NextCard To NextBank

Friday’s initial public offering of 6,000,000 shares of NextCard common stock, priced at $20 per share, will open at $33.50 per share this morning. More than 8.0 million shares traded hands Friday with the stock trading from a low of $32.00 and a high of $40.75. The stock is trading on Nasdaq under the ticker symbol “NXCD”. The NextCard prospectus indicates the company intends to use some of the proceeds from the IPO to establish its own credit card bank, NextBank. The company says it will use at least $20 million to capitalize the bank. NextCard has already applied to the OCC for the charter. 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.


Wave Systems 1Q/99

Wave Systems Corp., a provider of electronic commerce, content distribution and security services, Friday reported results for the first quarter ended March 31, 1999. Wave also reviewed recent progress it has made in extending its Internet presence; in positioning the Company for deployment of its EMBASSY technology in a broader range of computers and electronic devices; and in expanding the range of potential applications being developed to benefit from the unique e-commerce and security capabilities of the EMBASSY platform. Reflecting its accelerated investment in enhancing its back-office and service infrastructure and expanding its sales and marketing efforts, Wave Systems, a development stage corporation, reported a net loss to common stockholders of $3,679,000, or $0.11 per share, for the first quarter ended March 31, 1999. Included in the results is a one-time, non-cash interest charge of $666,000, or $0.02 per share relating to a Black-Scholes valuation of 275,000 Warrants issued as part of bridge loan financing. In the prior year’s first quarter, the Company had a net loss of $2,095,000, or $0.08 per share. The weighted average number of basic shares outstanding in the first quarters of 1999 and 1998 was 32,148,000 and 27,359,000, respectively.

Reflecting the Company’s private placement of $23 million in Class A Common Stock to institutional, strategic and accredited individual investors, as of March 31, 1999, Wave had working capital of $17,748,000, total current assets of $21,506,000 and total current liabilities of $3,259,000. Commenting on the Company’s progress, Steven Sprague, President, stated, “Wave continues to make substantial progress in several areas of strategic importance to the Company, and our recent private placement provides a strong financial footing on which to move forward. In particular, recent agreements with Sigma Designs, Inc. (Nasdaq:SIGM), Actiontec Electronics and Atmel Corporation (Nasdaq:ATML) expand our opportunities for deployment, and Hauppauge Computer Works, Inc., a subsidiary of Hauppauge Digital, Inc. (Nasdaq:HAUP), is still slated to commence product shipments incorporating our technology by the end of our second quarter.

“Wave has also made significant progress establishing additional strategic relationships to expand the scope of applications being developed to utilize the EMBASSY platform. Our relationship with Security Dynamics’ RSA Data Security, our partnership with Sarnoff Corporation to form inTelecast and the incorporation of the Sun Java Card(TM) smart card application framework address this goal and demonstrate the broad potential for EMBASSY. “Focusing on the Internet, we launched the MyPublish digital content distribution system and secured an important partnership with (Nasdaq:TGLO) to provide access to MyPublish to its nearly 10.2 million users and 2.3 million members.

“Though we are pleased with our progress to date, we continue to pursue new strategic partnerships with a broad range of companies with the ultimate goal of developing broad-scale availability of a growing range of e-commerce and security services.”

About Wave Systems Corp:

Founded in 1988, the mission of Wave Systems Corporation is to create the world’s best technologies and services to secure and sell digital information. Wave’s core EMBASSY technology is an inexpensive, proprietary hardware and software-based device that enables secure transaction processing and distributed information metering in users’ PCs. Embedded in PC hardware and peripherals, set top boxes and other devices, EMBASSY is the foundation for client-based security applications and a new distribution and purchasing model for content and services. This low-cost, secure “system within a system” will enable the personal computer to assume an important new role in the evolving digital economy. By moving secure transactions to the desktop, Wave provides intrinsic value to the electronic commerce process, benefiting PC users, application developers, and hardware manufacturers. For more information, please visit Wave’s corporate web site at [][1].

For additional 1Q/99 financials on Wave Systems please visit CardData ([][2])




SIMS Communications Inc. Friday reported that revenue for the three month period ending March 31, 1999, increased 135 percent to $512,568, compared with revenue of $217,882 posted for the same three month period ending March 31, 1998, reflecting the company’s focus on their medical transaction processing business segment.

Gross profit totaled $323,686, a 286 percent increase over gross profit of $83,774 reported for the same period last year.

For the nine month period ending March 31, 1999, SIMS reported revenue of $1,284,585, a 96 percent increase over previous revenue of $654,885 posted for the same nine month period ending March 31, 1998. Net losses for the current nine month reporting period were reduced to $4,532,730, or $0.46 loss per share, compared with net losses of $4,791,434, or $1.71 loss per share reported for the comparable nine month period.

The company noted that as of March 31, 1999, stockholders’ equity totaled $4.03 million and net tangible assets reached $3.16 million. The net tangible assets reported exceeds the $2 million requirement instituted by Nasdaq and represents the final exception requirement.

On May 12, 1999, the company received correspondence from Nasdaq stating that it had met the second requirement necessary for continued listing on The Nasdaq SmallCap Market by fulfilling the Nasdaq Closing Bid Price Rule. Although it has not yet received confirmation from Nasdaq, the company believes that they have now fulfilled all qualification requirements in order to remain listed on the Nasdaq Stock Market.

SIMS Communications provides electronic transaction solutions for the health care industry. The company’s products include: its MedCard System, a system that provides 100 percent paperless electronic data entry at the physician’s office for all medical insurance billings and collections; its One Medical Service System, a cost-effective solution that gives pharmacies the ability to provide a complete, one-stop shopping solution for all its customers’ home medical equipment (HME) and home health care related service needs and to participate in managed care contracts; its Internet HME e-commerce sales, and its Internet health care portal, both under development, that will deliver health care information to consumers and health care providers and also will provide links to other Internet health care Web sites. For more details on SIMS 1Q/99 financials please visit CardData ([][1])



Amex Canada

American Express reported Friday that spending on its consumer and corporate cards was up 18% for the first quarter of 1999 in Canada. The company says that its total cardholder base in Canada has also increased by 14% from a year ago. Most of the new growth is coming from new credit cards, such as the American Express ‘AIR MILES Credit Card’, but enhancements to rewards programs on Amex’s premium charge card products have also had a positive impact both on card acquisition and billings. The number of new ‘Platinum Cards’ issued were up 20% over last year due to the added benefit of free Canadian Airlines companion tickets and to the introduction of ‘Points Accelerator’.


Mileage Plus Bonus

United Airlines announced Friday it has created a new program the enables merchants, for the first time, to determine their own mileage value offer for transactions. ‘Mileage Plus Shopping’ merchants will be able to specify the reward level for each purchase dollars, from one mile per dollar to ten miles per dollar. The MPS program was developed out of the Momentum Merchant Network, which provides a technological platform eliminating the need for tracking and reporting merchant sales and making all transactions entirely transparent. The ‘Momentum’ program was developed by a partnership between SHC Direct, Vital Processing Services and Universal Value Network.

[Click Here For Mileage Plus Shopping Brochure][1]

[1]: /cardflash/secure/oldstatic/1999/may/mp1.html


Triton Record

MS-based Triton Systems announced this morning that its ATM shipments for 1998 surpassed 10,000 units for the first time, a 35% increase over 1997. Triton says it has deployed off-premise ATMs in more than 30,000 retail locations. The company says the figures places it as the fifth largest ATM manufacturer in the world and, for the fourth consecutive year, the third largest in the U.S.


Aria Card

San Francisco-based Providian is launching its new online credit card brand this morning that will directly compete with San Francisco-based NextCard. The new suite of ‘Aria’ VISA cards features online instant approvals, a rewards program, online balance transfers, online account access and upgraded perks. The four ‘Aria’ VISA cards include ‘Aria VISA Platinum Premium’, ‘VISA Platinum’, and two subprime card programs, ‘VISA Portrait’ and ‘VISA Persona’. ‘The instant rewards feature for ‘Aria’ is the ‘MyPoints’ program which offers 5 points for every purchase dollar, a 500 point bonus for opening an account, and a 2,500 point bonus for a balance transfer. Providian says the addition of ‘Aria’ aggressively positions Providian in the e-commerce segment. However, it is unclear this morning how Providian will promote its new product among the dozens of card products it currently offers, under contract, from competitors, via Last February, Providian acquired WebCard, and created its new E-Commerce Division. NextCard’s CEO/founder, Jeremy Lent, is a former Providian CFO/SVP. Other NextCard officers/directors who formerly worked for Providian include: Timothy Coltrell and John Hashman.

Platinum Premium 0%/3mo 7.99% 12.99%-21.99% 21.99%
Platinum 0%/3mo 12.99% 12.99%-21.99% 21.99%
Portrait 0%/2mo 19.99%* 21.99% 21.99%
Persona 0%/2mo 23.99%* 23.99% 23.99%

all cards no-annual-fee except Persona; * no grace period


Super ATM’s

Cleveland-based Firstar said Friday it is gearing up to deploy its first ‘Super ATM’ next month. The new ATMs will dispense cash, account statements, postage stamps and phone cards. Firstar will make the first installation at Hopkins International and Burke Lakefront Airports. Seven Firstar ATMs, one in each of Hopkins International’s four terminals, and another in the airport’s shopping mall and off-site car rental center, will be installed in early June. At the same time, Burke Lakefront Airport will see a Firstar ATM be installed in the main concourse. Firstar now operates 200 ATMs in Northeastern Ohio and 1,400 ATMs throughout the Midwest.


Bankrate Acquisition

Intelligent Life Corp announced friday that it has hired Edward Vermont (“Monty”) Blanchard, Jr. as Executive Vice President for Strategy and Acquisitions. Mr. Blanchard’s responsibilities will include identifying and consummating acquisitions and other strategic ventures for Intelligent Life. Intelligent Life is committed to a growth strategy, as outlined in its recent registration statement, which includes acquisitions. The Company has expressed its desire to expand original editorial content and research on consumer financial subjects including banking and credit, insurance, taxes, investing and planning.

“Retaining an executive with Monty Blanchard’s qualifications reinforces the commitment our company has made to expansion through acquisition. We have worked together for a number of years, and I am sure he will work to find and close the right deals quickly and effectively for our shareholders,” said William P. Anderson, President and CEO of Intelligent Life. “We want to move quickly; having Monty on board will help us do that.”

“I am pleased to join the outstanding management team Bill has assembled, and I am excited at the prospect of helping to build a great internet-based financial services company,” Mr. Blanchard said.

Mr. Blanchard is a former Managing Director and co-head of the Financial Institutions Mergers & Acquisitions Group at Merrill Lynch & Co., Inc. While at Merrill Lynch, Mr. Blanchard served as strategic M&A Advisor for a number of the firm’s large financial service clients in the insurance, asset management, credit card, consumer and commercial financial industries. In addition, he acted as a senior internal M&A Advisor and negotiator for a number of Merrill Lynch’s own acquisitions, including Smith New Court (U.K.), Macintosh Securities (Australia), Mercury Asset Management (U.K.), Midland Walwyn (Canada) and the takeover of selected former branches of Yamaichi Securities in Japan. Mr. Blanchard has worked as an investment banker since 1979 and was employed at Merrill Lynch from 1966 to 1999. He has a BA from Harvard College and an MBA from the University of North Carolina at Chapel Hill.

About Intelligent Life Corp.

Intelligent Life Corporation is a new media publisher. It creates original editorial content relating to personal finance and publishes this content through its Internet sites,, and Through its site, the Company provides consumers with independent, objective research on banking and credit products including mortgages, home equity loans and credit cards. In addition, this information is published on co-branded Internet sites through more than 60 distribution arrangements, including many of the leading online publishers of financial information. Its original research is also distributed in print through major national and local publications. In the fourth quarter of 1998, had more than 1.3 million unique visitors, according to Media Metrix.


Virtual Clearing House

Internet Payment Exchange, a new bill payment solutions company based in Clifton, VA, is developing the financial industry’s first Internet-based payment clearinghouse. The IPAYX Virtual Clearinghouse will efficiently transfer payment and remittance advice information among consumer and business customers through the Internet. The clearinghouse will be compatible with bill presentment and traditional “pay-anyone” payment systems.

“Current payment clearing options, such as those offered by CheckFree , are built on an old telecommunications architecture that’s losing money for all parties but the payment processor,” said Douglas E. Braun, president and chief executive officer of Internet Payment Exchange. “IPAYX will virtually eliminate the need for a middleman in payment routing and clearing, significantly decreasing the third-party role. We’re capitalizing on the ubiquity of the Internet to turn bill payment into a money maker.”

Generating Revenue Through Bill Payment

As much as 65 percent of electronic banking costs is attributed to fees charged by third-party companies for payment processing, Braun noted. The IPAYX Virtual Clearinghouse will change the economy of bill payment by making it a profit center for payment originators (such as banks) and significantly cutting costs for billers who use consolidators (including warehouse and lock box operations) to receive payments. The payment originator is paid for the effort of collecting the payment by the consolidator, who in turn is paid by the biller. The biller acquires the payment at a fraction of the traditional payment expense. “Payment clearing currently requires the originator to pay for transactions they remit,” Braun said. “IPAYX turns that model upside down. We also charge per item rather than per consumer, letting originators take advantage of least-cost routing.”

A Direct Payment Route

The IPAYX Virtual Clearinghouse provides a direct route for electronic payments, using the Internet as a universal information channel. It is designed so that any payment warehouse can send electronic payments directly to biller remittance lock boxes anywhere. Within the Virtual Clearinghouse architecture, IPAYX will offer a virtual private network for payment clearing and information exchange. The virtual private network adds encryption and authentication to the Internet, thereby creating a closed set of access points that use regular Internet pathways for private and secure communications. As a result, the individual transactions take the shortest, fastest and most economical route. IPAYX will also provide a directory synchronization service for routing and posting biller information.

“In the Internet world, there’s no need to funnel payments to third parties when a biller is directly addressable,” Braun said. “Payments aren’t touched, sorted, or handled by any intermediaries, so chances of error are minimized and transaction charges are significantly reduced.” Additional IPAYX Services In addition to the Virtual Clearinghouse, IPAYX will provide alternative delivery services for payments that can be partially completed electronically, such as ACH with either e-mail or fax remittance not

“The irony of e-billing today is that around half of electronic payments are converted into paper checks,” Braun said. “IPAYX offers solutions to help maximize the use and acceptance of electronic payments.” IPAYX will also offer check printing to complement the IPAYX electronic delivery network. The company is currently discussing business relationships and alliances with several super-regional banks and financial service providers.

“We’re already getting a strong response from banks and other financial services companies who want to realize the benefits of electronic payments that have remained elusive,” Braun said. “By providing a highly efficient, low-cost payment alternative, IPAYX has a competitive advantage that will set new standards for the bill payments industry.” About Internet Payment Exchange

Internet Payment Exchange (IPAYX) is a new bill payment solutions company formed in January 1999 to develop efficient, low-cost solutions for bill payment clearing among financial institutions. IPAYX’s products and services are designed to help financial institutions stay involved and profitable in the emerging electronic payments industry. The company’s flagship product is a Virtual Clearinghouse that uses the Internet to efficiently transfer payment and remittance advice information among consumer and business customers at a greatly reduced cost. IPAYX was founded by experienced managers in banking and technology circles with considerable frontline knowledge about electronic banking and payment systems. For more information about IPAYX and its founders, contact Douglas Braun by phone at 703-449-8890, e-mail at, by fax at 703-449-9692 or visit


M-Smart Jupiter

Imagine a world where you could securely log onto your computer, purchase an airline ticket via an encrypted Internet connection and download the boarding pass onto a smart card. Next, you can log onto a government Web site, download your passport onto the same card and then use it to board the airplane to an international destination. When you reach your destination, you could then plug that same smart card into your computer and download an application that allows you to collect hotel and rental car loyalty points. And, perhaps most importantly, before embarking on the trip home, you could plug the card into your computer and download your first class upgrade.

This world is now significantly closer, thanks to Motorola’s Worldwide Smartcard Solutions Division’s (WSSD’s) M-Smart Jupiter(tm) Platform, which supports secure and dynamic application download, robust security, advanced speed and processing power, and maximum flexibility in building value-added smart card solutions. In short, the new platform will allow consumers and businesses to customize smart cards, just as personal computers are customized today by downloading software onto the platform. Similar to how defacto standards helped drive the personal computer industry in the 1980s, Motorola’s innovative Jupiter platform is expected to drive smart card applications and adoption into the next millennium.

“When personal computers were introduced, there was no prevailing standard. It was not until the world embraced the Windows(R) development and operating environment that the sales of PCs exploded,” said Francois Dutray, Motorola’s vice president and general manager, WSSD. “In contrast, in the smart card world, we’re deploying open standards platforms from the beginning, meaning that it may take five years to accomplish in the smart card market what it took 15 years to accomplish in the personal computer market.” The standards that make this possible are the Java Card ™ 2.1 and Visa Open Platform ™ 2.0 technology specifications, which enable the development of globally interoperable smart card systems. In addition, the specifications allow smart card issuers to choose from a variety of operating system options and application developers while providing a core security and card management technology.

Java Card 2.1 technology supports the downloading and customization of applets, or applications, on a smart card platform tailored to the cardholder’s requirements. In conjunction with Open Platform 2.0, which supplements the Java Card platform, a user can securely and dynamically download applications onto the card. Combined with Motorola’s 32-bit RISC processor-based M-Smart Jupiter Platform, these standards create a secure, convenient and dynamic downloading environment. “We are excited by Motorola’s Jupiter platform,” said Patrice Peyret, director, Java Card. “This new development will add to the already significant momentum of Java Card technology in the marketplace and will help drive the adoption of multi-application smart cards.”

In addition, Motorola’s M-Smart 32-bit Jupiter platform represents a significant advancement in smart card security in that it combines both a hardware and software firewall. Until now, smart card platforms have employed a software- only firewall to maintain integrity between the applications – such as banking and transit – that are loaded on the card. Motorola’s unique hardware/software firewall combination, which is based on a secure memory management unit, prevents applications and data from being accessed by unauthorized users. If the hardware firewall detects intrusion, the card is automatically deactivated, protecting the data on the card. In addition, it prevents applications from interfering with each other, which allows trouble-free downloading of additional applications and peace of mind for the consumer.

“We applaud Motorola’s implementation of the Open Platform on its M-Smart Jupiter 32-bit platform,” said Phillip Yen, senior vice president, Emerging Technology, Visa International. “This represents the most advanced technological implementation to date, which will bring significant benefits to card issuers. This dramatic innovation demonstrates the flexibility that a common, open platform provides to card manufacturers and application developers. It is one step further toward the creation of a smart card world based on common standards.” “Motorola has made great strides toward the deployment of multi-function dynamic smart card solutions,” said Jean-Gerard Galvez, chairman, president and CEO of ActivCard. “Coupling Motorola’s innovative technology with our logical network security and authentication services for Java Card technology and the Visa Open platform will enable smart card solutions that will power the future of Internet-based business.”

Creating a User-Friendly Development Environment

In addition to representing a quantum leap in capability and speed as compared to existing products on the market, Motorola’s 32-bit platform supports a multi-application environment and offers unique flexibility and functionality at the operating system level. The features of the operating system of the 32-bit card are modular, allowing users to customize applications with significantly less effort than in the past. Motorola can also customize the operating system for its customers – for example, a customer could choose an operating system that does not support contactless operation, thus allowing more space for a wider variety of applications to be loaded onto the card. In addition, Motorola is offering an application development workbench that developers can use to create applets that are compliant with Java Card 2.1 technology and Open Platform 2.0. The workbench, designed to develop applets that can work on any card that supports the Java 2.1 specification, will help create a friendly, robust development environment that will result in shorter application development cycles. For instance, an airline could use the workbench to develop a loyalty application that could be downloaded from the Web onto any smart card that is Java Card 2.1 and Open Platform 2.0 compliant. “Not only does Motorola’s Jupiter 32-bit platform support advanced security, flexibility and functionality, the workbench allows application developers to deliver applications into card holders’ hands quickly and easily,” said Dutray.

“By significantly reducing the application development cycle time, Motorola is helping drive further development and adoption of smart card applications worldwide.” Motorola is a global leader in providing integrated communications solutions and embedded electronic solutions such as software-enhanced wireless telephone, two-way radio, messaging and satellite communications products and systems, as well as networking and Internet-access products, for consumers, network operators, and commercial, government and industrial customers. Sales in 1998 were $29.4 billion. For additional information, contact Motorola WSSD at (847) 576-3041 or visit our website at .

Motorola & M-Smart Jupiter are trademarks of Motorola, Inc. Windows is a registered trademark of Microsoft. Sun, the Sun logo, Java and Java Card are all registered trademarks of Sun Microsystems, Inc. in the United States and in all other countries. Visa Open Platform is a trademark for Visa.