UK Military Smart Cards

3-G International, Inc. announces that it has entered into a contract with the UK Ministry of Defense to deliver a smart card-based medical documentation system.

“This award is a natural extension for 3GI given the smart card systems we have built for the U.S. Department of Defense (DoD),” commented Kit Letchworth, 3GI’s Senior Vice President. 3GI is the primary software developer and system integrator for the DoD Multi-Technology Automated Reader Card (MARC) program. “Our company (3GI) not only has six years experience in developing multiple application smart card systems, but we also understand how smart card technology can be applied effectively in military environments and for military healthcare operations,” said Mr. Letchworth.

3GI’s products will help MOD to reengineer the process of documenting, managing, and analyzing critical medical information by establishing the foundation of an Operational Medical Data capture (OMD) system. The system will employ smart cards to replace the existing paper documentation system used to record patient medical and treatment information during medical encounters. Through the use of small, hand-held computers, field medics will be able to ascertain critical medical information about soldiers prior to providing care at the point of injury. The medics will record treatment information to a soldier’s smart card electronically, enabling the soldier to carry this information to the next treatment location so that subsequent medical decisions can be made based on the most current data. The 3GI system will also enable more sophisticated processes such as casualty tracking, evacuation management, medical record management, and epidemiological analysis.

“The contract was awarded to 3GI following a competitive procurement process which also required a fully functional system demonstration,” said Mr. Letchworth. 3GI leveraged its knowledge of military healthcare needs with its strong smart card programming staff to develop products which meet the very specific needs of the UK military. The system is flexible in design, supporting multiple card operating systems and card readers, and will allow for the incremental inclusion of new smart card applications over time. The system will run on 3GI’s BSmart multiple application smart card software.

3GI is the largest U.S.-based smart card integrator and smart card software development company, with offices in Williamsburg and Springfield, VA, Honolulu, HI, and Shenzhen, PRC. 3GI recently established a branch office in London. 3GI was the primary integrator and software developer for the US Department of Defense Multi-technology Automated Reader Card (MARC), which supports 26 applications including medical data, physical access, stored value, identification, and others. Recently designated the 36th fastest growing technology company in the U.S. by the Deloitte and Touche “Fast 500” poll, 3GI also provides comprehensive smart card integration and software development services to other areas of government and to commercial sectors including banking, access security, and the computer industries.


Mondex Names Merchant Strategy Head

Paula R. Kramer, 41, has joined Mondex USA as director of merchant strategy. She reports to Janet S. Crane, president and CEO of Mondex USA.

In her new role, Kramer is responsible for developing strategies to recruit and involve smaller, independent retailers in Mondex. She will expand Mondex USA’s emphasis on important merchant segments, such as vending and convenience stores. She will also integrate the independent merchant strategy with the merchant branding segment.

“I have known Paula for more than 15 years, and have watched her successfully design and execute business strategies,” said CEO Janet Crane. “She is very market- and customer-focused and brings a new level of merchant expertise and perspective to Mondex USA. I am delighted to be working with her again.”

Mondex is electronic cash on a reloadable and highly secure computer chip embedded in a plastic card. Mondex smart cards make small-dollar transactions efficient and convenient over the Internet and in the physical world. MULTOS, the Mondex operating system, permits Mondex smart cards to carry multiple nonpayment applications like retailer loyalty programs that reward consumers for their repeated business, and corporate or college campus programs that provide users access to data and services.

Kramer has nearly 20 years of experience in the electronic funds transfer industry, in both the corporate and entrepreneurial settings. Prior to joining Mondex USA, Kramer served as vice president and general manager of merchant services at PNC Bank in Pittsburgh. While at PNC since 1994, Kramer was responsible for 30,000 clients, processing $7 billion in credit card volume and managing 80 employees.

From 1992-1994, Kramer was marketing director and principal at Transaction Processing, Inc. (Now part of First USA Paymentech) in Valley Forge, PA. Between 1979 and 1992, she served at Mellon Bank in Pittsburgh in various capacities, most recently as vice president in charge of business development and acquisition for the bank’s ATM Network Services business.

Kramer graduated summa cum laude in English from Indiana University of Pennsylvania.

Mondex USA was formed in April 1997 and is based in San Francisco. The company is owned by AT&T Universal Card Services, Chase Manhattan, Morgan Stanley Dean Witter Discover (NOVUS), First Chicago NBD, MasterCard, Michigan National Bank and Wells Fargo. For more information, visit the company on the Internet at [][1]



MasterCard SET Policy

MasterCard announced yesterday it will provide a ‘representment right’ for merchants who process transactions in a ‘SET’-compliant mode, provided they receive a ‘SET’ consumer certificate validated from a member financial institution and have a properly authorized transaction. The rules change goes into effect April 1. MasterCard estimates half of all chargebacks to merchants in the U.S. direct marketing industry occur when cardholders repudiate transactions. With the yesterday’s announced rule change, the “I didn’t order it” problem will be significantly reduced by involving ‘SET’ issuers of digital IDs in standing behind the transaction.


Hawaii Ed Smart Card Pilot

The Pathways Group, Incorporated (OTC Bulletin Board: PTHW) today announced that it has signed a pilot agreement to provide a Smart Card based system for handling both paid and FDA-sponsored school lunch programs, bus transportation, student identification, and other prepaid student activities.

The rollout of the Beta version of the software will begin March 1, 1998, at the Mililani complex and continue through the end of the school year. Assuming satisfactory completion of the Beta, the system will then be introduced statewide at the beginning of the Fall semester (September 1998).

Carey Daly, president and CEO of Pathways, said “This system, which is an extension of the previously announced Lanikila school program, opens the way for Pathways to market their technology to every school district in the country. The transaction-processing burden of these federal programs is well managed by the Pathways technology. We are very excited to be part of the new era of growth being planned for the State of Hawaii. Our continued commitment to the State and our experiences since coming to the State are absolutely positive. Other projects planned for the area will continue to meet our business plan and fulfill our mission statement.”

The Pathways Group, Inc. provides clients with innovative and unique solutions for securely creating, capturing and processing data and electronic transactions using custom application software and hardware systems. The company was established in 1987 by Carey Daly and has evolved into a leader in the development of custom software and hardware for electronic banking, data and transaction processing, and smart card applications. Pathways creation of proprietary “back room” systems allows for the capture and processing of data and transfer of funds via “ACH” protocol, the standard used in the banking industry for transfer of funds in retail, medical and institutional environments.

Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Act of 1995. Actual results may differ materially from those projected in any forward-looking statement. Investors are cautioned that such forward looking statements involve risk and uncertainties, including, but not limited to, dependence on the developing smart card marketplace; market acceptance of the company’s products; the rate at which the company’s customers deploy smart card solutions; and dependence on third party marketing arrangements. A description of the risks and uncertainties attendant to The Pathways Group, Inc. and other factors which could affect the company’s financial results are included in the company’s Securities and Exchange Commission filing on Form 1-A. A description of the risks and uncertainties attendant to The Pathways Group, Inc., and other factors that could affect the Company’s financial results are included in the Company’s Securities and Exchange Commission filing on Form 1-A.


USA Technologies Expands Officers

USA Technologies Inc. announced yesterday that it has promoted four officers and expanded its senior management team by creating three new positions, as the company anticipates a period of sustained growth due to the increasing revenues generated by its flagship product, the MBE Business Express.

Officers of the company recently promoted include Stephen Herbert, Executive Vice President and Chief Operating Officer; Brock Kolls, Senior Vice President – Research and Development; Leyland Maxwell, Senior Vice President and Chief Financial Officer; and, Keith Sterling, Executive Vice President – Systems, and Chief Information Officer.

The company has also created and filled three new officer positions Mike Lawlor, Vice President – MBE Joint Venture; Phil Harvey, Vice President – National Accounts and Marketing; and, Joseph Donahue, Vice President – Operations.

“I am very pleased to announce the promotion of several of our senior officers, as well as the addition of three new officers,” said George R. Jensen, Jr., president and chief executive officer of USA Technologies. “Entering 1998, USA Technologies stands ready to seize several lucrative opportunities as we continue to establish MBE Business Express in the hospitality, retail and business travel industries.  The expansion of our senior management is just one step that USA is taking as we prepare for a breakthrough year.”

USA Technologies’ flagship product is MBE Business Express(TM), a joint venture product with Mail Boxes Etc. MBE Business Express(TM), using USA’s patented technology and previously marketed by USA as Business Express(TM), provides credit card-activated self-service office systems for business travelers and consumers who need to access the internet or e-mail or use personal computers, printers, copiers and fax machines while they are away from their office or home.  Each unit also features a dial through telephone to a nearby Mail Boxes Etc. location for additional services and support such as color copying projects, binding and packing and shipping.  A simple swipe of any major credit card activates the office equipment and computer stations which offer many popular software programs as well as access to the internet and e-mail.  To maintain security, MBE Business Express(TM) is equipped with TransAct(TM), USA Technologies’ proprietary payment and management system that processes secure, real-time credit card transactions, billing customers for actual services used while ensuring timely payments to the business center owner.

USA Technologies is a leading owner and licensor of networked credit card- activated control systems for the personal computer, photocopier, facsimile and laptop printing capabilities.  The company’s proprietary technologies make available unattended, point-of-sale control systems for credit card payments.

Statement Under the Private Securities Litigation Reform Act

With the exception of the historical information contained in this release, the matters described herein contain forward-looking statements that involve risk and uncertainties that may individually or mutually impact the matters herein described, including but not limited to product acceptance, economic, competitive, governmental, results of litigation, technological and/or other factors, which are outside the control of the Company.


First Annapolis Hires IT Director

Ben P. Yuhas has joined First Annapolis Consulting as a Senior Associate and Director of Information Technologies. Dr. Yuhas will head the information technology services of First Annapolis Consulting. His functional areas of specialization will include predictive modeling, data mining, and decision support systems.

Dr. Yuhas has 10 years of experience in quantitative methods. He has worked with clients in the retail, telecommunications, and travel industries. Previously, Dr. Yuhas was a Principal within IBM’s Global Business Intelligence Consulting Group. In this position, he assisted clients in the assessment, design, and implementation of decision support systems and strategies. Prior to joining IBM, he was the Director of Neural Networks for AT&T’s Universal Card Services, where he managed predictive modeling efforts to support risk management and marketing.

Fred White, President, states “Ben brings an in depth knowledge of analytic techniques and an understanding of how they can best be integrated into the decision process.” Dr. Yuhas is a published author and a frequent speaker at conferences, seminars and executive forums. He holds a Ph.D. and an M.Sc. in Electrical and Computer Engineering from Johns Hopkins University and a B.A. in Mathematics from the University of Chicago.

First Annapolis Consulting is a full-service, general management consulting firm specializing in financial services, specifically credit card issuing, merchant acquiring, private label card, commercial card, electronic banking, and mortgage banking. The company offers a variety of services including planning, financial analysis and management, marketing strategy and research, operations planning and re-engineering, and general management advisory services. Its subsidiary corporation, First Annapolis Capital, provides merger and acquisition advisory services related to credit cards, ATMs, and other electronic banking businesses.


Dec Sales Up 2.2%

December same-store retail spending rose a moderate 2.2 percent over the same period last year, according to data compiled by TeleCheck Services Inc., the world’s leading check acceptance company.

The TeleCheck Retail Index is based on a year-over-year, same-store comparison of the dollar volume of checks written by consumers at more than 27,000 of TeleCheck’s 167,000 subscribing locations. TeleCheck is a subsidiary of First Data Corporation.

“Consumers maintained the same moderate spending pattern evidenced throughout the holiday season, despite the fact that this December had one less weekend shopping day than December 1996. Heavy discounting that ran throughout the season may have reduced total spending at the retail level,” said Dr. William Ford, TeleCheck’s Senior Economic Advisor.

The Southeast led the nation with a 4.7 percent increase. Sales rose 5.2 percent in Tennessee, 4.6 percent in Florida, 3.4 percent in The Carolinas, 2.6 percent in Georgia and 2.3 percent in Louisiana. Sales grew by 2.9 percent in Nashville, but dropped 2.4 percent in Memphis. Orlando’s sales rose 5.0 percent, Tampa’s grew 1.7 percent and Miami/Ft. Lauderdale’s gained 0.7 percent. Sales rose 3.4 percent in Atlanta and and 1.4 percent in New Orleans.

Both the Midwest and the Northeast were up 2.4 percent. In the Midwest, sales rose 2.5 percent in Wisconsin, 2.4 percent in both Illinois and Ohio, and 1.2 percent in Michigan. Minnesota’s sales dropped 0.1 percent. Milwaukee’s sales were up 2.1 percent, Chicago’s gained 4.9 percent, Cleveland’s grew 2.8 percent and Detroit’s rose 1.1 percent. Minneapolis/St. Paul’s declined 1.3 percent.

In the Northeast, sales rose 2.3 percent in New York and 2.1 percent in Massachusetts. New York City was down 2.2 percent while Boston was up 2.4 percent.

The Mid-Atlantic’s sales were up 1.9 percent, with Maryland up 2.1 percent, Virginia up 2.0 percent, New Jersey up 1.7 percent and Pennsylvania up 1.2 percent. Sales rose 0.4 percent in the District of Columbia, 3.2 percent in Baltimore, 0.4 percent in Philadelphia and 0.3 percent in Pittsburgh.

Sales in the West rose 1.2 percent. Hawaii’s sales grew 4.0 percent, Arizona’s and Washington’s increased 2.8 percent, California’s rose 1.1 percent and Colorado’s gained 0.7 percent. Oregon’s sales dropped 0.6 percent. Sales were up 3.4 percent in Phoenix, 3.7 percent in Seattle and San Diego, and 1.9 percent in Los Angeles, but dropped 0.5 percent in the Bay Area. Denver’s sales rose 2.6 percent and Portland’s grew 1.0 percent.

In the Southwest, sales rose 0.3 percent. Missouri’s sales were up 1.1 percent and Texas’ grew 0.8 percent, while Oklahoma’s dropped 1.1 percent. While St. Louis’ sales rose 1.6 percent, Kansas City’s dropped 0.2 percent. Austin’s sales grew 3.9 percent, Dallas/Fort Worth’s rose 3.0 percent, San Antonio’s gained 1.7 percent and Houston’s grew 1.4 percent. Oklahoma City’s sales rose 1.2 percent, but Tulsa’s dropped 1.6 percent.

TeleCheck’s index is compiled on a calendar basis and is based on the total sales volume of check-writing consumers at a broad cross-section of retailers. Figures are not adjusted for inflation. Checks account for 37 percent of retail spending. In 1996, TeleCheck authorized over $40.2 billion in checks and processed more than 645 million check inquiries.

Note The TeleCheck logo and holiday retail sales figures can be downloaded from the TeleCheck web site at [http//][1] .

Founded in 1992, Hackensack, NJ-based First Data Corporation is a global leader in payment systems, electronic commerce and information management products and services. First Data and its principal operating units process the information that allows millions of consumers to pay for goods or services by credit, debit or smart card at the point of sale or over the Internet; by check, or wire money – seamlessly and effortlessly.

For more information about First Data, visit us on the Internet at [http//][2].

Dr. William Ford holds the Weatherford Chair of Finance at Middle Tennessee State University. Earlier in his career he was president of the Federal Reserve Bank of Atlanta and served on former Fed Chairman Paul Volcker’s Federal Open Market Committee.

                TeleCheck National Retail Sales Index
                           January 6, 1998

NATIONAL                     2.2%
SOUTHEAST                    4.7%       WEST             1.2%     
Florida                      4.6%       Arizona          2.8%     
  Miami/Ft. Lauderdale       0.7%         Phoenix        3.4%     
  Orlando                    5.0%       California       1.1%     
  Tampa                      1.7%         Bay Area      -0.5%     
Louisiana                    2.3%         Los Angeles    1.9%     
  New Orleans                1.4%         San Diego      3.7%     
Georgia                      2.6%       Oregon          -0.6%     
  Atlanta                    3.4%         Portland       1.0%     
Tennessee                    5.2%       Washington       2.8%     
  Memphis                   -2.4%         Seattle        3.7%     
  Nashville                  2.9%       Colorado         0.7%     
The Carolinas                3.4%         Denver         2.6%     
                                        Hawaii           4.0%     
SOUTHWEST                    0.3%                                 
Texas                        0.8%       NORTHEAST        2.4%     
  Austin                     3.9%       Massachusetts    2.1%     
  Dallas/Ft. Worth           3.0%         Boston         2.4%     
  Houston                    1.4%       New York         2.3%     
  San Antonio                1.7%         New York City -2.2%     
Missouri                     1.1%                                 
  Kansas City               -0.2%
  St. Louis                  1.6%
Oklahoma                    -1.1%
  Oklahoma City              1.2%
  Tulsa                     -1.6%

MIDWEST                     2.4%    
Illinois                    2.4%    
   Chicago                   4.9%    
Michigan                    1.2%    
   Detroit                   1.1%    
Minnesota                  -0.1%    
   Minneapolis/St. Paul     -1.3%    
Wisconsin                   2.5%    
   Milwaukee                 2.1%    
Ohio                        2.4%    
   Cleveland                 2.8%    
MID-ATLANTIC                1.9%    
District of Columbia        0.4%    
Pennsylvania                1.2%    
   Philadelphia              0.4%    
   Pittsburgh                0.3%    
New Jersey                  1.7%    
Virginia                    2.0%    
Maryland                    2.1%    
   Baltimore                 3.2%    



Tanzanian Smart Phones

Boston-based African Communications Group , a company providing telecommunications services in Tanzania, will deploy more than 150 payphones from Intellicall, Inc. later this month.

The ACG Tanzanian order is the second to Intellicall since March 1996 and will bring deployment of Intellicall phones in Tanzania to more than 350.

The phones will be connected to existing Intellicall Intelligent Network Platform (INP) technology, which can process prepaid calls from “smart” chip cards, magnetic stripe cards and debit cards, and remote database memory.

“Our success in Tanzania is a direct reflection of the sophistication and functionality of Intellicall technology,” said John J. McDonald, Jr., president and chief operating officer of Intellicall. “Tanzania is a showcase for the versatility of our products in international markets.”

As the Tanzanian network grows, further orders are expected from ACG in the upcoming months. “We have been extremely pleased with the performance of the switching platform and phones,” said Monique Maddi, ACG chief executive officer. “Intellicall’s reliable technology has helped create a new demand from our customers, most of whom have never had the opportunity to experience telecommunications services.”

The $200,000-plus order exemplifies the growing popularity of prepaid phone platforms worldwide. The payphones will be installed in several major cities throughout Tanzania, where access to telecommunications services for the population of about 30 million is severely limited. ACG is licensed to install payphones across the 348,000 square-mile country.

“We have barely scratched the surface of the potential in the telecommunication markets in Tanzania and other African countries,” said Bill Brooks, Intellicall vice president of global sales. “Tanzania is a country with a developing economy, sorely in need of advanced telecommunications capabilities, and Intellicall, in partnership with ACG, is leading the way to providing those capabilities.”

Intellicall is a leading manufacturer of advanced public access telecommunications systems, including intelligent payphones, prepaid and call processing systems, and network control and business management systems.

Intellicall’s common stock is traded on the New York Stock Exchange under the symbol ICL and is listed in alphabetical quotations as “Intellicall” or “Intel Cal.”


Card Profits Drop

The weighted, average, after-tax, return-on-assets for the bank credit card business dropped from 2.00% to 1.56% during 1997, according to an annual study prepared by R.K. Hammer Investment Bankers. (The pre-tax figures were 2.6% for 1997 and 3.3% for 1996.) Hammer cites intense competition as the underlying reason for declining income yields. However those issuers who outperformed their peer groups have strong branch network sales cultures, a clear set of corporate/parent objectives, heavy investments in risk management technology and very aggressive marketing. Hammer also found the ROA for platinum cards to be significantly better than other card products and that returns for private label retail card portfolios continue to be significantly lower than bank credit cards.

                                 1997  CARD  PROFIT  ANALYSIS
                     Bank Cards  Store Cards   Standard   Gold   Platinum
Total Income           17.4%        16.8%        17.5%    17.4%    17.3%       
Operating Expense       4.3%         5.0%         4.3%     4.4%    4.4%
Net Charge-Offs         4.6%         5.5%         4.8%     4.4%    4.0%
Cost of Funds           5.9%         5.9%         5.9%     5.9%    5.9%
Pre-Tax Net Income      2.6%         0.4%         2.5%     2.7%    3.0%
Net Profit After-Tax    1.56%        0.24%        1.50%    1.62%   1.80%


First Union Picks ProfitMax Bankruptcy

HNC Software Inc. Tuesday announced that First Union Corp., a leading U.S. credit card issuer, has signed a license agreement for HNC’s ProfitMax Bankruptcy, a predictive software solution that monitors card transactions for indications of potential bankruptcy.

The new software is strategically important to First Union, according to Fred Winkler, executive vice president of First Union’s Customer Direct Access Division. “Our volume and quality-focus make state-of-the-art risk management more important than ever, given the recent trends in consumer bankruptcy,” Winkler said.

Using neural networks and HNC’s proprietary cardholder behavior profiling, ProfitMax Bankruptcy analyzes each cardholder transaction for evidence of bankruptcy risk. The use of cycle cut and transaction data often allows the prediction of bankruptcy even before the cardholder is delinquent on any payments.

David Nole, senior vice president Credit Policy at First Union, commented “Our experience with some of HNC’s other neural network, transaction-based products, such as Falcon, gives us confidence that the ProfitMax Bankruptcy methodology will be effective.”

“The purchase of ProfitMax Bankruptcy followed hard on the heels of First Union’s installation of our Capstone application decision processing system,” said HNC Software vice president Krishna Gopinathan. “It’s particularly gratifying that First Union’s experience with our services supported their decision to invest in our technology once again.”

Charlotte-based First Union Corp. provides financial products and services to more than 12 million corporate and retail customers nationwide. First Union is the nation’s sixth-largest bank holding company with assets of $144 billion as of Sept. 30, 1997.

With headquarters in San Diego, HNC Software Inc. (NASDAQHNCS) is a world leader in the development and delivery of predictive software solutions in client/server environments. HNC provides innovative predictive software systems in the financial services, retail, insurance information, and electronic commerce markets. For more information, contact Patsy Campbell, director of marketing, HNC Software Inc., 5930 Cornerstone Court West, San Diego, CA 92121, 619/546-8877. For the investor relations hotline, call 800/396-8052.


Driver’s Edge Card

Citibank unveiled its replacement for the ‘Ford Citibank VISA/MasterCard’ yesterday. The new ‘Driver’s Edge VISA/MasterCard’ offers cardholders the ability to earn rebates toward the purchase or lease of any new vehicle, regardless of make or model. Citibank says all ‘Ford Citibank’ cardholders were converted to the new program as of January 1. Last summer Ford decided to end its co- branded rebate program with Citibank at the end of 1997. The new ‘Citibank Driver’s Edge’ card offers a 2% rebate on purchases with an annual rebate cap of $500. A maximum of $1,500 may be accumulated towards the purchase or lease of any one vehicle. Cardholders simply submit a special ‘Redemption Form’ and two proofs-of-purchase to collect the rebate directly from Citibank. Citibank is also running a sweepstakes, giving away a new car each month.