ARKSYS in East Asia

ARKSYS announced its first agreement in the East Asian market with Banco Comercial de Macau of Macau. ARKSYS will provide the Macau-based bank with the company’s Integrated Credit Card System, an IBM AS/400-based solution for issuing credit cards and processing credit transactions.

In conjunction with the bank’s 25th anniversary, Banco Comercial de Macau sought to complete its retail banking offerings with an in-house credit card offering. ARKSYS’ products provided a seamless integration with the bank’s core retail banking system. ICCS will enable Banco Comercial de Macau to issue cards, acquire transactions and provide an Electronic Funds Transfer (EFT) connection to the Visa network.

ARKSYS offers Integrated Transaction Management, a suite of payment and transaction processing systems that allows financial institutions to provide customers online, real time transactions twenty four hours a day, seven days a week from a variety of delivery channels. ARKSYS ITM solution provides financial institutions with the ability to integrate and manage retail delivery operations including ATMs, POS terminals, credit cards/debit cards, merchant management, electronic funds networks, interactive voice response, Internet/Intranet personal banking, bill payment and commercial PC banking. The company’s solutions are established in more than 60 countries. ARKSYS is a wholly owned subsidiary of Euronet Services Inc. (Nasdaq: EEFT).

For more information, contact Tom Kleinsorge, Manager of Marketing, Voice 501-218-7188 (USA)/Fax 501-218-7302 (USA)/E-mail tkleinsorge@arksys.com or by mail at 17500 Chenal Parkway, Little Rock, AR USA 72211. ARKSYS’ home page address is http://www.arksys.com.

SOURCE ARKSYS Web Site: http://www.arksys.com

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NTT Breakdown

Japan’s NTT Data Corp. confirmed yesterday that CAFIS online credit card processing system crashed yesterday for about 2.5 hours. Nearly 500,000 NTT card terminals were unable to process card transactions from about 10 A.M. to 12:30 P.M., local time, Wednesday. The company estimates more than 200,000 transactions, mostly JCB and DC cards, were affected. According to Kyodo News, two computers in the Tokyo center were the culprits. Kyodo says NTT’s system crashed for four hours last June and for 30 minutes last July.

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GPT Buys Part of Abacus

Global Payment Technologies, Inc. , a leading manufacturer and innovator of currency acceptance systems used in the worldwide gaming, beverage, and vending industries, Wednesday announced the acquisition of 25% of Abacus Financial Management Systems Ltd., a UK-based software company, and the formation of Abacus Financial Management, Inc. US.

Stephen Katz, Chairman and Chief Executive Officer of GPT, said, “Abacus currently has a hardware and software product, of which GPT’s validators are a key component, that has for the past year been tested in several locations of a major UK-based retailer that operates hundreds of stores and thousands of cash registers. This rigorous testing has recently been completed, and we are excited about the current and potential applications for this product.”

GPT has acquired a 25% interest in Abacus and, together with the principal of Abacus, has formed a new US-based company, AFM-US, that has the exclusive rights to distribute the new product in North America. GPT owns 80% of AFM-US and plans to commence domestic test marketing of the new product shortly.

“We believe the formation of AFM-US is a natural progression of GPT’s growing business interests,” said Katz. “Abacus’ product offers the retail market a more secure, efficient, and reliable process for the counting, storage, and transportation of its receipts. The product is intended to be used in conjunction with the traditional cash register that we know today. Essentially, we are able to offer the retail market a “cash handling system” that should allow retailers to discover new dimensions of security, control, accuracy, and speed.”

James Redding, Chairman of Abacus Financial Management Systems Ltd., added, “Abacus embraces the new alliance with GPT, as GPT’s experience and reputation in the advanced automated currency acceptance and validation market should boost the new product’s acceptance and help drive the market going forward.”

Global Payment Technologies, Inc. is a United States-based designer, manufacturer, and marketer of automated currency acceptance and validation systems used to receive and authenticate currencies in a variety of payment applications worldwide. GPT’s proprietary and patented technologies are among the most advanced in the industry.

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Chile’s CorpGroup Installs CrediTable

CorpGroup, a leading financial services corporation in Latin America, will be among the first financial groups in the region to install Fair, Isaac and Company, Inc.’s StrategyWare decision support system for account origination. CorpGroup also purchased CrediTable credit application models and custom application models from Fair, Isaac and will use these solutions to manage its credit card, consumer and installment loan portfolios. CorpGroup Financial, the Banking Division, was created by Infisa (Chilean shareholders) in 1997, when it joined forces with Chase Capital Partners, National Bank of Canada and two top American Investment Funds to form a conglomerate with an initial $750 million fund targeted for Latin America financial investments.

“We’re implementing Fair, Isaac solutions to help us better manage our various portfolios using a customer-centric view instead of our current product-specific view,” said Carlos Auszenker, head of Risk Management of CorpGroup. “Using StrategyWare for account origination and management will empower our analysts with comprehensive decision-making tools to become more customer-focused.”

CorpGroup is devoted to investment in the Latin America financial sector with plans to become a major regional financial network, encompassing banking, insurance, pension fund administration, and related businesses. The Banking Division includes CorpBanca and Banco Del Orinoco in Venezuela, CorpBanca in Argentina and Chile, and Corfinsa and Financiera Condell in Chile.

Fair, Isaac’s StrategyWare gives credit analysts powerful adaptive control capabilities to design, test and execute complex decision strategies without additional programming support. CrediTable predictive models enable credit grantors to apply application scoring quickly to new, small or niche portfolios that lack the extensive history required for custom model development.

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. Fair, Isaac delivers data management services, analytics, software, and consulting to the financial services, direct marketing, personal lines insurance, retail, and healthcare industries.

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Bally Card

Bally Total Fitness is keeping its co-branded credit card program alive with a new MBNA agreement. By the end of this summer MBNA will begin marketing the ‘Bally Total Fitness Platinum MasterCard’ and ‘Bally Total Fitness Platinum VISA’ card. The Bally program was originally launched in Aug. 1996 as a restricted-credit VISA card with OR-based Orchard Federal Savings Bank. Under the Orchard VISA program, Bally transferred members’ membership fees to the VISA card. Last August Bally had signed up 100,000 customers for the VISA program. Bally indicated yesterday the number has since grown to 125,000. Bally expanded the card program with Metris Companies in Apr. 1997 as a MasterCard co-branded program. The Bally/Metris MasterCard offered an airline mileage reward. Metris launched its marketing program for the ‘Bally Rewards MasterCard and Gold MasterCard’ in Aug, 1997, with a one million piece pre-approved maildrop. The Metris program apparently produced lackluster results. Bally will discontinue the Metris program but retain the Orchard program. The MBNA version will offer membership upgrades, apparel, merchandise, personal training, nutritional supplements, and reductions in membership dues. Bally Total Fitness is the largest, commercial operator of fitness centers in the USA, with about four million members and 330 facilities in 27 states and Canada.

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MedCard on PC

SIMS Communications, Inc. announced Wednesday that the Company is shipping a PC software version of its reputed MedCard System for healthcare claims processing and benefits verification.

The MedCard System, a completely paperless system, electronically processes 100% third-party insurance billings at the healthcare provider’s office.

“The PC version of the MedCard System is an excellent product,” stated Dr. Joseph Bonavoglia of Queens, New York. “It is intuitive and extremely easy to use. And, it fulfills its promise of providing a completely paperless billing operation. I am very impressed.”

“SIMS’ long-term strategy has been is to become the leading content provider for healthcare on the Internet. We aim to be the Yahoo! (Nasdaq:YHOO) of healthcare portals. This announcement adds the third major component to reaching this goal,” stated Mark E. Bennett, SIMS President and Chief Executive Officer. “In January, we announced the development of an Internet electronic commerce system from which consumers will be able to order over 5,000 Bergen Brunswig Corporation (NYSE:BBC) home medical equipment products on the Internet. In February, we announced the development and launch of our Internet Web Portal for healthcare information. Today, we announce that the PC version of our MedCard System will be linked to the Internet through our portal. By so doing, SIMS’ healthcare portal becomes the foundation from which all healthcare activities begin and end. Using our web portal as a gateway, hospitals and healthcare providers soon will be able to access medical benefits verification and eligibility data online, perform paperless third-party billing, order home medical equipment for their patients and research medical information.

“Consumers, using SIMS’ Internet healthcare web portal as a healthcare gateway, also will have access to healthcare chat rooms, healthcare content providers, electronic commerce sites, yellow pages and medical research. In other words, from this totally integrated healthcare environment, our web portal will provide content-rich, single-source access to healthcare information for both healthcare providers and consumers. SIMS’ revenues come from MedCard’s service fees, HME product sales, portal linkage fees and advertising.”

SIMS is currently researching and evaluating potential relationships with turnkey web portal solution providers such as Today.com (OTC BB:TODY) and Infospace.com (Nasdaq:INSP).

InfoSpace.com is a leading provider of private label solutions for content and commerce to web sites and Internet appliances. InfoSpace.com’s affiliate network consists of more than 1,500 Web sites. The company’s affiliates include AOL (NYSE:AOL), Netscape (Nasdaq:NSCP), Microsoft (Nasdaq:MSFT), Lycos (Nasdaq:LCOS), go2net Inc.’s (Nasdaq: GNET) MetaCrawler, Dow Jones (The Wall Street Journal Interactive Edition), ABC LocalNet and CBS’s affiliated TV stations. In addition, InfoSpace.com has agreements with a number of providers of Internet access devices including PCs by Acer America and The Pixel Company (for Packard Bell NEC), cellular phones by AT&T Wireless and UnWired Planet, pagers by WolfeTech (Motorola – (NYSE:MOT)), screen phones by InfoGear, Mitel, Mitsui (Nasdaq:MITSY) and Lucent, television set-top boxes by American Interactive Media, @Home (Nasdaq:ATHM), Lucent (NYSE:LU), On Command, Planetweb and Source Media, online kiosks by King kiosk platform and Lexitech kiosk platform, and personal digital assistants by AT&T Wireless, InfoGear and Unwired Planet.

SIMS Communications provides low cost, turnkey, transaction processing solutions to service providers and retailers. Its products include medical insurance verification, medical billing, prepaid phone card activations, customer affinity programs, financial transaction processing using credit cards and ATM/Debit cards and customized associated vertical market applications.

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Chip Card Stats

Worldwide chip card semiconductor shipments totaled 1,323 million units in 1998, resulting in 1,254 million chip cards being shipped according to a new study by GartnerGroup’s Dataquest unit. Siemens Semiconductor produced the largest volume of chip card silicon (microcontrollers and memory) in 1998, with 658 million units (49.7 percent market share). Gemplus manufactured the largest volume of chip cards (smart cards and memory cards) in 1998, with 404 million units (32.2 percent market share).

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Missed the Mark

San Diego-based HNC Software Inc. reported yesterday that, based on a preliminary review of its results for the first quarter, it expects revenue of approximately $48 to $50 million for the quarter, which is approximately 10% lower than the company’s projections. This compares to revenue of $35 million for the first quarter of 1998. The decrease in anticipated Q1 revenue is due primarily to a shortfall in revenue and profit from HNC’s Insurance Solutions Group. HNC will release its final 1Q/99 results on April 19.

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NYCE Goes CAS

NYCE Corp. announced yesterday its decision to bring universal participation in Card Alert Services, Inc. to all NYCE Network card issuing participants. The CAS program helps detect early stage criminal activity which enables institutions to block and reissue compromised cards before fraudulent cash withdrawals are made. CAS receives a subset of switch transactions from NYCE and six other participating shared networks. CAS monitors for abnormal transaction patterns. CAS estimates it has prevented $15 million to $20 million in losses to-date. Under a new network rules change, effective this month, all NYCE issuing participants will become automatic subscribers to CAS. NYCE has an ownership interest in CAS.

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PaylinX Distribution Deal

PaylinX Corporation, the leader in the Enterprise Payment Server market, today announced an exclusive distribution agreement with El Segundo, Calif.-based Merisel, Inc., a leading distributor of computer hardware and software products. Under the terms of the agreement, Merisel will distribute the PaylinX Enterprise Payment Server software to its extensive network of North American Value-added Resellers (VARs) and System Integrators, enhancing its competitive e-commerce offering with PaylinX’s unique enterprise commerce payment processing platform.

The PaylinX solution set offered through Merisel includes PaylinX Enterprise Payment Server and PaylinX Internet Payment Server. Both offerings utilize three payment options — PaylinX VISA POS-port, PaylinX VISA ISDN, and PaylinX Paymentech Frame Relay. These options enable Merisel resellers to offer their customers cost-effective, e-commerce payment solutions.

Only PaylinX provides enterprise commerce payment processing — enabling credit card transaction processing that spans electronic commerce, point-of-sale, interactive voice response (IVR) systems, catalog sales and call centers. PaylinX recently was named the 1998 Call Center News Service Product of the Year, and is a three-time winner of the Internet Commerce Expo Best of Show award.

Merisel VARs and system integrators will find the PaylinX distribution agreement instrumental in expanding their options for e-commerce solutions. “Most first- and second-generation electronic commerce implementations focus entirely on the Internet, forcing those who provide solutions, such as Merisel’s resellers, to implement costly, redundant systems and processes,” said Bob Lozano, president and chief executive officer of PaylinX. “PaylinX enables market leaders such as AT&T, PageNet, Bose, Microsoft, and MediaOne to provide a uniform, enterprise-wide transaction infrastructure for all customer sales interactions.”

“We are delighted to make PaylinX available to our resellers,” said Merisel’s Director of Software, Tony Warwick. “As the market leader in the enterprise payment server category, PaylinX brings significant value-add to Merisel resellers and system integrators, not only for enterprise-wide payment processing, but also in consolidation with existing legacy systems. The enterprise payment server market is a key enabler of enterprise commerce — and we’re pleased to be at the forefront with PaylinX.”

In addition to its enterprise-wide capability, the PaylinX architecture meets the high availability objectives of the most demanding IT environments by enabling feature set enhancements such as multi-processor failover, Payment Pipes(TM) transaction routing and load balancing, while safeguarding existing infrastructure investments. Running on a single NT server, PaylinX Enterprise Payment Server software processes tens of thousands of transactions per hour. Lab tests extend that number to a processing capability that supports one million transactions per hour. PaylinX Enterprise Payment Server is a true multi-threaded solution for enterprise applications.

About Merisel

Merisel, Inc., (Nasdaq:MSEL) is a leader in the distribution of computer hardware and software products. Based in El Segundo, Calif., Merisel is a Fortune 500 Company with reported 1998 sales of $4.6 billion. Merisel distributes a full line of 25,000 products and services from the industry’s leading manufacturers to resellers throughout North America. In addition, the company provides a full range of customized, value-added services. Merisel also offers dedicated support to high-end resellers through the Merisel Open Computing Alliance (MOCA(TM)) and the company’s Enterprise Computing Division. Merisel’s corporate Web site is located at www.merisel.com.

About PaylinX

Focused on enterprise commerce payment processing since 1995, PaylinX Corporation is the leader in the Enterprise Payment Server market providing real-time and/or batch credit card authorization, settlement and reporting across the entire enterprise. Only PaylinX provides enterprise commerce payment — enabling credit card transactions processing spanning e-commerce, point-of-sale, interactive voice response systems, catalog sales and call centers. PaylinX is available from Value Added Resellers, PaylinX OEM Partners, or directly from the company. PaylinX is headquartered in St. Louis, Missouri, and can be reached at (314) 692-0929 or www.paylinx.com.

Note to Editors: PaylinX is a registered trademark, PaylinX for Site Server and PaylinX ISDN Payment Pipe are trademarks of PaylinX Corporation. Other trademarks, service marks, and copyrights are the property of their respective owners.

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February Pause

After piling on $5 billion in additional revolving debt in January, American consumers cooled their jets a bit in February, adding a modest $2.3 billion to revolving credit. According to preliminary figures released Wednesday afternoon by the Federal Reserve, revolving credit, mostly credit card debt, grew at an annual rate of 4.8% during February, compared to 13.2% in January. For February 1998 revolving credit card debt grew at annual rate of 5.1% and stood at $535.3 billion. Overall consumer credit is growing 7.9% annually, compared to 4.9% one year ago, according to the FRB. At the end of February, American consumers were $1.323 trillion in debt, exclusive of home mortgages.

REVOLVING CREDIT HISTORICAL
Feb99 Jan99 Dec98 Nov98 Oct98 Sep98 Aug98 Jul98 Jun98 May98
%GRWTH: 4.8% 13.2 8.6 -2.4 13.0 7.5 10.7 -4.2 9.2 -1.4

$OWED: $569.0 566.7 560.5 556.5 557.6 551.7 548.3 543.4 545.3 541.2

Source: Federal Reserve; revised figures as of 04/07/99; For complete historical data visit [www.carddata.com][1].

Consumer credit grew at about an 8 percent annual rate in February, down from about 14 percent in January. Growth in all major
categories slowed in February, though the rise in auto loans remained quite rapid.

CONSUMER CREDIT OUTSTANDING 1
Seasonally adjusted
—————————————————————————————————————————————
1998 1999
:::::::::::::::::__ :::

Feb. Mar. Apr. May June July r Aug. r Sept. r Oct. r Nov. r Dec. r Jan. r Feb. p
—————————————————————————————————————————————
Percent change at annual rate 2
Total 4.9 6.6 4.3 2.3 9.0 5.4 6.6 6.9 10.6 1.6 2.4 14.1 7.9
Automobile 4.2 8.8 4.1 4.0 8.2 8.0 12.1 8.1 6.1 12.6 12.4 19.0 13.7
Revolving 5.1 9.1 5.4 -1.4 9.2 -4.2 10.7 7.5 13.0 -2.4 8.6 13.2 4.8
Other 3 5.5 -1.2 2.3 6.9 9.6 19.6 -8.9 4.2 12.7 -7.2 -24.1 8.2 5.1

Amount: billions of dollars
Total 1,240.5 1,247.3 1,251.8 1,254.2 1,263.5 1,269.2 1,276.2 1,283.6 1,294.9 1,296.6 1,299.2 1,314.5 1,323.2
Automobile 416.7 419.8 421.2 422.6 425.5 428.3 432.7 435.6 437.8 442.4 447.0 454.1 459.3
Revolving 535.3 539.4 541.8 541.2 545.3 543.4 548.3 551.7 557.6 556.5 560.5 566.7 569.0
Other 3 288.4 288.2 288.7 290.4 292.7 297.5 295.3 296.3 299.5 297.7 291.7 293.7 294.9
—————————————————————————————————————————————

TERMS OF CREDIT AT COMMERCIAL BANKS AND FINANCE COMPANIES 4
Percent except as noted: not seasonally adjusted
—————————————————————————————————————————————
Institution, terms, and type of loan
—————————————————————————————————————————————
Commercial banks
Interest rates
48-mo. new car 8.87 n.a. n.a. 8.69 n.a. n.a. 8.71 n.a. n.a. 8.62 n.a. n.a. 8.34
24-mo. personal 14.01 n.a. n.a. 13.76 n.a. n.a. 13.45 n.a. n.a. 13.75 n.a. n.a. 13.41
Credit card plan
All accounts 15.65 n.a. n.a. 15.67 n.a. n.a. 15.83 n.a. n.a. 15.69 n.a. n.a. 15.41
Accounts assessed interest 15.33 n.a. n.a. 15.62 n.a. n.a. 15.85 n.a. n.a. 15.54 n.a. n.a. 14.73

New car loans at auto finance companies
Interest rates 6.98 6.47 6.20 6.07 6.02 6.23 6.00 5.92 6.33 6.79 6.43 6.22 6.43
Maturity (months) 52.6 51.5 50.7 50.8 50.9 51.7 53.0 53.1 53.1 52.8 52.2 52.1 53.4
Loan-to-value ratio 92 92 91 93 91 92 93 93 92 91 91 92 92
Amount financed (dollars) 18,825 18,932 18,922 18,793 18,878 19,084 19,068 19,028 19,199 19,590 19,734 19,628 19,304
—————————————————————————————————————————————
This release is issued around the fifth business day of each month. The exact date and time may be obtained by calling (202) 452 – 3206.
Footnotes appear on reverse.

1
CONSUMER CREDIT OUTSTANDING
(Billions of dollars)
Not seasonally adjusted

—————————————————————————————————————————————
1998 1999
:::::::::::::::::__ :::

Feb. Mar. Apr. May June July r Aug. r Sept. r Oct. r Nov. r Dec. r Jan. r Feb. p
—————————————————————————————————————————————

Total 1,234.2 1,236.0 1,241.1 1,243.1 1,256.8 1,262.4 1,276.4 1,286.6 1,297.6 1,304.5 1,331.7 1,323.3 1,316.3

Major holders
Commercial banks 492.5 492.1 500.1 497.3 491.4 491.4 498.2 497.9 502.1 498.8 508.9 507.3 497.7
Finance companies 155.7 156.5 154.3 153.6 154.3 156.1 159.6 159.1 165.6 166.6 168.5 167.3 169.7
Credit unions 150.8 150.7 151.1 152.2 152.4 153.5 153.6 154.3 155.0 155.2 155.4 155.7 155.1
Savings institutions 47.1 47.1 47.5 47.9 48.3 49.0 49.6 50.3 51.0 51.6 51.6 52.0 52.5
Nonfinancial business 72.8 72.7 65.1 65.2 65.3 65.5 66.0 65.5 66.0 66.6 74.9 71.0 67.9
Pools of securitized assets 5 315.3 316.8 323.1 326.9 345.1 346.9 349.4 359.4 358.0 365.6 372.4 370.0 373.4

Major types of credit 6
Automobile 412.1 415.5 416.0 418.2 425.2 429.9 435.4 439.6 443.1 446.6 451.0 452.2 454.1
Commercial banks 152.7 153.9 151.3 151.7 150.9 153.2 155.5 156.3 156.8 157.1 158.1 160.3 159.9
Finance companies 84.7 86.8 90.6 89.6 89.9 91.7 95.3 96.2 97.6 99.0 103.1 102.8 105.0
Pools of securitized assets 5 66.0 65.1 63.7 66.0 71.6 72.5 70.8 72.1 71.8 72.6 73.0 73.2 73.2

Revolving 535.3 534.1 535.6 535.6 539.6 537.2 545.1 549.0 556.0 559.2 586.5 575.7 569.0
Commercial banks 204.6 201.3 209.2 207.3 200.9 197.6 200.4 197.6 200.9 196.9 210.3 204.8 197.6
Finance companies 36.9 36.6 30.4 30.5 29.9 29.4 29.6 28.4 33.3 33.1 32.3 32.4 32.2
Nonfinancial business 41.0 41.2 33.5 33.4 33.5 33.8 34.0 33.7 33.8 33.8 39.2 36.4 34.3
Pools of securitized assets 5 223.4 226.2 233.7 235.3 245.6 246.6 251.2 259.3 258.1 265.3 272.3 269.9 272.6

Other 286.8 286.4 289.6 289.2 292.0 295.2 296.0 298.0 298.5 298.7 294.2 295.4 293.2
Commercial banks 135.2 136.9 139.7 138.3 139.6 140.6 142.2 144.0 144.4 144.8 140.5 142.2 140.2
Finance companies 34.1 33.0 33.4 33.5 34.4 35.0 34.7 34.6 34.6 34.6 33.1 32.1 32.5
Nonfinancial business 31.8 31.5 31.6 31.8 31.7 31.7 32.0 31.8 32.2 32.9 35.7 34.6 33.6
Pools of securitized assets 5 26.0 25.6 25.6 25.5 27.9 27.8 27.5 27.9 28.1 27.7 27.1 26.8 27.7
—————————————————————————————————————————————

1. Covers most short- and intermediate-term credit extended to individuals, excluding loans secured by real estate.
2. Percent changes calculated from unrounded data.
3. Comprises mobile home loans and all other loans not included in automobile or revolving credit, such as loans for education, boats,
trailers, or vacations. These loans may be secured or unsecured.
4. Interest rates are annual percentage rates (APR) as specified by the Federal Reserve’s Regulation Z. Interest rates for new-car loans
and personal loans at commercial banks are simple unweighted averages of each bank’s most common rate charged during the first calendar
week of the middle month of each quarter. For credit card accounts, the rate for all accounts is the stated APR averaged across all
credit card accounts at all reporting banks. The rate for accounts assessed interest is the annualized ratio of total finance charges at
all reporting banks to the total average daily balances against which the finance charges were assessed (excludes accounts for which no
finance charges were assessed). Finance company data are from the subsidiaries of the three major U.S. automobile manufacturers and are
volume-weighted averages covering all loans of each type purchased during the month.
5. Outstanding balances of pools upon which securities have been issued; these balances are no longer carried on the balance sheets of
the loan originators.
6. Includes estimates for holders that do not separately report consumer credit holding by type.
r=revised. p=preliminary.

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

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Pathways & Proton

The Pathways Group, Inc. announced Wednesday that it has entered into a Letter of Intent with Proton World, the international end-to-end smart card solutions provider, based in Brussels, Belgium. The aim of the Letter of Intent, is to establish a series of comprehensive, non-exclusive business relationship agreements which will license Pathways to develop applications on the Proton platform, integrate Pathways existing applications on to the Proton platform and to operate the back office transaction processing under the Proton security system. The agreement also anticipates the use of the Proton System on Pathways proprietary Sprinticket unattended Point-of-Sale kiosks and other integrated systems.

![][1] Proton World was created by major smart card industry players (American Express, Banksys, ERG, Interpay Nederland, and Visa International) to enhance international smart card and electronic purse standards. Proton is currently the world’s largest electronic purse platform, licensed in 15 countries with 30 million smart cards issued and accepted at 230,000 terminals. The platform provides a complete set of powerful and easy-to-use building blocks. Proton’s technology is the most broadly implemented in national rollouts (Australia, Belgium, The Netherlands, Sweden and Switzerland have national schemes of Proton-based smart cards) in both number of transactions and installed terminal base. In Belgium alone, the Proton card was used for more than 3.3 million transactions in February 1999.

The multi-functionality of the Proton electronic purse systems is one of the keys to the success of this platform. It is suitable for multiple applications because it can replace several means of payment (such as cash and telephone cards) and can function in various environments (including public transport ticketing and Internet payments). Proton not only provides a reliable, convenient, and secure electronic purse, but also responds to global requirements for system integration and multi-application support, useful in today’s world and vital in the emerging virtual world of tomorrow.

Joining the ranks of worldwide Proton licensees will strengthen Pathways’ existing product offerings. Under the terms of the Letter of Intent, Proton will provide Processing, Development, and System Integration licenses which will allow Pathways’ software to operate within the Proton platform for their hardware technology used in point of sale and automated ticketing systems. Pathways’ plans to use the Proton System to install integrated smart card systems at retailers, theaters, amusement parks, and resorts. This will allow Pathways to provide a full suite of services to its clients, including custom applications, card fulfillment and personalization, as well as credit and debit card processing. In addition to electronic purse applications, smart cards can be used for scrip and loyalty programs, telephone services, security access, medical and healthcare services, and secure payments on the Internet.

Carey Daly, President and CEO of The Pathways Group, has recently returned from a trip to Europe, where he met with the senior management of Proton World in Brussels. Subsequently, Mr. Armand Linkens, Managing Director of Proton World visited the Senior Executives of Pathways, in their Santa Rosa, California facility. The result of these meetings was the subject letter of intent, which has led to current contract negotiations.

Mr. Daly was quoted as saying, “At long last, Pathways has secured the missing piece in our business strategy to position Pathways as the leader in transaction processing in the United States. Pathways can now offer credit card, debit card and smart card transaction processing from one terminal through one provider. Merchants will enjoy custom tailored loyalty schemes while riding on a secure, open system, payment card. We can now offer credit card issuing banks their own chip card with an internationally recognized system of security and infrastructure. Our existing products become more robust because we now have the strength of a system, which has been time and field proven, in the open system arena. Our target markets have expanded dramatically as a result of this agreement and our existing client base will be afforded yet another layer of functionality and versatility. Not only does this open up the opportunity to integrate a platform for secure Internet transactions, it also means that this same security can be applied to secure Internet access, a major problem in our industry. The PROTON platform will allow Pathways to successfully compete with every other smart card business on a global scale. Finally, I believe this partnership will mark a major turning point in our business model. We are, needless to say, very proud to deliver this opportunity to our clients and our shareholders.”

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

SOURCE Pathways Group, Incorporated

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

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