Free-For-All

MA-based International Data Corp. predicted yesterday that sales of Internet banking applications will soar 250% this year. IDC says Internet banking applications are quickly becoming the panacea for banks hoping to increase their market share and retain customers.  An IDC bulletin, released last night, shows that sales of these applications topped $93 million in 1998 and will jump to over $326 million in 1999. The report said more than 1,200 banks and credit unions in the U.S. signed with online banking applications vendors and providers to build fully transactional Web sites in 1998. This year 7,200 more financial institutions will acquire online banking applications. By the year 2000, IDC expects Internet banking applications to account for almost one-third of the overall U.S. banking applications market.

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Crackdown

National Consumer Protection Week received a major publicity boost yesterday as the Federal Trade Commission and National Association of Attorneys General announced that 17 law enforcement agencies have filed 43 law enforcement actions against defendants who claim to help consumers obtain new credit histories through new identification numbers, a practice known as “file segregation.” The suspect firms sell instructions about how consumers can substitute federally-issued, nine-digit employee identification numbers or taxpayer identification numbers for social security numbers and use them illegally to build new credit profiles. For fees ranging from $29.95 to $200.00, the companies offer to sell consumers the instructions they need to apply to the Internal Revenue Service for employer or taxpayer identification numbers. The FTC also noted yesterday that the Internet has enabled this scam to spread far and wide. For more information on National Consumer Protecton Week visit CardTrak ([www.cardtrak.com][1]).

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

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SmartDisk Attracts Japanese Investors

SmartDisk Corporation, a company focused on providing simple, innovative solutions that advance and enhance the use of miniature media and smart cards, announced that Rohm Company, Ltd. and Yamaichi Electronics Company, Ltd. have made investments in the company and become its strategic partners.

Rohm will provide ASIC (application specific integrated circuit) design expertise needed for the small form factor devices that are part of SmartDisk’s product line. Yamaichi will provide the high volume manufacturing capability needed to support SmartDisk’s products.

“When electronics leaders such as Rohm and Yamaichi make a commitment to participate in our business, it underscores the viability of SmartDisk’s unique patented technology and the growing importance of the flash memory and smart card arenas,” said Addison M. Fischer, Chairman, SmartDisk Corporation. “We look forward to long and rewarding relationships with both Rohm and Yamaichi.”

About FlashPath(TM)

FlashPath(TM) has the same physical dimensions as a 3.5 inch floppy disk, and includes a slot in which a Toshiba SmartMedia(TM) card can be inserted. FlashPath fits directly into and works from the 3.5 inch floppy disk drive found on most PCs, quickly and easily uploading digital images, audio clips and data from the SmartMedia card onto the PC for editing and transport. FlashPath provides SmartMedia with a decisive advantage over other portable storage media because it can be used with various PCs, including portable and desktop computers, without the need for special cards, external connections or interfaces. FlashPath is expected to accelerate further development of the digital still camera market and to significantly expand the use of SmartMedia for other purposes including audio applications and general data storage.

About Smarty(TM)

The Smarty(TM) smart card reader/writer acts as a bridge between a smart card and a PC. Smarty has the same dimensions as a 3.5 inch floppy disk and includes a slot into which a smart card can be inserted. To use it, one simply inserts a smart card into the slot and slips Smarty into a PC’s floppy drive. Increasing use of smart cards in Asia, Europe and the U.S. is fueling a need for a versatile, economical card reader. Smarty fulfills this need, supporting electronic commerce, banking, health care, and government applications, and the high-level security that such transactions require including access control, network authentication and data certification.

About Rohm Company, Ltd.

Rohm Company, Ltd. is engaged in the development and manufacturing of various types of semiconductors. In the field of monolithic integrated circuits (ICs), Rohm specializes in the development of application specific custom ICs, which are widely used in PCs, networks, communications and multimedia. In the field of devices, Rohm has manufacturing capability in deep submicron complementary metal oxide semiconductors (CMOS), bipolar CMOS (BiCMOS) and bipolar process technologies, and is capable of applying its diverse capabilities to specific application requirements. In addition, Rohm has advanced technical capability in developing nonvolatile memory devices as it owns the basic patents of flash memory structures and unique high reliability electrically erasable programmable read only memory (EEPROM) cell structures. For additional information, visit Rohm’s web site: [www.rohm.com][1].

About Yamaichi Electronics Company, Ltd.

Yamaichi was established in 1956 in Tokyo as a supplier of high performance interconnection devices. In order to produce Yamaichi’s very high precision, fine pitch sockets and connectors with consistent quality, the company’s manufacturing facilities use the latest in automated production and assembly equipment. With over 2,000 employees, including 110 engineers and a total of 250,000 square feet of manufacturing space, including plants in the Philippines, Korea and China, Yamaichi can provide its customers with custom or conventional products with the most favorable combination of price, quality and delivery.

About SmartDisk Corporation

SmartDisk Corporation is the provider of patented solutions for reading and writing to flash memory cards, smart cards and other miniature storage media. These solutions take the form factor of a 3.5-inch floppy disk, therefore transforming the floppy disk drive of the personal computer to enable new applications. The market for SmartDisk’s solutions is the installed base of 300 million personal computers that work with the 3.5-inch floppy disk drive. SmartDisk Corporation was formed to capitalize on the growth of digital applications. For more information, go to [www.smartdisk.com][2].

[1]: http://www.rohm.com
[2]: http://www.smartdisk.com

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AmEx Beefs-Up European Service

Tower Technology, Inc., announced that American Express has chosen Tower Technology’s case management solutions for American Express customer service operations across Europe. The advanced case management system, which will be headquartered in Brighton, England, will allow American Express to provide improved customer service across Europe.

The system, designed and implemented by Tower Technology and Staffware Corporation, integrates document imaging and case management to process all incoming documents, facsimiles, e-mail and telephone calls from American Express merchants throughout Europe. Through the use of sophisticated workflows, the system will automate many existing manual processes and eliminate the majority of paper documents that American Express customer service representatives handle. It will be fully operational later this month.

“This is an exciting development which will deliver state-of-the-art-technology to the Operations Group, increasing productivity by more than 30 per cent and resulting in improved customer service,” said Michael Whyte, Vice President of Re-engineering at American Express. “The introduction of this type of technology directly supports the American Express mission to deliver `Best in Class’ service to its customers and achieve the fastest possible time to market for new products and services.”

“Our technology lends itself to rapid deployment against tight schedules and we were able to demonstrate this to American Express,” said Damian Hyland, Managing Director of Tower Technology. “Naturally, we are very pleased to be working with an organization like American Express which has built its business on outstanding customer service.”

About Tower Technology

Tower Technology is a privately held company established in 1987 in Sydney, Australia. It is a worldwide leader in delivering award-winning, high-volume, production imaging, case management and integrated document management solutions. Tower Technology has a proven track record of providing mission-critical solutions on time and on budget. Many of the world’s largest imaging and document management systems, some of which have hundreds of millions of objects on-line, are powered by Tower Technology. Tower Technology supports customers around the world and has offices in the U.S., Australia and Europe. For more information on Tower Technology and Tower IDM, contact Tower Technology at 617-236-5500, e-mail: [inquiry@towertech.com][1] or visit the web site at [www.towertechnology.com][2].

[1]: mailto:inquiry@towertech.com
[2]: http://www.towertechnology.com

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Diners Award

‘Club Rewards’ by Diners Club won coveted honors for the second consecutive year, by being awarded the prestigious ‘1998 Freddie Award’ for the “Best Frequent Traveler Affinity Charge/Credit Card” by the readers of InsideFlyer magazine. In addition to being named the favorite program of the year, voters also awarded Diners Club a 9.3605 out of a possible 10 in terms of value delivered. More than 82,480 frequent flyers determined the winners by written or on-line ballots. On average, the voters belong to seven loyalty programs.

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BAMS 4Q

BA Merchant Services, Inc. reported yesterday it processed 205 million transactions in the fourth quarter for a total of 714 million for all of 1998. BAMS processed 531 million in 1997. Total annual sales volume grew from $33.9 billion to $41.5 billion last year. However net income dropped for the fourth quarter due to charges for BAMS pending merger with BankAmerica Corp. On Dec. 22 BankAmerica and BAMS signed a definitive merger agreement in which Bank of America will acquire all of the publicly held Class A shares.

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Charge-Offs Sink

Credit card charge-offs reported in January for the December collection period fell 27 basis points to 6.00%, sinking to its lowest level since Jan. 1997, and well below January 1998’s level of 6.84%. According to Fitch IBCA’s ‘Credit Card Performance Indexes’, all five key measures registered better results versus month- and year-earlier comparisons. For example, the Fitch IBCA ’60+ Day Delinquency Index’ fell 11 basis points to 3.15% and is significantly below the 3.62% level from a year ago. Performance of portfolio yields and total monthly payment rates increased from the prior month, and rose moderately from year-ago levels of 19.45% and 15.21% to 19.57% and 15.62%, respectively. Fitch also noted that the three-month excess spread rebounded to 5.34% from 5.15% last month–a level not experienced since Oct. 1994. The Fitch IBCA index is based on the performance of $185 billion in credit card-backed securities. According to preliminary figures produced by CardData ([www.carddata.com][1]), end-of-year receivables for the industry were about $450 billion.

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

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Duncan to iMALL Board

iMALL, Inc. announced that John F. Duncan, age 37, has been elected to the iMALL board of directors.

Duncan is executive vice president, Business Development of First Data Merchant Services Corp., a wholly owned subsidiary of First Data Corp. (NYSE:FDC). This move increases the size of the iMALL board to eight.

“The addition of John Duncan to our Board of Directors further enhances our prominence as an e-commerce company,” stated Richard Rosenblatt, chairman and chief executive officer of iMALL. “John’s wealth of direct experience in our sector, both from his ongoing tenure with our partner, First Data Merchant Services, and his prior work with MasterCard International will provide iMALL with strong strategic counsel going forward.”

Duncan’s recent responsibilities at First Data Merchant Services (FDMS) have focused on Internet commerce opportunities, including membership on FDMS’ e-commerce steering committee. Since joining FDMS in 1994, Duncan has directed efforts including the introduction of Internet product offerings, the formation of e-commerce alliances and the development and implementation of FDMS’ marketing and branding strategies.

Duncan also led FDMS as it forged strategic partnerships with Fortune 500 companies including Chase Manhattan Bank and Wal-Mart. Prior to FDMS, Duncan was vice president, Emerging Markets at MasterCard International and vice president, Merchant Services at Citicorp. Duncan received an undergraduate degree in Marketing and an MBA in Finance from Hofstra University.

On Nov. 2, 1998 iMALL and FDMS agreed to provide a full array of Internet commerce solutions to FDMS’ clients and their merchant businesses. Under terms of the ten-year agreement, FDMS and iMALL will jointly market turnkey solutions providing comprehensive Internet services including storefront design and building, site hosting, payment-enabling electronic commerce functionality and online merchant application processing.

As part of the agreement, FDMS took an equity interest in iMALL and gained preferred-provider marketing rights relating to iMALL’s shopping portal Stuff.com ([www.stuff.com][1]).

About iMALL

iMALL (Nasdaq:IMAL), a pioneer in electronic commerce services, enables and supports small and medium-sized businesses in their effort to cost effectively engage in electronic commerce through the use of iMALL’s proprietary e-commerce tools and services. iMALL offers its e-commerce services directly to merchants, as well as through partnerships with leading ISPs, Web hosting firms and financial service companies with an Internet focus.

The company operates the largest shopping mall on the Internet, located at www.imall.com, as well as the mall at animalhouse.com, the most popular destination on the Internet among college students. iMALL recently launched an innovative shopping portal and powerful product-level search engine, Stuff.com(SM), “The best place to buy Stuff(SM)” and “The best place to sell Stuff(SM).”

About First Data Merchant Services

First Data Merchant Services Corp. (FDMS), a wholly owned subsidiary of First Data Corp. (NYSE: FDC), is one of the nation’s leading providers of electronic commerce solutions for hundreds of financial institutions and nearly 2 million businesses.

FDMS offers a full range of processing solutions including credit, debit, check and pre-paid payments, along with value-added information and Internet-based services. For further information, visit [http://www.firstdata.com.][2]

[1]: http://www.stuff.com
[2]: http://www.firstdata.com

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Hypercom Enters Germany

Hypercom, a global provider of electronic payment solutions, announced Tuesday that it is expanding its European presence and is entering the German payments market.

Hypercom has selected INTERNET A.G., a respected German payments technology solution provider as a distributor to introduce Hypercom’s end-to-end payment solutions to banks, third-party processors and merchants in Germany. Hypercom’s entry into the German payment market extends the number of European countries Hypercom now operates in to 12, and more than 60 countries worldwide.

Rob Meli, Managing Director of Hypercom Europe commented: “We are pleased to announce the availability of Hypercom’s point-of-sale electronic payment solutions to Germany’s business community and delighted that INTERNET A.G. will be distributing our products. INTERNET A.G. has been supporting point-of-sale terminals, providing telemarketing in-and outbound services, and help desk and installation services. This highly-respected distributor has the logistical and technical expertise and market awareness to bring Hypercom’s innovative solutions to the German marketplace.”

INTERNET A.G. will sell and support Hypercom’s end-to-end family of electronic payment products, including the company’s ICE interactive touch-screen, consumer-operated point-of-sale (POS) terminals, networking systems and the Ascendent(TM) family of payment and data transaction processing and Internet payment software.

Hypercom’s recently-announced ICE 5000 terminal is the first multi-function touch-screen smart card terminal with integrated high security PIN Pad, FastPOS 9600 baud modem, electronic signature capture, high-speed thermal printer and automated paper cutter. The intuitive touch-screen simplifies operations, reduces training costs and allows banks to quickly deploy new payment applications.

“The need to offer new payment services, limit fraud, lower transaction costs and differentiate service offerings is leading German banks to develop new card-based payment systems and expand the number of POS terminals. In comparison to France and the UK, Germany has far fewer terminals and that represents significant opportunities and benefits for payment solution providers and users alike,” according to Rob Meli.

“It’s not just the potential for traditional payment locations that excites us about the German market, but also the rapid development of virtual shopping,” continued Mr. Rob Meli. “The payment options and loyalty programs that are now available on main street also have to be accessible to the Internet shopper. We have chosen INTERNET A.G. because of their experience in this area. They are ideally-positioned to support payment transactions over the Internet with Hypercom’s Ascendent Internet Commerce solutions.”

Andrew Tiedeman, the Managing Director of INTERNET A.G., comments: “Hypercom brings both state-of-the-art payment technology and global experience to the German POS market. German banks, retailers and third-party processors will be able to gain differentiation and business advantages by adopting these new payment solutions.”

About Hypercom Corporation

Hypercom (NYSE: HYC) is a global provider of electronic payment solutions, including innovative point-of-sale terminals, network products and Ascendent transaction processing software solutions. On a global basis Hypercom delivers the services and technology infrastructure required to quickly integrate and deploy new payment and added value applications to improve business performance and lower total cost of ownership.

Headquartered in Phoenix, Arizona, USA. Hypercom markets its products on all continents, with installations in over 60 countries. European sales and support offices are located in the United Kingdom, Hungary and Russia. In addition local EMEA distributors have been appointed in Poland, Romania, the Baltic States, Ukraine, Yugoslavia, Russia, Turkey, Cyprus, Greece, Mauritius, Egypt, Kenya, Ghana, Bahrain, Jordan, Israel and South Africa. Further information on Hypercom and its products can be found at [www.Hypercom.com][1]

About INTERNET A.G.

INTERNET A.G. was founded in 1994 and is located in Frankfurt, Germany. A Full Solution Provider, the company offers a variety of custom-made solutions ranging from Internet Access, Firewall Systems, Network Solutions, Web Storefront Development, through to Electronic Commerce and Payment on the Internet. Through its Electronic Commerce Competence Center, Internet A.G. promotes, implements and supports all payment solutions that prove beneficial to client merchant by defining the business requirements for customers, technical implementation and providing support. INTERNET A.G. has offices in Frankfurt, Hamburg, Weinheim and Munich. Further information about the company and its products can be found at .

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

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FreeBill Released

Businesses will now be able to offer their customers the convenience of receiving and paying bills via direct e-mail because of an electronic billing breakthrough developed by Brinkman Technologies, Inc. (BTI).  BTI’s FreeBill system offers businesses and government agencies an in-house alternative to the expensive “third party toll-way” model currently in existence, benefiting businesses and consumers with no transaction fees and more control over the bill payment process.

Using their existing e-mail service, consumers will receive billing statements directly from their vendor as an e-mail attachment.  To pay the bill, consumers will simply click on a hyperlink to their online billing statement, where they will be able to select from several payment options. With FreeBill, the biller now has the ability to process the payment on the date specified by the customer without third-party intervention or the need to hold an account at a participating financial institution.  This process marks a revolutionary shift in an industry dependent upon such companies since the inception of the electronic bill payment.

With lower front-end costs, no ongoing transaction fees, and complete in- house control over their electronic billing system, this new bill presentment and payment model will attract businesses that previously found the cost of electronic billing prohibitive.  The current electronic billing model requires businesses to make a substantial up-front investment and pay ongoing transaction fees for the privilege of using a third party processor (such as CheckFree and TransPoint) to send billing information, debit the customers’ bank accounts and collect payments.  FreeBill allows companies to automate this process and keep total in-house control over their billing systems and customer data.  The system converts the current flow of paper bills and checks into electronic media.

“Technology should make our lives easier and businesses more efficient, therefore reducing costs to businesses and consumers,” said Mark Brinkman, BTI president.  “Unlike the current electronic billing model, FreeBill allows businesses to keep their customer data private and avoid ongoing transaction fees that would eventually be passed on to the consumer.  The bottom line benefits are the cost savings and enhanced security for consumers, making FreeBill a superior choice for businesses.”

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Wards Bankruptcy

Montgomery Ward & Co. said Monday it will emerge from Chapter 11 bankruptcy protection in mid 1999 as a result of an agreement reached with Wards’ Creditors’ Committee. As a first step in the agreement, GE Capital, a major creditor, is to acquire The Signature Group, the profitable direct marketing arm of Wards which was not part of the retailer’s general bankruptcy filing.  Wards will then place a sum in a fund to settle court-approved pre-bankruptcy unsecured claims of creditors other than GE Capital.  GE Capital and Wards management will receive the equity in the reorganized retailer. In the last 18 months, Wards closed more than 100 under-performing stores.

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