Safe-ACCESS

ARKSYS announced Safe-ACCESS, a smart card security system that combines hardware and software security techniques to protect Internet and/or intranet financial data transmissions.

Safe-ACCESS, when combined with ARKSYS’ Commercial-ACCESS, a cash management system, or Personal-ACCESS, a home banking system, allows banking customers secure access to private financial data. With a combination of proven hardware and software security techniques, security risks for financial institutions are reduced.

“Internet usage is gaining popularity and creating similar growth among intranet users. Today’s technology allows not only for business, educational and media information to be transmitted over public and private lines, but private financial data, as well,” said Mary Rose, Vice President of Marketing with ARKSYS. “A combination of hardware and software security can eliminate security infringements and breaches almost entirely, while providing valuable services to banking customers.”

According to Rose, the added element of a “key”, the smart card, restricts unauthorized users, even if the password, or a “back door”, is discovered. Key aspects of the smart card security include data encryption and digital signatures.

ARKSYS is a privately-held software company headquartered in Little Rock, Arkansas, USA and is a premier provider of effective payment and financial transaction delivery systems. The company offers comprehensive ATM, POS and debit card packages, EFT network solutions, interactive voice response, smart card consulting, international credit card systems, and Internet and intranet banking offerings for cash management and home banking.

ARKSYS’ home page address is .

ARKSYS, Integrated Transaction Management and ITM are trademarks of Arkansas Systems, Inc.

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CreditDesk WWW Interface

Financial institutions can now extend the use of Fair, Isaac’s CreditDesk(R) application processing software to remote or in-house sites with a new Fair, Isaac Web browser-based interface. The graphical user interface allows institutions with multiple branches to maintain control over loan decisions and provide faster decision notification. Fair, Isaac announced that the interface is the first of a wide range of Internet and Intranet application processing solutions the company plans to offer to credit grantors.

“This interface can support consistency in loan decisions while simultaneously helping branch loan officers streamline operations,” said Fair, Isaac Product Line Manager Bill Barnes. “Instead of branches receiving applications by telephone or fax and then retyping them into the system, the data goes directly to the central office, where risk managers can make sure accept/decline decisions are being made consistently.”

CreditDesk is Windows-based software that automates the processing and evaluation of consumer and small business credit applications. The new CreditDesk interface improves the flexibility and cost-effectiveness of the application process, Barnes said. Since every computer with a compatible Web browser can support the interface, a credit grantor can use existing machines to expand a network to incorporate any number of data entry sites. In addition to branches, third parties and loan prospects themselves can also be granted access to the CreditDesk interface.

The interface runs on any Java-enabled Web browser, such as Netscape Navigator or Microsoft Internet Explorer. The web-browser interface is available as a CreditDesk system option.

Since 1956, Fair, Isaac has helped businesses maximize the value of data for strategic decision making. The company pioneered the use of credit scoring in consumer and commercial lending. Today, Fair, Isaac provides data-driven decision making solutions such as customer and operational data management and modeling, data warehousing and information analysis, strategy design, and software to businesses in financial services, direct marketing, personal lines insurance, retail, and health care. Headquartered in San Rafael, Calif., Fair, Isaac employs more than 1200 people in 16 offices worldwide. For the fiscal year ended September 30, 1997, the company reported revenues of $199.0 million, a 28 percent increase over the prior year.

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MerchantWAVE

Global Payment Systems has announced a new “all-in-one” merchandising service that helps merchants set up and maintain a virtual storefront on the Internet. It also gives them the ability to accept credit cards in a secure environment. The announcement was made yesterday at the BAI Retail Delivery Show in New Orleans.

Known as MerchantWAVE, the comprehensive, turnkey package, allows businesses to create an on-line catalog for their products and services. To set up the catalog, merchants simply key in product information, based on a pre-established format or “template.” Or if they choose, they can submit paper or digital files to Global for assistance in creating the on-line catalog. Photos can also be incorporated into the storefront. The software used in Global’s Internet service was developed by CommerceWAVE, Inc., an Internet merchant transaction software developer based in Carlsbad, California. It is being resold by Global Payment Systems to its banking customers for their merchant base.

In addition, merchants can accept credit card payments and authorize transactions in real-time through an encryption system that fully meets the financial industry’s security requirements.

“Our service offers merchants an easy and affordable method to establish an Internet presence and expand their products and services in the international market,” said David K. Hunt, Global Payment Systems’ president and CEO. “Once the merchant’s Internet store has been set up on our MerchantWAVE host computer, managing product inventory and transaction processing is as simple as a point-and-click of the mouse.”

MerchantWAVE reduces merchants’ startup and maintenance costs since no software or hardware is required — other than a PC and access to the Internet.

Consumers shop the merchant’s store on the Internet where they can purchase goods or services 24-hours-a-day, seven-days-a-week with credit cards in a secure environment. Using MerchantWAVE, businesses also can offer shoppers traditional payment methods using phone or fax order processing. Payment authorization information is captured for settlement, using MerchantWAVE’s administrative menu functions.

“By offering this innovative Internet business solution we are continuing to meet our bank customers’ evolving needs,” said Hunt. “MerchantWAVE expands our product offerings for our banks’ customers and epitomizes our flexibility in response to customer demand.”

Global Payment Systems is a major provider of transaction processing products and services for financial and corporate organizations worldwide. Global provides services to more than 1.2 million merchants in North America and processes in excess of 2.7 billion transactions annually. While well- known for its card services, Global also serves more than 700 financial institutions and 12,000 corporations in 44 countries through its cash management and financial EDI services.

National Data Corporation (NYSE: NDC) is a leading provider of information services for the payment systems and health care markets.

When used in this report, press releases and elsewhere by management or the Company from time to time, the words ‘believes,’ ‘anticipates,’ ‘expects’ and similar expressions are intended to identify forward-looking statements concerning the Company’s operations, economic performance and financial condition, including in particular, the likelihood of the Company’s success in developing and expanding its business. These statements are based on a number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company, and reflect future business decisions which are subject to change. A variety of factors could cause actual results to differ materially from those anticipated in the Company’s forward-looking statements, some of which include competition in the market for the Company’s services, continued expansion of the Company’s processing and payment systems markets, successfully completing and integrating acquisitions in existing and new markets and other risk factors that are discussed from time to time in the Company’s Securities and Exchange Commission (“SEC”) reports and other filings. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligations to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof, or thereof, as the case may be, or to reflect the occurrence of unanticipated events.

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Electrifying MasterCard

While several U.S. electric/gas utility firms are mulling cobranding relationships with credit card issuers, DE-based Delmarva Power & Light Company became the first one out- of-the- chute yesterday. MBNA and Delmarva rolled out the ‘Conectiv MasterCard’ offering cardholders the ability to earn certificates, based on card purchases. Under federal and state regulations the certificates may not be used for direct payment of utility bills but rather the value may be applied to utility bills. The certificates are also good towards direct payment for non-regulated products and services. Delmarva is in the process of merging with NJ-based Atlantic Energy and will rename itself Conectiv after the merger. Conectiv will have one million electric customers and 100,000 gas customers.

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Iris ID for ATMs

A revolutionary new personal identification system developed by Sensar, Inc. for use in electronic banking will soon allow financial institutions to offer customers higher-value ATM services beyond the withdrawal of small amounts of cash. Using a standard video camera and lighting techniques, as well as unique software, this virtually fraud-proof personal identification system validates a bank customer’s identity within seconds by imaging the iris (the colored portion of the eye), digitally encoding the image, and comparing it to a previously stored code already on file. If the codes match, ATM access is automatically approved. The technology has also proven highly reliable for identifying individuals wearing glasses or contact lenses.

With electronic transactions by consumers growing in popularity, particularly at ATM locations where over 30 billion transactions were processed worldwide last year alone, the need for a more secure, fraud- resistant, yet still user-friendly means of personal identification has become critical. Sensar’s patented new technology is several orders of magnitude more accurate and reliable than any other biometric solution available today, including voice, face, hand and fingerprint methodologies. System security can not be bypassed or compromised in any way. In addition, no active participation is required from the customer to operate the system and there is no inconvenience to the user. Many experts believe Sensar’s unique iris identification system will eventually eliminate PIN numbers for bank customers.

According to Rob VanNaarden, Vice President of Sales and Marketing for Sensar, “Although limitations on transactions and fraud at ATMs have prevented consumers from taking full advantage of electronic banking capabilities for many years, up until now no personal identification solutions were available that combined speed, reliability, high accuracy and user-friendliness.

“Sensar’s iris identification system will change all that by delivering a powerful, personal identification tool that will permit bank customers to access a broader range of high-value ATM services, such as deposits, higher- value cash advances, transfer of funds between accounts and bill payments,” VanNaarden says. “In addition, this technology will dramatically reduce ATM related fraud while providing heightened security for the ATM customer.

Founded in 1993, Sensar is a spin-off of the Sarnoff Corporation, an internationally-acclaimed advanced technology research and development organization. Sensar holds the exclusive rights to computer-vision technology developed at Sarnoff for use on a worldwide basis that is being incorporated into the company’s iris identification system. The company has a multi- million dollar development, distribution and supply agreement with Citicorp for direct marketing of its products into the financial services arena, as well as strategic partnerships with ATM manufacturers NCR, OKI Electric of Japan, and LG Electronics of Korea.

IriScan, Inc. of Mt. Laurel, New Jersey, USA, holds the exclusive worldwide patents on the iris identification concept developed by Drs. Leonard Flom and Aran Safir and the software and process technology invented by Dr. John Daugman, Cambridge University, England. Sensar uses, under license, the iris identification process developed and owned exclusively by IriScan.

IRISCAN is a trade mark of IriScan, Inc. of Mt. Laurel, New Jersey, and is used by Sensar, Inc. under license from IriScan, Inc.

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Xmas Shopping Demographics

The majority of American consumers (84%) are still shopping for holiday gifts, reports the International Mass Retail Association (IMRA) in their first Weekly Gallup Holiday Shopping Poll, sponsored by Visa USA. The IMRA conducted the random weekly telephone poll to determine how much of the Christmas shopping has been completed and by whom. The survey reported that the primary Christmas shoppers (58%) are women, with only 20% of households reporting sharing in the shopping burden and 18% percent of the shopping being done primarily by men.

Although the majority of holiday presents will be purchased by female shoppers overall, it is within the Baby Boomer (35 – 54 year old) households that this trend is most prevalent. Among the Generation Xers (18 – 34 year olds), although the female is the primary shopper for holiday purchases, it was reported that the holiday shopping duties are more likely to be shared between the men and women of the household. Furthermore, among the 16 percent of consumers who have already completed their holiday shopping, half are over age 55 and 59 percent are men.

In addition to shopping, most consumers are planning to do other traditional holiday activities, such as baking cookies or decorating with lights. While half of all respondents reported that they planned to bake cookies sometime this holiday season, seventy percent will put up Christmas lights this year.

The first weekly IMRA “Holiday Shopping Study” random telephone poll of 500 adult consumers nationwide was conducted the week of November 24 – 30, 1997. For a complete copy of the IMRA Weekly Holiday Poll, please contact Robin Lanier at the IMRA, telephone (703) 841-2300 or visit the IMRA web site at [www.imra.org][1].

The International Mass Retail Association represents the mass retail industry — the consumers’ choice for price, value and convenience. Its membership includes the fastest growing retailers in the worlds — discount department sores, home centers, category dominant specialty discounters, catalog showrooms, dollar stores, warehouse clubs, deep discount drugstores, and off-price stores, a well as the manufacturers who supply them. IMRA retail members operate more than 77,000 American stores and employ millions of workers. One in every ten American works in the mass retail industry, and the IMRA retail members represent over $411 billion in annual sales.

[1]: http://www.imra.org

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VISA & Holiday Inn Promotion

Holiday Hospitality has teamed up with Visa for its Holiday Inn Second Night Free winter promotion. More than 1,000 Holiday Inn and Holiday Inn Express hotels in the United States and Canada are participating in the promotion which will run through Feb. 9, 1998.

Second Night Free offers leisure travelers a consecutive night at no charge for every night that they stay at the non-discounted (Second Night Free) rate. The offer is only available to consumers who have a coupon and make their reservations in advance.

Coupons will be distributed via insertions in Parade Magazine, USA Weekend Magazine, The New York Times Magazine, and the Philadelphia Inquirer Magazine on Dec. 7, 1997.

Plus, as an added value at participating hotels, all guests who pay for their stay with a Visa card will receive a VISA Value Pack* filled with special coupons from Hertz, Northwest Airlines, Hollywood Video, Moto Photo and K-Mart. Recipients receive a free day on a leisure weekend rental from Hertz, a $119 companion fare from Northwest Airlines, free movie rental from Hollywood Video, a special offer from K-Mart, and a buy-one-get-one photo enlargement from Moto Photo.

Note: Holiday Hospitality, the hotel business of Bass PLC of the United Kingdom, operates or franchises more than 2,300 hotels and 390,000 guest rooms in more than 60 countries and territories.

The following service marks are owned by Holiday Hospitality Corporation, its subsidiaries or affiliates: Holiday Inn(R), Crowne Plaza(R), Holiday Inn Express(R), Holiday Inn Select(R) , Holiday Inn Garden Court(sm), Holiday Inn SunSpree(R) Resorts, Holidex(R), Holidome(R), Priority Club(R), Crowne Plaza Preferred(R) and e.space(sm) .

Holiday Hospitality offers information and reservations capability on its pages on the World Wide Web of the Internet — for Holiday Inn hotels and for Crowne Plaza Hotels and Resorts.

*Visa Value Pack offers require additional purchase.

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 370,000 ATMs in the Visa/Plus Global ATM Network. Visa’s Internet address is .

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ATM Software Reinvented

In conjunction with yesterday’s keynote address by Bill Gates at the BAI Retail Delivery Conference, Microsoft, KeyBank and Diebold demonstrated a new ATM software architecture that will enable banks to deliver new products and services via various Internet technologies. Diebold’s new ‘OPTimum’ architecture is based on the ‘Component Object Model’ and supports ‘Windows Distributed iNternet Architecture for Financial Services’. As a result ‘OPTimum’ is less dependent on the delivery channel or operating system which enables financial institutions to introduce applications quickly into multiple environments.

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OBI Consortium to Meet

OBI Consortium members will meet on December 16-17, 1997 for the 2nd Roundtable Forum, to be held in Boston, MA. The focus of the two day meeting will be on refining the scope of the existing OBI standard, finalizing the OBI certification process and reviewing case studies detailing the significant progress being made by member companies in their business-to-business commerce efforts. The OBI standard which provides a uniform approach to high-volume, low-dollar purchases over the Internet, was first released in June 1997 and has quickly evolved to become the industry’s defacto business-to-business Internet commerce standard.

At the Roundtable Forum Meeting, members will be discussing long term strategic planning with particular emphasis on the evolvement of the OBI standard. The strength of the OBI standard will be significantly enhanced by defining and developing new standards that cover other areas of the procurement process. Members will also be drafting version 1.1 of the OBI standard, to be released in Q1, 1998. President of the OBI Consortium, Neal Casteel of National Semiconductor noted, “The OBI Consortium is a cooperative forum that provides members with ongoing technical innovation, support for pilot projects and most importantly a real voice in the future direction of the OBI standard itself.” He added, “There has been a significant shift in the dynamics of how the OBI Consortium is operating as working groups made up from member companies are increasingly becoming responsible for the day to day running of the Consortium. The result is that the combined needs of the buying, selling, requisitioning, technology and payment organizations represented in the OBI Consortium membership are all being met.”

What is the value of membership in the OBI Consortium? Doug Bailey, Business Development Manager, Electronic Commerce, BOC Gases explains, “BOC gases has worked closely with our customers over several years to develop electronic commerce services. With the value of supply chain management and Internet-based electronic commerce becoming more widely adopted, the need for a standard process is clear. As a member of the OBI Consortium, BOC can stay abreast of leading edge thinking while continuing to enhance our capabilities.” Hewlett-Packard’s EC-EDI Strategic Planning Manager, Sandy Whitson added, ” The OBI Consortium creates the opportunity to define business fundamentals and technical requirements necessary for business-to-business electronic commerce. This should enable buyers and sellers to more easily adopt and quickly attain benefits from electronic commerce.” Another new member Rohm and Haas Company, clearly stated the advantages of OBI membership, “The OBI standard gives vendors and customers a generic solution to interfacing over the Internet that still allows for some freedom in how each party would like their systems to work” stated Laurie Mestres, Business Analyst.

Internet business-to-business commerce is entering a new phase of corporate commitment as members are able to detail the bottom-line value of OBI-compliant applications. For example, OBI capability was a necessary requirement for Kinko’s Inc., the copy-center and office services chain, when they selected Actra’s BuyerXpert for use on its extranet, soon to be handling over 50,000 transactions a month. Similarly, Shell Oil have identified many benefits of the OBI standard, not least its ability to act as a catalog aggregator. The first real proof of concept has been very successfully achieved by the first live pilot scheme between Office Depot and Motorola, using Intelysis software. Currently transactions are coming from 3 Motorola sites and trial users have been quick to endorse the new scheme and particularly like the added control they have. The dynamic nature of the Office Depot catalogue allows end-users at Motorola to search, select, obtain pricing, check on-hand inventory, backorders and status information on existing orders.

New OBI Consortium members Bellcore, BOC Gases, Dun & Bradstreet, Fisher Scientific, Graybar, Hewlett Packard, Johnson & Johnson, Lockheed Martin, and Rohm and Haas Company have joined 33 other Fortune 500 companies including Actra, American Express, Ford Motor Company, G.E., IBM, Microsoft, Texas Instruments and Visa.

The Open Buying on the Internet (OBI) Consortium is a non-profit organization dedicated to developing open standards for business-to-business Internet commerce. Membership in the Consortium is open to buying and selling organizations, technology companies, financial institutions, and other interested parties on an annual fee basis. The Consortium provides a forum for standards development, education, and compliance certification. For more information on the OBI Consortium, visit [www.supplyworks.com/obi][1].

[1]: http://www.supplyworks.com/obi

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Visa Check in the Midwest

NationsBank announced yesterday it will convert its ‘MasterMoney’ cardholders to ‘VISA Check’ cards. The conversion is part of NationsBank’s acquisition of Boatmen’s Bank and affects more than half a million cardholders. The region involved includes MO, IL, IA, AR, KS, OK and NM. NationsBank also announced it has selected VISA’s DPS for operational support in the midwest.

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Hypercom Names Asia Point Man

Hypercom Corporation continues to expand operations in Asia with the naming of Clive Cooper-Smith as Managing Director for Hypercom’s rapidly growing Asia-Pacific region. Cooper-Smith will be responsible for sales and operations, including Hypercom’s offices in Hong Kong, Singapore, Beijing, Tokyo and Sydney.

Based in Phoenix, AZ, Hypercom is the leading supplier of point-of-sale (POS) payment systems, enterprise networking solutions and client/server software.

“With Hypercom’s rapidly growing business in China and increasing orders throughout Asia, we believe Clive Cooper-Smith’s experience and leadership will further strengthen Hypercom’s market position and our commitment to our many clients in the region,” said Jairo Gonzalez, President of Hypercom International, a division of Hypercom Corporation.

Before joining Hypercom, Cooper-Smith was CEO and General Manager for Advantage Groups, a New Zealand-based distributor of POS products for Asia. Previously, Cooper-Smith held several senior-level positions with personal computer application developer Ashton Tate, including General Manager in New Zealand, Marketing Director for Asia, and General Manager of Africa and Latin America Sales.

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Holiday Travel Exp Up 55%

The American Express Travel Index found that people will be spending 55.5 percent more this season on holiday travel compared with last year.

“With travel more affordable today, and consumers putting more and more of their disposable income, towards investments and leisure activities, it is not surprising to see such a dramatic increase in travel budgets, particularly during the holiday season when consumers want to see friends and family they haven’t seen all year, or simply want to reward themselves with a trip,” said Emelie Smith, vice president, Retail and Travel Industries Marketing, American Express Travel Related Services Company, Inc. (TRS).

Holiday travel budgets varied dramatically among survey respondents. For example, as with gift budgets, men will outspend women by almost 100 percent ($183 vs. $98). In addition, travelers with incomes over $50,000 expect to spend $313 on holiday travel, while those with incomes over $100,000 will spend an average of $718. Overall, consumers responding to the American Express study in 1996 reported spending approximately $90 on travel related expenses. This year, holiday travelers expect to spend $140. Compared with other items in the holiday budget, travel and entertaining showed the most growth, while spending on gifts and decorations remained flat.

The national survey of 800 consumers revealed that one in five (18 percent) Americans will be going out of town this holiday season. In all, travelers expect to be away for an average of six days. According to the American Express Travel Index, 76 percent of travelers are planning to spend the holiday season with family, while 8 percent will visit friends. Twenty-seven percent say they will travel by plane, while most will take the car (68 percent). Another 5 percent said they would travel by bus or train.

Who Is Doing the Most Traveling

According to the American Express Travel Index, most will spend the holidays at either mom’s or grandma’s. People between the ages of 18 to 44 will travel more than those 45 and over (20 percent vs. 15 percent). In addition, households earning $49,000 or less, are likely to stay at home compared with those earning $50,000 or more (32 percent will travel during the holidays vs. 57 percent). Compared with the rest of the nation, those living in the north central region of the U.S. will travel the most during the holidays (21 percent), followed by West Coast residents (18 percent), Southerners (16 percent) and Northeasterners (15 percent).

Paying for Holiday Travel

Flexibility continues to be important to consumers who will use a variety of payment methods for purchases this season, including holiday travel expenses. Once again, credit cards surpass checks as the second most popular form of payment cited by 48 percent of respondents to 40 percent for checks. Cash remains the preferred method of payment overall, cited by 84 percent of those surveyed.

“The popularity of credit cards this year can be attributed to the attractive rewards and consumer protection programs that help make credit cards more than just a payment vehicle,” said Emelie Smith. “In addition, fiscally responsible consumers are beginning to understand that the ability to consolidate travel, dining and shopping expenses, especially at a time of year when personal spending activity is at its highest, provides a great cash management value.”

American Express is welcome at stores, restaurants, hotels and service providers where Cardmembers spend on everything from health and beauty aids, to computers, to a weekend away. Current American Express research shows that based on the way Cardmembers use their American Express cards, Cardmembers can put 92 percent of their plastic spending on American Express. Presently, a fast-growing number of merchants worldwide welcome American Express with a new establishment accepting the Card every two minutes. Expanded merchant coverage, a greater number of cards and higher spending per Cardmember helped American Express Company post a third quarter net income which was 14 percent higher than the same period a year ago.

American Express Travel Related Services Company, Inc., is a wholly owned subsidiary of the American Express Company — a diversified worldwide travel and financial services company founded in 1850. It is a leader in charge and credit cards, Travelers Cheques, travel, financial planning, investment products, insurance and international banking.

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