NextBank

NextCard, Inc., signed a definitive agreement Monday to acquire Textron National Bank, a subsidiary of Textron Financial Corp. While terms of the transaction were not revealed, the total assets of Textron National Bank at the closing will consist of less than $3 million in cash and other short-term securities. Upon closing the deal Textron National Bank will change its name to NextBank, National Association. NextCard said the acquisition will give NextCard the ability to originate credit card accounts for its own account and enable the Internet credit card firm to diversify funding sources. NextCard currently has approximately $450 million in funding capacity through conduit funding arrangements with Barclays Capital and ING Barings. The company currently purchases card receivables on a daily basis from its issuer, CA-based Heritage Bank. Up until Jan 12 of this year Heritage funded all card receivables. When NextCard went public in May the firm indicated plans to use at least $20 million to capitalize NextBank.

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Bancomer Cross-Sells Using CRM

Bancomer, S.A., one of the top banks in Mexico, will install Customer Relationship Management scoring models from Fair, Isaac and Company, Inc. to enhance the relationships it currently has with its customers. The bank initially plans to use the models to cross-sell credit cards to its deposit customers. Bancomer, S.A. also uses Fair, Isaac scoring models in various credit divisions as well as Fair, Isaac’s adaptive control system for credit card management.

“Bancomer is consistently looking at ways to improve customer relationships,” said Raquel Voorduin, vice president of Modeling Technology, Bancomer, S.A. “The CRM models will enable us to study the different relationships we have with our customers. From there, we will develop strategies and target offers based on this improved knowledge, as well as measure the impact of our marketing strategies for future efforts.”

![][1] Fair, Isaac (http://www.fairisaac.com) helps businesses worldwide maximize the value of data to make more profitable decisions about their customers, operations and portfolios. Known for its pioneering work in credit scoring and its use of data in transaction-level decisions, Fair, Isaac now delivers data management services, analytics, software, and consulting to the financial services, healthcare, telecommunications, and eBusiness markets. Headquartered in San Rafael, Calif., Fair, Isaac employs nearly 1,600 people in 18 offices worldwide. For the fiscal year ended September 30, 1998, the company reported revenues of $245.5 million. For more information, call Fair, Isaac at 800-999-2955.

Bancomer is one of the two largest financial institutions in Mexico and holds a leading position in consumer lending and services, insurance, and pension fund management markets. Its subsidiaries in those businesses are: Seguros Monterrey Aetna, Seguros Bancomer, Pensiones Bancomer, Afore Bancomer, and Fianzas Monterrey Aetna.

[1]: /graphic/fairisaac/fairisaac.gif

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Smart Game Cards

Gemplus snagged its single largest volume smart card order in the United States yesterday. Nintendo of America Inc. will distribute Gemplus smart cards for its new ‘Pokemon Snap’ video game. The promotion will run through Thanksgiving. While playing ‘Pokemon Snap’, players “snap” pictures of Pokemon characters as they play the game. The “photos” are stored in the game cartridge. Players then take their cartridges to participating Blockbuster stores and purchase a Pokemon Collectible Smart Card. Each store will have a special Pokemon Snap Station, equipped with Gemplus smart card readers, where the game cartridge and the smart card are inserted. Players can then print out a page of 16 stickers featuring their four favorite Pokemon, paid for by the `token’ stored on the smart card.

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CardWatch

While card solicitations historically thin out during the summer months the big guns are still going head-to-head according to CardWeb’s marketing intelligence service, CardWatch ([www.cardwatch.com][1]). The key competitive terms this summer: Platinum and Intro Rates. Meanwhile Capital One and Household are slugging it out in the sub-prime segment.

CARDWATCH AUGUST SOLICITATIONS

ISSUER – CARD NAME INTRO REG FEE
First USA e-Parks Platinum VISA 3.9% 9.49% None
First USA New York Life Platinum VISA 3.9% 9.99% None
American Express Corporate Optima Platinum 2.9% 11.99% None
MBNA Fidelity Investments Platinum Plus VISA 2.9% 12.99% None
MBNA Platinum Plus VISA 2.9% 12.99% None
Chase Platinum MasterCard 3.99% 13.49% None
Citibank Dividend MasterCard 3.9% 16.90% None
Household MasterCard NA 18.90% $49.00
Capital One Premium Rewards VISA NA 19.8% $19.00
Capital One Stamp & Coin VISA NA 19.80% $39.00

Source: CardWatch (www.cardwatch.com) special access fees apply

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

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VF Lynks Up

Hewlett-Packard’s VeriFone division has signed an agreement with Atlanta-based Lynk Systems, Inc. for 20,000 ‘Omni 3200 POS’ payment systems. The agreement follows a pilot test of the companies’ combined solutions with merchants in the great Atlanta metro area. Monday’s deal will enable Lynk and VeriFone to deliver merchants an optimal POS payment solution that combines VeriFone’s newest payment system with Lynk’s application-development and transaction-processing and customer-service expertise. The ‘Omni 3200’ features a fully integrated thermal printer printing at 12.5 lines per second, large graphical display and ATM-style, screen-addressable keys.

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USWD Signs Maverick

U.S. Wireless Data, Inc. , the leader in applying wireless technology to the payments industry, and Maverick International, a merchant credit card processor based in Tucson, AZ, Monday announced a two-year transaction processing agreement. Under the terms of the agreement, Maverick International will offer USWD’s Wireless Express Payment Service to its existing and prospective customers for high-speed wireless credit card authorizations.

Dean Leavitt, USWD’s chairman and chief executive officer stated, “Wireless card processing has become a requirement for the suite of services offered by transaction processors. Our Wireless Express Payment Service product provides a conduit for processors to easily implement and manage their individual wireless strategy.”

U.S. Wireless Data’s WEPS is a comprehensive suite of wireless transport services and server technology designed to deliver payment transactions securely and efficiently from merchants to payment processors. The high-speed WEPS service supports encryption, real-time diagnostic capability, and online, real-time reporting capabilities.

One feature of the WEPS service is the ability for merchants and merchant acquirers to access terminal, account and transaction information via a secure Internet web site. This feature represents a major advance in the goal to provide merchant acquirers with a rich set of customer support tools. It also provides merchants with a user-friendly method for directly managing their card processing information.

Maverick offers full data processing and customer support services to the financial transaction processing industry. Maverick has made a significant investment in wireless transaction processing over the past two years and has cemented its commitment to wireless by adopting the Wireless Express Payment Service.

“Maverick has employed a strategy of offering customized software and client/server technology for its customers thus enhancing the value of client relationships,” said John Hunnicutt, chairman and chief executive officer of Maverick International, “WEPS is a perfect complement to our product offering.”

About U.S. Wireless Data, Inc.

U.S. Wireless Data, Inc. ( [http://www.uswirelessdata.com][1] ) is the leader in applying wireless technology to the payments industry. Through the use of its proprietary technology, software, carrier relationships, and front-end authorization and capture capability, USWD enables merchant acquirers banks and independent sales organizations to provide their customers with fast and cost-effective transaction processing solutions.

About Maverick International

Maverick ( [http://www.maverickintl.com][2] ) offers full service data processing and customer support services to the financial transaction processing industry. Maverick’s proprietary developments include: CDPD certified POS software capable of delivering an authorization response as fast as 250 milliseconds, with most transactions being processed in under three seconds. Their “PurchasePoint(TM),” Internet processing software connects merchant websites with Maverick’s StrongBox(TM) authorization network and provides advanced features such as multi-authorization unit auto-load balancing and asynchronous transaction processing. It also provides back-end processing enhancements for automated credit of Internet-related retrieval requests and enhanced chargeback processing.

[1]: http://www.uswirelessdata.com/
[2]: http://www.maverickintl.com/

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IFS 2Q/99

IFS International, Inc. reported Monday that its Form 10-KSB has been filed with the U.S. Securities & Exchange Commission and reflects that revenues for the fiscal year, ended April 30, 1999, totalled $10,164,618, a 95.2% increase over revenues of $5,208,334 reported for the previous fiscal year. Net losses posted for fiscal year 1999, after factoring in $781,341 in one-time, non-recurring charges and customary interest, taxes, depreciation and amortization, were $703,907, or $0.53 loss per share, compared to net losses of $1,261,473, or $1.15 loss per share, reported for fiscal year 1998. Notwithstanding the one- time, non-recurring costs, adjusted earnings before income tax, depreciation and amortization (EBITDA) for fiscal year 1999 was approximately $1.3 million.

According to David Hodge, Chief Executive Officer and President of IFS International, Inc., “As previously announced, we are delighted that we’ve been successful in achieving notable top-line growth while reducing our year end operating losses. It is important to note that we would have realized a 54% decrease in losses; however we elected to expense in fiscal 1999 the final payment due Charles Caserta, one of the original founders of the Company, in accordance with his termination agreement. Although this resulted in our reducing losses for the year only 44% instead of the 50-60% originally expected, we have positioned IFS International to gain enhanced financial strength as we move forward through fiscal 2000.”

Continuing, Hodge added, “It is also noteworthy to mention that had we not sustained numerous one-time, non-recurring charges associated with everything from loan acceleration costs to Y2K conformity to infrastructure growth expense, IFS International would have, in fact, achieved profitability for the year. Nonetheless, we are now on pace to deliver to our shareholders continued improved results as we proceed with our global growth initiative.”

IFS International, Inc. and Network Controls International, Inc. are divisions of IFS International, Inc., which has headquarters in the United States and subsidiary offices in the United States, United Kingdom, Singapore, Australia and Germany.

IFS International, Inc. develops, markets and supports software products for the Electronic Funds Transfer (EFT) market. IFS’ TPII suite of software products provide for Automated Teller Machine (ATM), Point of Sale (POS), network switches, smart-card, card management, bank teller platform, home banking and call-center solutions. NCI, Inc. provides complementary products, such as NCI Business Centre(TM), an enterprise-wide retail bank branch solution designed to deliver traditional and Internet/Intranet based transactions.

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Smart Card Deal

IC One, Inc. confirmed Monday it was awarded the Utah Valley State College smart-card student ID contract. UVSC currently has approximately 20,000 full and part-time students, 2,000 faculty, and 120,000 alumni. IC One says negotiations are underway with the UVSC Alumni Association to make the card a membership card for that organization as well. IC One’s smart card loyalty program has been testing in Utah County for about a year.

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CardPro Acquired

WI-based M&I Data Services signed an agreement Monday to acquire the assets and customer relationships of Cardpro Services, Inc.. Cardpro Services has delivered plastic card personalization and procurement solutions since its founding in 1979. Cardpro personalization technologies include embossing, encoding, thermal printing, card activation labeling and PIN generation. The firm has relationships with the major ATM and debit networks and is VISA and MasterCard certified for credit and debit card personalization. With the acquisition, M&I Data Services says it will support in excess of 1,500 customers while gaining opportunities to service a wider base of customers within the financial, healthcare and transit industries. Bastian Knoppers, owner, founder and president of Cardpro Services will become president and GM of the Cardpro Services business unit at M&I Data Services. M&I Data Services will retain Cardpro’s employees and the business unit’s operations will continue to be based in Willowbrook, IL.

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Brazil Smart Cards

South American Business Information reported this morning that VISA International will introduce smart cards into the Brazilian market this week. There are currently 20 million VISA credit cards in Brazil. The Bradesco bank will reportedly replace 15 million credit cards with the new smart cards. VISA indicated that nearly 12,000 ATMs in Brazil are ready to accept smart cards. VISA International president Malcolm Williamson is traveling in the region. Last week Williamson said in a Mexico City news conference that the number of VISA cards worldwide reached 850 million at mid-year, a 30% increase. He also reported that VISA now holds a 72% marketshare in Latin America compared to 68% one year ago.

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Nestor 2Q/99

Nestor, Inc. reported Friday consolidated revenues of $2,747,000 and a net loss of $121,000 ($.01 per share) for the six months ended June 30, 1999, as compared to revenues of $1,482,000 and a net loss after taxes of $1,901,000 ($.16 per share) reported for the six months ended June 30, 1998.

For the second quarter, the Company reported consolidated revenues of $1,306,000, an increase of 137% from $551,000 reported during the same quarter last year. A net loss of $138,000 ($.01 per share) was also reported for the second quarter, an 88% improvement over the net loss of $1,162,000 ($.07 per share) reported in the corresponding quarter of 1998.

Improved results reflect an increase in new licensing revenues realized by the Company’s Financial Solutions Division and its risk-management product line, PRISM(R). Financial Solutions revenues totaled $2,618,000 in the first half of 1999, as compared to $1,205,000 in 1998, and the division reported a net profit from operations of $576,000 for the six months ended June 30, 1999 as compared with a net loss of $382,000 in the same period last year. Revenues for the second quarter included initial license fees from deliveries to four new customers, including the first PRISM licenses in the United Kingdom and South America and the first license of CampaignOne(TM), a customer relationship management solution.

Nestor Traffic Systems, Inc., the Company’s 62.5% owned subsidiary, reported revenues of $101,000 and a net loss before minority interest of $1,079,000 for the six months ended June 30, 1999 as compared to revenues of $208,000 and a net loss of $779,000 in the comparable prior year period. The minority interest in the Company’s traffic systems subsidiary resulted in a reduction of $217,000 in the consolidated loss of the subsidiary for the second quarter and a reduction of $405,000 in the consolidated loss for the six months ended June 30, 1999.

“We are continuing to build upon our direct sales efforts and have realized the benefits of our strong partner relationships. ACI and CSK Corporation have helped us to realize substantial revenue growth and we remain optimistic that the current trend will continue,” said David Fox, Nestor President and CEO. “Our Nestor Traffic Systems subsidiary has also made great strides with its CrossingGuard(R) automated red light enforcement solution. The initial, fully functional installation in Vienna, Virginia is an industry first – using full video to detect, record and issue citations to red light running violators. CrossingGuard brings communities increased red light enforcement and unique collision avoidance features to enhance intersection safety.”

About Nestor

Founded in 1983 and headquartered in Providence, RI, Nestor, Inc. is a leading provider of intelligent decision-support solutions for the financial services industry. Nestor’s client/server products incorporate innovative pattern-recognition technologies ideally suited for data-intensive, mission-critical decision applications in real-time environments. The Company’s products for financial institutions support fraud detection and case management for credit, debit, retail and commercial card fraud, as well as Internet and merchant fraud; bankruptcy prediction; and customer relationship management. Nestor products are sold direct and by selected partners worldwide. Through its subsidiary, Nestor Traffic Systems, Inc., the Company also applies its technologies to a suite of video-based intelligent transportation systems that promote enhanced traffic management and improved safety.

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Lower Cost Transactions

Seattle-based eCHARGE Corp. predicted this morning that the use of VISA and MasterCard online will become obsolete because of the associations’ old technology, high-cost infrastructure and lack of agility, clash with the philosophy of the Internet. The company says its new ‘eCHARGE’ solution will save online merchants up to 100 basis points on transaction fees over traditional credit card fees. The online payments firm announced this morning plans to deliver ‘eCHARGE’, the first Internet purchasing account with online credit and prepayments, in the fourth quarter. ‘eCHARGE’ will give Internet users the ability to sign up for their account online, get real-time account approval and buy immediately. ‘eCHARGE’ will also offer families and businesses the ability to set up sub-accounts with individual spending limits, and the ability to pre-select sites at which members can buy. In addition, ‘eCHARGE’ offers online settlement, reporting and accounting and can process micropayments for purchases as small as one cent.

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