Beneficial Posts 4Q Loss

Beneficial Corporation reported Wednesday a net loss after special charges of $12.8 million, or $0.25 per share, for the fourth quarter of 1997, compared to earnings of $23.3 million, or $0.39 per share for the fourth quarter of 1996. In accord with the new accounting rule, all earnings per share numbers are now presented on a diluted basis. Fourth quarter 1997 results were reduced by a $27.8 million, or $0.51 per share, net aftertax provision for the planned disposition of the Company’s German consumer banking subsidiary, and by a total of $18.7 million in aftertax ($31.1 million pretax), or $0.34 per share, of special charges. Before all of these charges, core operating fourth quarter diluted earnings per share total $0.60.

The $18.7 million in aftertax charges relate to Beneficial’s overall restructuring and reorganization plan. The charges consist of additions to litigation reserves, writedowns of real estate holdings on Harbour Island and elsewhere that are in the process of being sold, and charges related to the reorganization and restructuring program.

For the full year, net income fell 10% to $253.7 million, from the 1996 record level of $281.0 million. Comparable diluted earnings per share declined 10% to $4.54, from $5.05 in 1996. Excluding the fourth quarter special charges, proforma 1997 core diluted operating earnings would have been $5.39 per share, or 7% growth over 1996 results of $5.05 per share.

Finn M. W. Caspersen, chairman and chief executive officer, commented, “Our results reflect the changes taking place at Beneficial. Although earnings and profitability are not yet at acceptable levels, we are pleased that fourth quarter earnings before the special charges rose from 1996 levels. We are well into the initial stages of the loan office re-engineering effort, and branch personnel are excited about the systems and process improvements that are in development. The effect of these changes will be to enhance receivables growth and reduce costs over time, leading to improved earnings performance.”

Caspersen continued, “Looking forward, incremental costs of the re-engineering effort will burden near-term operating earnings, before benefits of the re-engineering begin to be realized in 1999. At this time, we are assuming only modest revenue enhancement benefits from the re-engineering effort this year. Accordingly, we expect only low single-digit earnings per share growth in 1998 relative to 1997 core diluted operating earnings of $5.39. As the re-engineering efforts are fully implemented, we project earnings per share growth will improve to at least a 12% rate longer term.

“We are also making very good progress on our other strategic initiatives announced last October — namely, the sale of our Canadian and German subsidiaries. With respect to Canada, we are in the final stages of negotiation with one purchaser and expect to announce quite soon a definitive agreement that will produce a large gain in the first quarter of 1998. Similarly, we are progressing on the sale of our German consumer banking subsidiary. The full anticipated loss on the divestiture of Germany has been recorded in fourth quarter results. As previously announced, the proceeds from the sales are being used to fund a 3 million share buyback program, which has just begun. Finally, we are close to a transaction for sale of our large Hamilton Farm parcel of property in New Jersey, but are not yet at closure.

“Our franchise remains extremely valuable as evidenced by the strong auction of our Canadian business. 1998 will be an exciting year for Beneficial Corporation. Management is extremely optimistic about the potential earnings benefits of both the loan office re-engineering effort and the overall restructuring plan. Both should deliver significant value to our shareholders. We will report on our progress on both scores during the year,” Caspersen concluded.

For the fourth quarter, managed receivables grew $743 million, compared with the all-time record growth of $1,228 million in the fourth quarter of 1996, which benefited from particularly rapid receivables growth from one merchant at Beneficial National Bank USA (BNB USA), the Company’s private-label credit card subsidiary. Managed receivables outstanding ended the year at $17.9 billion, representing a gain of $1.1 billion, or 6% for the year, compared to 1996’s record gain of $2.3 billion, or 16%. Excluding Canada and Germany, which are in the process of being sold, managed receivables gained $1.1 billion, or 7%, to end the year at $16.9 billion.

Fourth quarter net chargeoffs increased 19% to $117.4 million from $98.7 million in the fourth quarter of 1996. As an annualized percentage of average owned receivables, net chargeoffs rose to 3.26% from 2.75% a year earlier, and 2.96% in the third quarter of 1997. On the basis of managed receivables outstanding, net chargeoffs rose to 2.73% from 2.37% of receivables in the fourth quarter of 1996, and 2.50% in this year’s third quarter. The increase in the chargeoff rate is due to the continuing higher incidence of consumer bankruptcy in North America, and the expected maturing of BNB USA’s large private-label credit card portfolio.

For the full year, net chargeoffs increased 30% to $412.2 million, from $316.9 million in 1996, and to 2.85% from 2.26% as a percentage of average receivables owned. On a managed receivables basis, net chargeoffs for the full year rose to 2.43% from 2.01% in 1996.

Total owned delinquency at year-end was essentially unchanged from the prior-quarter level. All owned loan and sales finance balances delinquent two months and greater on a contractual basis increased to 4.24% from 3.38% a year earlier, but declined slightly from 4.26% at September 30, 1997. Including securitized receivables, and examining delinquency of all managed receivables, reveals a similar pattern of 4.02% at year-end, compared to 3.20% a year earlier, and 3.94% at September 30, 1997.

At December 31, 1997, the allowance for credit losses was $559.9 million, or 3.73% of outstanding receivables, compared to $498.2 million, or 3.43% of receivables at the end of 1996, and $525.2 million, or 3.75% of receivables at September 30, 1997. Accordingly, during the fourth quarter, $34.7 million was added to the balance of the reserve. At the year-end level the reserve covers 1997 net chargeoffs 1.36 times, a conservative ratio by industry standards.

This press release contains forward-looking statements based on current expectations that involve a number of risks and uncertainties that could cause actual results to differ materially. The potential risks and uncertainties that could cause actual results to differ materially include the ultimate costs of the systems and process improvements referred to above and the degree to which benefits from the systems and process improvements are realized; the results of the refund anticipation loan business; the ultimate successful consummation of the sale of the Canadian and German subsidiaries; continuing competitive and pricing pressures; continuing increases in the incidence of consumer bankruptcy in North America; and the onset of a recession or a similar downturn in the economic cycle in North America resulting in adverse consequence to the economic health of the consumer. Further information on factors that could affect the Company’s financial results are included in the Company’s filings with the Securities and Exchange Commission, including the Quarterly Report on Form 10-Q for the quarter ended September 30, 1997 and the Annual Report on Form 10-K for the year ended December 31, 1997, which will be filed in March.

Beneficial Corporation is a $17 billion, New York Stock Exchange-listed financial services holding company. Subsidiaries of the Company provide financial services through their various consumer-finance, credit-card, banking and insurance operations located throughout the United States, Canada, the United Kingdom, Ireland, and Germany.

                                    FINANCIAL HIGHLIGHTS
                              Three Months          Twelve Months
                            Ended December 31     Ended December 31
(in millions, except                       %                       %
per share amounts)         1997    1996 Change   1997      1996  Change

Net (Loss)/Income (a)     $(12.8)  $23.3   – %  $ 253.7   $ 281.0 (10)%
Diluted (Loss)/Earnings per
  Common Share(a)         $ (.25)  $ .39   – %  $  4.54   $  5.05 (10)%
Dividends per Common
Share                    $  .57   $ .52   10%  $  2.18   $  1.98  10 %
Shareholders` Equity                           $1,772.3  $1,694.8   5 %
Finance Receivables Owned                     $15,030.2 $14,536.2   3 %
Finance Receivables Managed                   $17,942.9 $16,861.0   6 %
Allowance for Credit Losses as a
  Percentage of Owned Finance
  Receivables                                     3.73%   3.43%
Return on Average Equity                         14.42%  17.38 %
Return on Average Assets                          1.49%   1.76%

    (a) 1997 reflects a $27.8 million aftertax ($.51 per share) provision
for loss on disposal of the Company’s German consumer
banking subsidiary and $18.7 million ($.34 per share) of aftertax special
items relating to additional legal reserves, a writedown of
certain real estate investments and costs associated with the Company’s
re-engineering efforts.


SPS Shrinks

SPS Transaction Services said its active private label accounts declined 11% last year from 3.5 million to 3.1 million accounts. Total card loans also dropped from $2.2 billion to $1.9 billion. SPS continues to be plagued by high charge-offs and delinquency. For last year average chargeoffs hit 9.2% compared to 7.7% for 1996. Delinquency (30-89 days) also grew from 4.9% in 1996 to 5.4% last year. Long term delinquency (90-179 days) also edged up from 3.9% to 4.2% last year. However SPS did report a 9% increase in electronic transactions processed during the fourth quarter with the total number hitting 122 million versus 112 million for the fourth quarter 1996. Active commercial accounts at year’s end were also up 9% to log in at 979,000.


MoneyGram up Slightly

MoneyGram Payment Systems, Inc. reported Wednesday that its net income for the three months ended December 31, 1997 was $2.4 million, or 14 cents per common share, compared with $1.9 million, or 12 cents per share, in the fourth quarter of 1996.  For the full year, net income was $11.7 million, or 70 cents per share, compared with $14.6 million, or 88 cents per share, in 1996.

The fourth-quarter results include charges for impairment reserves on certain underperforming agent contracts with guaranteed minimum commission payments.  These contracts were entered into prior to 1996.  Charges were also recorded for non-recurring expenses of converting MoneyGram operations, which have been conducted under licenses held by First Data Corporation (FDC) in the various state jurisdictions, to licenses issued directly to MoneyGram Payment Systems, Inc.  Finally, reserves were taken for miscellaneous asset write-downs and other items.  The after-tax effect of these charges on net income was 6.7 million.

Separately, the company also reversed the valuation reserve against the deferred tax asset that had been recorded on the company’s balance sheet at the time of MoneyGram’s divestiture by FDC.  The reversed valuation reserve was in an amount of $6.9 million.  The deferred tax asset will be amortized over future years and results in reduced tax payments in those years.

Total revenue for the fourth quarter was $33.7 million, an increase of 10 percent over the $30.7 million recorded in the fourth quarter of 1996. Revenues for 1997 were $140.9 million, an increase of two percent from the 1996 level of $137.7 million.

Transactions handled by MoneyGram totaled 1.46 million in the fourth quarter and 5.87 million for the full year.  This compares with year-earlier levels of 1.40 million and 5.78 million, respectively.

James F. Calvano, Chairman and Chief Executive Officer, said  “In 1997 we had to confront a number of significant challenges, including the organizational task of structuring MoneyGram as a public company and securing the required money-transmitter state licenses.  Much of this transitional work has now been completed, and we have begun the new year with the successful move earlier this month of our transaction processing from FDC’s data processing center to computer facilities provided by IBM Global Network Services.  With this transfer of our transaction processing, and with the state licensing process now complete, the final separation of MoneyGram from First Data is at hand, and we have laid the foundation for the accelerated growth of our company in 1998.”

MoneyGram Payment Systems, Inc. is a leading non-bank provider of consumer money transfer and other financial services.  Through the MoneyGram network of more than 22,000 convenient agent locations, customers can wire cash in minutes to more than 100 countries throughout the world.  MoneyGram ExpressPayment(SM) service enables credit card issuers, mortgage servicers, finance companies, collections companies and others to collect good-funds payments from delinquent debtors within hours.  The company was organized in January 1996 and completed the initial public offering of its common shares on December 11, 1996.

                       MONEYGRAM PAYMENT SYSTEMS, INC.
                           Statement of Operations
                        Three months ended December 31
                   (in millions, except per-share amounts)

                                           1997              1996

      Fee and Other                      $ 28.0             $ 24.4
      Foreign Exchange                      5.7                6.3
        Total Revenue                    $ 33.7             $ 30.7


      Agent Commissions                  $ 17.1             $ 10.4
      Processing                            7.9                6.1
      Advertising & Promotion               7.4                6.7
      Selling & Service                     2.6                2.9
      General & Administrative              6.2                1.5
        Total Expenses                   $ 41.2             $ 27.6

    Income (Loss) before Income Taxes    ($ 7.5)            $  3.1
    Income Tax Expense/(Benefit)           (9.9)               1.2

    Net Income                            $ 2.4             $  1.9

    Basic Earnings per Share              $ .14              $ .12
    Diluted Earnings per Share            $ .14              $ .12

    Weighted Average Shares and
      Equivalents Outstanding            16,686             16,625

                       MONEYGRAM PAYMENT SYSTEMS, INC.
                           Statement of Operations
                       Twelve months ended December 31
                   (in millions, except per-share amounts)

                                           1997              1996

      Fee and Other                      $113.6             $108.6
      Foreign Exchange                     27.3               29.1
        Total Revenue                    $140.9             $137.7


      Agent Commissions                  $ 52.8             $ 44.3
      Processing                           26.7               23.9
      Advertising & Promotion              28.0               29.1
      Selling & Service                    11.2               10.6
      General & Administrative             14.4                6.2
      Total Expenses                     $133.1             $114.1

    Income before Income Taxes           $  7.8             $ 23.6
    Income Tax Expense/(Benefit)           (3.9)               9.0

    Net Income                           $ 11.7             $ 14.6

    Basic Earnings per Share             $  .70             $  .88
    Diluted Earnings per Share           $  .70             $  .88

    Weighted Average Shares and
      Equivalents Outstanding            16,701             16,625


ECHO Up 24%

Electronic Clearing House Inc. reported fiscal 1998 first-quarter net earnings of $62,000, compared with net earnings of $50,000 for the same period last year, a 24 percent increase, resulting in net earnings per share of $0.004 for both periods.

Overall revenue increased 3 percent over the same period in the prior fiscal year. The increase reflected revenue growth of 6 percent in bank-card processing and transactions revenue and a 53 percent decrease in terminal sales and lease revenue over the same period in the prior fiscal year.

Fiscal 1998 first-quarter revenues and income from operations were $4,212,000 and $69,000, respectively, as compared with $4,087,000 and $115,000 for the same period last year.     “In addition to our profitable operations during the first quarter of our fiscal year, ECHO received an order for 3,100 terminals from U-Haul and ECHO made a smooth transition in the presidency of the company from Mr. Don Anderson to Mr. Larry Thomas,” stated Joel M. Barry, chief executive officer of ECHO. “We believe that both of these events will have positive and long-term effects on the company.”

Electronic Clearing House provides credit-card processing, check guarantee and various Internet services to more than 8,000 retail merchants, as well as providing inventory-tracking services to thousands of U-Haul dealers across the nation.

Through a subsidiary, Computer Based Controls, ECHO designs, develops and manufactures software and point-of-sale hardware that is utilized as credit-card-processing terminals, automated money-order dispensers, utility-bill payment systems and inventory-tracking devices.


InfiStar is Born

It’s a credit card issuer’s dream the capability of originating new accounts without regard to the marketing cost or risk exposure. Yesterday Atlanta-based InfiStar and Mellon Bank announced the signing of a novel, multi-year agreement whereby InfiStar will develop VISA and MasterCard accounts on Mellon’s behalf, and then sell the productive accounts to Mellon. Mellon will continue to internally generate credit card accounts while InfiStar will tap into its own marketing database. InfiStar will also provide Mellon with marketing and portfolio management expertise. InfiStar is a wholly owned subsidiary of InfiCorp Holdings Inc. and was formerly known as Card Issuer Program Management. InfiCorp, headed by industry veteran Jerry Craft, recently received approval for a credit card bank.


Best Travel Card Awards

The suspense is over, InsideFlyer finally announced the winners of the 10th Annual Freddie Awards in association with MCI and American Express SkyGuide at the Westin New York Hotel.

![][1]     An unprecedented 44,000 frequent travelers voted, rating airline and hotel programs in eight categories  Program of the Year, Best Award, Best Bonus, Best Program Newsletter, Best Web Site, Best International Program, Best Elite-Level Program and Best Customer Service.  A Freddie was also awarded for the Best Frequent Traveler Affinity Credit Card Program, and Petersen singled out four programs for Special Recognition awards.

![][2]     “Frequent travelers around the world know what the best programs are. They travel with them daily.  We’re honored that for the last ten years they’ve chosen to allow the Freddie Awards to represent their votes,” said Petersen. “Only a handful of programs embody the sort of excellence it takes to earn the honor of a Freddie Award.”

![][3]     The Continental OnePass and Marriott Rewards frequent travel programs snapped up the first etched crystal trophies for the coveted Program of the Year awards.  Continental went on to win additional Freddies in four more categories  Best Program Newsletter, Best Web Site, Best Elite-Level Program and Best Customer Service.  Buoyed by the revamping of their program, Marriott Rewards also won four more Freddies  Best Award for its 200,000 point Choice Award, Best Program Newsletter, Best International Program and Best Customer Service.

![][4]     Hilton HHonors made a respectable showing with three Freddies  Best Bonus for its “Double Dip,” Best Web Site and Best Elite-Level Frequent Guest Program.  Diners Club topped the list for Best Frequent Traveler Affinity Credit Card and Virgin Freeway took the Freddie for Best International Frequent Flyer Program.  A surprise showing in this year’s Freddie’s came from Southwest Rapid Rewards, which garnered second place wins in two categories Best Frequent Flyer Program and Best Customer Service.  Petersen believes this reflects changes in the voting process.  For the first time, Freddie ballots ![][5] included a value vote which allowed voters not only to choose the best program, but also to rate their choice with 10 equating the highest score possible.  This was a change from the popular vote which was used in the first nine years.  It was not a matter of how many votes a program received but the overall merits of what each program has to offer which determined the winners. The addition of the value vote and a record number of voters made the Freddie Awards for 1997 the most comprehensive and accurate ever.

![][6]     This year Petersen gave special recognition to several programs and individuals he believes demonstrated exceptional management and commitment to frequent travelers.  He commended Reno Air QQuick Miles for a program debut promotion akin to Hilton’s “Double Dip;” Northwest WorldPerks showed commitment to frequent flyers by allowing members to access award seat availability online; Sheraton Club International created Instant Rewards, a program which allows points to be used as currency in its hotels; Continental OnePass used Internet email to alert members to weekend award specials; and finally, Petersen lauded the efforts of Senators John McCain, Bob Graham and Kent Conrad for their efforts to fight new tax on miles.

The Freddie Awards are named after Sir Freddie Laker who attracted fame for his pioneering marketing ideas within the travel industry in the 1970s. The “Freddies” were introduced to members of frequent traveler programs in 1988.  Petersen, then the editor of FREQUENT, decided to poll members of various frequent traveler programs.  The Freddies have since grown in stature and importance and are the oldest and most prestigious awards solely voted on by frequent flyers themselves.

Sponsors of this year’s Freddie Awards include the following

InsideFlyer, a monthly magazine dedicated to the coverage of frequent travel programs around the world, helps more than 80,000 readers optimize their mileage and point earning potential through in-depth news coverage of programs, their partners and special bonuses and promotions.

MCI, headquartered in Washington D.C., offers the industry’s most comprehensive portfolio of communication services.  With 1996 revenues of $18.5 billion, MCI ranks as one of the world’s largest telecommunications companies. MCI is also the world’s third largest carrier of international voice traffic and operates one of the world’s most advanced Internet networks. Since its founding in 1968 MCI has been a leader in bringing the benefits of long distance competition to businesses and consumers and is now leading the charge to open U.S. local calling markets to competition.

SkyGuide, published by American Express, is a monthly pocket sized airline schedule guide used by frequent business travelers.

                            Freddie Award Winners
                     Numbers Represent Value Vote Rating

    Program of the Year

      Continental OnePass                9.30
      Southwest Rapid Rewards            9.12
      United Mileage Plus                8.98

      Marriott Rewards                   8.58
      Hilton HHonors Worldwide           8.44
      Westin Premier                     8.37

    Best Award

      Delta SkyMiles – Hawaii coach award for 30,000 miles
      American AAdvantage – Reno Air/Midway Airlines
      partner awards for 15,000 miles
      United Mileage Plus – shuttle awards for 6,000 miles

      Marriott Rewards – 200,000 point Choice Award
      Hilton HHonors Worldwide – Point Stretchers
      Hyatt Gold Passport – Equal reward redemption levels
      for regular and resort hotels

    Best Bonus

      American AAdvantage – “Drive and Dream” promotion
      United Mileage Plus – “United Connection” online bonus
      Continental OnePass – BusinessFirst double miles promotion

      Hilton HHonors Worldwide – “Double Dip”
      Marriott Rewards – “Double Take” promotion
      Hyatt Gold Passport – “Nights after Nights” promotion

    Best Program Newsletter

      Continental OnePass Update         8.63
      United Mileage Plus Mileage Plus   8.40
      TWA Frequent Flight Bonus Update   8.34

      Marriott Rewards Marriott Rewards  8.24
      Hilton HHonors Worldwide Update    8.09
      Westin Premier Preview             8.06

    Best Web Site

      Continental OnePass                8.88
      Northwest WorldPerks               8.73
      TWA Frequent Flight Bonus          8.65

      Hilton HHonors Worldwide           8.34
      Marriott Rewards                   8.21
      Sheraton Club International        8.19

    Best International Program

      Virgin Freeway                     8.49
      Qantas Frequent Flyer              8.12
      Thai Royal Orchid Plus             8.08

      Marriott Rewards                   8.64
      Hyatt Gold Passport                8.46
      Hilton HHonors Worldwide           8.40

    Best Elite-Level Program

      Continental OnePass                9.28
      United Mileage Plus                9.02
      TWA Frequent Flight Bonus          8.91

      Hilton HHonors Worldwide           8.62
      Westin Premier                     8.51
      Marriott Rewards                   8.47

    Best Customer Service

      Continental OnePass                9.19
      Southwest Rapid Rewards            9.18
      United Mileage Plus                9.01

      Marriott Rewards                   8.72
      Hyatt Gold Passport                8.59
      Westin Premier                     8.58

    Best Frequent Traveler Affinity Charge or Credit Card

     Diners Club Club Rewards            9.45
     Marriott Rewards Visa Gold          8.77
     American Express Membership
      Rewards                            8.74

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IVI Ingenico Gets Argentina Contract

International Verifact Inc. announced that its Latin American joint venture, IVI Ingenico Inc., has received an order commitment totaling over US $1.0 million to supply ITRON with Ingenico’s Elite 500 electronic payment terminals. These terminals will be deployed throughout Argentina to authorize and process healthcare transactions.

IVI Ingenico, Inc., based in Coral Gables, Florida, is a joint venture between IVI and its strategic alliance partner, Groupe Ingenico, of Paris, France.

Jorge Fernandez, Executive Vice President and General Manager, IVI Ingenico stated, “The decision to use our products is a strong endorsement of our next generation technology in EFT-POS. Furthermore, it demonstrates our company’s continued worldwide leadership in smart card base POS products.”

The terminals will be used in doctor’s offices, pharmacies, clinics and hospitals to verify a patient’s eligibility to receive healthcare benefits. While these transactions will initially be processed using magnetic stripe cards, they can be easily switched to smart cards in the future, which would further reduce telecommunications and other data processing costs. The software will be developed as a partnership between ITRON and IVI Ingenico.

“We chose IVI Ingenico for several reasons. The first one is their technology, which will allow us to purchase products that meet our current requirements, but still provide us with a built-in smart card platform to migrate to in the future. No additional investment in hardware will be required to do this. Secondly, their UNICAPT(R) operating environment will allow us to write and maintain our own applications, while providing us with the security and flexibility that we will need in managing different applications in the future. And finally, we chose their solutions because we had already worked with their products in the past and have experienced first hand their quality and flexibility,” Gabriel Simsic, Vice President, ITRON.

Group Ingenico is engaged in the design, development and sales of secured terminals and complete systems dedicated to electronic payments, loyalty and electronic benefits transfer and is the recognized leader in smart card technology in Europe, Africa and the Asia-Pacific areas.

IVI is engaged in the design, development and sale of electronic payment solutions for retailers, financial institutions, governments and other businesses. The company’s hardware and software products include solutions for point-of-sale debit/credit/EFT/EBT terminals, check readers, smart card readers, POS printers and secure PIN entry devices. Additional company information is available on IVI’s website at .


Cyberflex Multi 8K Card

Schlumberger has released for sale the latest in its family of Java-based smart cards, the Cyberflex Multi 8K card, offering enhanced support for secure multiple applications. Cyberflex Multi 8K is immediately available, and is now being shipped in the current version of the Cyberflex Development Kit.

Cyberflex Multi 8K is built on the Cyberflex 2.0 Core technology introduced last year by Schlumberger, and with 8K bytes of EEPROM, the new card has three times the memory space available for Cardlets(TM), or applications. In addition it has internal facilities that reduce the amount of code required for individual applications. The result is that an increased number of bigger Cardlets can be loaded onto the card.

“We are pleased about Schlumberger’s announcement today,” said Patrice Peyret, director of consumer transactions at JavaSoft, a business unit of Sun Microsystems, Inc. “With their new Cyberflex card, Schlumberger continues to make significant headway in Java Card innovation and development and in bringing new products based on Java technology to the market.”

“Cyberflex Multi 8K incorporates a real advance in technology that brings our customers what they have been asking for – more space for applications,” said Paul Beverly, vice president of marketing for Schlumberger Smart Cards division. “With the hundreds of Cyberflex Development Kits we’ve sold, we expect 1998 to be the year in which interoperable multi-application cards will hit the streets in volume applications.”

Schlumberger continues to lead the smart card industry in the development of this exciting new technology for smart cards, and in the availability and shipment of Java-based smart cards. With Cyberflex Multi 8K, a new level of technical capability has been established that will enable developers to introduce practical applications for all markets.

Until now smart cards, which incorporate a computer chip and memory instead of the traditional magnetic stripe, have been very successful in single roles – as bank cards, phone cards, electronic tickets and so on. But like early computer software, the programs they run are specific to a particular manufacturer’s card, and to all intents and purposes ‘carved in stone’.

Java card and Cyberflex have changed all of this. Now issuers can put more than one application on a card, securely, and modify the applications after the cards have been issued.

This means that consumers will for the first time have cards that can perform a range of functions – such as debit, credit, e-purse, e-commerce and loyalty – and which can also have these applications changed and updated. This reprogrammable quality is expected to have an enormous impact as consumers will be able to individualize cards to reflect their own needs and priorities.

About Schlumberger

Schlumberger Electronic Transactions offers a flexible portfolio of smart card-based solutions for businesses and communities of all kinds. The company provides cards, terminals, development tools and support in open configurations for operators, developers, integrators and distributors worldwide. Under The Smart Village brand, the Schlumberger offer includes the milestone Cyberflex card, the industry’s first Java-based smart card.

Schlumberger is unique in that it provides both smart cards and turnkey solutions along with a full range of tools and services for Telecom, Banking, Retail, Mass Transit & Parking, Healthcare and Networks. The company has design and manufacturing facilities in Europe, North America, Asia and Latin America.

The Electronic Transactions group employs over 5,000 people and operates 45 facilities. Among dedicated facilities in 34 countries, the group has 9 research and development centers strategically located in Europe, Asia and North America.

Schlumberger Electronic Transactions is a business segment of Schlumberger Ltd., a $10.65 billion global technology and service company providing oilfield services, natural resource management, smart card transactions-based technology and associated systems, and semiconductor test equipment.


MSFDC Picks E-Bill Printer

Interface Systems, Inc. and MSFDC, the electronic bill presentation and payment joint venture between Microsoft  and First Data Corp. announced that the new MSFDC service plans to employ Interface’s enterprise printing and document formatting systems for mainframe computers.  This means that when the service is introduced later this year, customers of billers using mainframes will be able to see customized utility, banking and other bills in the format to which they are accustomed — whether displayed electronically or printed in hard copy.

“With the help of systems integrators like Interface Systems, MSFDC will take electronic bill presentment and payment beyond its infancy stage to large-scale acceptance and usage,” says Warren Dent, senior vice president at MSFDC.  “Interface provides a valuable service by helping billers prepare their data from various platforms and integrate it with MSFDC’s technology.”

Corporations that use mainframe computers to perform billing functions include the majority of banks, utilities, and retailers, as well as phone, cable, oil, gasoline, and credit card companies, according to Robert Nero, president and CEO of Interface.  “Virtually all major billers employ mainframe computers,” he says.  “Interface’s Oasis printing and document formatting systems will translate print data streams from legacy systems at these companies and make them useful for the Internet.  It means that Interface will be providing a key component to the success of electronic consumer billing and payment worldwide.”

Interface will modify its existing Advanced Function Printing (AFP) translator to make mainframe-based print data understandable to the MSFDC system.  Work with MSFDC and its beta site partners will begin immediately. Broadscale introduction of the full MSFDC service is due this summer.

MSFDC, based in Denver, is a joint venture company equally held by Microsoft and First Data Corporations.  The company was formed to offer a new Internet-based Electronic Bill Presentment and Payment (EBPP) service to billers, banks and consumers.  The service offers an easy and secure way for customers to receive bills and pay them, all online.

Interface Systems, Inc. provides customized mainframe information distribution and connectivity solutions to businesses around the globe.  With more than 30 years of experience, Interface works closely with companies to design solutions that enhance the utility and value of existing information systems by building on them, rather than replacing them.  Interface is headquartered in Ann Arbor, Mich., and markets its products worldwide.  The company’s current list of partners includes such industry leaders as Microsoft and Lucent Technologies.

All company, brand and product names are or may be trademarks of their respective holders.


FDC Downshifts

First Data said yesterday its greatest disappointment last year was the slowing rate of growth in its merchant processing services revenues over the last half of 1997. As a result, FDC is re-examining every facet of the merchant processing business, making both organizational and operational changes. However FDC’s card issuer services and payment instruments businesses were among the company’s strongest performers. Total company revenues for last year were only up 6%, impacted negatively by several business divestures. Yesterday FDC announced it was selling off yet another unit, its imaging and documents management business, First Image. Domestic merchant card volume processed increased 20% to $259 billion with total domestic card accounts on file at 161 million at year’s end, a 20% annual gain.


Upping the Ante

Membership services king Cendant Corporation is offering $2.7 billion to acquire credit insurance king American Bankers Insurance Group. In a letter to AIB’s Board last night Cendant made an offer of $58 per share in cash and stock, representing a 23% premium over AIB’s agreement to be acquired by American International Group. AIG announced December 22 its acquisition of AIB for $47 per share or $2.2 billion. Under terms of the December AIG agreement, AIB is prohibited from discussing offers from other interested bidders during a 120-day blackout period and if another bidders emerges AIG would be granted 19.9% of AIB’s common stock. Cendant said last night it will commence litigation this morning to eliminate the blackout period and the stock grant. Cendant was created through the merger of CUC and HFS on December 17.