Reloading Cards via Internet

Product Technologies Inc. (PTi) today announced that Internet revaluing of smart cards can now be accomplished using SmartCity 4, its turnkey smart card-based e-purse (electronic purse) application that also provides a multi-application development platform and tools to systems integrators. This enhancement makes it possible for SmartCity smart card holders to load cash to their e-purse(s) via the Internet from such devices as PCs and interactive kiosks.

To add more cash value, the user inserts a smart card into a PC/SC-compliant smart card reader. The user then accesses the participating financial institution’s Web site via a standard Web browser and selects the smart card revalue option. The application prompts the user for a smart card PIN and the amount of money the user wishes to add to the card’s purse. Pertinent account information is then securely read from the card and transmitted with the revalue request to the financial host for routing to the appropriate authorization network. If authorized, the cardholder’s account is debited or charged and the value loaded to the card’s purse. In addition to the revalue function, cardholders may also view purse balances and their last 10 transactions.

The availability of this new technology means that a user no longer needs to travel to a bank to load e-purse funds; the card can be revalued securely without the user ever having to leave home. The demand for this kind of convenience is evidenced by a new study from Killen & Associates which forecasts a smart card revaluing market of $26.5 billion by 2005.

“This advanced Internet-based technology that we have developed for SmartCity is a first, and it responds to a strong market need to provide the consumer with increased convenience, as well as security in electronic purse transactions,” said Bill Mangino, PTi’s president and chairman. “PTi remains committed to delivering these technological advances to our customers in anticipation of market demand.”

The Internet Revalue feature of SmartCity 4 will be demonstrated at CardTech/SecurTech `98 in Booth No. 1230. The show will be held at the Washington Convention Center in Washington D.C. from, April 28-30, 1998.

Pricing And Availability

The Internet Revalue feature of SmartCity 4 will be available in June 1998. Price varies according to customer’s existing SmartCity installation.

About PTi

PTi is a leading supplier to systems integrators of smart card-based e-purse applications that can be used in combination with loyalty and other applications. It is headquartered in Middletown, CT, with a branch office in Moscow, Russia. Further information on the company can be found at: .

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FDC TX Vol Up 19%

First Data reports net income for the first quarter was $131 million, down 4% from $136 million last year.  The quarter included a $28.5 million gain on the disposition of NTS and restructuring charges of $28.9 million, principally related to a restructuring and staff reduction program in the merchant card processing business, for a net charge of $0.4 million.  Merchant Processing Services revenues were up 10% in the quarter to $317 million.  The overall volume trends reflect increasing momentum, particularly in the merchant bank alliances.  Domestic merchant Visa and MasterCard volume increased 22% to $53 billion, and domestic transactions processed grew 19% to 964 million. Domestic Card Issuer Services revenues increased 8% to $286 million.  Total domestic accounts on file increased 25% to 170 million, as First Data’s account growth remains well above overall card industry growth.  Revenue grew more slowly than accounts on file as a result of the unusually high level of contract renewals and repricing during 1997, and as a result of exiting certain unprofitable relationships in the back office servicing certain unprofitable relationships in the back office servicing business.

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AmEx Yield Up

American Express reported this morning an improvement in net interest yield yesterday for the first quarter due to the expiration of introductory rates. Net interest yield for the AmEx U.S. card base rose to 9.6% from 8.7% one year ago. Meanwhile delinquency leveled-off but chargeoffs climbed for the first three months of 1998.

                     AMEX  1Q  U.S. SNAPSHOT

                              98-1Q          97-1Q
          CARD LOANS         $14.2b         $12.9b
          VOLUME             $38.5b         $34.6b
          CARDS              23.3m          22.9m
          DELINQUENCY*         3.6%           3.6%
          CHARGEOFFS           6.3%           5.1%
          DISCOUNT RATE       2.74%          2.75%
          PER CARD VOL      $1600          $1498
          PER CARD FEE       $38            $39
               * delinquency rate is for 30+ days;

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Iris ATM Goes Online

Britain’s Nationwide Building Society introduced the world’s first PIN-less ATM yesterday.  The ATM system has been pioneered by NCR, using an iris identification system developed by Sensar Inc. of Princeton, NJ.  Using the NCR ATM, the customer simply puts in their ATM card and a camera mounted in the machine photographs the colored portion of the eye, the iris.  If the iris staring back matched the record on the databank, the ATM will allow instant access to your bank account without need for a PIN number.  The entire process can take as little as two seconds, and presents no danger to customer’s eye.

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LEO and PayCard Demo

ORGA Kartensysteme GmbH, will be showcasing a host of new applications for its innovative technology at CardTech/SecurTech ’98 in Washington, DC next week. ORGA will discuss and demonstrate its LEO (Loyalty and Electronic Purse) System to offer merchants worldwide a customized, fraud-resistant smart card payment and loyalty system they can use to attract new customers.  Because it has been designed as an open specification architecture, LEO should be able to utilize a diverse range of industry-available terminals, host computers and chip cards.  ORGA will also demonstrate Internet application.  There will be demonstrations of the company’s new “Paycard,” a smart card that features the best elements of both contact and contactless technologies, as well as a new biometric fingerprinting system for security/access control.

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Cap One Dividend

Capital One Financial Corporation today announced a quarterly dividend of $.08 per share payable May 21, 1998 to stockholders of record as of May 7, 1998. This is the Company’s thirteenth consecutive quarterly dividend since it became independent on February 28, 1995. Dividends declared by the Company are eligible for direct reinvestment in the Company’s common stock under its Dividend Reinvestment and Stock Purchase Plan. For additional plan information, stockholders should contact First Chicago Trust Company of New York at 800-446-2617.

The dividend declaration followed the Company’s fourth annual stockholders’ meeting. During the annual meeting, stockholders elected Nigel W. Morris and W. Ronald Dietz to serve three-year terms on the Board of Directors. Mr. Morris is President and Chief Operating Officer of the Company. Mr. Dietz is Chief Executive Officer of TARP, of Arlington, Virginia, and President of Charter Associates, Ltd. Both Messrs. Morris and Dietz have been Directors of the Company since February 28, 1995. In other business, stockholders approved an amendment to the 1994 Stock Incentive Plan and re-appointed Ernst & Young LLP as independent auditors.

Headquartered in Falls Church, Virginia, Capital One Financial Corporation () is a financial services company whose principal subsidiaries, Capital One Bank, and Capital One, F.S.B., offer financial products and services to consumers. Capital One collectively had 12.7 million customers and $14.0 billion in managed loans outstanding as of March 31, 1998, and is one of the largest providers of MasterCard and Visa credit cards in the world.

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VISA Helps Fight Hotel No-Shows

Yesterday at the American Hotel & Motel Association Annual Convention, Visa U.S.A. unveiled a national education and communication program to help the lodging industry solve the problem of no-shows, which experts estimate exceeds $100 million.  This program comes on the heals of a successful pilot study Visa completed earlier this year with Best Western International, Inc., Choice Hotels International and Holiday Hospitality.  Visa’s “Managing No-shows: Issues and Answers” program is a multi-faceted education campaign designed to help brand reservationists and hotel staffs understand the magnitude of the no-show problem and improve communications with consumers regarding hotel cancellation policies.  The program is available, free of charge, to hotel chains, as well as independent properties of any size.

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Paymentech TX Vol Up 38%

Paymentech, Inc. reported Thursday net income of $4.3 million for the third quarter ended Mar 31, 1998.  In the March 1998 quarter, Paymentech processed approximately $11.8 billion in bankcard sales volume and approximately 463 million total transactions, including third-party authorization and capture transactions.  Bankcard sales volume increased 16% and total transaction volume increased 38% over the prior-year quarter.

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Vietnam Cards

Vietnam’s largest commercial bank, Vietcombank, launched its first VISA card yesterday. The bank says its expects to issue about 1,500 cards this year or about the same number issued to date through its first Vietnam issuing member, Asia Commercial Bank. Vietcombank has issued about 1,200 MasterCards over the past two years. Vietnam has approximately 3,000 VISA/MasterCard merchant acceptance locations. Vietcombank requires a $400 monthly income to qualify for the card. The average per capita income in Vietnam is $300 per year.

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First Citizens – Vital Sign

Vital Processing Services (Vital), a leading, full-service merchant services provider, announced the signing of a long-term merchant processing agreement with Raleigh, N.C.-based First Citizens Bank.

First Citizens will consolidate all of its acquiring activities with Vital, utilizing Vital’s entire product line including merchant point-of-sale (POS) products and portfolio management services.

A long-term user of Vital’s authorization and capture services, First Citizens currently has 75 percent of its merchant POS business with Vital. Approximately 8,000 merchant accounts also will be converted to Vital’s clearing and settlement merchant processing system by October, 1998.

“First Citizens’ decision to consolidate our acquiring business with one processor signifies our confidence in Vital as a lasting entity in the merchant processing marketplace. We selected Vital because of its keen understanding of our needs and because it is 100 percent behind our strategic direction,” said Wayne Duncan, executive vice president of retail lending at First Citizens Bank.

“The trend towards single-source processing relationships continues. We are delighted First Citizens chose us to be its merchant processing solution,” said Fred Gumbel, CEO and president of Vital.

With more than $9 billion in assets, Raleigh, N.C.-based First Citizens Bank operates 335 branches serving nearly 200 towns and cities in North Carolina and Virginia. First Citizens offers a complete line of financial services to individuals, families, and small to mid-sized businesses. Products and services offered include mortgage, personal and commercial loans, commercial leases, trust and investor services, savings accounts and checking accounts. The bank was founded in 1898 in Smithfield, N.C. Its World Wide Web page is located at .

Vital Processing Services (Vital) is a leading full-service merchant processing company. Its clients include financial institutions that provide credit card processing to their merchant customers. Headquartered in Tempe, Ariz., Vital offers financial institutions operational services that enhance business solutions without competing for their merchant business. Its services include merchant POS products, electronic authorization and data capture; clearing, settlement and exception processing; merchant accounting, billing, and reporting; operational fulfillment services (including the outsourcing of chargeback and retrieval processing); risk management; and customer service. Vital is a merchant processing joint venture of Visa(R) U.S.A. and Total System Services, Inc.(R) (NYSE: TSS) (TSYS(R)) (). Vital’s Internet address is .

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