Golden Buckeye Prepaid Tutition

The Ohio Tuition Trust has the perfect solution for children on your holiday shopping list: prepaid college tuition.  It doesn’t need to be assembled, it doesn’t require batteries and it won’t break a week later.  And it is a truly meaningful lasting gift for your special child.

The Ohio Prepaid Tuition Program offers an amazingly affordable gift option.  During the holidays and until the end of January, families can open an account in the Ohio Prepaid Tuition Program for only a $30 enrollment fee — a $20 savings off the standard $50 enrollment fee.  Families enrolling a newborn child can enroll at anytime of the year at a discounted enrollment fee of $25.  Prepaid tuition units can be purchased for only $45.50, or less, depending on the purchase option chosen.

Grandparents can save $10 off the enrollment fee in the Ohio Prepaid Tuition Program with their Golden Buckeye card.  To receive the Golden Buckeye card discount, card members must attach a photocopy of their card to their prepaid tuition contract form.

To give the gift of prepaid tuition to a child not currently enrolled in the program, family and friends can call 1-800-AFFORD-IT (233-6734) to request an enrollment packet for the Ohio Prepaid Tuition Program.  Families and friends can also request and download the enrollment packet at .

“The enrollment packet provides all the information a family needs to immediately open a prepaid tuition account.  We recommend presenting the enrollment packet with a check or money order for the enrollment fee to the family of the child.  The child’s parents can then complete the prepaid tuition contract form needed to start the account.  Prepaid tuition makes a unique and thoughtful gift for a child, especially when combined with a small traditional gift of a toy or book that the child can enjoy more immediately. It’s true that this gift may not be appreciated today as much as the latest toy, but it will provide the child life-long value when he or she enrolls in college,” said Barbara Jennings, executive director for the Tuition Trust.

The 1998-99-enrollment campaign offers Ohio prepaid tuition units at the affordable price of $45.50 or at the autopayment price of $43.50 per unit.  In 1998-99, the average Ohio public university tuition already costs more than $4,300.  Each unit purchased represents 1 percent of future weighted average annual tuition at Ohio public universities.  Families currently enrolled in the prepaid program, and all new families who enroll during this 1998-99 enrollment period, are able to lock in this 1998-99 cost of college throughout this pricing year which lasts until September 30, 1999.  Even further discounting of tuition unit pricing is available depending on the age of the child enrolled and the number of units being purchased at one time.

Although prepaid tuition is valued at the rate of Ohio public university tuitions, tuition units can ultimately be used at any accredited public or private college in the country.  Ohio’s prepaid tuition can also be used for graduate school and room and board costs, offering even greater flexibility of use in the future.

The Ohio Tuition Trust Authority was created by the Ohio General Assembly in 1989 to promote savings for higher education.  Through the Ohio Prepaid Tuition Program, parents can start paying for college tuition and fees while their children are young by purchasing tuition units.  The Ohio Prepaid Tuition Program offers a straight forward, simple, safe and affordable way for families to save for college.  The program currently has more than 73,000 participants and more than $340 million in total assets.  Ohio families can learn more about the Ohio Prepaid Tuition Program or receive an enrollment kit by calling 1-800-AFFORD-IT (233-6734) or by visiting our Web site at .

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Citigroup Expansion

While Citigroup announced yesterday it is cutting more than 10,000 jobs worldwide with more than 3,500 positions to be eliminated in the U.S., the company will nonetheless beef-up its credit card telemarketing unit. Citibank says it will hire 700 telemarketers to fulfill its direct marketing initiatives which are showing significant potential. For example Travelers Property Casualty has sold approximately 3,000 auto and homeowners insurance policies through the call centers servicing Citibank’s card operations. The cross marketing has also spread to other areas. Primerica has opened some 1,000 new Citibank checking accounts through cross-marketing in Las Vegas and Atlanta. Citibank currently has approximately $64 billion in U.S. bank card receivables according to CardData  ([www.carddata.com][1]).

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

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Mobile Product Award

De La Rue, Motorola and Logica’s end to end mobile commerce solution won the Financial Times 1998 Global Telecommunications Award for most innovative mobile product.

The award winning mobile commerce solution comprises of the world’s first dual slot GSM Cellular Phone from Motorola, De La Rue’s SIMphonIC Java powered SIM toolkit smart card and Logica’s m-Commerce(TM) server (1).  The solution will revolutionize consumer ‘lifestyles’ enabling consumers to receive information services, make purchases and download e-cash securely, while on the move.  These services are potentially available to consumers in any of the 100 countries around the world with a GSM mobile phone network.

“We are most honored to receive such a prestigious award,” says Kevin Duffey, group telecommunications director at Logica.  “It reinforces Logica’s commitment to driving the future of mobile commerce and in our prediction that by December 2001, over 6.2 million Americans could be spending over $5.1bn per year via mobile commerce.  The Logica m-Commerce(TM) server software will help make this forecast a reality by allowing any mobile phone to link to any bank or retailer’s information systems.”

“We are delighted that this mobile commerce solution has been recognized as the most innovative mobile product,” says Paul Goode, Business Development Manager, De La Rue Card Systems.  “The award signifies a key milestone in the development of mobile commerce as a real business and consumer proposition where smart card phones will be a vital business and leisure tool for the Millennium.”

“The award positions De La Rue as the leading force in smart card innovation and with its heritage and expertise in both the banking and GSM markets, De La Rue is making  mobile commerce a reality today, bringing greater opportunities, more freedom and greater lifestyle flexibility than ever before imagined.”

Joachim Hoffmann, Director, Mobile Commerce Business, Motorola Cellular Subscriber Group, EMEA, commented: “This award is recognition of the role that mobile commerce will play in the future of communications — and, once again, Motorola is leading the field.  We believe that personal access to smart card services is the key that will ignite the market.  We will continue to develop and deliver solutions, with our partners, to enable a smart future — one fuelled by electronic transactions and driven by user convenience.”

De La Rue, Motorola and Logica are all members of the Global Mobile Commerce Forum — a consortium of over 85 companies from 17 countries working together to deliver the benefits of mobile commerce to consumers worldwide.

About Logica

Logica is a leading provider of business engineered, content-rich solutions primarily for the Energy & Utilities, Telecommunications, Financial Services and Automotive markets.  The company’s expertise is in systems integration, consulting, products and core process out-tasking/applications management.  In collaboration with its partners around the world, Logica helps its clients achieve sustainable, profitable growth, by maximizing the value of their core assets.  Logica’s success is driven by its people, and is delivered through focused industry, process and application expertise enabled by technology.  The company offers its products and services through innovative, flexible business partnerships and measures its success by the impact it has on its clients’ results.

With its North American headquarters in Lexington, MA, Logica has over 850 staff based in North America and offices in Atlanta, Dearborn, Denver, Fort Lauderdale, Houston, Pittsburgh, New Jersey, New York, Oakland, Orlando, San Francisco, St. Louis, Toronto, Washington D.C., and Williamsburg.

Logica plc was founded in London in 1969 and now has offices in 23 countries and over 7,000 employees worldwide.  Today Logica is a leading international computer consultancy, systems integration and software company with clients across diverse markets including finance, telecommunications, energy and utilities, industry, government, defense, transport and space. For the fiscal year ended June 1998, Logica’s revenue was $790 million (473 million pounds sterling).  Logica’s home page can be found at .

About De La Rue

De La Rue Card Systems — part of De La Rue the ‘cash to cards’ group whose 1998 annual turnover was 790.2M pounds — supplies almost 500 million magnetic stripe and microprocessor based smart cards each year.  The world’s leading supplier of VISA and MasterCard products, it specializes in third party card integration and customer solutions for banking, telecoms, PayTV, retail, transport, health and identification markets.  Offering total end-to-end solutions for electronic commerce applications, it also holds manufacturing licenses from Europay, Mondex, Diners Club, APACS (UK Banks), GIE Cartes Bancaires (French Banks), American Express and others.  Its vision is that ‘by 2005, 10% of the world’s population will possess a De La Rue smart card.’

About Motorola

Motorola Cellular Subscriber Group is one of the world’s leading manufacturers of cellular telephones, producing a comprehensive range of cellular subscriber equipment for all the world’s leading cellular standards including NMT, TACS, ETACS, GSM, DCS 1800, TDMA, CDMA and AMPS.  It supplies a complete range of wearable, pocket, mobile, handportable and transportable cellular telephones for analogue and digital cellular systems.

(1) The Logica m-Commerce server(TM) is built on Postilion from Mosaic Software.

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Associates’ Agent Deal

In the largest agent bank program established in the credit card industry, Associates First Capital Corp. announced this morning it has been selected to launch and manage a credit card services program for Washington Mutual Bank, FA.  Under a multi-year agreement, The Associates will market credit card products to approximately 4 million Washington Mutual customers with accounts in more than 800 branches in California, Florida and Texas. The Associates formerly had an agent relationship with Great Western which has since merged with Washington Mutual. Seattle-based Washington Mutual, with $159 billion in assets, operates retail banking networks in Washington, California, Oregon, Idaho, Montana, Texas, Utah and Florida and conducts mortgage lending operations in 29 states. The Associates has approximately 14 million active customers and $10 billion in managed credit card receivables in the U.S.. According to CardData ([www.carddata.com][1]), The Associates’ VISA/MasterCard portfolio, at the end of the 3Q/98, includes: $5,845,634,968 in receivables; 7,844,319 gross accounts, 3,386,272 active accounts and 11,825,776 cards-in-force.

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

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EBT 1999

The EBT Industry Council of the Electronic Funds Transfer Association Tuesday announced that its second annual conference on the future of electronic benefits transfer systems will be held on Nov. 7-9, 1999 in Washington, D.C.

More than 250 delegates attended the 1998 EBT conference, dubbed “EBT — The Next Generations,” said John Pfeuffer, vice president of Citicorp Services Inc., and chairman of the EBT Industry Council.

“This year’s conference was an outstanding success,” said H. Kurt Helwig, executive director of the Electronic Funds Transfer Association. “Our EBT Industry Council looks forward to taking EBT — The Next Generation to an even higher level in 1999.”

EBT — The Next Generation brings government and private industry together to analyze how the latest transaction technologies and applications can be used to deliver government serviced to citizens in the future.

“Surveys showed that our delegates were nearly unanimous in saying that the 1998 conference delivered the EBT information they were looking for,” said Pfeuffer, “and that the conference was worth continuing in 1999.”

Delegates praised the amount of information found in the conference’s 25 sessions, as well as the quality of the presentations, he added.

Delegates to the conference came from 30 states, as well as Puerto Rico, Guam, Quebec, the United Kingdom, and Italy, according to Helwig. Over one dozen companies provided corporate support for the conference.

About the Electronic Funds Transfer Association

The Electronic Funds Transfer Association is the nation’s leading inter-industry trade association dedicated to advanced payment systems and commerce. Now in its third decade, its members include Transaction Network Services Inc., NCR, and virtually all shared ATM networks in the U.S., including HONOR, PULSE EFT Association, and Electronic Payment Services Inc. It can be reached at its web site, [www.efta.org][1].

About the EBT Industry Council

The EBT Industry Council is the longest-standing trade group dealing with the business and policy issues of electronic benefits transfer systems.

Its broad base of membership include equipment manufacturers such as VeriFone Inc., and NCR; EBT transaction processors Buypass and Concord EFS; systems integrators Lockheed Martin and EDS; and consulting companies Benton International Inc., Burger, Carroll & Associates Inc., Chaddsford Planning Associates, and Maximus.

[1]: http://www.efta.org

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FUSA Bonds Rated

First USA Credit Card Master Trust’s $650 million class A 5.36% asset-backed certificates, series 1998-9, are expected to be rated ‘AAA’, and $44.83 million class B 5.66% asset-backed certificates, series 1998-9, are expected to be rated ‘A’ by Fitch IBCA.

Fitch IBCA’s expected ratings are based on the strength of the Visa and MasterCard collateral pool, available credit enhancement, excellent servicing capabilities of First USA Bank, and the solid legal and cash flow structures framing the transaction.

Credit enhancement supporting the class A certificates is derived from the subordination of the class B certificates and excess collateral equal to 13% of the total initial invested amount for each series.  Class B investors are protected from losses by the 6% enhancement of the excess collateral.  The excess collateral represents interests in the trust subordinate in payment rights to class A and class B certificates.

Several economic and credit stress scenarios were devised by Fitch IBCA to determine appropriate credit enhancement levels.  The scenarios simultaneously stress yield, chargeoff, and monthly payment rate steady state assumptions. Under the available enhancement, class A withstands a 30% decrease in yield, a 40% decline in payment rates and chargeoffs increasing to 32% and still makes full and timely payments of investor principal and interest.  Class B sustains a 20% decrease in yield, a 30% decline in payment rates and chargeoffs increasing to 22% without suffering a principal or interest loss.

Class A and class B investors for series 1998-9 will receive monthly interest on the 18th of each month throughout the revolving and accumulation periods and on the scheduled final payment date which is anticipated to be Jan. 20, 2004, provided an early payout event does not occur.  Early amortization of the bonds may result from a deterioration in asset quality, transferor insolvency or servicer default.

Fitch IBCA also expects to affirm its outstanding ratings assigned to the existing master trust series indicating that the issuance of series 1998-9 will not result in a ratings reduction or withdrawal.

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Racom Realigns

Racom Systems, Inc. announced that it is developing a new business strategy focused on licensing Racom’s radio frequency core technologies to the semiconductor and embedded systems markets.

Since its founding in 1991, Racom historically has focused on marketing its advanced ferroelectric memory (FRAM) and RF electromagnetic technologies to the contactless smart card market.

“With smart card industry revenues lagging behind expectations and adverse market conditions persisting, Racom has reviewed its business and concluded that its unique and patented technology offers great potential for the emerging embedded systems marketplace,” says Art Rancis, president and CEO for Racom Systems. “Our goal is to repackage the skills and intellectual property Racom excels in and become a leading licensor of wireless, RF-enabled technologies and services for embedded semiconductor-based applications.”

RACOM’S NEW FOCUS AND STRATEGY

Racom is now extending its generation of RF-based products, tools and services to enable embedded systems and microcontrollers to communicate, store and process data without the need for wire connections. Racom’s experience in developing proven solutions for a wide range of smart card applications positions the company as a technical leader within the RF field. With more than 3.9 billion embedded controllers produced in 1997, and an increased need for devices of all types to transmit and process data via the Internet through wireless technology, Racom has identified the semiconductor and OEM markets as its primary targets.

“Racom has successfully licensed its RF and FRAM technology to industry leaders Rohm, Fujitsu and Hitachi, and we intend to build upon that success during the coming year,” explains Racom’s Rancis. “We will continue to service our existing smart card customers and applications, and offer technical services to industry leaders and partners. Regardless, Racom will clearly focus its efforts on becoming a licensor of leading-edge technologies.”

RACOM RESTRUCTURING

Under Rancis’ direction during the last four months, Racom has been completely restructured and continues to generate revenues from its existing lines of business while preparing for its major re-launch and marketing introduction early in 1999. For instance, the company recently made smart card system sales to ITT Industries, Inc., Berlin, Germany, and Otis Incorporated, Cernusco, Italy. Racom also announced it has signed a manufacturing and marketing partnership with Iris Technologies, the first such agreement reflective of its new outsourcing and licensing strategy. The company’s staff has been reduced with engineering and R&D remaining the primary focus for the company.

“We eliminated staff to reduce overhead and provide the opportunity to re-build the company with experienced personnel to match our new focus,” said Rancis. “We plan to start re-staffing during 1999.”

RACOM ADDITIONAL FINANCING

To carry out its new business strategy, Racom has secured a $350,000 loan on its FRAM RF-ID licensing royalties from Ramtron International, one of its principal stockholders. Racom also is pursuing additional financing from the investment community and hopes to announce further funding during first quarter of 1999.

“We’re pleased to announce much-needed funding in the form of an advance on existing licensing royalties from Ramtron. This allows us to move forward with our re-structuring plan,” says Rancis.

About Racom Systems, Inc.

Racom Systems, Inc., headquartered in Denver, Colorado, develops and markets RF-based technologies that automate transactions for electronic commerce, information technology, physical and logical access control, and industrial automation. Racom solutions provide secure, convenient and personalized access to money, information, property and services. For further information about Racom, its technology and products, contact Racom Systems at its Web address, , by telephone at 303/771-2077, or by fax at 303/771-4708.

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CashSource Certified

M&I Data Services said Tuesday it has certified Diebold’s ‘CashSource Plus 100, 200 and 400’ ATMs. The new ‘CashSource Plus’ ATMs from Diebold are improved low-cost cash dispensers designed for convenience stores, food retailers, gas stations, hotels, drug stores, entertainment and other retail locations. Besides providing consumers with quick access to cash, the machines dispense coupons, postage stamps, pre-paid phone vouchers or other revenue-generating items. The Diebold ‘CashSource Plus’ ATMs will interface to M&I Data Services via dial-up technology and the current release of ACI’s ‘Base 24’ software.

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NBS 3Q

NBS Technologies Inc. reported Tuesday its results for the fourth quarter and the year ended September 30, 1998.

During 1998, NBS significantly strengthened its financial position through the disposition of two subsidiary companies that were not integral to position the Company for growth in the emerging electronic commerce market.

For the year ended September 30, 1998, net income was $11.4 million ($0.38 per share) compared to $3.5 million ($0.12 per share) in the previous year. The Company disposed of two subsidiary companies for net proceeds of $26.2 million resulting in a gain from the sale of these companies of $11.4 million. The net proceeds were used to reduce term bank debt and working capital facilities. Income before discontinued operations for the year ended September 30, 1998, was $2.2 million ($0.07 per share) compared to $4.2 million ($0.14 per share) in the previous year.

For the quarter ended September 30, 1998, net income was $8.5 million ($0.28 per share) compared to $2.1 million ($0.07 per share). This quarter includes a gain of $8.4 million from the sale of NBS Imaging Systems. Income before discontinued operations for the quarter ended September 30, 1998, was $1.6 million ($0.05 per share) compared to $2.1 million ($0.07 per share) in the prior year.

“The divestiture of NBS Imaging Systems together with the sale of the card production facility in the United Kingdom, allows NBS to focus both financial and human resources on developing the new applications, technologies and expertise required to support the Company’s position as a full service provider of card services, card issuance solutions, transaction solutions and related services,” commented Ken Kivenko, President & CEO.

Recent Highlights include:

– Introduction of MagCheck(R), a certification process developed by NBS that leads to longer card life and reduces the number of credit and debit card failures at point of sale

– Sale of two NBS Horizon(TM) card issuance systems with high-speed smart card personalization and initialization modules to a European customer

– In October, Opticheck(TM), a new innovative card inspection system designed and manufactured by NBS, was unveiled at the International Card Manufacturer’s Association Expo in San Francisco

– Development of a new cost-effective PinPad for processing debit transactions in the US market that is “plug-and-play” with competitors’ terminal

– This month Canada Trust introduced the first environmentally friendly biodegradable credit card in Canada which was produced by NBS using proprietary processes

Outlook

The outlook for NBS and the markets it competes in remains positive. The financial market, in particular, is providing new opportunities resulting from recent bank mergers in the United States, and shorter card life until Year 2000 concerns are alleviated. The Company is at the beginning of an exciting new era, where the use of card-based products and solutions will greatly speed and simplify the way individuals around the world handle many aspects of their personal and financial affairs. Although NBS faces increased competition in the markets served, it is optimistic about its ability to continue to provide competitive products and services to the markets in which it operates as well as to new markets. To achieve its growth objectives, NBS will continue to build strong relationships with customers and business partners, focus on niche markets with innovative, high quality, cost effective products and services and rapidly expand into international markets.

NBS Technologies Inc. is a multinational company that designs, manufactures and markets an integrated line of card, card issuance, identification and point-of-sale products, services and software. Customers, who cover a wide range of market segments and applications, include financial institutions, retailers, government agencies, and healthcare organizations. The Company is a Toronto-based public company that sells to customers in over 85 countries through facilities located in Canada, the United States and the United Kingdom.

Consolidated Statement of Operations and Deficit

          
                       Three Months              Year
                          Ended                  Ended
                        September 30,         September 30,
(in thousands of
  Canadian dollars)    1998       1997       1998       1997
————————————————————–
                 (Unaudited)  (Unaudited)

Sales             $ 31,036     $ 27,264    $106,562   $100,236
Cost of sales       18,753       17,207      66,948     62,455
—————————————————————
Gross profit        12,283       10,057      39,614     37,781
—————————————————————
Expenses
Selling, general
  and administrative 7,357        5,829      23,796     21,290
Research and
  development        1,692          325       6,453      5,139
Depreciation and
  amortization         882          733       3,662      3,157
—————————————————————
                     9,931        6,887      33,911     29,586
—————————————————————
Income before
undernoted items    2,352        3,170       5,703      8,195
Interest expense       543          861       2,981      3,287
—————————————————————
Income before income
taxes               1,809        2,309       2,722      4,908
Income taxes           220          166         550        757
—————————————————————
Income before
discontinued
operations          1,589        2,143       2,172      4,151
Gain on sale of
subsidiary
companies           8,400            –      11,391          –
Losses of
discontinued
operations         (1,457)         (84)     (2,170)      (626)
—————————————————————
                     6,943          (84)      9,221       (626)
—————————————————————
Net income for the

period              8,532        2,059      11,393      3,525
Deficit, beginning
of period         101,172      106,092     104,033    107,558
—————————————————————
Deficit, end of
period           $ 92,640     $104,033    $ 92,640   $104,033
—————————————————————
—————————————————————

Income before
discontinued
operations
  – basic and fully
    diluted          $0.05        $0.07       $0.07      $0.14
Net income per
share
– basic and fully
   diluted           $0.28        $0.07       $0.38      $0.12
—————————————————————
Weighted average
common shares
outstanding
(thousands)        29,981       29,981      29,981     29,981
—————————————————————
—————————————————————

Consolidated Balance Sheets
as at September 30,
(in thousands of Canadian dollars)          1998         1997
—————————————————————
ASSETS
Current
Accounts receivable                      $19,064      $15,147
Inventories                               10,006       10,030
Prepaid expenses and deposits                697          803
—————————————————————
                                           29,767       25,980
Capital assets                             15,001       15,804
Other assets                                1,267        2,806
Assets of discontinued operations               –       22,551
—————————————————————
                                          $46,035      $67,141

—————————————————————
—————————————————————
LIABILITIES
Current
Bank indebtedness                        $ 7,565      $14,875
Accounts payable and accrued liabilities  24,441       18,910
Deferred revenue                           2,507        2,156
Current portion of long-term debt          4,738        9,475
—————————————————————
                                           39,251       45,416
 
Long-term debt                              8,712       24,378
Liabilities of discontinued operations          –       10,668
—————————————————————
                                           47,963       80,462
—————————————————————
SHAREHOLDERS’ DEFICIENCY
Capital Stock                              90,712       90,712
Deficit                                   (92,640)    (104,033)
—————————————————————
                                           (1,928)     (13,321)
—————————————————————
                                          $46,035      $67,141
—————————————————————
—————————————————————

Consolidated Statement of Changes in Financial Position

                                                Year Ended
                                               September 30,
(in thousands of Canadian dollars)           1998        1997
—————————————————————
OPERATING ACTIVITIES
Income before discontinued operations    $  2,172      $ 4,151
Depreciation and amortization               3,662        3,157
Amortization of deferred financing costs      204          231
Change in non-cash working capital         (1,154)        (878)
—————————————————————
                                            4,884        6,661
—————————————————————
INVESTING ACTIVITIES
Purchase of capital assets, net of
disposals                                 (2,859)      (3,404)
Additions to other assets                       –       (1,989)
—————————————————————
                                           (2,859)      (5,393)
—————————————————————
FINANCING ACTIVITIES
Proceeds on sale of subsidiary companies   26,245            –
Issuance of long-term debt                    381            –
Repayment of long-term debt               (20,922)     (11,025)
—————————————————————
                                            5,704      (11,025)
—————————————————————
Cash (used in) provided from discontinued
operations                                  (419)       3,088
—————————————————————
Increase (decrease) in cash during year     7,310       (6,669)
Bank indebtedness at beginning of year    (14,875)      (8,206)
—————————————————————
Bank indebtedness at end of year         ($ 7,565)    ($14,875)
—————————————————————
—————————————————————

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GE  Proc  Deal

One day after announcing its partnership with First USA, GE Capital announced Tuesday it is switching processors. First Data Resources will now provide card processing and other portfolio systems services for GE Capital’s card services in the U.S. GE currently uses Total System Services and handles some processing in-house. Terms of yesterday’s FDR agreement were not disclosed. First Data called the contract “a monumental win”. GE says FDR provides the “right mix of products and services to help its retail partners with incremental sales and customer loyalty”. In the U.S., GE currently has an estimated $18 billion in retail card receivables and $4.5 billion in bank card receivables according to CardData ([www.carddata.com][1]). GE has about a 20 million consumer customer base in the U.S.

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

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TD Signs GPS

Global Payment Systems announced Tuesday an agreement to provide cardholder processing services for The Toronto-Dominion Bank.  Under the terms of the agreement, GPS will supply a variety of credit card issuing services for TD Bank and its U.S. subsidiary, Waterhouse National Bank of New York. Global’s services to TD Bank will include authorization and clearing, statement production and exception processing. Global will also manage the TD Bank ‘U. S. Dollar Advantage VISA’ card portfolio, as well as continue to manage processing for the Waterhouse National Bank card portfolio. The TD Bank ‘U.S. Dollar Advantage VISA’ card is designed for Canadian residents who travel frequently to the United States.

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Fee Frenzy

While promotional credit card pricing continues to reach historical lows, card issuers are continuing to jack-up back-end fees and pump-up punitive interest rates. Other yield tweaking includes the use of the two-cycle interest calculation method, the use of a daily periodic rate to compound interest charges, shortening of grace periods and the creation of new fees. According to the upcoming January issue of CardTrak ([www.cardtrak.com][1]), credit card fee income has grown 79% over the past two years while interest income has only increased by 9.8%. The growth in fee income is linked to higher late fees and over-limit fees. According to CardData ([www.carddata.com][2]) late payment fees have soared 58% over the past 24 months, from an average of $13.88 to $21.94. Among the top ten issuers late payment fees now average $26.10. Industry-wide, over-limit fees now average $21.02, up 53% since Nov. 96. Among the top 10 issuers, over-limit fees now average $25.70. Some issuers are imposing fees for closing an account, not using an account for at least six months and for customer service.

     FEE  INCOME                    INTEREST INCOME 
1998:  $17.9B  (+20.9%)          1998:  $57.4B   (+8.0%)
1997:  $14.8B  (+48.0%)          1997:  $53.1B   (+1.5%)
1996:  $10.0B  (+20.5%)          1996:  $52.3B  (+23.9%)
1995:  $ 8.3B  (+13.7%)          1995:  $42.2B  (+21.3%)
1994   $ 7.3B      NA            1994:  $34.8B      NA
  Source: CardTrak (www.cardtrak.com) and CardData
   (www.carddata.com) both services of CardWeb, Inc.

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

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