New Cubic Subsidiary

San Diego-based Cubic Corp. announced the formation of a new subsidiary company to develop and leverage applications for the company’s newest contactless smart card chip technology. The new company will be known as Cubic Microchip Development Inc.

The formation of the company is related to Cubic’s development of a new high-speed chip for contactless smart card applications which require the ability to read and write data securely at very high speeds. A Cubic-designed chip currently in use in contactless smart cards in Washington, DC can handle transit transactions in less than one-tenth of a second. The newest Cubic chip design offers transit customers and other users greater memory and can operate at higher transaction speeds.

Cubic is the world leader in integrated payment systems for mass transit and is the only company with an actual working contactless card payment system in large scale transit use in the U. S. Cubic designed contactless cards are now in use by the Washington Area Metropolitan Transportation Authority in Washington, DC. Contactless cards using Cubic designed chips are also scheduled to go into transit use soon in Chicago.

Cubic’s new technology makes new contactless card applications available for uses beyond transit. Other potential customers include government benefits issuers, medical providers, drivers’ license bureaus, passport offices, security companies, as well as retail and e-commerce businesses. The expanded memory and security designed into Cubic’s latest chip will allow a commuter to use the same contactless card for transit and many other payment applications.

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Bank Plus Delinquencies Drop

Bank Plus Corporation reported that as of October 31, 1999 total outstanding balances in the credit card portfolio of its wholly-owned subsidiary Fidelity Federal Bank, FSB, were $238.6 million, a net decrease of $12.3 million from the September 30, 1999 balances, and total delinquencies decreased to 19.9% from 20.5% at September 30, 1999.

Delinquencies under the MMG Direct, Inc. program decreased to 19.4% at October 31, 1999 from 19.7% at September 30, 1999, while delinquencies under the American Direct Credit, Inc. portfolio decreased to 22.3% at October 31, 1999 from 23.8% at September 30, 1999.

Bank Plus Corporation is the holding company for Fidelity Federal Bank, FSB, which offers a broad range of consumer financial services, including demand and time deposits and mortgage loans. In addition, through its affiliate Gateway Investment Services, Inc., a NASD-registered broker/dealer, Fidelity provides customers of the Bank with investment products, including mutual funds, annuities and insurance. Fidelity operates through 36 full- service branches, 35 of which are located in Southern California, principally in Los Angeles and Orange counties.

Outstanding Credit Card Balances
As of October 31, 1999
(Dollars in thousands)

MMG ADC All Other Total

Current Balances $83,550 $82,541 $25,015 $191,106
Delinquent Balances:
30 to 59 days 5,038 5,685 2,049 12,772
60 to 89 days 4,053 4,679 854 9,586
90 to 119 days 3,709 4,489 728 8,926
120 to 149 days 3,861 4,584 – 8,445
150 days and over 3,478 4,254 4 7,736
Total Delinquencies 20,139 23,691 3,635 47,465

Total Balances $103,689 $106,232 $28,650 $238,571

Delinquency %
30 to 59 days 4.9% 5.4% 7.2% 5.4%
60 to 89 days 3.9% 4.4% 3.0% 4.0%
90 to 119 days 3.6% 4.2% 2.5% 3.8%
120 to 149 days 3.7% 4.3% 0.0% 3.5%
150 days and over 3.3% 4.0% 0.0% 3.2%
Total 19.4% 22.3% 12.7% 19.9%

Available Credit $18,212 $25,880 $5,564 $49,656

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Barnes & Noble Goes MPS

Barnes & Noble, the nation’s largest retailer of books, will now be utilizing the services of Fifth Third Bank’s subsidiary, Midwest Payment Systems, for credit card processing and Internet-based back office management. Fifth Third will electronically process Visa, MasterCard, Discover, and American Express transactions for all of the retailer’s more than 1,000 stores, which include Barnes & Noble, B. Dalton, Scribner’s, Bookstop, Bookstar, Charlesbank, and Doubleday.

“We found Fifth Third Bank to be the best choice among the top processors in the nation,” reports Darrell Meussner, Vice President & Chief Financial Officer, Retail and Distribution, Barnes & Noble, Inc. “We were looking for a processor with the capability to provide us with custom solutions. Fifth Third’s development capabilities definitely made them stand out. In the back office area alone, we expect substantial cost savings by utilizing Fifth Third’s MVision system.”

MVision, Fifth Third’s internally-developed back office management system, is an Internet-accessible link which enables retailers to receive reports, view transaction and deposit data, handle chargebacks, export card data into other applications, and scan receipts or handwritten documents into the system.

Barry L. Boerstler, Fifth Third Bank Executive Vice President, states, “With millions of credit card transactions per year, Barnes & Noble needed a processor with high volume capabilities. Our in-house data center utilizes the most advanced processing technology available. This partnership will enable us to provide their back office operations with unmatched processing speed and reliability.”

A subsidiary of Fifth Third Bank, MPS was ranked #1 EFT provider by Faulkner & Gray (March, 1999). MPS processes more than four billion ATM, POS and e-commerce transactions per year for more than 60,000 retail locations and financial institutions worldwide, including Federated Department Stores, The Kroger Co., Circuit City, Office Depot, and CompUSA. MPS’ merchant customer base generates more than $40 billion in credit card sales annually.

Fifth Third Bancorp is a diversified financial services company headquartered in Cincinnati, Ohio. The Company, which is Y2K ready, has $41 billion in assets, operates 14 affiliate banks with 647 full-service Banking Centers, including 112 Bank Mart(R) locations open seven-days-a-week inside select grocery stores and 1,400 Jeanie(R) ATMs in Ohio, Kentucky, Indiana, Florida, Arizona and Michigan. A leader in e-commerce, Fifth Third expects to process over four billion electronic transactions in 1999. The Bank’s financial strength continues to be recognized by rating agencies with deposit ratings of AA- and Aa2 and commercial paper ratings of A1+ and P1 from Standard & Poor’s and Moody’s, respectively. Fifth Third operates four main businesses: Retail, Commercial, Investment Advisors, and Midwest Payment Systems, the Bank’s data processing subsidiary. Investor information and press releases can be viewed at [http://www.53.com][1]; press releases are also available by fax at no charge by calling 800-758-5804, identification number 281775. The company’s common stock is traded in the over-the-counter market through the Nasdaq National Market System under the symbol “FITB.”

Barnes & Noble, Inc. (NYSE: BKS) operates 521 Barnes & Noble and 448 B. Dalton bookstores. Barnes & Noble stores stock an authoritative selection of book titles and provide access to more than one million titles. They offer books from more than 50,000 publisher imprints with an emphasis on small, independent publishers and university presses. Barnes & Noble is one of the world’s largest booksellers on the World Wide Web ( [http://www.bn.com][2]), and the exclusive bookseller on America Online (keyword:bn). Barnesandnoble.com has the largest standing inventory of any online bookseller. Barnes & Noble also publishes books under its own imprint for exclusive sale through its retail stores, mail-order catalogs, and Web site.

General financial information on Barnes & Noble, Inc. can be obtained via the Internet by visiting the company’s investor relations web site at .

[1]: http://www.53.com/
[2]: http://www.bn.com/

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Brazilian Phone Cards

Ft. Lauderdale, FL-based TCS, Inc., reported Tuesday that it has deployed a service platform for Embratel, the Brazilian national long-distance company, to provide calling card services throughout Brazil. The deal marks the first time pre-paid calling card services will be widely available in the Brazilian marketplace. The deployment is expected to put calling cards in the hands of more than 10 million Embratel customers within the next two years. Over 3 million pre-paid cards have already been pre-sold. The cards will provide global access and national pre-paid calling throughout Brazil. Post-paid cards with features including speed dial and conference calling will be rolled out the second half of next year.

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OPAY Soars

Official Payments Corp., formerly known as U.S. Audiotex Corp., watched its stock soar 50% on the first day of trading. More than 8 million shares traded hands Tuesday as the stock closed at $22.50 per share. The company’s IPO of 5,000,000 shares of common stock had been priced at $15 per share. The company raised $75 million. The 5 million shares offered, represented a 24% stake in the company. The company specializes in tax payments via credit cards and has the IRS as its largest client. FULL STORY:

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Xmas Retail Sales

How much will the average American family shell out for holiday gifts? American Express said Tuesday its survey shows the figure to be $1,008 while The Conference Board said yesterday its poll shows the average to be $500. AmEx says total holiday spending will hit $1,558 per family. Both surveys show spending on holiday gifts will fall between $50 billion and $100 billion. Total holiday spending will land somewhere around $100 billion to $150 billion. According to the ‘American Express Retail Index’, 44% of consumers plan to get some, if not all, of their shopping done this coming Friday, dubbed “Black Friday” by the retail industry, up from 39% in 1998. The Conference Board says its survey shows 17% of consumers will shop online.

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Platinum Meltdown

Gold VISA and MasterCards lost their luster to Platinum cards and now, Platinum VISA and MasterCards are beginning to dull. A new research study shows the penetration level for Platinum and Gold are nearly equal with 31% of all households having a Platinum product and 32%, a Gold card. In 1999, there are 33.5 million households with Gold cards, 10 million fewer than in 1997. The research, released this morning by PSI Global, shows that 32.5 million households now have Platinum cards, 25 million more than in 1997. According to the new PSI study, ‘Impact of Platinum cards on the General Purpose Credit Card Market’, Platinum card ownership would far exceed Gold cards by 2003, if issuers’ marketing efforts mirror the last three years. If Platinum continues to grow at the same rate, penetration will reach 58 million (55% of all U.S. households) by 2003. This would exceed Gold card ownership by more than a 2:1 margin and approach parity with Standard card ownership. The PSI study also noted that upgrades from Gold and Standard accounts represent 44% of new Platinum accounts opened in the last two years.

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MasterCard GiftCards

Another issuer of MasterCard Giftcards has emerged. Newport Beach, CA-based CardEx Incentives released a ‘Millennium MasterCard GiftCard’ and two other holiday-themed MasterCard GiftCards. The holiday GiftCards are all available in prepaid denominations, in $25 increments. A full-service incentive company, CardEx Incentives is the industry pioneer and expert in developing and managing corporate incentive programs that feature MasterCard debit cards as rewards. CardEx products and services include: prepaid GiftCards, rechargeable IncentiveCards, gift certificates and travel awards, as well as incentive program design, launch, implementation, tracking and management.

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Online Card Fraud

Nearly 75% of online merchants consider credit card fraud to be a concern, yet 41 percent do not know that they are held financially liable when online fraud takes place, according to a recent independent fraud survey commissioned by CyberSource Corp. The CyberSource fraud survey found that lack of confidence by consumers is the number one concern for online merchants, followed by stolen credit cards, unauthorized access to customer information, hacking and chargeback fees. Respondents also expressed frustration at the lack of adequate controls from credit card companies and the government. Fear of the negative impact fraud can have on online brand image was also mentioned as a strong concern for merchants. Seventy-two percent of online merchants surveyed believe that sales would increase somewhat if online shoppers were not worried about fraud. With the lucrative holiday season approaching, online fraud has a special significance, with 74 percent of merchants believing that fraud will increase this holiday season. The survey was conducted by Mindwave Research, Inc.

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Bombay Credit Card

Transamerica Distribution Finance and The Bombay Company, Inc. announced Monday that TDF has been selected as Bombay’s new private label credit card provider for the company’s chain of stores, mail order and e-commerce in the United States.

“Bombay intends to continue aggressively growing our private label credit card business so we elected to change to a provider that offers our customers a superior credit card program,” said Cathy Pringle, vice president, marketing for Bombay. “Transamerica developed a comprehensive program for our customers and the financing package was very competitively priced.”

Relatively new to the private label credit card industry, TDF has made significant inroads since its entree in 1997 by partnering with well-known and respected retailers such as Bombay. Transamerica’s partnership with Bombay is also its first major entry into the furniture and home furnishings industry.

“We are excited about our partnership with Bombay,” said Gary Slagle, vice president of TDF’s retail division. “It exemplifies our commitment to provide creative financial solutions in the furniture industry.”

The Bombay Company, Inc. (NYSE: BBA) is a specialty retailer marketing classic and traditional furniture, prints and accessories through a network of 423 Bombay stores and its mail order operations in the United States and Canada as well as over the Internet at [http://www.bombayco.com][1].

Transamerica Distribution Finance is a single source provider of finance solutions offering asset based lending, accounts receivable servicing, commercial recovery services, inventory finance, vendor leasing, consumer and business revolving credit cards and import financing. TDF is a subsidiary of San Francisco-based Transamerica Corporation, an AEGON Company, one of the world’s largest independent financial services companies with more than $50 billion in assets. TDF has been financing manufacturers, distributors, resellers and retailers in various industries for over 40 years and currently operates in North America, South America, Europe and Asia. More information can be found on the company’s Web site, .

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

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bCard Miles

Salt Lake City-based bCard.net, a subsidiary of PrimeHoldings.com, announced an agreement Monday with United Airlines to provide incentive miles to bCard holders. bCard.net also recently announced agreements with Delta and American Airlines. bCard.net has distributed over 150,000 bCards so far and its Web site attracts 250,000 hits per week. bCards are universal electronic business cards, based on proprietary smart cards: used to store, transfer and other wise manage information about business professionals. Cards can store large amounts of digital information that can be easily shared and stored to facilitate communication between business professionals and commerce between business entities.

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Seattle Smart Cards

The Pathways Group and Motorola have signed papers to jointly develop a smart card-based electronic purse solution for the Seattle Transit System. Pathways and Motorola anticipate working together to pursue the development of an open e-purse smart card to be issued in the Greater Puget Sound region, in Washington State, in conjunction with the Puget Sound Regional Fare Collection System RFP. The electronic purse will reside on the same card as the purse of the Transit Authority and will provide enhanced features, such as loyalty or affinity programs. The ERG Group and Motorola recently teamed up in the award of the largest smart card system contract in the United States. The ‘TransLink’ system will allow commuters to pay for transit system travel throughout the nine-county San Francisco Bay Area using a single regional smart card.

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