ECHONET

Electronic Clearing House yesterday introduced the ‘ECHONET’ service, a browser-based interface to ECHO’s Web site, targeted at smaller merchants who have Internet access but do not have the transaction volume to warrant the purchase of a POS terminal. The service allows the merchant to access the full suite of Internet transactions which include deposits, credits, credit card authorizations and address verification. ‘ECHONET’ merchants can also review their transactions online at any time.

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TNS 3Q/99

Transaction Network Services, Inc. reported third quarter revenues of $46.1 million, a 80 percent increase over third quarter 1998 revenues of $25.6 million.

Revenues for the nine months ended September 30, 1999 reached $126.9 million, compared to $64.1 million for the year-ago period.

Net income for the quarter reached $5.5 million, or $0.38 per diluted share, compared to $2.1 million, or $0.16 per diluted share in the year-ago quarter. Net income for the nine months was $9.6 million, or $0.69 per diluted share, compared to $5.8 million, or $0.44 per diluted share for the same period in 1998.

The company’s POS division contributed $31.1 million to revenues this quarter compared to $16.4 million in the year-ago quarter, representing a 90 percent increase. Year-over-year transaction volume grew from 907 million in the year-ago quarter to 1.6 billion this quarter. Average daily transaction volume for the quarter grew to 17.3 million compared to 9.9 million for the same period last year. These increases reflect incremental volumes from the September 1998 acquisition of AT&T’s Transaction Access Service (TAS) business, as well as continued growth from existing POS customers. TNS’ migration of all TAS transactions to its network was completed in September of 1999.

TNS’ Telecom Services division third quarter revenues grew 24 percent year-over-year to $9.8 million from increased usage of its CARD*TEL(R) telephone call billing validation and fraud control services and other telecommunications services.

The International Systems division, which includes TNS subsidiaries in Ireland, Sweden, France, and the UK, contributed $3.4 million to revenues this quarter, an increase of 475 percent from $591,000 for the same period last year. These revenues include transaction revenues primarily from TNS’ UK subsidiary and royalty revenues generated from transactions in Canada.

The Financial Services division contributed $1.9 million to revenue this quarter, a 187 percent increase over third quarter revenues of $662,000 in 1998. These revenues were generated primarily from the addition of new customers to the financial services network and from revenues added through the acquisition of Transline Communications Inc. in January, 1999. The TNS financial services network provides a secure, independent, Internet Protocol (“IP”) Extranet for transacting securities trading orders and associated data electronically between brokerage firms and financial institutions.

Transaction Network Services, Inc. (TNS), headquartered in Reston, Virginia, provides data communications services for transaction-oriented applications. The company is listed on the New York Stock Exchange under the symbol TNI. Additional company information is available on the TNS website at [http://www.tnsi.com][1].

TRANSACTION NETWORK SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share amounts)

Three Months Ended Nine Months Ended
September 30, September 30,
——————- ——————-
1999 1998 1999 1998
——- ——- ——- ——

Revenues $ 46,127 $ 25,582 $126,954 $ 64,092

Cost of network services 24,513 15,175 75,413 37,049

——- ——– ——— ——

Gross profit 21,614 10,407 51,541 27,043

——- ——– ——— ——

Other operating expenses:
Engineering & development 1,735 1,370 4,662 3,538

Selling, general &
administrative 5,611 3,152 14,631 8,337

Depreciation 2,732 1,805 7,812 4,792

Amortization of intangibles 2,019 1,031 6,205 2,123

Reserve for AMNEX
assets (Note 2) – – 919 –

——- ——- ——– ——–

Total other operating
expenses 12,097 7,358 34,229 18,790

——- ——- ——– ——–

Income from operations
before provision for
income taxes, equity in
earnings of affiliate and
minority interest 9,517 3,049 17,312 8,253

Interest expense (1,126) – (3,051) –

Interest income and other 379 54 1,253 910

——- ——– ——— ——–

Income before provision for
income taxes 8,770 3,103 15,514 9,163

Provision for income taxes 3,290 1,202 5,842 3,597

Equity in earnings of
Unconsolidated affiliate – 178 93 259

Minority interest in net
income of consolidated
subsidiary – 20 (128) 20

——- ——– ——— ——-

Net income $ 5,480 $ 2,099 9,637 $ 5,845

======= ======== ========= =======

Diluted earnings per
common share $ 0.38 $ 0.16 $ 0.69 $ 0.44

Basic earnings per
common share $ 0.41 $ 0.17 $ 0.73 $ 0.46
======= ======== ========= ========

Weighted average
shares – diluted 14,555 13,470 14,058 13,253

======= ======== ========= ========

Weighted average
common shares – basic 13,530 12,690 13,199 12,577

======= ======== ========= ========

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

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BC Card Insurance

Korea’s BC Card Company and CIGNA International signed a long-term agreement to market, sell and distribute a broad spectrum of insurance products and services in the Republic of Korea. The ten year deal will enable BC Card to provide its customers with a variety of life, accident and health insurance coverages underwritten by the Life Insurance Company of North America in Korea, CIGNA International’s Korean life insurance affiliate. BC Card, a general consumer financial services company that offers credit cards, insurance, travel services and mail order sales, manages a customer database encompassing more than 100 million pieces of credit information in Korea.

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Cardpro Acquisition Completed

Financial software and processing services leader M&I Data Services has finalized its acquisition of Cardpro Services, Inc., a leading provider of credit and debit card personalization services.

The acquisition will strengthen M&I Data Services’ electronic funds delivery business by enhancing and expanding the products and services offered to customers. Cardpro Services brings to M&I an experienced management team and support staff, as well as a growing customer base, which provides M&I a strong and established market position. With the acquisition, M&I Data Services will support in excess of 1,500 customers while gaining opportunities to service a wider basis of customers within the financial, healthcare and transit industries.

“The Cardpro Services business unit adds substantial depth to the offerings of M&I Data Services’ Electronic Funds Delivery (EFD Services) business,” said Frank D’Angelo, senior vice president and general manager of EFD Services for M&I Data Services.

Cardpro has delivered plastic card customization and procurement solutions since its founding in 1979. Cardpro card personalization technologies include embossing, encoding, thermal printing, PIN generation and mailing, card activation labeling, and others. Cardpro is Visa and MasterCard certified for card encoding and embossing.

Headquartered in Milwaukee, Wis., M&I Data Services is a division of Marshall & Ilsley Corporation (Nasdaq: MRIS), a $23.6 billion holding company. M&I Data Services had total revenue of $509 million in 1998 and provides leading-edge technology solutions to the financial services industry, offering consulting, software and processing solutions for financial institutions worldwide. The company’s rapid growth is being fueled by innovative product development, strategic product acquisitions and strong growth of its customer relationships. For more information visit the M&I Data Services Web site at [http://www.midata.com][1].

The Electronic Funds Delivery (EFD) Services division of M&I Data Services processes and authorizes over 80 million transactions a month, supports more than 7,500 ATMs, has issued more than 10 million ATM and debit card accounts, performs network gateway services, and has network interfaces to all of the major regional and national ATM and point-of-sale (POS) networks. The EFD Services division provides complete cardholder services (600,000 credit card accounts) and merchant services (36,000 merchants), credit approval, and portfolio risk management, and offers a neural network fraud management solution and card personalization services.

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

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AspireCard.com Takes Form

AspireCard.com, Inc., on-line marketer of the Aspire Visa credit card, announced Wednesday that it has engaged the services of iXL, Inc. for on-line internet marketing communications, and WestWayne, Inc., an integrated marketing communications firm, for off-line, traditional communications.

“We have an excellent team in place to establish [www.AspireCard.com][1] as the premier site for on-line credit card marketing,” said Richard House, president of AspireCard.com, Inc.

AspireCard.com, Inc., a wholly owned Internet subsidiary of CompuCredit Corporation (NASDAQ: CCRT), launched its web site, [www.AspireCard.com][2], in July of this year to meet the demand for real time approval of credit card applications on-line.

Atlanta-based iXL, Inc., a wholly owned subsidiary of iXL Enterprises (Nasdaq: IIXL), is a leading strategic Internet services company which provided front-end web site design and systems engineering for the connection to AspireCard.com’s advanced risk evaluation system. In August, iXL also began designing the on-line media campaign for AspireCard.com. Atlanta-based WestWayne, Inc., through its cultural marketing division, BlackSheep, will develop and launch the off-line media campaign for AspireCard.com in the 4th quarter of this year.

Interested consumers may apply for an Aspire Visa credit card on the web by entering [www.AspireCard.com][3], then clicking on the application icon. After completing a credit application on-line through the AspireCard.com site, the applicant will receive an answer within seconds. According to House, AspireCard.com, Inc. is among only a few select credit card companies that can provide real time decisioning on-line.

AspireCard.com, a wholly owned subsidiary of CompuCredit Corporation, promotes the Aspire Visa credit card on the Internet. CompuCredit Corporation is a credit card company that uses technology based analytical techniques it has developed to identify credit-worthy consumers who it believes are not currently being served by more traditional consumer credit providers. CompuCredit markets Aspire Visa credit cards to these consumers on an unsecured basis through traditional channels such as direct mail and telemarketing, as well as through its Internet marketing services subsidiary, AspireCard.com, Inc. CompuCredit also markets life insurance, card registration, telecommunication products, membership in buying clubs, travel services and debt waiver programs to its cardholders. Aspire Visa cards are issued by Columbus Bank and Trust under an agreement with CompuCredit. CompuCredit completed its initial public offering in April 1999. CompuCredit was included in the Russell 2000(R) Index in July of this year.

[1]: http://www.aspirecard.com/
[2]: http://www.aspirecard.com/
[3]: http://www.aspirecard.com/

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ORGA Brazil

DARUMA ORGA Card Systems has opened a new production site in Taubate, Brazil. This is ORGA’s fourth smart card production plant worldwide. The DARUMA ORGA plant will produce custom smart cards for telecommunications, banking, transport and retail clients. The first VISA certification has been completed. The DARUMA ORGA Card Systems joint venture was founded in Dec. 1998. DARUMA is a leader in Brazil’s telecommunications sector. ORGA also has smart card plants in Germany, South Africa and Russia.

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VISA on Broadway

VISA has become the preferred card of Live Broadway and the only card accepted for the Tony Awards as a result of agreements with Tony Award Productions, the American Theatre Wing, The League of American Theatres and Producers, and SFX Entertainment. VISA cardholders will receive the added benefits of exclusive advance ticket availability and priority seating at Broadway events around the country. VISA’s integrated marketing program will combine national advertising, consumer promotions, online programs and public relations, providing added exposure for Broadway events and organizations. A comprehensive preference program with each partner will stimulate VISA card usage at all points of transaction. Elements will include point-of-sale visibility and prompting, advertising and promotional exposure, and VISA branding on tickets. All four organizations will provide online links, branding and VISA preference for electronic commerce. In addition, Visa will receive usage rights to the four prestigious marks and transfer pass-through rights to all members and participating merchants. VISA says Broadway productions around the country draw a combined annual attendance of more than 30 million, with box office receipts of more than $1.3 billion,

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Cap One gets Treasury Award

Treasury & Risk Management magazine awarded Capital One Financial Corporation the Alexander Hamilton Award for sophistication, ingenuity, and best practices in treasury management. Capital One received more awards than any other company — winning the Overall Excellence Gold Standard Award for its comprehensive program.

Several Capital One associates were on hand to accept the awards on behalf of the Company. “Having the right people is key to Capital One’s success. Capital One’s associates are constantly innovating and developing treasury tools that support and enable the fast growth of our company,” said David Willey, Senior Vice President of Corporate Financial Management and Treasurer for Capital One. “To receive this kind of national recognition validates the strength of our associates and their groundbreaking efforts.”

In addition to the overall award, Capital One received four individual awards.

Capital One was awarded the Gold for its innovative use of technology that improved its treasury functions. The entry detailed Capital One’s technology infrastructure that supports retail deposits — an alternative funding source for the Company.

Capital One received the Gold in the Investor Relations category for the Company’s ability to create new and exciting methods for instituting a clearly defined fixed income investor relations program that would expose more investors to Capital One.

Capital One received the Silver for its retirement program, which recognizes the Treasury Department’s integrated approach of doing business with other departments across the Company. The entry highlights the design of a retirement plan to support the Company’s strategic objective of attracting and retaining the highest quality workforce, while continuing to grow the business.

In the Financial Risk Management category, Capital One received the Silver. This award recognizes Capital One’s innovative solutions for managing liquidity; the Company developed a scenario-driven liquidity management framework that ensures adequate liquidity to support the Company’s business strategy.

Headquartered in Falls Church, Virginia, Capital One Financial Corporation ([http://www.CapitalOne.com][1]) is a holding company whose principal subsidiaries, Capital One Bank and Capital One, F.S.B., offer consumer lending and deposit products. Capital One subsidiaries collectively had 20.8 million customers and $18.5 billion in managed loans outstanding as of September 30, 1999, and are among the largest providers of MasterCard and Visa credit cards in the world. Capital One trades on the New York Stock Exchange under the symbol “COF” and is included in the S&P 500 Index.

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

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Zale Gift Cards

Zale Corporation, North America’s largest specialty retailer of fine jewelry, announces the perfect alternative to traditional gift certificates, with the introduction of electronic gift cards in all three of its domestic brands: Zales Jewelers, Gordon’s Jewelers and Bailey Banks & Biddle Fine Jewelers. These wallet sized gift cards can be purchased in any denomination from $25 to $10,000.

This introduction is a great complement to the gift-oriented merchandise, allowing the recipient to make their own special selection from the broad assortments of fine jewelry and watches. By the end of October, the card will be available across all stores and bear the respective brand name. The cards can be used anytime for any occasion.

“We are thrilled to be able to offer yet another gift-giving solution to our customers. The gift card is a great option for the customer who wants to give a gift of lasting value but may be undecided on selection and working with limited time,” said Beryl Raff, President and Chief Executive Officer of Zale Corporation.

The gift card offers ultimate flexibility and convenience for both the gift giver and the recipient. Gift card holders can redeem their cards for merchandise, increase their balances or verify their balances at any store. Customers can also obtain their balance by calling the toll free number on the back of the card.

Zale Corporation operates approximately 1,330 specialty retail jewelry stores located throughout the United States, Canada, Puerto Rico, and online, including Zales Jewelers, Zales Outlet, Zales Direct at [www.zales.com][1], Gordon’s Jewelers, Bailey Banks & Biddle Fine Jewelers and Peoples Jewellers. Additional information on Zale Corporation and its operating divisions is available on the Internet at [www.zalecorp.com][2].

[1]: http://www.zales.com/
[2]: http://www.zalecorp.com/

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First USA Fallout

Bank One confirmed yesterday that First USA’s chairman and CEO, Richard Vague, has resigned. The news follows the release of Bank One’s latest earnings report which revealed that sluggish growth in the First USA card division is dragging on Bank One’s earnings. Bank One says the company will continue to be highly focused on stabilizing returns at First USA. The First USA problems involve marketing, pricing and customer issues. In response to Vague’s decision to leave, Bill Boardman has been elected chairman and head of First USA. The Bank One board of directors also announced yesterday that Verne Istock will become president of Bank One. John McCoy has also been elected chairman while continuing to serve as CEO of Bank One. The First USA executive management team, which has been together for some time, has been coming apart. In May, Randy Christofferson resigned as president of First USA Bank.

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ChargeBack Defender

PA-based riskwise.com has introduced a tool that helps e-commerce merchants identify customers who are using a stolen card, have a history of not paying for products, are abusive of product returns or have a propensity for family fraud (unauthorized purchases by children). ‘ChargeBack Defender’ offers: access to more than 50 databases containing more than two billion consumer records; proprietary models designed to accurately predict the risk associated with a first-time transaction without the need to depend on purchasing history of a specific customer; predictive results in an average of two seconds or less; and the industry’s lowest false/positive rate due to riskwise.com’s multiple databases used for each individual identifier that instantly verify any discrepancies suspected during the transaction. riskwise.com is run by Paul Fichtman.

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