TASQ to Distribute Tellan Software

Tellan Software Inc., a leader in electronic-transaction processing software, Monday announced a strategic alliance with TASQ Technology, the largest provider of information and inventory management business solutions for the point-of-sale (POS) equipment and supply industry. The alliance will facilitate distribution of Tellan’s PCAuthorize and MacAuthorize software products to TASQ’s channel of partners, representing 1.5 million merchants and 4,000 direct bank and Independent Sales Organizations (ISO) relationships.

TASQ’s deployment expertise will streamline implementation of Tellan’s cost-effective authorization solutions for merchants, banks and ISOs. In addition to PCAuthorize and MacAuthorize, Tellan manufactures and distributes a powerful line of electronic payment solutions for Internet commerce, mail-order and home-based businesses, businesses using PCs as their electronic cash registers, and global enterprises wishing to consolidate payment applications into a centralized payment platform.

“We are delighted to be associated with TASQ as they represent the best in the payment industry,” said Donald Neff, president and CEO of Tellan Software. “We feel this milestone shows the direction of the payment industry moving from hardware to more integrated software solutions.”

TASQ executive vice president Randy Simoneaux commented: “Tellan has earned an outstanding reputation for providing quality payment-processing software solutions. The PCAuthorize product will deliver a unique and complete value-based PC solution to our channel.”

About Tellan Software, Inc.:

Tellan Software manufactures and distributes a robust line of electronic payment solutions for Internet commerce, business establishments using PCs as their electronic cash registers, mail order and home-based businesses, as well as global enterprises wishing to consolidate payment applications into a centralized payment platform. Tellan Software is a privately held corporation with headquarters in San Jose, California. For more information, visit Tellan on the World Wide Web at:

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CreditConnection Patent

Credit Management Solutions, Inc. Monday announced that the U.S. Patent and Trademark Office has issued the company U.S. Patent 5,878,403 on its CreditConnection service, an electronic commerce service for online lending. The CreditConnection service links credit originators with funding sources nationwide and in Canada to allow the originators to transmit credit applications and receive decisions.

Currently in use for automobile and recreational vehicle lending and leasing, CreditConnection incorporates a standard methodology that allows the transmission of an individual application to multiple funding sources. “This underlying methodology will support our expansion of the CreditConnection service to a wide range of consumer and business credit types,” said Peter M. Leger, president and COO of CMSI. Leger further stated that, “While there is at present no standard for this type of lending, we believe that this methodology, along with the strength of our technology, supports CreditConnection becoming the standard. We are delighted that the U.S. Patent and Trademark Office has recognized the unique nature of the service by granting us this patent.”

The CreditConnection patent covers interactive credit application and routing systems and methods that allow credit applications to be received electronically from credit originators and forwarded to lenders, either simultaneously or sequentially, and allow the lenders’ credit decisions to be returned electronically to the credit originator. If an application is sent sequentially, the credit originator can instruct the system whether to automatically send to the next lender based on the credit decision received from the previous lender or a predetermined time delay, until a credit approval is received from a lender. The connections between credit originators, lenders, and the CreditConnection host computer are either through private telecommunications lines or the Internet.

The patented technology may also be used in connection with web-based technologies like CMSI’s CreditOnline(R) as the method of transmitting credit applications to lenders and receiving decisions made by the lenders using their own decisioning systems. “Another good example of this leverage,” Leger said, “is the Internet online financing technology that CMSI is rolling out in its strategic alliance with LendingTree, Inc. which was announced on March 1, 1999. LendingTree is one of the fastest growing online loan centers available to consumers on the Internet.”

Vehicle dealers nationwide are using the CreditConnection service to improve productivity, profitability, and customer service in their Finance and Insurance (F & I) department, a key source of dealership profits. Using the Internet or another network, applications can be delivered electronically directly into a lender’s credit decisioning system and decisions returned to the dealer within minutes. In addition, CreditConnection manages the department workflow electronically, tracking the status of each application and eliminating the need for time-consuming logs and follow-up calls. This allows the F & I manager to concentrate on more profitable tasks and improve service to the dealership’s customers at the same time. The system also delivers a variety of strategic reports that allow the dealership to better manage all of its financing relationships.

Today, CreditConnection dealers can communicate electronically with some of the largest financial institutions, finance companies and captive finance companies that provide automobile credit, including AmeriCredit; BancOne; Bank of America; Bank of Montreal; Key Bank; NationsBank; PNC; Wachovia; WFS Financial; GMAC, the captive finance company of General Motors; and NMAC, the captive finance company of Nissan Motors. “Lenders and credit originators are acutely aware that the future of lending lies in the Internet,” said CMSI’s Leger. “The CreditConnection patent is another step in CMSI’s strategy to maintain leadership in the area of credit management technology.”

About CMSI

Founded in 1987 and headquartered in Annapolis Junction, Md., Credit Management Solutions, Inc. provides consumer credit automation and loan marketing software and services to major financial institutions and non-bank financial companies. Its flagship product, CreditRevue(R), is a credit origination and processing system used by financial institutions to automate and speed the processing and decisioning of all types of consumer loan products. CreditRevue clients include NationsBank, Banc One, Wells Fargo, The Associates, Wachovia, WFS Financial, and Nellie Mae. The CreditConnection service is a combined electronic network and service which electronically connects credit originators with multiple financing sources for the submission and decisioning of loans and leases. In the automotive sector, CMSI has entered into strategic alliances with Automatic Data Processing (ADP) Dealer Services Group, and Universal Computer Systems, Inc. (UCS), the nation’s leading providers of products and services to auto dealers and manufacturers’ captive finance companies. In the small business credit sector, the company has entered into a strategic alliance with Dun & Bradstreet, Inc., the world’s leading provider of business-to-business credit, marketing information, and receivables management services.

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TSAI Buys Incession

Transaction Systems Architects, Inc., one of the world’s leading providers of EFT processing solutions, announced Monday that it has acquired approximately 72% of the outstanding shares of Insession, Inc., a privately held corporation based in Boulder, Colorado for approximately 666,000 shares of Transaction Systems’ Class A Common Stock.

Insession, Inc. was formed in 1991 and develops software products for the enterprise application server and networking marketplace. Insessions’ primary software product is ICE (Intersystem Communications Environment). The ICE solution enables Tandem Computer users to communicate and exchange data with mainframe systems over SNA, APPN and TCP/IP communication protocols.

“TSA has been an exclusive distributor of the ICE product since 1991 and it is a good addition to our product set” said Greg Duman, executive vice president and chief financial officer of Transaction Systems Architects, Inc. “Many of the largest banks around the world who run our Tandem-based ATM and POS systems rely on ICE to connect their Tandem systems to their mainframes in order to access critical customer data.”

Transaction Systems Architects’ software facilitates electronic payments by providing consumers and companies access to their money. Its products are used to process transactions involving credit cards, debit cards, smart cards, home banking services, checks, wire transfers as well as automated clearing and settlement. Transaction Systems’ solutions are used on more than 3,300 product systems in 70 countries on six continents.

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ECHO – Magic

Electronic Clearing House Inc. has signed a letter of intent to acquire Magic Software Development Inc for stock and an earn-out. Magic provides electronic check conversion, electronic check re-presentment, payday loan, check verification, and check guarantee solutions to financial services companies and retailers. Based in Albuquerque, N.M., Magic has 11 employees and processes more than 75 million check verification transactions per year, totaling more than $2 billion. ECHO says it will now be strategically positioned to provide a complete check conversion system that includes a front-end authorization and capture and back-end processing and settlement. ECHO also says it sees a huge market potential in electronic checks.

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One Million Served

MasterCard International confirmed yesterday that its ‘MasterCard Global Service’ program, launched in 1995, has serviced more than one million card-related requests to-date from cardholders in 196 countries utilizing the service when they traveled abroad. MasterCard said that despite handling the requests in 46 languages it achieved a 96% satisfaction rating. Last year MasterCard says it reached an all-time high with over 500,000 services handled through its ‘MasterCard Global Service Center’. MasterCard expects more than 600 million people will travel internationally this year, and that number is expected to double in the next 15 years. Credit card usage among travelers is high, with the average expenditure for an international business trip at US$4,314, with 60% being paid on a credit card. Among services offered: Lost and Stolen Card Reporting, Emergency Card Replacement, Emergency Cash Advance, Access to Account Information and MasterCard Card Enhancements and MasterCard/Cirrus Cash Machine Location Information.

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Phone Cards Dive

Long distance rates for prepaid phone cards are in a downward spiral. Last month a 5.9 cents per minute rate was announced by at least one provider. OH-based Standard Register says this morning that prepaid phone cards are now offering domestic long-distance rates averaging 20 cents per minute, with some as low as two cents per minute for the first five minutes. The company says the trend toward reduced prepaid long-distance rates should continue throughout 1999.

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Online Card Fraud

As consumers become more comfortable using credit cards on the Internet, merchants are becoming more concerned with credit card fraud. This week’s issue of ComputerWorld suggests that the on-line fraud rate for cards-not-present may be far higher than industry averages, especially for Web sites that are poorly maintained or sell big-ticket merchandise. In some cases, ComputerWorld found anecdotal evidence of fraudulent transactions running as high as 20% or more of a Web merchant’s sales. The IT newspaper says fraud rates are significantly higher for on-line transactions versus other card-not-present transactions such as mail-order and telephone-order businesses. Even merchants offering low-ticket products and services are paying a high price as they are forced to swallow charge-back fees, that in most cases exceed the actual amount of the transaction. Since accepting credit cards online, via a secure server, CardWeb.com, Inc. has encountered a number of attempted frauds. However one case slipped through in which an Eastern European financial firm purchased thousands of dollars of CardWeb services with a seemingly valid American Express card. Three months after approving the transaction, American Express notified CardWeb that the transaction was made on a valid, but not-issued account number. AmEx waived the charge-back fees. CardWeb has also encountered firms attempting buy as much as $10,000 in services with fraudulent cards. ComputerWorld suggests outsourcing credit card verification and hiring third parties with sophisticated antifraud software.

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Chase Goes Trilingual

Chase Manhattan Bank announced Monday it has created a trilingual brochure containing sections in English, Spanish and Chinese, to make it easier for consumers to fill out a credit card application. The “Quick and Easy Guide for Completing your Chase Credit Card Application,” is now available in all of Chase’s 475 branches in its tri-state footprint and at 130 Texas branches. Chase says it found that Hispanic or Chinese consumers are more comfortable doing business in Spanish or Chinese. Chase also says English speaking consumers are sometimes intimidated when filling out credit card applications.

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Not Ready For Prime-Time

“The success of smart cards is tied directly to card acceptance devices consumers like to use and the behind-the-scenes infrastructure’s ability to support rapidly changing electronic transaction applications,” said Frank S. Pierce, APR, PDM, vice president of international marketing and business development, Hypercom Corporation. “Environments that process both emerging microchip-based cards as well as conventional magnetic-stripe based cards will also be requisite.

“The key to every technology adoption is ultimately consumer acceptance, not the technology itself. For the majority of consumers, successful technology is technology the consumer himself isn’t aware of using. The more the technology itself is effortless and transparent to the consumer, the more benefit and value they perceive. Smart cards aren’t yet at this point.”

“Consumers everywhere want faster, more secure, more convenient and reliable interactions without sacrificing control and personal service, regardless of the technology. One factor in delivering these benefits to consumers is the infrastructure. At the front end there must be trouble-free, easy-to-use card acceptance devices for the buyer at the point-of-sale. The behind-the-scenes infrastructure must be flexible, scalable, fast and high performing not only for business as usual, but also to support the tremendous demand for new-century applications like e-commerce, loyalty programs, online advertising, electronic messages and electronic signature capture. For these reasons, touch-screen card ‘swipe’ devices and server-based application software are playing a central role, not a secondary role, in determining whether or not smart cards will become a widespread success.”

“The introduction of chip cards impacts the entire infrastructure, not just the point-of-sale or point-of-interaction devices,” Pierce told IC Card ’99 Conference attendees in Tokyo. “Server-level applications software is the ‘missing link’ adaptive layer to enable host legacy systems put in place two or three decades ago to quickly and easily add new functionality, features, programs and performance needed in 1999 and beyond without disrupting or replacing existing mission-critical legacy systems.”

Out of the more than 2.5 billion cards worldwide used to activate some type of commercial or personal financial transaction, only 99 million smart cards are in circulation. In the United States alone, more than 650 million conventional magnetic stripe-based credit and debit cards exist. The average cost of a smart microchip-based card typically exceeds US$10, compared to four cents for a magnetic stripe card.

However, smart cards offer significantly greater information storage and processing capacity than conventional magnetic stripe-based cards. As a result, they are being used in an array of applications ranging from advanced credit, debit and stored-value cards by banks, to medical and eligibility records and authorizations by healthcare providers, and customer loyalty programs by retailers.

“Keeping the transaction environment current is essential to supporting smart card deployment,” said Pierce. “Accelerating smart cards from the ‘year of the pilot’ to real marketplace success lies in the utility and value they bring to the consumer. New consumer operated touch-screen card acceptance devices and server-level application software offer the advantage of speeding the evolution of the electronic processing industry to handle more sophisticated electronic payment options.”

Pierce noted that the United States lags behind Europe, Asia and Latin America in smart card adoption. Driven in part by the rapid transition to the Euro, Europe is the leading user of smart card payment solutions, with two-thirds of the global use. “The POS and banking/finance industries are in the early stages of a re-tooling for smart cards,” he said. “Server-level application software and faster, portable touch-screen terminals that can read and process an array of card types and applications are in demand from companies that want to stay in leadership positions and be competitive.”

Hypercom Corporation (NYSE:HYC) is a global provider of electronic payment solutions, including multi-function 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(R) 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 60 countries through a global network of offices and affiliates in Argentina, Australia, Brazil, Chile, China, Hong Kong, Hungary, Japan, Mexico, Russia, Singapore, the United Kingdom and Venezuela. Hypercom’s Internet address is [www.hypercom.com][1].

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

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Fortis Buys ABIG

Fortis, the international insurance, banking and investment group, and American Bankers Insurance Group, Inc., one of the two leading U.S. credit-related insurers, announced yesterday that they have entered into a definitive agreement for Fortis to acquire 100 percent of the outstanding common and preferred shares of American Bankers Insurance Group, Inc. . For each share of American Bankers Insurance Group common stock, Fortis will pay USD 55 in cash, representing a 19 percent premium to the closing price of common stock on March 5, 1999, and for each share of preferred stock, Fortis will pay USD 109.857 in cash, valuing ABI at USD 2.6 billion. Fortis will also assume USD 194 million of outstanding debt of ABI. The transaction is expected to be immediately accretive to Fortis’ earnings per share on an unleveraged basis and will enhance its overall earnings growth rate.

The transaction will create a leading specialty insurer in the US by combining ABI with American Security Group (“ASG”), Fortis’ credit insurance subsidiary based in Atlanta. Similar to ASG, ABI specializes in providing credit-related insurance products in the US and Canada. ABI is also active in Latin America, the Caribbean and the United Kingdom. The combined company will have annual gross premium earned of USD 3.6 billion.

The acquisition of ABI adds complementary products and distribution channels, particularly through the credit operations of major retailers and consumer-oriented financial institutions. Increased earnings stability in these businesses will be achieved from diversity of channels, products and customers. Furthermore, significant synergies will result from the integration of both organizations’ operating and corporate structures and cross selling over their combined distribution network.

Allen Freedman, chief executive officer of Fortis, Inc., Fortis’ U.S. holding company, said, “The combination of American Bankers Insurance Group and American Security Group strengthens our leadership position in a well-defined, attractive specialty market that both companies know well and in which we have separately made major strides. Our businesses are highly complementary, have similar business processes and share a common, customer-centered focus.

“The combination will allow us to increase the number of channels through which we market our credit insurance products. It will broaden product lines, enhance cross-selling opportunities and promote the application of database marketing capabilities to a broader range of customers and array of channels. In Europe and Asia, Fortis will be able to open new growth opportunities for the combined company. For these reasons, this is a winning transaction for both organizations, and we look forward to working closely together to serve our customers in the U.S. and abroad,” Freedman said.

Henjo Hielkema, vice chairman of Fortis’ Executive Committee and chairman of Fortis’ Insurance Group, said, “This transaction will double the size of Fortis’ insurance operations in the United States and significantly enhance the scope of our insurance operations worldwide. It is also consistent with Fortis’ strategy to concentrate on a limited number of highly profitable and growing specialty businesses in the United States. Not only is the transaction immediately accretive to earnings per share, but we expect it will generate more than USD 100 million of pre-tax annual synergies from operating efficiencies and scale economies within three to five years.”

Gerald N. Gaston, president and chief executive officer of American Bankers Insurance Group, said, “The combination will benefit American Bankers Insurance Group through the global scale, depth of resources and new growth opportunities from our combined operations. This transaction is a positive outcome for our employees, customers and shareholders. We look forward to concluding it as quickly as possible and joining with Fortis to better meet our customers’ needs.”

Mr. Freedman will continue as chairman of Fortis’ US operations. The combined business will report to Edward J. O’Hare, executive vice president of Fortis, Inc. and former chairman of ASG. Mr. O’Hare will become president and chief executive officer of the combined entity and remain a member of the Fortis, Inc. Executive Committee. Mr. Gaston will work with Mr. Freedman and other senior Fortis, Inc. executives through the transition, after which he will retire. Mr. Gaston will, however, continue on a consulting basis with Fortis, Inc.

The transaction has been approved by the Boards of Directors of both companies, and is subject to customary closing conditions, including regulatory approvals, as well as the approval of ABI’s shareholders. The transaction is not subject to financing. Fortis has sufficient resources to complete the transaction, and expects to refinance it with a combination of internally generated funds and capital raised in the international financial markets. Closing of the transaction is expected to take place in the third quarter of 1999.

Certain officers and directors of ABI holding approximately 7.5 percent of the outstanding common stock have agreed to vote in favor of the merger. Furthermore, the Merger Agreement provides under certain circumstances for Fortis to receive up to USD 100 million, pursuant to a breakup fee and an option to purchase 19.9 percent of ABI common stock.

Fortis has been advised by Donaldson, Lufkin & Jenrette and Warburg Dillon Read. American Bankers Insurance Group has been advised by Salomon Smith Barney.

BACKGROUND INFORMATION

Profile of Fortis

Overview

Fortis is an international group operating in the fields of insurance, banking and investment. In its home market, the Benelux, Fortis is one of the largest financial services providers, offering a broad range of financial services through various distribution channels. In other countries of Europe, the United States and Asia, Fortis focuses on specialist market sectors. At year-end 1997 Fortis had assets in excess of EUR 298 billion (USD 328 billion) and total revenue for the year amounted to EUR 33 billion (USD 37) billion).

Investment in Fortis is possible through the shares of Fortis (B) in Belgium and Fortis (NL) in the Netherlands. Fortis (B) is listed on the stock exchanges of Brussels, London and Luxembourg. Fortis (NL) is listed in Amsterdam, London and Luxembourg and has a sponsored ADR program in the United States. On March 5, 1999 the combined market capitalization was EUR 38.9 billion (USD 42.2 billion), ranking Fortis as one of Europe’s ten largest financial institutions.

Insurance

Fortis offers a comprehensive range of life and non-life insurance products in Belgium and The Netherlands. The Fortis group’s Belgian insurance companies are the leading group of insurance companies in Belgium based on 1997 gross premiums written. Fortis also offers a range of life and non-life products in the United States with an emphasis on specialty niche areas. In addition, Fortis offers life and non-life products in a number of other countries around the world, including Spain, the United Kingdom, Luxembourg, France, Australia and Singapore.

Banking

Fortis offers a wide range of retail banking, corporate banking, private banking, investment banking and investment management services in Belgium and The Netherlands.

Fortis’ Belgian banking operations consist principally of Generale Bank, Belgium’s largest bank, acquired in June 1998, and ASLK-CGER Bank, Belgium’s fifth largest bank, in each case measured in terms of total assets as of December 31, 1997.

Fortis’ banking operations in The Netherlands consist mainly of the retail banking operations of VSB Bank, the retail and corporate banking operations of Generale Bank Nederland and the specialized investment, corporate and private banking and investment management operations of MeesPierson.

Following the business combination with Generale Bank, Fortis is in the process of integrating all its banking activities into one banking group, Fortis Bank, which will be organized around five business lines: individuals, self-employed and small enterprises; medium-sized and large enterprises and public sector; private banking; asset management; and investment banking and financial markets.

Investment management

Within its banking group’s asset management line of business, Fortis manages most of the investments and funds of its insurance and banking operations and offers a wide range of investment management services to third parties in Belgium, The Netherlands, the United States and Asia.

Strategy

Since its formation in 1990, the prime objective of Fortis has been the creation of sustainable high value for Fortis shareholders. Fortis is a leading international services group, active in banking, insurance and investment management, with strong Benelux roots.

Fortis intends to seek further expansion, developing its strong Benelux platform, on a selective basis, into a European one, while also building a more significant presence , particularly in the US and Asia. In the Benelux, Fortis intends to position itself as a leading provider of integrated financial services, offering retail, corporate and institutional clients a full range of insurance, banking and investment products through a variety of distribution channels. In its other markets, Fortis intends to focus on selective customer segments, product lines and distribution channels.

Profile of Fortis, Inc.

Fortis, Inc., established in 1978, is the holding company through which Fortis provides specialty insurance and investment products to businesses, associations, financial service organizations and individuals in the United States. It owns or manages approximately USD 15 billion in assets and had revenues of more than USD 3.2 billion in 1997. Fortis’ U.S. strategy is to concentrate operations in specialized market segments with leading market positions. Such segments include variable life and annuities, specialized credit insurance, group long term disability insurance and individual and small group health insurance.

Since 1997, Fortis has invested nearly USD 1 billion in acquisitions in the US to strengthen specific market positions. It acquired ACSIA and AdultCare in the long term care market; Insureco, which provides services to financial institutions; Pierce National Life Insurance Company, one of the largest suppliers of pre-need funeral services in the US and Canada; and John Alden Financial Corporation, which through its John Alden Life Insurance Company subsidiary, is a leading provider of small group health and managed care services.

Profile of American Bankers Insurance Group

American Bankers Insurance Group concentrates on marketing affordable, specialty insurance products and services through financial institutions, retailers and other entities offering consumer financing as a regular part of their business. The company, through its insurance subsidiaries, operates in the United States, Canada, the Caribbean, Latin America and the United Kingdom.

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Seinfeld Promotes Double Points

American Express announces a new commercial featuring Jerry Seinfeld designed to promote use of the Card for everyday occasions. The new commercial will debut this week and will continue to run on network, spot and cable television programming including Entertainment Weekly on CNN, 20th Century on The History Channel, The Late Night Movie on TBS. The commercial will air in both 30-second and 60-second versions and will promote a double points promotion* at drug stores nationwide.

In the commercial, Seinfeld provides an amusing and light-hearted view on buying those everyday, unglamorous items found at the drug store.

“American Express is pleased to be part of another creative endeavor with Jerry Seinfeld,” said John Hayes, Executive Vice President of Global Advertising for American Express. “Jerry’s renowned ability to find humor in some of life’s more commonplace experiences continues to help raise awareness of the value of using American Express Cards in everyday situations.”

The commercial is the result of a creative collaboration by Jerry Seinfeld with American Express and its advertising agency, Ogilvy & Mather.

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

* A nationwide promotion that will give double points for spending at supermarkets and drug stores is running now through April 30th. The promotion is open to American Express Cardmembers who have Cards enrolled in the Membership Rewards(R) program, or who have the Delta SkyMiles(R) Credit Card, the American Express(R) Golf Card, the Hilton Optima(R) Card, the New York Knicks Card or the New York Rangers Card.

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