Attrition is now a factor in online banking. While the absolute number of online bankers grew 100,000 to a total of 6.3 million in the past 12 months, 3.1 million U.S. adults have discontinued their use of online banking according to Cybercitizen Finance from NY-based Cyber Dialogue. The study also found that only 35% of online bankers that discontinued their service were inclined to try it again. The research revealed that more than 50% have discontinued use because they find the service too complicated or were dissatisfied with the level of customer service. In contrast to online banking, only 3% of investment traders who are online have discontinued trading online and 85% of current traders are satisfied with their service.

Cybercitizen Finance 1999 Baselines (millions of users)

1998 1999 CAGR
Total Online Users 53.5 65.4 22%
Online purchasers 14.5 24.4 68%
Online banking 6.2 6.3 2%
Online traders 4.0 6.1 53%
Manage finances online 18.1 23.1 28%
Online insurance seekers 8.8 12.9 47%
Online credit card applications 3.3 4.2 27%
Online loan applications 3.2 4.6 44%
Online mortgage applications 2.7 3.2 19%

Source: Cyber Dialogue


GSA Smart Card

Citigroup’s e-Citi unit, VISA and the General Services Administration, launched this week, the first ‘Open Platform’ smart card program in the U.S. using Sun’s ‘Java Card’ technology. The multi-application GSA smart cards were demonstrated at the first annual GSA ‘SmartPay Conference’ in Nashville. The GSA smart cards were issued to 500 of GSA’s Federal Technology Service employees. The cards combine official GSA employee identification with typical corporate campus features such as access to buildings and IT resources, secure e-mail and property management, and with the standard credit payment of a government travel and purchase card. Technology components include magnetic strip, contact and contactless smart chips and fingerprint biometrics. GSA employs about 14,000 people and has an annual budget of nearly $13 billion, 98% of which comes from reimbursable funding for services provided to other federal agencies.


SmartCash ATM Pilot

Greenland Corporation yesterday announced an agreement with a leading Texaco-Star Mart franchisee.

Dr. Lou Montulli, CEO of Greenland Corporation stated, “Greenland has entered into an agreement with one of the leading and largest national franchisee representatives for Texaco-Star Mart stores, MRE Corp., an Anaheim, California based franchisee operator of Texaco-Star Mart operations, for the installation and testing of the SmartCash ATM.”

“The SmartCash ATM was installed August 16 and will be used by MRE Corp. to evaluate the various services offered by the SmartCash ATM. MRE Corp. is one of approximately 100 Texaco-Star Mart franchisee owned stores and its Vice President, Gil Ficke, is Chairman of the Texaco Star-Mart Franchise Advisory Counsel. In addition, other Texaco-Star Mart franchisees have expressed a strong interest in the SmartCash ATM and are awaiting the results of the testing with MRE Corp., prior to ordering the SmartCash ATM machines.”

“We are obviously very excited about this opportunity because of the significant potential for volume purchases that it represents through the validation and acceptance of the SmartCash ATM by users, store owners and potential purchasers.”

Greenland Corporation is a manufacturing corporation with existing product and product under development. The Company is currently introducing an automated payroll check-cashing machine with full ATM functionality, and money order dispensing services. Future services to be included with the machine are phone cards and advance payday loan services.


UTM Coming

Seattle-based UTM Systems Corp. said yesterday it is on target to rollout its ‘UTM Machine’ this fall. The ‘UTM’ is an epayment solution modeled after ATMs. The ‘UTM Machine’ uses proprietary smartcard technology. The new system has a dual-certificate security feature to dramatically reduce incidents of credit card fraud and chargebacks. The ‘UTM Machine’s’ hardware/software design adds a level of security not currently available from other epayment options. Directly linked to the global ATM network, the ‘UTM Machine’ requires a physical credit or debit card and is activated by the user’s PIN code. Also, because transactions occur and are authorized over the ATM network, a consumer’s credit or debit card information never resides on a Web merchant’s server.


Discover’s OnRamp

Discover Financial Services and EarthLink announced an agreement this morning to exclusively offer EarthLink’s Internet access services to more than 3 million Discover/Novus Network merchants. The deal includes special pricing for merchants and a co-branded EarthLink Personal Start Page. Discover says a recent survey showed only 26% of U.S. small businesses (less than 100 employees) are online, but 58% of managers at those companies perceive the Web as important or very important to their firm’s overall business strategy. Beginning this month, all Discover/Novus Network merchants will be eligible for EarthLink’s Internet access services. Discover is also sponsoring a lower-than-retail monthly service charge for online merchants. Discover and EarthLink have also collaborated on a co-branded, customizable Personal Start Page, which includes links to exclusive offers for Discover/Novus Network merchants. The offer will be promoted through direct mail and monthly statement inserts.



FL-based Racal Security and Payments introduced ‘SmartATM’ yesterday which offers cost-effective, hardware-based, cryptographic solution for improved security levels. ‘SmartATM’ provides Triple-DES or DES-based encryption and authentication functions that operate on a smart card for use in ATM applications. Designed for use on virtually any application platform without the need for special interfaces or additional power requirements, the ‘SmartATM’ smart card interfaces to the host system using a smart card reader with a serial interface that obtains power from the host’s keyboard interface. Specifically designed for ATM applications and meeting the emerging needs for the migration to Triple-DES and the requirement for unique key per terminal, SmartATM is used inside the ATM to provide Triple-DES or DES-based PIN encryption and ‘Message Authentication Code’ functions for transactions. All the cryptographic functions are performed on the ‘SmartATM’ card that also contains any keys needed by the system.


ATS Up 188%

ATS MONEY SYSTEMS, INC. announced record earnings as a result of operations for the quarter ended June 30, 1999, which was set forth in its Quarterly Report on Form 10-QSB filed with the SEC on August 11, 1999.

2nd Quarter ended June 30 Six Months ended June 30

1999 1998 1999 1998
Total Revenues $4,244,476 $4,923,500 $7,535,119 $8,127,831
Net Income 560,970 194,964 806,087 308,385
Earnings per share $.10 $.03 $.14 $.05

Gerard F. Murphy, Chief Executive Officer of ATS Money Systems, Inc., commented, “Net Income of $560,970 during the 2nd Quarter 1999 was $366,006 (187.7%) higher than the $194,964 net income in the 2nd Quarter 1998 and was due to the increased sale of software at higher margins in the 2nd Quarter 1999. The record earnings achieved during the six month period are the result of the continued acceptance of our Cash Office System products, as well as initial sales of new products in the fast food, convenience store and grocery markets.”

Cost of equipment and systems sales decreased from 70.0% of sales in the 2nd Quarter 1998 to 47.8% of sales in the 2nd Quarter 1999. This was due to increased sales of software in the 2nd Quarter 1999 compared to higher sales of hardware in the 2nd Quarter 1998. Cost of maintenance and service decreased from 44.2% in the 2nd Quarter 1998 to 40.0% in the 2nd Quarter 1999 due to lower costs from a third party vendor.

Selling general and administrative expenses of $1,324,696 in the 2nd Quarter 1999 were $18,442 (1.4%) lower than in the 2nd Quarter 1998. Basically, higher salaries, additional staff and higher rents for increased office space was offset by reduced commissions resulting from a decrease in sales of equipment and systems.

Income tax expense for the 2nd Quarter 1999 was $403,000 compared to $122,000 in the 2nd Quarter 1998. This increase of $281,000 (230.3%) was due to the comparable rise in income from operations.

ATS Money Systems, Inc., with its consolidated wholly-owned subsidiary, Innovative Electronics, Inc., is engaged in the development, sales and service of currency counting systems and equipment for department and chain stores’ cash offices and bank commercial vaults and of specialized information communications systems primarily used by chain stores. The Company’s customers are businesses that handle a large number of cash, check and credit transactions on a daily basis, such as banks, department stores and chain stores.


eGlobe Card Services Slips

eGlobe announced Tuesday its results for the second quarter of 1999, with consolidated revenue reaching more than $9.1 million and growth in the Company’s IP Voice and other new business meeting expectations. This revenue compares with revenue of $8.4 million in the first quarter and $6.8 million in the fourth quarter of 1998. In its form 10-Q filed with the SEC today, the Company also presented a strengthened balance sheet — reflecting financing arrangements entered into in the last two quarters and finalized in July. A condensed version of this pro-forma balance sheet is included in this press release.

Primarily due to the cost of expanding its IP Voice network, the Company posted an operating loss in the quarter of approximately $5.7 million, excluding acquisition, financing, amortization, depreciation and other non-cash charges. Including those charges the total loss was $11.2 million.

Commenting on the results, eGlobe’s Chairman Christopher Vizas said, “We are satisfied with our results for the second quarter and the improvement in operating margins excluding the up front costs for expanding our network. We experienced solid growth in our Network Services division and expect our billable minutes to continue to increase over the next several quarters.”

Network Services — IP Voice

As previously announced, the Company is building a global IP Network based upon the IDX business acquired in December 1998. Construction of that network, intended to support all of the services provided by the Company, is fueled by the sale of Internet Protocol (“IP”) Voice services — similar to those provided by Net2Phone, Delta Three and ITXC. eGlobe is concentrating on initiating this service with its international telephone company partners around the world — the same partners to whom it supplies support for post paid calling cards.

Revenues for Network Services reached $3.8 million in the second quarter as compared to $1.8 million in the first quarter, reflecting a 225% increase, from 7.3 million to 16.9 million, in billable minutes and not including $0.4 million of service provided to the Card Services Division of the Company. The Network Services division also expanded its direct network to a total of 16 countries in the second quarter.

In line with management expectations, Network Services experienced increased network expansion costs and significant losses in the second quarter. As a result of its costs of expansion and minutes growth, particularly the costs associated with implementing new direct routes and with building service on those routes, Network Services realized negative gross margins of approximately $1.0 million in the quarter and operating losses of $2.4 million. Adjusting for the up-front costs, route-by-route operating margins improved in the second quarter.

Sometime within the next year, the Company plans to reach sufficient volumes of traffic in Network Services to permit it to finance the acquisition of international fiber optic cable and other transmission links. These purchases are expected to lower the cost of service and improve gross margins. Even with such investment, however, management expects losses to continue during the expansion of the network.

Card Services

Card Service revenue declined in the second quarter to $5.3 million from $6.8 million in the first quarter. While the legacy business of providing services to telephone companies around the world that issue post paid calling cards remained constant, Card Service revenue related to providing services to issuers of prepaid cards in the United States declined. The revenue decline resulted primarily from the tightening of contracts and procedures related to business with U.S. prepaid card issuers.

The Company showed substantial improvement in margins for Card Services. Gross margin was approximately $1.0 million, resulting in a quarterly operating loss for the division of approximately $700,000 — an improvement of $1.0 million over the operating loss in the first quarter. Management expects continued substantial margin improvement in the third quarter.

Global Office Services

eGlobe launched the first offering in its Global Office Services division in July, following its acquisition of Vogo Networks late in the second quarter. Global Office Services division had no revenue in the second quarter and is not expected to contribute material revenues this year, although it is expected to provide measurable revenue in 2000 and beyond. Global Office Services added about $200,000 to expenses in the second quarter and can be expected to contribute $1.0 million or more to operating costs over the next several quarters as it builds its unified messaging service and provides telephone access to Internet services.

Financing Growth

Management is continuing its aggressive growth plan for 1999 and intends to pursue that plan into the foreseeable future. Implementing the plan will continue the large cash demands on the Company and the need for aggressive cash management. To accomplish all the Company’s objectives, management rose significant financing in the first and second quarter of 1999 and is focused on raising additional capital through the end of the fiscal year.

Through June 30, 1999, the Company raised new funds in excess of $32.0 million. To maintain growth, the Company plans a private placement of equity in the third quarter of up to $10 million and additional financing of debt or equity in the fourth quarter of 1999 or the first quarter of next year, depending upon market conditions.

“We continue to grow and expand our business and now offer customers multiple products and services. Our strategy is to be able to offer our customers a fully integrated suite of services and we have made substantial progress since the beginning of this year, when we had only a single line of service. Although we expect to continue to incur additional costs and expenses as we grow the business, we also expect to post sequential revenue growth over the next several quarters,” concluded Vizas.

eGlobe is a leading supplier of global enhanced telecommunications and information services, including Internet voice and fax, calling card services along with related validation, billing and payment systems and other international Intranet and inter-networking services in partnership with telecommunications operators around the world. Operating through its World Direct network, eGlobe originates traffic in 90 territories and countries and terminates anywhere in the world. eGlobe provides its services principally to telecommunications companies and financial institutions.


Web Ads

NextCard’s online ad budget has pushed the Internet card issuer into the list of the Top Ten Advertisers with the most impressions on the Web. First USA, the most active card issuer on the Web, slipped off the list. According to the Internet Advertising Index from Nielsen//NetRatings, NextCard came in at the No. 5 position for July compared to No. 23 in June and No. 7 in May. First USA has slipped to No. 27. FirstUSA scaled back its advertising efforts by not running any banners on Yahoo!, which accounted for about 40% of Yahoo!’s banners in June. Among the most viewed banner ads on the web is Capital One’s ‘Platinum VISA’ banner ad. According to Nielsen, the average Internet user in July visited 12 unique sites, viewed 353 pages and clicked on 0.58% of banner ads viewed. Meanwhile, CardWeb’s consumer channel advertising continues to deliver the highest response rate and approval rate for card issuers. CardWeb delivers, each month, 600,000 to 1,000,000 ad impressions which produce 70,000 to 100,000 clicks. Over the past twelve months CardWeb’s consumer channels have generated, based on advertiser feedback, an estimated 300,000 applications and 48,000 new accounts. The current twelve consumer ad slots on are sold out.


Wingspan Name Marketing Chief, a subsidiary of Bank One Corporation, has announced the appointment of Michael J. Cleary as executive vice president of marketing. In this role, Cleary will be responsible for the marketing and product development areas of

“We are very excited about Michael joining He brings a level of marketing knowledge and experience which will prove to be extremely helpful in ensuring’s continued position as a leader in providing online financial services,” said Jim Stewart, president and chief executive officer,

Prior to joining, Cleary served as president and chief operating officer overseeing worldwide sales, marketing and operations for Smart Carte, Inc. Previously, he served as executive vice president and chief operating officer for Pinnacle Brands where he was responsible for marketing, operations, creative, information technology, legal, licensing and human resources. He also served as the chief financial officer for a major sporting goods manufacturer. Cleary has a bachelor’s degree from Princeton University and a master’s degree in business administration from the Amos Tuck School of Business Administration at Dartmouth College. ([][1]) is a division of FCC National Bank, a subsidiary of Bank One Corporation. is the new powerhouse in personal finance, offering consumers unparalleled freedom and choice in managing their money. provides consumers with a wide range of financial products and services brought together at one website, including traditional banking, investment and planning services, and objective search tools.



Smart Parking

Schlumberger was awarded a contract, Tuesday, to provide ‘Pay & Display’ terminals, software and installation for 660 parking spaces in the City of Denver. With the Schlumberger parking system, the motorist simply inserts payment and the terminal issues a ticket that confirms the amount of time purchased. The motorist then returns to the vehicle and places the ticket in full sight on the vehicle’s dashboard. In order to simplify collection, the City of Denver wanted a parking solution that would allow motorists to pay by both credit cards and dollar bills. A credit card “hot list” is downloaded to the terminals each day to quickly reject unauthorized cards on site, while software enables card transaction data to be transmitted directly to the bank.


Carnival Smart Cards

The Pathways Group, Inc. announced Tuesday that it has signed an agreement with Funtastic Traveling Shows, one of the largest carnival operators in the U.S. Under the terms outlined in the agreement, Pathways will implement a smart card system that will allow Funtastic to remove all cash from the midway. Conditions of the agreement call for Pathways to supply the hardware, including terminals and receipt printers, as well as the smart cards for the pilot period. Implementation of the pilot is expected to occur in California this October and will run for approximately two weeks.

During the experimental pilot program, Funtastic customers will purchase smart cards instead of paper tickets. These smart cards will be accepted at terminals located at rides, games and food concessions. The smart cards sold at Funtastic’s ticket windows will contain no preset value, thus allowing customers to add any amount of money onto the card that they desire. Because the cards are rechargeable, customers will be able to have value added to them as often as they choose. Pathways and Funtastic anticipate that this system will prove to be extremely convenient for customers and a benefit to Funtastic’s business.

The Pathways Group, Inc. is a leading U.S. developer of smart card-based technologies offering smart card and transaction processing solutions for commerce, retail, education, recreation, amusement, government, and transportation. The Pathways Group also designs and manufactures SPRINTICKET(TM) unattended ticketing dispensers. Every SPRINTICKET system operates on state-of-the-art hardware platforms using standard Microsoft(TM) operating systems and an SQL database. In addition to accepting all major credit cards, SPRINTICKET dispensers are designed to accept and recharge smart cards. Pathways performs the credit card processing for all SPRINTICKET transactions, including authorization at the time of purchase and end-of-day account reconciliation. SPRINTICKET dispensers are currently installed at ski areas, amusement parks, and transportation services across the United States.

Funtastic Traveling Shows operates carnivals along the West Coast, averaging 70 shows per year at shopping centers, festivals and fairs. They provide everything from the simplest merry-go-round to a complete state fair setup.

The Pathways Group, Inc. provides clients with innovative and unique solutions for securely creating, capturing and processing data and electronic transactions using custom application software and hardware systems. The company, established in 1987 by Carey Daly, has evolved into a leader in the development of custom software and hardware for electronic banking, data and transaction processing, and smart card applications. Pathways’ creation of proprietary “back office” systems allows for the capture and processing of data and transfer of funds via “ACH” protocol, the standard used in the banking industry for transfer of funds in retail, medical and institutional environments.