Pascarella Award

Mr. Carl Pascarella, President and CEO of Visa U.S.A. received this weekend the Special Achievement Award in Business from the National Italian American Foundation (NIAF).  Pascarella was among seven honorees at the 1998 NIAF annual gala dinner in Washington, D.C.

“There are so many Italian-American businessmen and women whom I admire greatly, I am honored to be singled out for this year’s NIAF special achievement award in business,” Pascarella said.  Pascarella, who is the grandson of Italian immigrants, was presented with the award by Mr. Lawrence Auriana, Chairman of the Kaufmann Fund.

The National Italian American Foundation began the Special Achievement Award program in 1976 to recognize the positive contributions of Italian Americans in a variety of fields, including business, literature, sports, entertainment and humanitarian service.  Other honorees at this year’s NIAF awards event included:

* Angelo Mozilo, Chairman and CEO, Countrywide Home Loans Special Achievement Award for Humanitarian Service

* Gay Talese Special Achievement Award in Literature

* Leonard Riggio, Chairman and CEO, Barnes & Noble Special Achievement for the Promotion of Literacy

* Tommy Lasorda Lifetime Achievement Award in Sports

* Anjelica Huston Special Achievement Award in Entertainment

* Barbara Sinatra The NIAF Hope for Children Award

Carl Pascarella was named president and chief executive officer of Visa U.S.A. in 1993.  Before assuming his current position, Pascarella was president of Visa International’s Asia-Pacific region and director of the Asia-Pacific Regional Board of Visa.

As the world’s best way to pay, Visa is the preferred payment brand and the largest consumer payment system worldwide with more volume than all other major payment cards combined.  Visa plays a pivotal role in advancing new payment products and technologies to benefit its 21,000 member financial institutions, their cardholders and the global economy.   As the leader in emerging technologies, Visa has more than 70 smart card programs in 31 countries and on the Internet, with 22 million Visa chip cards, including 8 million Visa Cash cards.  Visa is pioneering SET Secure Electronic Transaction programs to enable and advance Internet commerce.  Visa’s 642 million cards, generating more than US$1 trillion in annual volume, are accepted at over 15 million worldwide locations, including more than 400,000 ATMs in the Visa Global ATM Network.  Visa’s Internet address is .

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FUSA Free Ship

First USA is offering free shipping and handling for items purchased from a variety of premier catalogs. First USA will promote its credit cards as “The Card That Ships It For Free”. Participating catalogs include The Company Store, Harold’s, JCPenney “Best Gifts” Catalog, Omaha Steaks and Orvis. The offer is good for purchases made from 16 select catalogs by December 31. In order to take advantage of the free shipping offer, First USA and Bank One cardholders must use the appropriate purchase codes when the order is placed with the catalog company. Purchase codes can be obtained from First USA Customer Service. The free shipping and handling program covers standard delivery only. First USA will offer the new service to its 1,300 affinity and co-branded programs.

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Mondex Chile

Chile’s six leading banks announced Thursday the purchase of the franchise rights for Mondex electronic cash in Chile using the ‘MULTOS’ operating system. The franchise gives the banks: Banco de A.Edwards, Banco de Chile, Banco de Credito e Inversiones, Banco Santiago, Banco Sud Americano and Banco Santander, exclusive rights to commercially develop Mondex electronic cash in Chile and represents a major step both in Mondex’s roll-out plans across South America following the recent sale of franchises in Central America and Uruguay. The franchisees will use ‘MULTOS’ to develop electronic cash, debit and credit functions on a single card, in addition to a range of public and private sector services such as loyalty programs and electronic ticketing. Mondex projects it could have more than two million smart cardholders in Chile.

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Hypercom Revival

Hypercom’s stock rose sharply yesterday after release of it latest earnings report. While total revenues and net income remained significantly below last year the company did meet its expected earnings. The company says going into the quarter, it was aware of the three items that caused earnings per share to decline from last year. First, last year’s same quarter revenues included a one-time increase of $10 million associated with shipments made in the first quarter a year ago that were delayed from the 1997 fourth quarter, due to the startup of Hypercom’s manufacturing facility in Brazil. The second item is the Asian economic crisis which caused revenues there to decline 44%. Thirdly, the continued investment in new product development resulted in an increase of more than $3 million in research & development expense. Hypercom also said yesterday that the major challenge has been to reverse the losses posted in the company’s ‘Network Systems’ business unit. Hypercom Network Systems broke even this quarter.

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NPC Commission Express

National Processing Co. is providing travel agencies with a new global service that electronically converts commission payments from one currency to the home currency of the travel agency, eliminating costly bank conversion fees.

This enhanced service to NPC Commission Express is provided at no charge to the travel agency.

NPC developed the new service, NPC Global Payment Network, with National City Corporation, its majority stockholder, and Deutsche Bank, the second largest bank in Europe.

With NPC’s Global Payment Network’s electronic deposit and NPC’s new Internet travel commission data reporting system — PortNPC.com — travel agencies that operate in 17 countries for the first time will be able to process commission payments and reports without paper. Those countries include the United States, Canada, and most European nations with near term expansion to Pacific Rim countries.

NPC Global Payment Network operates in conjunction with NPC Commission Express, a commission processing service that allows travel vendors, including hotels, cruise lines, car rental companies and others, to consolidate numerous commissions for travel agents into single,  weekly payments.  NPC Global Payment Network then ensures the commissions are paid to travel agencies in the appropriate currency.

“This provides significant savings for travel agencies.  In some cases, travel agencies can’t afford to cash a commission check because bank conversion fees amount to more than the commission itself.  This service converts the currency free,” said Tom Turi, NPC Senior Vice President.

A free electronic deposit option of NPC Global Payment Network provides travel agencies further savings and increased cash flow with timely access to their hard-earned commissions.

“They don’t have to wait for the mail service from country to country to deliver the payments with NPC Global Payment Network’s free electronic deposit option,” Turi said.  “The travel industry has worldwide breadth and to compete effectively, companies must be able to process efficiently from a cost and speed standpoint.  Our Global Payment Network makes that possible.”

Turi said that Deutsche Bank and National City were ideally suited to participate in the development of NPC Global Payment Network.

“We chose Deutsche Bank as a partner because of its global presence and willingness to co-develop this service so needed by the travel industry. Through Deutsche Bank and National City, we offer check and electronic deposit.  Today we operate in 26 currencies and have the ability to provide immediate access in 17 currencies through electronic deposit.  Additional currencies are being added on a regular basis.”

NPC is a leading provider of processing services for the travel industry, handling 402 million travel-related transactions annually that total $72.8 billion.  Each week, NPC processes $1 billion in airline tickets.  All airline tickets sold by travel agents are processed by NPC, which serves 147 airlines and 47,000 travel agents.

NPC is the operating company of National Processing, Inc. and is a leading provider of transaction processing services and customized processing solutions. Deploying technology and applications software, NPC provides products and value-added services which include processing of card and check transactions for merchants, outsourcing of administrative and financial functions, and ticket processing and settlement for providers of travel-related services. Approximately 88 percent of NPC is owned by National City Corporation.

The Deutsche Bank Group, headquartered in Frankfurt, Germany, is one of the world’s largest financial institutions with total assets exceeding $1.2 trillion. The group has about 2,300 offices in more than 50 countries and employs about 75,000 people.

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InstaBuy Boost

CyberCash and First USA are teaming up to offer merchants and consumers the new ‘InstaBuy Service’ developed by CyberCash. ‘InstaBuy’, which is built on CyberCash’s new ‘Agile Wallet Platform’, makes online shopping easier and more convenient for merchants and consumers by providing one-click shopping at any online merchant site using the ‘InstaBuy’ service. At the time of an online purchase with a participating merchant, the consumer is asked to type his or her name, shipping and billing information, credit card number and expiration date, which is stored in the ‘InstaBuy’ wallet. When the shopper makes a purchase later at any ‘InstaBuy’ enabled merchant site, the ‘InstaBuy’ information is automatically provided. The consumer simply enters their password and completes the purchase with a single click of a mouse.

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NPC – 3Q

National Processing, Inc. reported Thursday that net income for the three months ended September 30, 1998, was $3,381,000 or $.06 per share.  Included in net income was a one-time settlement fee of $2.4 million (after-tax) received for the cancellation of a merchant card processing contract.  Absent this settlement, net income would have been $981,000 or $.02 per share, compared to $7,637,000 or $.15 per share for the corresponding period in 1997.  Revenues were $121,430,000, compared to $100,780,000 the previous year.

For the nine months ended September 30, 1998, net income was $9,861,000 or $.19 per share, compared to $15,164,000 or $.30 per share in 1997.  Revenues increased 25%, to $354,257,000.

The decline in third quarter and nine-month 1998 net income was due primarily to continued shortfalls in the Corporate Services Division, which, as previously disclosed, has been experiencing severe operating problems in the remittance product area during a lengthy and difficult conversion to a new operating environment.  The cumulative effect of these problems has substantially increased costs and reduced margins.  Continued difficulties are likely for the foreseeable future.  Additionally, the third quarter 1998 results were unexpectedly weak in the Merchant Services Division, due to higher operating expenses.

Given the lower third-quarter results and unsettled outlook, the company indicated that full-year 1998 earnings could fall short of analysts’ consensus expectations by as much as one third.  According to First Call, consensus earnings estimates for the full year 1998 were $.42 per share as of September 30, 1998.

National Processing is a provider of transaction processing services and customized processing solutions.  Deploying technology and applications software, the Company provides products and value-added services which include processing of card and check transactions for merchants, outsourcing of administrative and financial functions, and ticket processing and settlement for providers of travel-related services.  National Processing is 88% owned by National City Corporation, a bank and financial services company based in Cleveland, Ohio.

This press release contains forward-looking statements involving risks and uncertainties which could cause actual results to differ materially.  Such risks and uncertainties include the company’s ability to retain and attract profitable customer accounts, its ability to timely resolve the aforementioned operating problems, competitive factors generally, and other risks detailed from time to time in its SEC reports.

                             National Processing, Inc.
                                 Financial Summary
                      (In thousands, except per share amounts)

                                                               Percent
    THREE MONTHS ENDED SEPTEMBER 30:        1998        1997    Change
    Revenues                              $121,430    $100,780    20%

    Other income                             4,000          —    —
    Operating expenses                      64,642      47,929    35

    Wages and other personnel expenses      31,977      24,702    29
    General and administrative expenses:
      Recurring                             16,760      12,856    30
      Restructuring                             —          —    —
    Depreciation and amortization            6,718       4,194    60

    Operating Profit                         5,333      11,099   (52)

    Net interest income                        116       1,214   (90)
    Income before income taxes               5,449      12,313   (56)
    Provision for income taxes               2,068       4,676   (56)

    Net Income                              $3,381      $7,637   (56)

    Net Income Per Share — Diluted          $0.06       $0.15   (60)

    Shares used in computation              50,691      50,764    —

    NINE MONTHS ENDED SEPTEMBER 30:

    Revenues                              $354,257    $284,169    25%
    Other income                             4,000          —    —
    Operating expenses                     176,717     136,543    29
    Wages and other personnel expenses      96,576      70,639    37
    General and administrative expenses:
      Recurring                             49,308      38,625    28
      Restructuring                             —       6,340    —
    Depreciation and amortization           19,789      12,171    63

    Operating Profit                        15,867      19,851   (20)

    Net interest income                        589       3,527   (83)
    Income before income taxes              16,456      23,378   (30)
    Provision for income taxes               6,595       8,214   (20)

    Net Income                              $9,861     $15,164   (35)

    Net Income Per Share — Diluted          $0.19       $0.30   (37)

    Shares used in computation              50,777      50,680    —

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Advanced ATM

OR-based Card Capture Services signed agreements yesterday with Hollywood Entertainment Corp. to place 500 Diebold ATMs in Hollywood Video stores nationwide, following the success of a three-month pilot in OR and WA. The Diebold machines are capable of displaying on-screen color advertisements. Advertisements can be downloaded directly to machines via ‘CCSConnect’, a proprietary software linking CCS machines to a central network operations center via high-speed modem. ‘CCSConnect’ also enables 24-hour remote monitoring of machine status from the network operations center. CCSConnect operates on all major manufacturer’s ATM hardware.  Diebold’s ‘CashSource Plus’ 200 and 400 models feature high-quality, color monitors and thermal printers allowing retailers to tie-in an advertising message with printed collateral. Hollywood Entertainment has more than 1,000 outlets.

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Diebold Update

Diebold said it realized a 26% jump in orders for the third quarter. For the third quarter Diebold had net income of $29,391,000 compared to $27,406,000 for the second quarter. The company said it made several improvements since mid-year including: increased orders in every geographic region led by significant growth in Diebold direct international sales channels; a 13% increase in the backlog, reversing three consecutive quarters of declines and a 9% decrease in operating expenses.

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Corn Card

Gemplus and CORN CARD International announced agreements Thursday to promote and develop markets for a biodegradable card as an alternative to the billions of non-recyclable plastic cards. The material that is being used in the card, ‘MAZIN’ resin, is made from environmentally friendly materials, including corn by-products. The University of Nebraska developed the material that is used in the cards, CORN CARD International holds the trademark for the name (MAZIN) and holds distribution rights for commercial deployment of MAZIN, and Austria-based Digicard is the one of several companies to experiment with printing the cards. MAZIN is completely biodegradable when introduced into a composting environment. The biodegradation process is affected by temperature, humidity, pH, and substratum activity. Effective biodegradation rates will vary, but while still offering the same physical characteristics of today’s PVC cards. The new cards, when left in a compost pile for 3 to 5 weeks, will totally disappear after a bacterial process reduces the material to hydrogen, carbon and water.

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CCMC &  FD Direct Banking

CCMC and First Data Direct Banking have joined forces to sell the industry-leading NetPrecision Home Banking and Card Services programs, the two firms announced Thursday.

CCMC Inc. is an information technology consulting firm that focuses on providing technology solutions for community banks. The agreement is CCMC’s first partnership with another bank technology vendor.

“This is a natural partnership, combining CCMC’s extensive knowledge of the banking industry, experience with leading-edge technology and its focus on branch banking with First Data Direct Banking’s Internet banking products,” said David Willis, president of CCMC. “It provides us with a key tool necessary to assist community banks in maintaining their competitive position.”

Internet banking “is rapidly becoming a required extension of the branch environment,” according to Willis. “The use of dial-up software for home banking is being replaced by Internet connections that offer a full array of functions for the bank’s customers. Internet banking systems are the next evolution in branch automation, and will be as vital as the teller and CSR,” he predicted.

“We are excited to welcome CCMC into the First Data Direct Banking Partners program,” said Randy Kahn, President of First Data Direct Banking. “The combination of CCMC’s existing banking technology solutions and NetPrecision Internet services offers banks a complete arsenal for competing in tomorrow’s technology-driven financial services marketplace.”

CCMC selected First Data Direct Banking after reviewing several Internet banking providers. “NetPrecision offered the best functionality of any of the products available,” Willis said. “We believe First Data Direct Banking has the experience and the staying power to outlast the young software and Internet companies that currently populate the market.”

A significant factor in the decision was First Data Direct Banking’s ongoing commitment to the security of its Internet services, Willis said. In May, the company became the first financial services provider to earn Web Host Compliant certification from the International Computer Security Association, an independent agency that audits and verifies network security.

First Data Direct Banking Partners Program members have been particularly successful marketing the NetPrecision 30/30 Home Banking product, which offers a fully functional, scalable and completely branded web site in 30 business days. The 30/30 product, which can be customized to include any features or functions desired, has proved popular among community banks because of its affordability and speed to market. To date, more than 40 financial institutions have chosen NetPrecision as their Internet banking and credit card platform.

About CCMC

CCMC is an information technology consulting firm dedicated to helping banks implement leading-edge technologies to solve real-life, mission-critical business issues. CCMC provides technology consulting services to financial institutions and industry vendors, including strategic technology planning, technology integration, custom solutions and educational services. The company has developed solutions for branch automation environments, including teller functions, account opening functions, sales management functions and referral processing. Founded in 1994, CCMC has headquarters in Altamonte Springs, Fla. For further information about CCMC, please visit the company on the Internet at [www.ccmcinc.com][1].

About First Data Direct Banking

First Data Direct Banking builds and hosts customized Internet financial service solutions for financial institutions of all sizes.

Using the NetSpeed process, financial institutions can have fully functional, branded web sites up and running in just 30 business days with the NetPrecision system.

Los Angeles-based First Data Direct Banking ties leading-edge online financial services partnerships and template, custom-built or existing web sites into transaction processing provided by electronic payments processing leader First Data Corp.

Direct Banking can be found on the World Wide Web at [www.netprecision.com][2].

Hackensack, N.J.-based First Data Corp. is a global leader in payment systems, electronic commerce and information management products and services. First Data and its principal operating units process the information that allows millions of consumers to pay for goods and services by credit, debit or smart card at the point of sale or over the Internet; by check or wire money. For further information about First Data, please visit the company on the Internet at [www.firstdatacorp.com][3].

[1]: http://www.ccmcinc.com
[2]: http://www.netprecision.com
[3]: http://www.firstdatacorp.com

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Toys “R” Us VISA Upgraded

Chase Manhattan Bank and Toys”R”Us have enhanced the rebate structure of the Toys”R”Us Visa Card from Chase, making the card even more rewarding. Beginning in October, cardmembers of the Toys”R”Us Visa Card from Chase will earn a 4% rebate, up from 3%, each time the card is used for purchases at Toys”R”Us, Kids”R”Us, and Babies”R”Us. Cardmembers will continue to earn a 1% rebate on all other purchases everywhere Visa is accepted. As an added benefit, cardmembers will now have the flexibility to choose when and how to use the rebates. For every $10 earned in rebates, cardmembers will receive a Geoffrey Reward coupon. Geoffrey Reward coupons can be used at any of the “R” Us family of stores for savings right at the register. Cardmembers can even collect their coupons for holidays, birthdays and special occasions. The coupons are good for one year from the date of issuance.

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