Netherlands Smart Cards

Motorola’s Worldwide Smartcard Solutions Division and Australia’s ERG Group were awarded a contract by The Ministry of Transport, Public Works and Water Management in the Netherlands for approximately 14 million guilders (US$6.6 million) to enhance bus service in the city of Groningen by implementing a field trial of an integrated smart card automated fare collection system called ‘Tripperpas’. The results of the study confirmed the need for a smart card field trial as a preliminary step to eventually replacing the ‘Strippenkaart’ paper ticketing system for all public transport within the Netherlands. Motorola’s systems integration and operational management services, ERG-provided bus terminals and ARRIVA bus depot computing equipment will support the ‘Tripperpas’ system. In addition, more than 10,000 ‘M-Smart’ dual-interface smart cards are expected to be issued to customers of ARRIVA for a 24-month field trial involving approximately 80 buses in Groningen that is expected to begin in the second half of next year.

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E-Bill Demand Soft

PSI Global says a new study shows that consumers’ interest in electronic bill presentment and payment services lags behind that of companies, particularly high-volume billers, that want to switch from paper-based systems to electronics. PSI says it found that just seven percent of U.S. households think that they could receive and pay bills via the Internet within six to 12 months. And 16 percent say they would like to use the Internet both to receive and pay bills within the next three years. However PSI says the good news for billers is that close to 50 percent of U.S. households already have PCs, and more than a third of these PC owners actively use financial management software. The infrastructure is in place for large numbers of consumers to accept EBPP. The research firm says another positive indicator that consumers will adopt new bill payment methods is the decline in the usage of checks from 90 percent of all payments in 1990 to 76 percent this year. PSI estimates that consumers will make 15.9 billion bill payments this year.

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Hypercom Promotion

Hypercom Corporation today announced the appointment of John Marshall as senior vice president and general manager, Hypercom North America POS. Mr. Marshall will be directly responsible for managing and directing Hypercom(R) sales, service and support throughout the United States, Canada, Mexico and Puerto Rico. Marshall will report to Chris Alexander, president of Hypercom Worldwide Payment Solutions, a new streamlined organization responsible for all payment product sales and support, including Hypercom’s POS Multi-Lane Division and The Horizon Group. Marshall had previously served as senior vice president of sales, US/Canada POS.

“Hypercom’s shipments soared by almost 45% in the US last year, in large part due to John Marshall’s efforts. His appointment to this newly-created position is directly in line with our goal to continue that momentum, simplify our organizational structure, improve efficiency and provide existing and potential customers with the most advanced value-added electronic payment solutions,” said Chris Alexander, president, Hypercom Worldwide Payment Solutions.

Marshall is a 30-year veteran of the electronic payments, banking, data processing and communications industries. Prior to joining Hypercom in 1987, Marshall was vice president of sales and marketing for Ausnet and its subsidiary, EFTEL, the operators of Australia’s only independent EFT switch networking running both ATMs and card payment systems.

Hypercom Corporation (NYSE:HYC) is a global provider of electronic payment solutions, including multi-functional point-of-sale terminals, peripherals, network products, Ascendent(TM) payment and transaction software and Internet-based and electronic commerce payment solutions. On a global basis Hypercom delivers the services and technology infrastructure required to quickly integrate and deploy new payment applications. These applications provide competitive value-add programs, improved business performance and low total cost of ownership.

Headquartered in Phoenix, Arizona, Hypercom markets its products in more than 70 countries through a global network of affiliates and offices in Argentina, Australia, Brazil, Chile, China, France, Hong Kong, Hungary, Japan, Mexico, Russia, Singapore, Sweden, the United Kingdom and Venezuela. Hypercom’s Internet address is www.hypercom.com.

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NYCE-Magic Formally Merge

NYCE Corporation and Magic Line, Inc., two of the leading electronic payment services providers in the United States, have formally closed their merger. The transaction received regulatory approval last week from the Federal Reserve Board, the last step required prior to completing their merger.

Last week, the two companies announced that the combined entity will operate under the single brand of NYCE for all products and services throughout its expanded marketplace created by the merger.

The merged company will operate as NYCE Corporation, serving over 45 million cardholders in 15 states, through a network that includes 35,000 automated teller machines (ATMs) and 185,000 point-of-sale (POS) retailer locations.

Dennis F. Lynch is President and Chief Executive Officer of NYCE Corporation. John G. Bascom, who had been President and Chief Executive Officer of Magic Line, Inc., is Executive Vice President of NYCE and President of its Midwest Regional Business Unit, which is based in Dearborn, Michigan, where Magic Line had been headquartered.

“We are pleased to have our merger approved as originally structured and closed, and we are ready and eager to start moving forward as a combined company,” said Mr. Lynch. “Building on the powerful franchises of our two EFT companies, NYCE will become an even greater electronic payments resource for our participants and the consumers they serve. We think the timing of our merger is astute and the combination of all we offer will be unbeatable.”

NYCE Corporation has 12 principal financial institution owners whose representatives serve on NYCE’s Board of Directors. In addition, the Board has four seats for regional representatives from the Northeast and Midwest regions. Mr. Lynch and Mr. Bascom also serve on the Board.

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NextCard – InsWeb

NextCard announced this morning it has signed an agreement with InsWeb, an Internet insurance marketplace. The agreement marks the first time that NextCard applicants will be able to access insurance products online through a co-branded insurance center, which may be accessed directly from NextCard’s Web site. Under terms of the deal, InsWeb will become NextCard’s exclusive insurance provider.

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De La Rue to Sell

The smart card shake-out has begun! UK-based De La Rue is reportedly in advanced discussions to unload its card division, including its smart card operations. According to this weekend’s Financial Times, De La Rue is in negotiations with three interested parties, namely, Gemplus, Schlumberger and Groupe Bull, all based in France. It was not clear whether Germany’s Giesecke & Devrient or France’s Francois-Charles Oberthur were also involved in the final phase of bidding. NM Rothschild, which replaced Schroders as the De La Rue’s advisers this year, is handling the sale. According to London’s Financial Times, De La Rue’s cards division made operating profits of 4.7mGBP on sales of 161mGBP last year, with smartcards comprising about a third of revenues. The newspaper estimated that De La Rue has been investing 15m-20mGBP a year in smart cards and has an 8% share of the global smart card market. The cards division also produces mag stripe credit and debit cards, including those for VISA and Mastercard. The company is thought to prefer a sale of the division as a whole rather than two separate deals. The deal is expected to fetch 100m-200mGBP. The company has been going through a restructuring since last September.

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AMNESTY VISA

Canada’s Citizens Bank and Amnesty International Canada have joined up to offer the new ‘Citizens Bank Amnesty International VISA’. The new card, which features a dove in flight on a black background, was introduced Monday. Under terms of the affinity agreement Citizens Bank will automatically donate 10 cents to Amnesty International Canada for each transaction. Amnesty International has 67,000 members in Canada. Citizens Bank is wholly owned by VanCity Savings Credit Union.

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Instant Discount

Royal Bank announced this morning it has extended its instant discount program to its ‘Low Rate Option’ and ‘No-Fee’ VISA cards. Royal has more than 5.2 million VISA cardholders in Canada. The program features instant discounts at point of sale on a variety of products and services wherever the Visa ‘Partners Program’ logo is displayed. Over 30 of the country’s top retailers are ‘VISA Partners’, offering discounts from 5% to 25% in 4,000 retail locations across Canada. Participating retailers include: AMJ Campbell Van Lines, Cadet Cleaners, Cantel AT&T, Certa ProPainters, Chubb Security Systems, Crabtree & Evelyn, Domino’s Pizza, Famous Players, Glidden Paints, Kernels Popcorn, Maaco Auto Painting & Body Shop, Music World, National Car Rental, Play It Again Sports, RadioShack, and others.

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AmEx Cards in Puerto Rico

Banco Santander Puerto Rico and American Express today announced a new strategic alliance that will allow Banco Santander to issue American Express Card products in Puerto Rico. Under the agreement, Banco Santander will introduce in Puerto Rico an American Express Card designed for small and medium-sized businesses. In addition, Banco Santander will issue American Express standard and gold revolving credit cards.

All Banco Santander American Express card products, available in the fall, will be distributed through Banco Santander’s 76 branches in Puerto Rico and accepted by all merchants on the American Express global network.

“We are pleased to announce this new partnership with American Express,” said Benito Cantalapiedra, president and chief executive officer of Banco Santander Puerto Rico. “This alliance will enable our bank to strengthen its position in the credit card industry in Puerto Rico, and is in line with its expansion strategy in the region.”

Mr. Cantalapiedra added, “The new service will enable our existing clients and potential new clients, in an expanded market area, to benefit from the recognized quality and dependability associated with American Express and Banco Santander.”

“This agreement is an expansion of our existing relationship with Banco Santander in Spain where we have had a joint venture since 1992 to market the American Express Card,” said James Li, president, Global Network Services for American Express. “Banco Santander is one of the largest financial institutions and card issuers in the world and one of the leading banking institutions in Puerto Rico. They are a natural fit with American Express, bringing together our global reach, highest customer service level and their local market position and expertise.”

Under the agreement announced today, Banco Santander Puerto Rico American Express Cardholers will have access to more than 1,700 Travel Service Offices in more than 130 countries.

Founded in 1976, Banco Santander Puerto Rico is a publicly held company that trades in the New York Stock Exchange under the symbol “SBP.” Operating in Puerto Rico for 22 years, the bank offers a full array of commercial, mortgage and consumer banking services. Supported by a team of more than 1,700 employees, Banco Santander Puerto Rico has 76 branches in Puerto Rico — 14 of which are fully automated branches operating under the name of “Red Express” — and one branch in New York City.

Banco Santander Central Hispano (BSCH), S.A., the largest financial group in Spain and Latin America, owns 78.3 percent of Banco Santander Puerto Rico outstanding common shares. It is ranked first by stock market capitalization in the Euro zone, and eighth by assets volume. According to proforma balance sheets and statements of income on March 31, 1999, BSCH had US$337.61 billion in total managed funds, and US$259.46 billion in assets — with 22 million clients spread across its operations in 34 countries, including all of the major global financial centers.

American Express, while continuing to grow its proprietary card business, has been aggressively pursuing its strategy of opening the company’s merchant network to other card issuers around the world. In the last several years American Express has developed partnerships with 47 such institutions in more than 50 countries.

American Express is a diversified worldwide travel, financial and network services company founded in 1850. It is a world leader in charge and credit cards, Travelers Cheques, travel, financial planning, investment products, insurance and international banking.

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Providian Opens TX Ops

Providian Financial last week officially opened its new Arlington, Texas, banking operations center. Providian currently employs 400 people in Arlington and expects to create as many as 700 additional jobs there in the next year.

Community members and government officials joined Providian senior management and employees for a ribbon cutting ceremony at the new facility. Chamber of Commerce President and Chief Executive Officer David Sampson welcomed Providian to Arlington saying, “We’re delighted to see Providian become a top employer in this community. Their investment in the long-term growth of Arlington and the sheer number of new jobs created is exciting. We are proud to include Providian among an impressive local representation of corporate America.”

“We’re glad to be in Arlington,” said Providian Executive Vice President Seth Barad. “Our new community offers a very positive business climate and a very strong and qualified labor force. Both will enable us to build our growing employee population, who will help uphold Providian’s commitment to 100% customer satisfaction. Providian is proud to be a part of the Arlington community and we plan to be an active member of it.”

As a part of its community commitment, Providian today announced a $20,000 donation to the YWCA Arlington Child Development Center, a program of the YWCA of Fort Worth and Tarrant County. Providian’s donation will assist the center in providing subsidized quality child care for economically disadvantaged families. “Subsidized child care is essential for low-income working families to be self-sufficient,” said Judy Bishop, Executive Director of the YWCA Arlington Child Development Center. “We are extremely grateful to Providian for making this leadership donation. It will greatly enhance our efforts to provide quality child care to needy children.” Providian’s donation is part of the Company’s national Providian Child Care Initiative.

Providian Financial has over 8,000 employees in the U.S. and the U.K, with facilities in California, Kentucky, New Hampshire, Utah, Texas, and London, England. Providian’s Arlington, Texas, offices are located at 3801 South Collins Boulevard. People who are interested in employment opportunities with Providian should call 817-417-4444 or fax their resume to 817-417-4673.

Providian Financial Corporation (www.providian.com) is a leading provider of lending and deposit products to consumers nationwide and in the United Kingdom. Providian serves a broad, diversified market with loan products that include credit cards, revolving lines of credit, home loans, secured cards and fee-based services. With $16 billion in assets under management and 10 million customers, Providian is committed to providing 100% customer satisfaction. San Francisco-based Providian Financial is one of the ten largest bankcard issuers in the nation, and in 1998 ranked as the seventh best performing stock in the S&P 500 and the single best performing stock in the S&P Financial Composite Index.

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Discover Partners

Discover Financial Services announced late last week its list of ‘Platinum Partners’ for Discover ‘Platinum’ cardholders. Under the program cardholders who receive a yearly ‘Cashback Bonus’ award of up to 1% can double the award through certificates that are redeemed at select merchants. Participating merchants include: United Airlines; Hyatt Hotels; Alamo; Blockbuster; Rand McNally; Foot Locker; 1-800-flowers; Omaha Steaks; Lobster Gram; Samsonite; Royal Caribbean; Carnival Cruises; Delta Certified Vacations; MusicDirect.com; Virtual Vineyards; and Discover Brokerage.

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AmEx UK

American Express is unleashing a major new advertising campaign to support its charge card business in the UK. Competition in the UK is heating up after the recent entry of Providian and Discover into the credit card market. One of the four initial themes features Lennox Lewis in the boxing ring promoting AmEx as “Handy If You Get Robbed in America”, highlighting AmEx’s emergency card and cash replacement services. Another spot features the tag line “What the Brits Pack”. Insertions will appear in the national press and national press supplements as well as lifestyle magazines such as Vanity Fair and Harpers & Queen through to current affairs weeklies such as Time and The Economist. The 3mGBP advertising campaign was developed by Ogilvy & Mather. Media buying is being handled by Carat.

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