ECS Set to Grow

Global Games/Communications, Inc. of Minneapolis, Minnesota, unveiled its development plan for its subsidiary, Electronic Card Services, Inc. of Miami, Florida on Tuesday.

Global acquired ECS in December 1997. ECS is a young business providing prepaid phone cards through both counter sales and machine dispensing. Its initial distribution has been in the Toronto, Canada market. ECS’s rapid growth is reflected by third quarter 1997 revenues of $450,000 and fourth quarter revenues of $750,000. Global paid $1.6 million for ECS in cash and restricted stock.

Global’s immediate plans are to double the outlets in Toronto by the end of January 1998. Subsequent installations are planned for Montreal, Ottawa and Vancouver during the first half of 1998, and several U.S. cities will be entered during the third and fourth quarter of 1998. Strategic alliances have been established with several entertainment magazines to promote the cards and expand the number of outlets.

“We expect an exponential growth for this company,” commented Mr. Gary Borglund, President of Global. “We have the sites, machines and marketing clout to triple the volume of ECS in the next few months. In addition, we are adding other applications to the cards…they will be be able to be used for dating chat line and related services, for Internet Access, as well as other uses. Our new sites will provide a high volume of traffic with a focus on upwardly mobile, younger demographics with a knowledge and affinity for the use of plastic card access to many applications. Our current projections are for $14 million in revenue in calendar 1998, with an operating profit margin approaching fifty percent (50%).”

Electronic cash card sales in 1997 were just over $2 billion in prepaid phone card usage alone, and an annual volume of over $4 billion is expected by the year 2001. The prepaid cards will fit strategically with Global’s Village concept, as the cards can be used to access Internet services when traveling, and the Village will be an effective mechanism to market the cards to Internet browsers.

Global Communications provides commercial Internet services, third party credit card processing, and Internet entertainment with bingo and lotto games. Several other acquisitions are in process by which Global will expand its Internet services and revenue sources.

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VISA Sends Young Artists to Olympics

Artistic talents and creative imaginations will send five children from the United States to the 1998 Olympic Winter Games in Nagano, Japan next month.  Winners met the challenge of the “Visa Olympics of the Imagination” international art competition, a contest inspiring thousands of children worldwide — between the ages of nine and 13 — to submit original artwork illustrating a special person they admire participating in an Olympic Winter sport.

![][1]     The five U.S. winners selected from thousands of entries nationwide are Philip Tanedo, Los Angeles; Alyssa Wehr, Grinnell, Iowa; Shuki Merlis, Atlanta; Zareen Mehmud, Brooklyn, New York; and Sadek Ghaznavi, Brooklyn, New York.

“We are proud to be able to bring together the worlds of sport and art by honoring artistic talents and imaginations of schoolchildren in true Olympic style,” said Michael Beindorff, executive vice president of marketing and product management, Visa U.S.A. “‘Visa Olympics of the Imagination’ is an opportunity to unite people from around the world in a celebration of the human spirit and Olympic competition.”

The five young artists from the United States join 21 children from 13 nations on an all-expenses-paid trip by Visa with a parent to witness the pinnacle of athletic competition.  Children’s artwork created for the contest will be displayed at an international art exhibit in the Olympic city of Nagano, Japan.

Winning United States entries can be found on the Visa Olympic of the Imagination Internet site at [http//www.visa.com/visakids/][2].

Entries include

“Jonathon Larson  La ‘American’ Boheme”

Philip Tanedo, age 13 from Los Angeles, portrays Jonathon Larson, the composer of the Broadway musical Rent, figure skating because he is a true artist and figure skating is one of the most artistic Olympic sports.

“Mother Teresa  An Eternal Legacy”

Zareen Mehmud, age 13 from Brooklyn, New York, portrays Mother Teresa as a hockey player fighting the opposing team’s defense to make her goal symbolizing how Mother Teresa was a fighter for her beliefs.

“Katie”

Alyssa Wehr, age 13 from Grinnell, Iowa, admires her sister Katie and portrays her figure skating symbolizing her efforts to never give up.

“Koss Skates for Olympic Aid”

Shuki Merlis, age 11 from Atlanta, portrays Johann Olav Koss the great Olympian speed skater who started Olympic Aid, an organization that raises money for children that need help all over the world.

“‘Air’ Olympics ’98”

Sadek Ghhaznavi, age 13 from Brooklyn, New York, portrays a famous basketball player competing in a variety of Olympic Winter sports symbolizing his reputation of athletic prowess and talented ability to master any sport.

United States winners were selected by a prestigious panel of judges at an event sponsored by Visa in conjunction with the International Children’s Art Museum in San Francisco, which specializes in the exchange of children’s art from around the world.  Judges included Bay Area Olympian Matt Biondi and world-renowned artist Alexandra Nechita, 12, who is touted as “Mozart with a paintbrush.”  Judging of entries was based on originality, imagination and artistic merit.

Winners of the “Visa Olympics of the Imagination” art competition will attend the 1998 Winter Games as guests of Visa from February 5-11.  The young artists will observe the Opening Ceremonies and be spectators at Olympic events such as Women’s Ice Hockey and Speed Skating.  In addition, they will be involved in a number of Japanese cultural activities and exchanges including creating a gigantic mural painting with children from all around the world.

On the evening of February 7, Visa will unveil an outdoor exhibit of the children’s art and award the “first medals of the Olympic Games” as part of a special presentation on the Olympics ceremonial stage.  The grand prize winner will earn a “Best of Show” award and earn a trip for two to the 2000 Olympic Games in Sydney, Australia.

Visa, a worldwide sponsor of the Olympic Games since 1986, is the official payment system of the 1998 Olympic Winter Games in Nagano, Japan, and will continue as the exclusive card and official payment system for the 2000 Olympic Games in Sydney, Australia.

Visa is the preferred payment brand and the largest consumer payment system worldwide.  It 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.  Visa is the only consumer payment system to facilitate $1 trillion worth of purchases of goods and services in a fiscal year.  Visa’s nearly 600 million cards are accepted at more than 14 million worldwide locations, including 380,000 ATMs in the Visa/PLUS Global ATM Network.  Visa’s Internet address is .

[1]: /graphic/visa/olympics/3.gif
[2]: http://www.visa.com/visakids/

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MBNA’s Payoff

MBNA’s unprecedented investment in its ‘Platinum Plus’ program paid off in spades last year. According to MBNA’s fourth quarter income report, released publicly yesterday, MBNA added 9.4 million new accounts representing 11.4 million cardholders during 1997. Although not disclosed, it is estimated MBNA generates more than 80% of its new cardholders from solicitations for its ‘Platinum Plus’ VISA and MasterCard program. Two years ago MBNA took a $54.3 million pre-tax charge for expenses related to the launch of its platinum program and continues to significantly outspend its competitors in platinum marketing. In other financial highlights MBNA’s total managed loans hit $49.4 billion at year’s end (the credit card portion should be around $44 billion) and year-to-date card volume logged in at $66,399,425,000. For the fourth quarter card volume was $18,976,327,000 compared to $16,478,242,000 for the third quarter. Despite MBNA’s platinum success the issuer continues to expand its affinity portfolio, adding 563 new programs last year.

                            MBNA  VITALS
             Card Receivables Growth          +24.6%             
             Volume Growth                    +36.3%
             Delinquency (30+ day)*            4.59%
             Charge-Offs*                      3.97%
             Net Interest Margin*              7.50%
* percentage of managed loans including credit cards and consumer
installment loans)
       Source company report

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Fleet Rated

Duff & Phelps Credit Rating Co. has assigned a rating of ‘A-‘ (Single-A-Minus) to the $500 million subordinated debt offering of Fleet Financial Group.  These 30-year securities are noncallable, and were priced at 99.122 percent for a yield to maturity of 6.945 percent.

DCR reaffirmed its ratings of Fleet Financial Group following a series of agreements by Fleet to acquire three significant consumer financial services businesses.  The acquisition of Columbia Management Company and the pending acquisitions of Quick & Reilly Group, Inc.(Q&R), and the credit card operations of Advanta Corp. provide Fleet with a broad array of consumer financial products and distribution channels that should enhance earnings stability and diversification.

In addition to significantly expanding Fleet’s investment management services, the Columbia and Q&R acquisitions provide an opportunity to sell banking products to a new, geographically diverse customer base.  Columbia gives Fleet a $22 billion family of mutual funds, increases assets under management to $74 billion and is expected to increase noninterest income by 5 percent.  The acquisition of Q&R brings Fleet extensive investment product distribution capabilities and provides it with specialized market making and securities clearing businesses.  Q&R will operate independently, offering discount brokerage services through its national network of 117 branches.  The company also operates a securities clearing company that services 340 correspondents and acts as a specialist and market maker in several listed and over-the-counter securities.

Initially, the agreement to acquire Columbia raised some concerns regarding increased leverage.  However, as a pooling, the Q&R transaction required Fleet to reissue 10.75 million shares in the fourth quarter 1997 to cleanse tainted shares and has strengthened capital ratios.

The acquisition of Advanta`s credit card operation should further enhance Fleet’s earnings and geographic diversification.  The combination of Fleet’s risk management discipline and Advanta’s marketing expertise should allow the company to effectively compete in the rapidly evolving credit card industry. Fleet’s success with recent acquisitions mitigates concerns associated with the integration of Advanta`s credit card operations.

Fleet’s improved profitability and expanded banking franchise have resulted from earlier acquisitions of Shawmut National Corporation and NatWest Bank, N.A.  These acquisitions have strengthened Fleet’s market position in New England and the metropolitan NY and NJ areas.  The mergers also produced a company with solid asset quality and a diversified banking and financial services franchise.  Over the long term, these transactions have the potential to significantly improve profitability through improved efficiency and revenue growth opportunities.  The two bank acquisitions also allowed Fleet to improve its balance sheet efficiency by shedding low-yielding assets and high-cost purchased funds.  At the same time, the new asset mix and higher leverage increase the risk profile of the balance sheet.

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More with Less

Early results from Bankcard Update’s/CardData’s ‘Fourth Quarter Portfolio Survey’ shows some card issuers experienced slight growth or a slight contraction in their cardbase but still posted healthy results for 1997. First National of Nebraska’s fourth quarter volume grew 5% compared to last year while card loans increased 10.5% for 1997 despite the fact that the number of accounts dropped more than 300,000. An exception, Travelers added 77,971 accounts during the fourth quarter and 1997’s receivables growth exceeded 48%. Huntington National Bank upped receivables 20.3% last year while active accounts inched up 2.4%. First Tennessee’s card outstandings rose 4.8% during 1997 while the number of accounts only grew by 13,000.

                           EOY  RECV           4Q VOLUME           EOY ACCTS
First Natl Nebraska        $3,345,391,000      $1,042,620,000      3,815,280
Travelers Bank             $1,361,083,000      $1,088,637,000        984,798
Huntington Natl Bnk          $612,908,000        $302,510,000        460,263
First Tennessee              $564,000,000        $324,539,000        533,000
       Source Bankcard Update/CardData (301-695-4660)

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G&D Cardtech Opens

Giesecke & Devrient (G&D) Chairman of the Board of Management, Dr. Hilmar Dosch, accompanied by G&D’s principal stockholders, Mrs. Verena Mitschke von Collande and Mrs. Claudia Miller, and Volker Bartholomaei, president of G&D America, Inc., officially opened the expanded and modernized G&D Cardtech production facility in suburban Cleveland, OH Tuesday. G&D America acquired Cardtech in April, 1997 and is investing upwards of $50 million in the US to upgrade the plant to produce state-of-the-art chipcards and more than double the plant’s capacity for conventional magnetic stripe cards.

In remarks to invited guests, Dosch emphasized that G&D’s decision to acquire Cardtech “…symbolizes our commitment to a growing presence in the US and our strong desire to develop a world class manufacturing base in the Americas.” Dosch said that his expectations for G&D Cardtech “are not at all radical we simply want our facility to be absolutely world class in terms of products, production quality, and customer service.”

G&D has enlarged the Cardtech facility by 55 percent and more than doubled its card capacity to over 100 million cards annually, making G&D Cardtech one of the largest US card producers. Ongoing modernization will enable G&D to produce cutting-edge chipcards within the near future. G&D’s integrated North American strategy links its Canadian subsidiary G&D Security Cards Systems, Inc. (GDSCS) with its Mexico unit (Giesecke y Devrient de Mexico S.A. de C.V.) and permits G&D to address the full spectrum of card applications ranging from magnetic stripe cards to highly-customized environments utilizing its proprietary STARCOS(R) operating systems. The combined production capacities of the three sites gives G&D the largest capacity of any North American card and card systems manufacturer.

Dosch emphasized that the Munich-headquartered G&D was becoming increasingly global in its focus with a sales and manufacturing presence in Spain, Belgium, Greece, Russia, Singapore, the People’s Republic of China, Hong Kong, and South Africa in addition to its North American operations. While G&D is very much a high-tech company, Dosch stressed that “security and competence” remained the guiding principles of the firm.

Gearing up for the smart card ‘revolution’ in North America, G&D has been a key player in the largest and most innovative of smart card rollouts. G&D produced nearly one million Visa Cash(R) cards for Nationsbank during the 1996 Atlanta Summer Olympics and is the leading supplier of Visa Cash cards for Citibank’s innovative smart card project in New York City involving more than 700 merchants. GDSCS also has been involved in sophisticated smart card pilots including the Scotiabank Visa Cash card pilot in Barrie, Ontario. GDSCS recently received its Provisional Bureau certification by Mondex International to produce and supply Mondex(R) cards for smart card electronic purse and loyalty applications.

ABOUT GIESECKE & DEVRIENT

Giesecke & Devrient GmbH is a world leader in the development and production of cards and card systems, including microprocessor, memory, and magnetic stripe cards. A privately-held Munich-based corporation, Giesecke & Devrient employs 4,300 people worldwide in its operating units in Germany, Belgium, Spain, Mexico, China, Russia, Singapore, Australia, South Africa, Canada, and the United States. The rapidly expanding G&D America manages over 900 employees and is a wholly-owned subsidiary of Giesecke and Devrient. The Virginia-based company focuses its North American sales and development efforts on products for Giesecke & Devrient’s Card and Card Systems Division and its pioneering currency processing systems which are used by major central banks and leading commercial banks throughout the world. As one of the largest manufacturers of secure magnetic stripe and chip cards in North America, G&D America operates production and research facilities in Cleveland, Ohio; Bedford, Massachusetts; and Philadelphia, Pennsylvania; as well as in Toronto and Mexico City. For further information, please contact G&D America toll free at 800-296-4371 or see the Giesecke & Devrient GmbH web site at

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NationsBank’s First SET Tx

NationsBank announced Tuesday the successful execution of the bank’s first SET Secure Electronic Transaction, which enables a customer to securely use their credit card over the Internet without fear of another party intercepting, monitoring or changing the transactions.

This transaction differs from others announced in the United States in that it uses the 1.0 production specification and software from different technology providers.

NationsBank has been working with the 1.0 production specification for the past six months.  In conjunction with IBM and MasterCard, NationsBank conducted a SET enabled transaction to purchase items from a MasterCard promotional web site.  The 1.0 specification is the industry-approved standard for transmitting credit card information over the Internet.

“This SET initiative underscores our commitment to electronic commerce, the Internet and addressing customer concerns about security,” said Rick Collins, vice president of New Product Development for Card Services at NationsBank.  “Our successful completion of an end-to-end SET transaction represents the first step towards offering a solution to our customers who want to securely shop on the Internet.”

Currently, the technology is available only in pilot projects.  Future initiatives include expanding the technology to consumers, although no timetable has been established.

NationsBank used a branded IBM CommercePOINT Wallet(TM) and the IBM Registry for SET(TM) certificate services, which enables a consumer to securely store and transmit their credit card information to a merchant web site over the Internet.

MasterCard, working with GlobeSet(TM), provided a merchant server and payment gateway.  This combination of software allows transactions to flow securely over the Internet from the customer to the merchant to the bank and back, thereby fully authenticating interoperability.

“Ensuring security is a key aspect of IBM’s focus on e-business — using the Internet to improve business efficiency,” said Mark Greene, vice president, Internet payments and certification for IBM.  “IBM is delighted to work with NationsBank and MasterCard to enable secure Internet transactions for their customers.  As the first SET 1.0 launch in the U.S., this is a landmark accomplishment.”

“While there has been a lot of worry lately about SET interoperability, efforts like these with leading banks like NationsBank go a long way to showing the path forward to secure and efficient Internet commerce,” said Steve Mott, senior vice president for Electronic Commerce/New Ventures at MasterCard.

“GlobeSet congratulates NationsBank on their groundbreaking achievement in the SET arena,” said Dennis Jolly, vice president of sales and operations for GlobeSet.  “We look forward to more milestones in the future, helping to develop SET business solutions that further demonstrate our full interoperability with other SET vendors and customers.”

As the industry’s leading provider of electronic business solutions, IBM was the first company to bring to market in 1996 a comprehensive suite of secure end-to-end electronic commerce solutions, the CommercePOINT family of products and services.  In April, IBM announced the first merchant server in the industry to use the SET protocol, Net.Commerce.

MasterCard International, a payments company with one of the world’s most recognizable brands, is dedicated to helping more than 23,000 financial institutions around the world offer consumers a variety of payment options.

MasterCard remains focused on helping shape the future of money by expanding acceptance of its global brands (MasterCard(R), Maestro(R), Mondex(R), and Cirrus(R), the world’s largest ATM network) and maintaining reliable, secure networks facilitating global value exchange.

GlobeSet is a leading developer of comprehensive, SET software solutions for secure payment card transactions over the Internet, with applications for the buyer, merchant, financial processor, and certification authority.  The company is part of the SET design team and serves as a charter member of the SET Business Review Panel.

NationsBank Corporation (NYSE NB), headquartered in Charlotte, N.C., is a bank holding company that provides financial products and services nationally and internationally to individuals, businesses, corporations, institutional investors and government agencies.  NationsBank has primary retail and commercial banking operations in 16 states and the District of Columbia.  With its completed acquisition of Barnett Banks on January 9, 1998, NationsBank has total assets of $310 billion.

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MBNA Dividend

MBNA’s  Board of Directors approved an increase of 12.5% in the quarterly dividend rate to $.09 per common share, which will increase the annual rate to $.36.  The cash dividend is payable April 1, 1998, to stockholders of record as of March 16, 1998.

MBNA Corporation, a bank holding company and parent of MBNA America Bank, N.A., a national bank, has $49.4 billion in managed loans.  MBNA, the largest independent credit card lender in the world and one of the two largest overall, also provides retail deposit, consumer loan, insurance, and card acceptance services.

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Diversinet Enters E-Security

Diversinet Corp. announced Tuesday at the 1998 RSA Conference, the premier international cryptography event of the year, its plans to launch an all-new product line as the company changes its strategic direction to offer ground-breaking technology for secure electronic commerce-enabling servers.

Diversinet’s technology will provide businesses with efficient and versatile turnkey security solutions for Intranet, Extranet and Internet applications. Compared to the more cumbersome products available on the market today, a Diversinet-enabled system is much more scalable. It can service several hundred users or several million users, without frustrating lag times.

“The key advantage of the Diversinet technology is its simplicity,” said Dr. Taher Elgamal, Chief Scientist for Netscape Communications Corp. “It is a flexible, effective and efficient security solution for e-commerce applications,” added Dr. Elgamal, who also serves on Diversinet’s board of directors.

Complete anonymity and security

Diversinet’s certification server, the company’s core product, issues on-demand `D-certificates’ and distributes public keys in an anonymous and trusted manner. Unlike current systems where the certificates include additional personal information that is irrelevant to the user’s need for access to the system (e.g. name, address, phone number), D-certificates only carry the user’s alpha-numerical ID. This reduces process time and the amount of memory required to store the certificate, making it more efficient and significantly less expensive to encode on a smart card. Diversinet products can be either software-based or can use hardware smart cards for authenticating users.

There is also no need for a revocation process since the owner of the certificate controls the certificate public key. The certification server distributes the certificate but does not attest to any knowledge of the owner.

The certification server, which is scheduled for release in May, will include client software to retrieve, store and maintain D-certificates as well as a toolkit to allow developers to use D-certificates within their applications. The product will include a “light authentication” system that will allow companies to simply integrate the certification process into existing and/or new systems.

Streamlined authorization process

Diversinet’s authorization server works with the certificate server to increase the security of applications by enabling them to determine the level of permitted access for any user. Unlike other authorization servers, the Diversinet product will allow access to users without prior setup within the applications. The authorization server utilizes D-permits – portable credentials that are carried by the users and presented when needed, eliminating the need for an application database. The authorization servers will be available in the third quarter of this year.

“Diversinet is poised to revolutionize the burgeoning e-commerce security market with its flexible, efficient, and effective products,” said Nagy Moustafa, President and Chief Executive Officer of Diversinet Corp. “Our patented authorization and authentication technology positions Diversinet to be an industry leader.”

“Diversinet is working with OEMs to license the technology for future product development so that it becomes a standard for secure, corporate e-commerce solutions”, Moustafa added.

About the company

Diversinet Corp., (), is a developer of products based on public-key infrastructures (PKI) and technologies required for corporate networks, Intranets and electronic commerce on the Internet. The Toronto, Canada based-company’s proprietary PKI technology offers customers ease of use, as well as efficient and flexible implementation for a variety of diverse security authentication applications.

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Security Dynamics & Schlumberger Partner

Security Dynamics Technologies, Inc. and Schlumberger Limited announced a partnership whereby Security Dynamics plans to use Schlumberger technology to provide SecurID(R) smart cards as part of its new SecurSight product portfolio announced yesterday.  The addition of smart cards to Security Dynamics’ family of SecurID solutions is designed to provide customers with additional choices for implementing strong user authentication in enterprise security solutions.

Security Dynamics is adding Schlumberger’s RSA cryptographic smart cards to its existing line of SecurID authentication devices, including hardware tokens and SoftID(R) software tokens.  As part of its SecurSight product roadmap, Security Dynamics is providing customers with a migration path that outlines the opportunities and transition issues for companies looking to implement next-generation security technologies, such as public key and digital certificate technology.   To protect customers’ existing security investments, SecurSight solutions will work with both SecurID tokens and smart cards.  Additionally, SecurSight will support Security Dynamics’ traditional time-synchronous authentication method as well as public-key authentication simultaneously.

“As digital certificate technology and smart card readers become more prevalent, smart cards will become an alternative form factor for customers implementing user authentication,” said Dave Power, senior vice president of marketing and corporate development at Security Dynamics.  “Through its partnership with Schlumberger, Security Dynamics plans to deliver a broader range of options for its smart card customers who want to deliver information to their users anytime, anywhere, securely.”

“Public Key Infrastructure is recognized by the IT community as the cornerstone of future network security, and smart cards are a natural multi- application token for large scale deployments,” said Lou Bisasky, general manager of Schlumberger Smart Cards North America. “We are pleased and excited to work with Security Dynamics, a pioneer and a leader in network security solutions.  Together, we plan to deliver to our mutual customers higher utilities thanks to the combination of Public Key and smart card technologies.”

The partnership between the companies is designed to allow Security Dynamics’ customers to leverage Schlumberger’s leading portfolio of smart card technology and applications, worldwide manufacturing and distribution channels.  Conversely, Schlumberger’s Corporate Campus customers will have the opportunity to migrate to enterprise security solutions offered by Security Dynamics’ SecurSight solutions.

Schlumberger was first to introduce state-of-the-art 1024-bits RSA crypto smart cards required for public key operations such as dynamic two-factor user authentication or document and message signing.  Schlumberger’s cryptocards are integrated as plug-ins in such solutions as Microsoft’s Internet Explorer and Netscape’s Navigator and Communicator browsers.  Schlumberger is also the leading provider of smart card-based multi-application campus cards particularly targeted at Corporate Campuses.  Schlumberger’s cards are designed from open systems and industry standards, such as the RSA crypto- algorithm, the PKCS#11 specification and the PCSC specification.

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 product offering includes the milestone Cyberflex card, the industry’s first Java-based smart card.

The Electronic Transactions group employs over 5,000 people and operates 45 facilities. Among dedicated facilities in 34 countries, the group has nine research and development centers strategically located in Europe, Asia and North America.  Schlumberger Electronic Transactions is a business segment of Schlumberger Limited, a $9 billion global technology service company providing oilfield services, natural resource management, transactions-based technology and associated systems, and semiconductor test equipment.  More information can be found at .

About Security Dynamics

Security Dynamics Technologies, Inc. is the leading provider of enterprise network and data security solutions that help companies conduct business securely, protect corporate information assets and facilitate business-to- business electronic commerce.  With more than two million users of its SecurID authentication technology, Security Dynamics is the world leader in two-factor user identification and authentication.  RSA Data Security, Inc., a wholly owned subsidiary of Security Dynamics, is a leading supplier of software components that secure electronic data, with more than 300 million of copies of RSA encryption and authentication technologies installed worldwide.  RSA technologies are part of existing and proposed standards for the Internet and World Wide Web, ISO, ITU-T, ANSI, IEEE, and business, financial and electronic commerce networks around the globe.  Security Dynamics and RSA can be found on the World Wide Web at and , respectively.

This press release contains forward-looking statements relating to the planned introduction by Security Dynamics of SecurID smart cards incorporating Schlumberger technology, and such statements involve a number of risks and uncertainties.  Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are delays in product development, undetected software errors or bugs, competitive pressures, market acceptance of Security Dynamics’ SecurSight products and Public Key and smart card technologies, technical difficulties, changes in customer requirements, government regulations, general economic conditions, and the risk factors detailed from time to time in Security Dynamics’ periodic reports and registration statements filed with the Securities and Exchange Commission, including without limitation Security Dynamics’ Registration Statement on Form S-3, as amended (File No. 333-35035), filed on September 5, 1997.

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Flat Fleet

Fleet Financial Group’s fourth quarter was essentially flat compared to the third quarter according to Bankcard Update/CardData. Fleet’s receivables grew a mere $42.2 million and its credit card customer base increased slightly less than 8,000 accounts. The issuer is in the process of absorbing the Advanta portfolio and installing a new card czar.

               FLEET FINANCIAL FOURTH QUARTER 1997 STATS (12-31-97)
          RECV      Q-VOL     YTD-VOL   ACCTS     ACTVS     CIF
Fleet     $2.7b     $1.0b     $3.4b     2.3m      1.4m      N-R
     recv-receivables; vol-volume; accts-accounts; actvs-actives;
cif-cards-in-force
     Source CardWeb, Inc.’s Bankcard Update/CardData

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ValiCert Service Global Pilot

ValiCert, a company delivering encryption technology and services for assuring the validity of digital certificates, today announced it has expanded its global field trials of the ValiCert Service with several leading digital certificate product partners.  The ValiCert Service — a unique service which provides an intelligent clearinghouse for checking the validity of digital certificates — will now be supported by Baltimore Technologies, Entegrity Solutions, Entrust Technologies, GTE CyberTrust, and Xcert International, Inc. Initial field trials for the ValiCert Service were announced in late 1997 with international CAs Belsign (Europe) and Thawte (South Africa/USA).

The field trials are now being opened up to organizations worldwide as a unique opportunity for application developers, enterprises deploying a public key infrastructure, and users of certificate-enabled applications and services to test certificate validation in a real-world setting using the first available global validation service.  The trial will be capable of managing an average transaction rate of more than 30 million certificate validation requests per day.  For more information about the ValiCert field trial, see .

ValiCert’s global field trial validates digital certificates using live data by aggregating an array of Certificate Revocation List (CRL) data from ValiCert’s CA service and product partners.  The CA service partners feed all live data from their CRLs into the ValiCert Service in order to provide scalable validation services that assure the validity of their customers’ certificates across the global Internet, intranets and extranets.  The service partners who also market CA products can now incorporate the ValiCert Service Plug-in which will give their customers the option to participate in the ValiCert Service for communicating and conducting commerce across the Internet and enterprise intranets.

Expanded Field Trial Partnerships

ValiCert’s newest partners in the field trials include global leaders in products and services for encrypted communications and Internet commerce infrastructure.  “We are very pleased with the success so far of our ValiCert service and the high interest level in the field trials,” said Chini Krishnan, chairman and chief technology officer of ValiCert.  “Our expanded partnerships with the industry’s premier partners is an indication of our commitment to work with the top organizations who are focused on meeting the information security needs for today’s electronic environment.”

Baltimore Technologies is a global leader in the provision of cryptographic software solutions securing electronic commerce and Internet business.  From their headquarters in Dublin, Baltimore Technologies operate the EuroTrust Trusted Third Party (TTP) infrastructure for electronic commerce throughout the EU.

“Baltimore Technologies are excited about integrating ValiCert’s products into our UniCERT Certification Authority system,” commented Fran Rooney, CEO of Baltimore Technologies.  “The inclusion of ValiCert’s products allows our customers worldwide to perform truly secure cross-realm validation for electronic commerce.”

Entegrity Solutions is the leading provider of a Public Key Infrastructure (PKI) Security Development Platform (SDP) to rapidly deploy secure applications.  “Supporting ValiCert’s validation services in our Security Development Platform and Certificate Authority enables our customers to have access to a higher performance global validation service,” said John Weinschenk, vice president of marketing, Entegrity Solutions.  “We believe that a global validation service will also play a key role in Certificate Authority interoperability and assurance in the global Public Key Infrastructure.”

Entrust Technologies is a leading provider of Certification Authority (CA) and public-key management products for both Internet and intranet applications.  “There’s no doubt that certificate validation is an important value-added service for electronic commerce,” said Brian O’Higgins, chief technology officer, Entrust Technologies.  “Entrust provides an open platform that allows third parties and customers to provide additional certificate validation processes or technologies that are appropriate for business processes.  We will support ValiCert’s product and service development in this area.”

GTE offers a suite of high assurance certification authority products and services for use with public key-enabled security applications.  “GTE CyberTrust is committed to providing customers with the strongest security solutions available.  To accomplish this, GTE is working closely with industry pioneers like ValiCert to ensure that a comprehensive infrastructure is available,” said Tom Carty, vice president of marketing and business development for GTE CyberTrust Solutions Incorporated.  “Certificate validation is a critical component in this infrastructure and GTE is proud to participate in field trials of the ValiCert Service.”

Xcert International provides secure electronic business solutions to the global financial services market.  Xcert technology is based upon an interoperable Public Key Infrastructure that is cryptographically independent. “We believe that ValiCert’s pioneering efforts in certificate validation are an important part of the framework for global expansion of electronic commerce,” said Thomas Nolan, president and CEO of Xcert.  “Xcert is pleased to be a part of this expansion and to help define the infrastructure for secure online commerce.”

The ValiCert Service

The ValiCert Service is a scalable and network efficient system for users, merchants and enterprises that are conducting communications and commerce across the Internet.  The service enables certificate issuers to distribute all revocation data confirming the validity of a digital certificate in a timely, secure manner and to make this data — traditionally associated with unscalable, network-intensive Certificate Revocation Lists — easily available to applications and people that they wish to conduct business with around the world.  It enables any application, server or person accepting certificates, regardless of its source, to be assured of the certificate’s validity.  The ValiCert Service is targeted at enterprises that are conducting broad-based Internet communications and commerce, as well as individuals using public certificate authorities (CAs).

Digital Certificates

Digital certificates are gaining momentum and acceptance for use as electronic credentials for identification (comparable to a driver’s license or employee ID badge), for payment (comparable to a credit card), and for other communications or business transactions conducted over the Internet or corporate intranets.  As with the credit card industry, which developed a way to electronically validate the millions of credit card numbers issued by any bank in the world, the use of digital certificates requires its own clearinghouse network for certificate confirmation, so that individuals and businesses can assure the validity of any certificate.

About ValiCert

ValiCert was established in 1996 by a group of leading cryptographers and executives from the Internet services industry to build a broad validation infrastructure for the net economy.  Utilizing technology based on an innovative cryptographic technique called certificate revocation trees, ValiCert delivers an efficient, scalable and transparent solution for checking the validity of digital certificates in any Internet or intranet transaction. ValiCert is headquartered in Palo Alto, Calif. and is available on the World Wide Web at , or by e-mail at info@valicert.com.v

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