ENGUARD Unveiled

Applied Communications and Grapevine Systems unveiled ‘ENGUARD-atm’, a proactive monitoring, alarm and dispatch tool designed to monitor ‘BASE24-atm’ processing systems. ENGUARD-atm from Grapevine incorporates a suite of monitoring agents developed specifically for ACI’s ‘BASE24’ application software to provide complete, automated ATM network monitoring. When ENGUARD-atm encounters an event requiring attention, such as a low or out-of-cash cassette or terminal power failure, an automatic pre-defined alert is dispatched to designated personnel. The alert notification can take several forms, including an icon workstation display, audio prompt, local pager, email, fax or telephone message. If a response is not received within a configured interval, ‘ENGUARD-atm’ automatically escalates the alert to the next level of designated personnel. Support staff can respond via internal or remote access, including workstations, telephone interfaces or the Internet. All remote access is regulated by a built-in security function.

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BestBank Buys Credit Store Accounts

The Credit Store, Inc. announced that it has finalized a $5 million sale of seasoned, performing consumer credit-card receivables to BestBank of Boulder, Colorado. The performing credit-card receivables sold were generated by The Credit Store’s principal business activity, which is acquiring charged-off consumer debt and converting into new unsecured credit-card receivables. The sale of receivables to BestBank marks The Credit Store’s first asset sale since the Company began current business operations in Oct., 1996. The Credit Store said it will continue to service the portfolio purchased by BestBank. In addition, The Credit Store said it signed a three-year agreement through which BestBank will issue MasterCard and VISA credit cards for The Credit Store.

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Not Smart Cards

A study released yesterday suggests the disappointment in the Chase-Citibank smart card pilot in New York City is linked to the poor selection of merchant locations. The study, conducted jointly by Business Dynamics Consulting and Brittain Associates, says smart cards should be targeted at “correct change” locations such as pay phones, self-service laundry facilities, mass transit, taxi cabs and vending machines. The study says the focus so far has been on signing up the greatest number of merchants. Among sponsors of the syndicated study: American Express, Citibank, VISA and MasterCard.

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Debt Drop

American consumers lopped-off more than $3 billion of revolving debt during May according to figures released Wednesday afternoon by the Federal Reserve. For May, revolving credit contracted at an annual rate of 7.4%, a significant shift from last May’s 4.6% annual rate of growth. May is typically a weak period for credit cards, coming just ahead of the summer vacation period, but the Fed’s seasonally-adjusted data suggests cardholders may be slowing down this summer. However, auto lending and loans for mobile homes, boats, trailers, vacations and education remain strong this year, offsetting the contraction in revolving debt somewhat. More than 80% of revolving credit is bank credit card debt. Overall consumer credit grew a mere 30 basis points this May compared to 330 basis points last May. At the end of May, American consumers were $1.252 trillion in debt, exclusive of home mortgages.

                    REVOLVING CREDIT HISTORICAL
                  May98    Apr98   Mar98    Feb98    Jan98       
%GRWTH:   -7.4%     3.8     0.5      7.8      4.1                       
$OWED:     $534.7    538.0   536.3    536.1    532.6 
      
                  Dec97    Nov97    Oct97    Sep97    Aug97
%GRWTH:    2.3     -2.1     10.0      6.2      8.0
$OWED:     530.8    529.8    530.7    526.4    523.7
Source: Federal Reserve; revised figures as of 07/08/98

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New AmEx Global Net Head

American Express announced this week the appointment of James Li as president, American Express Global Network Services. Mr. Li will report to James M. Cracchiolo, president of American Express International, and will serve as a member of the company,s International Executive Team. Mr. Li most recently served as president of the Emerging Markets Group at American Express. In this position, he was responsible for developing the company,s Card and Travel product strategies and then effectively implementing those strategies in the emerging markets of Central and Eastern Europe, the Eastern Mediterranean, the Middle East and Africa. Additionally, Mr. Li led the company,s Corporate Card bank partnering programs across all international markets. In his new role Mr. Li,s immediate priorities will be to identify and sign new partners, deepen relationships with existing partners, continue to strengthen the infrastructure support American Express, non-proprietary business, expand the products and services the company offers its partners, and continue to enhance the organizational effectiveness of GNS.

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Hypercom Snags VeriFone Marketer

Hypercom Corporation named Mark McMurtrie Director of Marketing for the Europe, Middle-East and Africa (EMEA) region. Immediately prior to joining Hypercom, McMurtrie held senior marketing and sales management positions with VeriFone. In his new position, McMurtrie will be responsible for all aspects of marketing for Hypercom’s EMEA region. He will play a key role in developing business plans, establishing strategic relationships and creating marketing programs to support Hypercom’s aggressive expansion plans within Europe. During his eight years with VeriFone, McMurtrie played a key role in creating, implementing and directing key strategic European marketing initiatives for VeriFone, including point-of-sale product strategies, managing distribution channels and developing co-marketing tactics throughout the region.

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SCIA Fast Response Team

The Smart Card Industry Association’s Security Committee recently examined smart card and associated system security standards and strategies. The Committee also is forming a Fast Response Team of smart card security experts to handle security-related news media requests and is working on an ethics code for card developers, integrators and manufacturers on the Committee who might have access to sensitive information. The Committee brought together experts at its last meeting to address two major security standards: the US FIPS 140-1; Security Requirements for Cryptographic Modules and the European proposal for common criteria on smart card security developed by Eurosmart members and based on ITSEC recommendations. FIPS 140-1 is a four-level standard designed for all secure cryptographic devices and is the security measure for smart cards and the various elements of their support systems. The standard allows users to evaluate the security of each component for a given application, decide which level is appropriate and ensure that all elements within a given system operate on the same level, because the system is only as strong as its weakest link.

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Debt Debate

In its strongest attack on pending bankruptcy reform to-date, the Consumer Federation of America charged yesterday that card issuers have aggressively stepped up credit card marketing and credit extension while endorsing and promoting tighter bankruptcy laws. The CFA based its charges on the growth in credit card solicitations and credit lines. According to the CFA report entitled: “Recent Trends in Bank Credit Card Marketing and Indebtedness”, credit card solicitations have doubled and unused credit lines have tripled over the past five years. The CFA also pointed to the surge in sub-prime credit card loans as an example of “irresponsible lending”. MasterCard responded to the charges by saying all economic trends continue to support the ability of American consumers to manage their credit card spending and debt appropriately. MasterCard’s chief economist cited figures showing 40% of Americans pay-off card balances each month and 97% of cardholders make card payments on-time. VISA reportedly cited the drop-off in direct mail response rates as off-setting the growth in the number of credit card solicitations. The industry funded Bankruptcy Issues Council also piled on yesterday saying it is “ironic” the CFA opposes needs-based bankruptcy reform while 68% of Americans support the changes.

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Shop Safe Guarantee

The SABRE Group announced that Travelocity, the leading online travel site, has introduced Shop Safe Guarantee, an added insurance policy against unauthorized credit card usage. According to industry analysts, the number one reason consumers do not purchase products over the Internet is security.In the unlikely event credit card fraud occurs, most banks waive liability for unauthorized charges, or limit liability to $50. With Shop Safe Guarantee, The SABRE Group will reimburse the customer’s liability fee, up to $50, provided the transaction was made on Travelocity using the site’s secure server. Browsers such as Netscape’s Navigator or Microsoft’s Internet Explorer support secure socket layer encryption, which scrambles information as it is transmitted over the Internet. In addition, The SABRE Group has taken steps to assure consumers that Travelocity meets strict online security and business standards. Travelocity recently joined BBBOnLine, a Better Business Bureau initiative dedicated to helping consumers identify ethical online marketers.

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Pocket Pay Coming

Betting Inc. announced Tuesday that it has contracted Newcom Technologies ([www.newcom.com.au][1]) to manage the development of the patented Pocket Pay.

Pocket Pay is both a pocket-sized terminal and phone, capable of sending transactions using a wireless ATM card with PIN, a stored- value smart card or a card-present credit card to the ET&T () bank host for processing.

The goal is to develop a working model over the next 90 days and then demonstrate to a potential strategic manufacturer a live transaction being processed by the ET&T bank host.

The Pocket Pay is expected to make a tremendous impact on global personal mobile wagering, and will generate instant pay-per-play cash for gaming operators; substantial instant paid fees for Betting Inc. and Newcom Technologies per Pocket Pay transaction; and instant taxation of the player’s winnings, as the wagering transactions are an open track from the player’s bank to the state, government or private gaming company’s bank.

[1]: http://www.newcom.com.au

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