legal department, and, in 1984, was named general counsel.

“I am a product of the culture of the bank and am fundamentally committed to preserving and building on its heritage,” Klein said. “People’s has a tremendous foundation, including a proven commitment to our customers, our shareholders and our communities.”

“People’s ability to meet or exceed customer expectations is well-documented,” Klein said. “As we enter the new millennium, our customers, shareholders and communities can expect we will continue to be true to our values as we continue to evolve with the changing needs of the marketplace.”

People’s Bank ([http://www.peoples.com][1]) is a diversified financial services company providing commercial, consumer, insurance and investment services. Founded in 1842, it is the largest independent bank in Connecticut with managed assets of more than $12 billion, 133 branches and more than 200 ATMs. People’s is a leader in commercial banking, residential lending, Savings Bank Life Insurance sales and supermarket banking. An international credit card issuer, it ranks 17th nationally as an issuer of MasterCard and Visa.

People’s subsidiaries offer brokerage services through People’s Securities, Inc., asset management through Olson Mobeck & Associates, Inc., equipment financing and leasing through People’s Capital and Leasing Corp., and insurance services through R.C. Knox and Company, Inc.

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

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1Click

1ClickCharge and uTOK announced an agreement last week to develop a co-branded communications platform that will allow users to read notes containing knowledge and opinions about digital content before making a purchase. Starting last week, the 1ClickCharge and the uTOK co-branded application will be distributed free of charge to customers who want to join the 1ClickCharge community. Customers can use the co-branded platform to communicate with each other on a merchant site, or anywhere else on the Web.

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VISA Lawsuit

Dallas-based ZixIt Corp. filed a lawsuit against VISA USA last week. The suit alleges that VISA intentionally set out to destroy ZixIt’s ability to market its ZixCharge Internet transaction authorization system, which competes against SET. ZixIt’s suit alleges that within two days of learning about ZixIt’s competitive technology, VISA initiated an attack against ZixIt. The alleged VISA actions included the posting of more than 400 messages, under at least seven aliases, on the Yahoo! ZixIt message board. The messages allegedly attacked Digit and Surcharge and promoted/recommended competitive companies in which VISA has investment positions. The company did not specify what it is seeking and VISA issued no response.

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Y2K OK

The Y2K bug has yet to emerge in the payment card industry. Except for a well publicized glitch in London last week, the Y2K gremlins have yet to appear. Last Tuesday around 15,000 retail POS terminals in the UK began rejecting certain credit cards over a conflict with year 2000. The affected terminals were manufactured by UK-based Racal with most of the terminals deployed by HSBC. The glitch was resolved by Wednesday. VISA reported over the weekend that it processed 48 million error-free transactions worldwide in the first 19 hours of 2000, a 35% increase over the same period last year. The 19 hour period began with the arrival of the new year in Kiribati in the South Pacific. MasterCard also reported Saturday that its St. Louis center processed more than 17.5 million transactions by 10:30 pm CST without Y2K problems. ATM networks also report this morning a Y2K glitch-free weekend.

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KeyCorp Deal

Associates First Capital and KeyCorp announced last week an agreement to enter into an agent bank partnership, under which the companies will jointly manage KeyCorp’s credit card program. Under the terms of the agreement, The Associates also will acquire KeyCorp’s credit card portfolio of approximately $1.3 billion in receivables and nearly 600,000 active VISA and MasterCard accounts by the end of January. KeyCorp projects a net gain of approximately $330 million. As part of the agreement, The Associates will assume control of the KeyCorp credit card facility in Toledo and expects to retain its more than 300 employees.

KEYCORP SNAPSHOT (3Q/99 data)

Recv: $1,307,522,752 3Q Vol: $566,106,700
Accts: 1,083,872 Actives: 597,465 Cards: 1,429,766

Source: CardData (www.carddata.com)

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Triumphant

Vectrix.com acquired Triumphant Enterprises, Inc. last week. TX-based Triumphant, founded in 1991, will change its name to Triumphant Enterprises, Inc., a subsidiary of Vectrix.com and assume its position in the realm of interactive communications services. The acquisition further allows Vectrix.com to meet the needs of clients without third-party vendors. TEI currently authorizes VISA, MasterCard, American Express, Discover, Diners Club, Carte Blanche, and JCB. The firm also has debit links into many major debit networks. Vectrix.com is a full-service provider of e-business solutions, including Web site design and development, performance marketing and online branding, media services, hosting, and credit card transaction processing. Vectrix.com’s clients include Apple Computer, America Online, Hitachi, Compaq, Conoco, BMG Entertainment, Kraft Food Services, Devon Energy Corporation, Enron International, Emerson Radio, Hilton Worldwide and Nest Entertainment.

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