S&P Rates Euronet Services

Standard & Poor’s Friday revised its outlook on Euronet Services Inc. to negative from stable. At the same time, Standard & Poor’s affirmed its single-‘B’-minus long-term corporate credit and senior unsecured ratings on Euronet.

The outlook revision reflects Euronet’s slower-than-anticipated revenue growth in the second half of 1998 and the first quarter of 1999, mainly because of slower-than-expected growth of credit and debit card usage in some of the company’s main Central European markets. This has lead to a delayed improvement of operating margins and cash flow generation compared with the initial business plan. For Euronet to maintain its current ratings, it is therefore necessary that the company’s profitability and operating cash flow improve considerably during 1999.

The ratings on Euronet reflect the challenges the company faces to grow the size of its operations sufficiently to service its debt obligations. With a network of close to 1,600 automatic teller machines (ATMs) at April 30, 1999 — mainly in Germany, Hungary, and Poland — the company is the leading independent provider of ATM services in Central Europe. While these markets offer great growth potential for ATM services, the growth rate is closely linked to the general issuance of new debit and credit cards, the level of which is hard to predict. Furthermore, Euronet faces competition from networks set up by consortiums of banks with larger scales and resources. It must also negotiate favorable deals with banks and card-issuance organizations in order to attract customers to its ATMs. Euronet’s competitive advantages are its early market entrance — which has given it access to prime site locations — and its modern network and focused operations, which make it possible to offer a full range of ATM services at low cost. Furthermore, the company’s geographic diversity limits its dependence on one specific market, and makes it possible to direct investments toward the most profitable locations. Euronet’s service offerings were broadened following the $18 million acquisition of the U.S. computer software company Arksys in December 1998, and the company is now able to offer vertically integrated products to customers. While the acquisition had a negative effect on Euronet’s liquidity position in the short term, the company still expects to have sufficient cash to fund its initial ATM roll-out plan. In 1998, Euronet had $12 million revenues and a negative $23 million operating cash flow after working capital needs, while Arksys had $12 million revenues and a slight negative operating cash flow. At March 31, 1999, Euronet’s total debt to capital was 88%. Because the company is constantly installing new ATMs, and it takes a certain time for new machines to become profitable, Euronet also expects to have negative operating cash flow and operating losses during 1999. During the first quarter of 1999, revenues were up to $8 million ($5 million excluding Arksys) compared with $2 million in 1998, while cash and short-term liquid assets amounted to $38 million at March 31, 1999, down from $59 million at year-end 1998.


CheckFree & Intuit Settled

CheckFree Corporation and Intuit, Inc. today announced they have amicably resolved the issues that had led to the filing of a lawsuit last March, and to subsequent arbitration. Other than noting that neither party makes any payment for the settlement, the specific terms of the agreement were not disclosed.

In commenting on the resolution, Pete Kight, chairman and CEO of CheckFree said, “We have enjoyed a long and close relationship with Intuit, but we had an honest disagreement about how to apply our contract in a rapidly-changing environment. I’m very pleased that we were able to find a solution that allows our two companies to match our collective and respective strengths to address the full spectrum of the market’s approach to electronic billing and payment.”

Bill Harris, president and CEO of Intuit said, “We are pleased to be back on track in our relationship with CheckFree in a manner that benefits both companies. We look forward to our continued relationship and renewed dedication to meeting customer needs.”

About Intuit

Intuit Inc., a financial software and Web-based services company, develops and markets Quicken, the leading personal finance software; TurboTax, the best-selling tax preparation software; and QuickBooks, the most popular small business accounting software. Intuit’s Quicken.com Web site () is a leading financial Web site, offering a comprehensive set of financial news, information and tools, including insurance, mortgage, investment and tax preparation services. Intuit’s products and services enable individuals, small businesses and financial professionals to better manage their financial lives and businesses.

About CheckFree

Founded in 1981, CheckFree (), the operating subsidiary of CheckFree Holdings Corp., is the leading provider of financial electronic commerce services, software and related products. CheckFree designs, develops and markets services that enable nearly three million consumers to receive and pay bills over the Internet or electronically through a variety of bill aggregation points, including banks, brokerage firms, portals and interactive content sites on the Internet, and personal financial management (PFM) software. CheckFree’s range of services and products are focused on enabling customers to make electronic payments and collections, automate paper-based recurring financial transactions and conduct secure Internet transactions. After more than a year of beta testing, CheckFree launched the nation’s first fully integrated electronic billing and payment solution, CheckFree E-Bill, in March of 1997. Today, the Company has multi-year contracts with nearly 50 of the nation’s top billers to provide online billing and payment through the CheckFree distribution network.


No Big Deal

American consumers are not concerned about Y2K problems with ATMs. Results of a new Gallup survey, commissioned by Star Sytems, were released Friday and showed that 8 out of 10 ATM/debit cardholders in the US expect ATMs to function normally on January 1, 2000. In fact, 79% said they expect Y2K to have little to no effect on their personal finances. 64% said they plan to withdraw and set aside extra cash prior to January 1, but half of these said the amount they withdraw would not be any more than other weekends or holidays. The respondents also noted the information they received from their own bank was the most influential regarding their banking plans in preparation for Y2K.


Zebra cards & more

Zebra Technologies Corp., the worldwide leader in bar code and plastic card printing solutions, Friday announced that its partnership with cards & more LP has resulted in a new integrated system for producing personalized, state-of-the-art proximity cards.

The use of contactless smart cards for access control applications is accelerating. Embedded in these cards is a metallic antenna coil, which allows them to communicate with an external antenna. Referred to as “prox” cards, because they require only close “proximity” to an RF antenna, the cards are read in less than a second. Because the cards do not have to be “swiped” or passed by a “line of sight” they can be read while being carried in a pocket, wallet or handbag. The ability to read cards in this manner facilitates access without the delays associated with removal of the card from pocket or purse in order to “swipe” it through a card reader. “Our installed base of thousands of cards & more customers includes such interesting applications as access control for formula one racing events worldwide. Various types of contactless smart cards, including complimentary guest passes, race team season passes, and VIP Paddock passes are part of a total access solution,” said Peter Lippold, president of cards & more LP.

“Combining quality products, with our experience, service and support makes this a winning solution for our customers,” Lippold concluded. Rain, extreme temperatures, dirt and dust do not affect the functionality of the cards or card readers. Because of their durability, and since they can be reprogrammed, prox cards do not have to be replaced nearly as often as traditional access control cards. cards & more uses Zebra’s Eltron plastic card printers, including MaxSecure ID Printing Systems and Eltron P Series printers to personalize proximity cards of all types. The printers use cards & more’s integrated contactless smart card encoding station, permitting the cards to be printed and encoded in one process.

The printers personalize the encoded cards with a name, location, phone number or whatever text or image the application calls for. “Combining Eltron card printers with cards & more’s contactless smart card encoder and extensive knowledge and experience in prox card technology provides customers with the best of both worlds,” said Holly Sacks, vice president of marketing for Zebra’s card printer business. “With the accelerating growth of proximity card applications, our partnership with cards & more will allow more customers to deploy prox card solutions faster, confident in the knowledge that we are working together to implement their applications reliably,” remarked Sacks. cards & more recently demonstrated its proximity card personalization solutions using Eltron card printers at CardTech/SecurTech ’99, held May 12-14 at McCormick Place in Chicago. cards & more, one of the foremost systems integrators of smart card business solutions, provides turnkey ID badge and access control systems solutions. With its focus on contactless chip technology, combined with one-process graphic personalization, cards & more delivers complete smart card access control application solutions to companies worldwide. Information about cards & more products and solutions can be found at [www.cardsnmore.com][1].

Zebra Technologies Corp. manufactures and distributes Zebra and Eltron brand on-demand bar code label printers, secure ID printing systems and plastic card printers used in automatic identification and plastic card personalization applications worldwide. The company also offers software and related supplies, including more than 300 label and ribbon combinations. Zebra’s customers include more than 70 percent of the Fortune 500. The company’s stock is traded on the Nasdaq Stock Market under the symbol ZBRA. Information about Zebra products can be found at [www.zebra.com][2].

[1]: http://www.cardsnmore.com
[2]: http://www.zebra.com


CMSI Promotion

Credit Management Solutions, Inc., a leading provider of credit decisioning technology to automate and speed the processing of consumer and business loans, announced Friday, following its Board of Directors meeting, that its president Peter M. Leger has been promoted to chief executive officer.

Mr. Leger, 48, had been serving as CMSI’s president and chief operating officer since he was appointed to that role early in the fourth quarter of last year when he joined CMSI from Automatic Data Processing. At ADP, one of the nation’s leading information services and technology companies, Mr. Leger was president of the Dealer Services Group, ADP’s third largest division.

At the time Mr. Leger joined CMSI last fall, James R. DeFrancesco (founder of CMSI and chairman and CEO to date) said “… we have added world-class leadership and talent to our management team. Peter Leger has a demonstrated track record of success in managing high revenue growth businesses in a Fortune 100 global environment, while improving operational efficiencies, expanding into new geographical markets and increasing profitability for those entities.”

“During the past two quarters Mr. Leger has refocused the Company and intensified our efforts to return to profitability. We have the utmost confidence in his ability to lead a successful turnaround of this business. Our recent financial results combined with several major new strategic alliances and partnerships reflect the effectiveness of his leadership,” Mr. DeFrancesco said today.

“CMSI had already invested substantial resources over the past two years in developing leading-edge products and services, both for existing customers as well as new markets including E-Commerce and Internet Commerce,” Mr. Leger said. “Now, over a short period of time our team has built considerable new momentum and refined CMSI’s strategic focus to concentrate on those higher return activities for the Company. Further, the rapid growth and acceptance of the Internet is enabling us to roll out a variety of next-generation products that are tangible evidence of our leadership as innovators of online credit automation and financing solutions.”

For the quarter ended March 31, 1999, CMSI total revenue was $6.1 million vs. $4.2 million in the comparable period of 1998 and $5.3 million in the fourth quarter of 1998. Losses for the first quarter of 1999 were $(0.6) million, or $(0.08) basic and diluted loss per share, compared to a loss of $(1.4) million, or $(0.18) basic and diluted loss per share in the first quarter of 1998 and a loss of $(3.8) million or $(0.50) basic and diluted loss per share in the fourth quarter of 1998.

Mr. Leger further commented, “On behalf of the CMSI’s employees, Board of Directors and shareholders, I wish to thank Mr. DeFrancesco for his business vision and efforts which have laid the foundation for CMSI’s success and strong reputation in today’s marketplace.” Mr. DeFrancesco will continue to serve as chairman of CMSI’s Board of Directors and will continue to be active in certain strategic initiatives. Mr. Leger has been a CMSI director since December, 1996.

About CMSI

Since it was founded in 1987, CMSI’s credit automation and loan marketing technology services and software have been the choice of the world’s largest and most demanding lending institutions. Building on its leadership, the company is rapidly becoming a premier provider of Internet-based online lending and leasing technology. CMSI licenses credit decisioning and other automation systems and services for consumer and business credit. CMSI also offers a portfolio of products through service bureau alliances that are provided by its alliance partners on a per-transaction fee basis. The Company’s e-commerce and Internet commerce products and services are built around its patented CreditConnection(R) technology, which links credit originators such as automobile dealers and borrowers with an extensive network of leading prime and non-prime lenders.


Card Head To Lead People’s

The Board of Directors of CT-based People’s Bank named John Klein as the new president of People’s Bank yesterday. Klein will also become CEO on Oct. 1, 1999, and chairman Jan. 1, 2000. He was the head of the bank’s national and international credit card division. Klein will succeed the retiring David Carson. Klein has been with People’s for 28 years. He started out as a management trainee and in 1977, after graduating from law school, he established the bank’s Legal department, and, in 1984, was named general counsel. Klein was named SVP of Consumer Banking, which included credit cards, in 1990. Credit Card Services was made a separate division of the bank in 1996. People’s said yesterday that under John’s leadership, its credit card business grew nearly ten-fold since 1991, from $414 million to nearly $4 billion in receivables.


HyperSecur names President

HyperSecur Corporation announced yesterday that its wholly owned subsidiary, HyperSecur Corporation (Canada), has appointed Mr. Jean Dore as President.

In 1995, Mr. Dore, formerly the mayor of Montreal from 1986 to 1994, assumed the management of a consortium which was comprised of Hitachi Data Systems, Montreal, Canada, Bell Canada, Mouvement Desjardins (largest credit union organization in Canada), and M.U.C.T.C. (Montreal Urban Community Transit Corporation). The consortium oversaw smart card applications including the development of a common E-purse.

A year later he directed another consortium based in Montreal. Called “Omnipuce,” this consortium was comprised of Cubic Transportation Systems (world’s largest Automatic Fare Collection company based in San Diego, California), National Bank of Canada, Mouvement Desjardins and SNC-Lavalin, Canada’s largest engineering firm. Omnipuce proposed the first privately financed Automatic Fare Collection System linked to the banking electronic payment industry and using contactless smart cards as fare media.

Mr. Dore received a Bachelor in Arts from the University of Montreal in 1964, studied political science at McGill University and obtained a License in Legal Letters (L.L.L.) from the University of Montreal in 1976. Last week HYURA acquired HyperSecur (Canada) that represented that its major asset is the HyperProximity chip. The hyper proximity technology was introduced last week at the STMicroelectronics, Inc. booth at the CardTech/SecurTech Conference held in Chicago. The technology will be implemented in the ST16HF52 contactless smart card from STMicroelectronics. The chip is a duel proximity level contactless solution based on ISO 14443 Type B. Mr. Dore said: “We believe that HyperProximity technology will set the pace for a new generation of smart cards. Using the ST16HF52 allows us to introduce in the third quarter 1999 the first HyperProximity contactless solution capable of adding a completely new level of security. The ruggedness, reliability and versatility of these cards represent an extremely competitive alternative to contact technology. The cards will address the means of access and authentication in security, PC, financial, commercial, institutional, governmental and transportation applications.”

He added, “We intend to get the HyperProximity contactless technology certified as an alternative to all contact card applications including debit, credit, E-purse and PC/SC specifications.”

HyperSecur Corporation plans to exploit the technology with strategic partnerships to develop the hardware and software necessary to market the new technology to card manufacturers, system integrators and end users. The final product will be a new contactless chip and smart card based operating system supporting an innovative security structure.



CT-based MemberWorks Inc. has acquired Comp-U-Card Canada Group from Canadian Tire Acceptance Limited. The Canadian credit card enhancement services company offers leisure travel services, direct-to-home merchandising, loyalty programs, loyalty program management, credit card registry and protection. MemberWorks says Comp-U-Card Canada is a key part of its strategy to expand MemberWorks’ presence outside of the U.S.


Presto PhoneE

Destia Communications and Freeserve Thursday announced the release of ‘Presto Phone’, the first e-commerce telephony service in the United Kingdom. The ‘Presto Phone’ is a pre-paid, code-access telephone account that features real time call record viewing that allows members to access their call details and confirmation of their account, which they can use immediately. This is part of Destia Communications telecommunication services which include calling card and pre-paid card services.



EIS International announced yesterday that it will preview its ‘Call Processing System’ next week at the CTI Spring Expo. ‘CPS’ utilizes a new credit card authorization process which allows the processing of a customers credit card while remaining on the line with the customer. This is made possible through the integration of ICVERIFY software from CyberCash. This new feature also streamlines record administration by reducing the number of calls incorrectly marked as sales because of card rejection. With ‘Instant Credit Card Authorization’, the agent can mark the record as a no sale, request an additional credit card to complete the sale, or verify the customer-provided credit-card information during the call session, eliminating the need to update the record at a later time.


VHS Network To Enter US

VHS Network announced yesterday that according to recent reports, a group of payment companies, including Visa, are working to create a standard specification for smart card readers. The readers will allow customers to use smart cards for electronic commerce and Internet banking services across Europe. According to the research company Datamonitor, Europe leads the world in smart card spending with almost $1 billion expected to be spent on new projects in 1999. More than 80% of the smart card market, which looks set to exceed $3.5 billion by 2002 is centered in Europe.

“Even though Europe is far ahead of the United States, we believe that once major companies learn about the benefits of smart card technology, the U.S. will catch up with Europe very quickly,” says Elwin Cathcart, president of VHS Network. VHS Network Inc. recently entered into a major agreement with Groupmark Canada Ltd., to exclusively license its SmartCARD(TM) technology in the U.S.

According to Cathcart, increase in Internet usage will fuel the rapid expansion of SmartCARD(TM) technology in the U.S. “Banks and other major financial institutions have a growing concern over the vulnerability of the magnetic strip cards to fraud. With the growing use of card transactions over the Internet, the concern becomes even greater. SmartCARD technology effectively eliminates most of these safety fears, making it the ideal method of payment for Internet transactions. And since the Internet market penetration in the U.S. is much higher than in Europe, it should be just a matter of time before the SmartCARDmarket will explode in the U.S.,” Cathcart explains.

But SmartCARD technology is not just for the Internet. SmartCARDs store up to 8,000 characters of valuable information, vs. 125 characters in a typical magnetic charge card, making them an ideal choice for retail loyalty card programs and charge and debit cards. SmartCARD(TM) can also act as a preloaded electronic purse.

Many grocery and convenience stores already have loyalty programs in place. Cardholders get additional savings when they purchase certain advertised items. SmartCARDs can take these programs one step further. Because of the huge amount of information that can be stored in your card — and not in the retailer’s information system — your card is practically a portable database.

“The retailer can offer instant point of sale special promotions on high-margin merchandise or instant rewards or gifts based on your past consumption patterns. They can use the system to increase both the average order size as well as the total amount of monthly spending. Stores are able to attract more repeat business, and even decrease the importance of advertising low prices to attract customers. In fact, with SmartCARD(TM)-based loyalty programs, retailers can do individualized marketing within the store without ever posting sale prices on store windows or walls. This makes it harder for the competition to know what and how much the store is discounting,” explains Cathcart.

But it is not just the industry that benefits from VHS Network’s SmartCARD technology either. “Loyal customers will benefit by getting additional discounts on the items that they have a track record of being interested in. Consumers own their consumption profile. That can be a powerful tool,” says Cathcart.

Because the information is accessed instantly and further data is collected without linking to a network, SmartCARD is also extremely cost-efficient. The retailer can load updates on the central database just once a day.

However, SmartCARD may not be for everyone, at least in the beginning. As with all new technologies, a certain demographic segment typically adapts the technology in its early stages. “SmartCARD technology seems to appeal most to 25-50 year olds, who already have high expectations of advanced technology to simplify their lives. From both VHS Network’s and our client companies’ perspective, this doesn’t matter. That demographic segment includes approximately 50% of the population and the majority of the purchasing power,” Cathcart says.

In Europe, credit card associations and banks are promoting smart cards as a convenient and safe method of payment. “It really is a win-win situation for everyone involved. Even though merchants will have to buy a card reader that may cost $50-$400, they are relieved of the safety risk of handling cash. Banks like the system, because they can issue cards to people with a less than perfect credit records. And customers can manage their credit better and don’t have to fumble for change for small purchases that normally couldn’t be charges,” points out Cathcart.

VHS Network is one of the emerging players in the SmartCARD market. Groupmark Canada, the licensor of SmartCARD technology, has been a leading Canadian loyalty marketing firm for over 25 years. Groupmark was the first company in North America to offer a service totally dedicated to the implementation, marketing and management of the SmartCARD.


4anything.com board of directors

4anything.com yesterday announced the appointment of Alex W. “Pete” Hart to its Board of Directors. Hart, former Chief Executive Officer of MasterCard International and Advanta Corporation, adds e-commerce and financial services expertise to the board of directors. 4anything.com is the world’s first branded network of 2,500 vertical community portals, providing Net users quick and easy access to the best content, community, and shopping available online.

“We are extremely fortunate to have Pete Hart join our board of directors,” said Vincent J. Schiavone, founder and chief executive officer of 4anything.com. “With over 30 years of management, financial services, and emerging technology experience, Pete is an invaluable resource as 4anything.com establishes the next-generation of Internet portals.”

Hart served as chief executive officer of Advanta Corporation, a diversified financial services company, from 1994 to 1997. Prior to joining Advanta, he was president and chief executive officer of MasterCard International, and a member of the board of directors for Europay International.

Before joining MasterCard, Hart spent ten years with First Interstate Bancorp. In 1978, he joined as president and chief executive officer of First Interstate Services Company, a system-wide technology and operations subsidiary. In 1981, he was named executive vice president, responsible for consumer banking and operations. He also became the founding chairman of the board of the CIRRUS System, a global network of shared automated teller machines. Hart is currently a member of the advisory board of the Internet Capital Group.

“There is a simple brilliance to the 4anything.com network,” said Alex W. “Pete” Hart. “I look forward to helping the company further develop its easy- to-use approach to the best information, products and services on the Internet.”

About 4anything.com

4anything.com redefines Internet search through its branded network of over 2,500 vertical community portals, offering an enhanced Net experience through direct access to the best content, interaction and commerce available online. Each site is branded with the number “4” and the topic, creating easy-to-remember names, such as 4wine.com, 4baseball.com, 4autoinsurance.com, and 4Philadelphia.com.

Free of charge, the 4anything.com network delivers the brands and services users expect to find on the first page of results, neatly organized under useful headings. Further, each portal provides online community built around users common interests.

4anything.com has formed alliances with some of the leading content providers and directories on the Internet. By partnering with other content providers and distributors of information, 4anything.com is able to reach an international community of millions, and still cater to each individual’s most specific needs. The company has a strategic partnership with Safeguard Scientifics and a technology partnership with Inktomi. The company also has business alliances with Reuters, AccuWeather, and InfoSpace. 4anything.com is headquartered near Philadelphia in Wayne, PA and has offices in Los Angeles, CA.