ACI Russian Expansion

Applied Communications, Inc. (ACI), a subsidiary of Transaction Systems Architects, Inc. (Nasdaq: TSAI), announces the continued expansion of its customer base in Europe and Russia. Among the financial institutions choosing ACI software solutions are SGS-AGRO (formerly known as Stolichny Bank of Savings) in Russia; United Payment System of Ukraine, Ltd. in the Ukraine; Postabank in Hungary; and BULBANK in Bulgaria.

The four have licensed a variety of products, including: BASE24-atm and BASE24-pos, the world’s leading ATM and POS processing software; BASE24- InfoBase, a suite of file transfer, electronic funds transfer and hot list management solutions that support the transfer and processing of diverse data types across various networks; and GENcard, a modular set of applications designed to meet the card processing requirements of financial institutions in emerging card markets. BASE24 products operate on Tandem Himalaya servers to provide fault tolerant, high-volume processing. GENcard operates on a range of popular servers including Tandem and UNIX to offer platform flexibility.

SBS-AGRO

SBS-AGRO, the second largest retail bank in Russia, licensed BASE24-atm and BASE24-pos to support its network of 350 ATMs and 3,000 POS devices.

“We anticipate a great deal of growth in our ATM and POS networks, and chose the BASE24 solutions because they will grow with us,” said Vladimir A. Levtchenko, first deputy chairman of the board of SBS-AGRO. “We needed a new system that was state-of-the-art and able to handle a large number of transactions reliably and efficiently. BASE24 running on Tandem hardware is able to meet our needs now and in the future.”

BASE24-InfoBase complements the products SBS-AGRO has chosen to integrate on its new BASE24 platform. InfoBase will collect, distribute and process a variety of EFT data for the bank.

United Payment System of Ukraine, Ltd.

United Payment Systems of Ukraine (UPSU) is an independent processing company that will initially provide card processing services for pensioners to pay their utility bills electronically. UPSU was founded by a number of organizations, including Crimea Credit Bank, one of the leading banks in Crimea. UPSU will use BASE24-pos and GENcard to meet the challenges presented by the Ukraine’s transition from a cash-based to an electronic-cash society.

“To ensure a smooth transition from cash to cards, our customers require reliable, flexible processing and BASE24 meets the need,” said Vladimir A. Dubovenko, general manager of UPSU. “We expect growth in volume and in the types of services our customers want and chose BASE24 because it offers us the flexibility to integrate additional functionality and value-added services to meet customer demand.”

GENcard gives UPSU the ability to quickly introduce new card products and services including card issuance and renewal, customer and card account management, and merchant account management. It offers fast transaction processing and flexible information reporting to effectively manage card business.

Postabank

The third largest bank in Hungary, Postabank also chose the proven processing performance of BASE24-atm, BASE24-pos and GENcard. Postabank will use its BASE24 platform to combine two in-house card processing operations, offer new card products and bring outsourced processing operations in-house.

“BASE24 is the ideal platform to allow us to meet the rapidly growing card base typical of our emerging market,” said Zsuzsanna Haraszte, director of Bank Card Schemes at Postabank. “The ability to combine our current processing operations into a single reliable system will also allow us to expand our products and services.”

BULBANK

A state-owned bank with 25 branches in Bulgaria, BULBANK is ACI’s first customer in Bulgaria. BULBANK licensed GENcard operating on a Hewlett Packard server to offer card products and services to its corporate and private customer base.

BULBANK will initially use GENcard to issue a domestic Bulgarian Leva card and international VISA cards and to process card transactions. As volumes grow, additional functionality may be added.

“We are in a position to help our customers make the transition from passbooks to card products,” said Alexandre Dokov, deputy manager of Non- Commercial Payments at BULBANK. “GENcard gives us the opportunity to offer the convenience of cards to our customers while automating and reducing some of the administrative costs associated with manual transactions.”

BULBANK will establish its card processing centre in its main office in Sofia. Branches throughout Bulgaria will be linked via network connections.

“These are just a few examples of customers adding the flexible solutions ACI has to offer,” said Tom Boje, managing director of ACI’s Europe, Middle East and Africa Operation, based in the United Kingdom. “They represent ACI’s ability to offer solutions across the processing spectrum. Whether the need is for high-volume processing, ATM and POS switching, card maintenance or new functionality, we have the solution. And, we are committed to offering solutions and products that meet our customers’ needs today and in the future.”

Applied Communications, Inc. is a subsidiary of Transaction Systems Architects, Inc. (Nasdaq: TSAI). Transaction Systems’ software facilitates electronic payments and electronic commerce by providing consumers and companies access to their money. The company’s products are used to process transactions involving credit cards, debit cards, smart cards, home banking services, checks, wire transfers and automated clearing and settlement. Its solutions are used on more than 2,700 product systems in 69 countries on six continents.

Visit TSA and ACI on the World Wide Web at [www.tsainc.com][1].

[1]: http://www.tsainc.com

Details

Verisign + NetSign Deal

Litronic, Inc. and VeriSign, Inc. announced today an agreement has been signed to resell and distribute VeriSign Class 1 Digital IDsSM with Litronic’s NetSign™ a complete solution that seamlessly integrates smartcards with Netscape Communicator. NetSign is fully integrated with Netscape’s implementation of secure e-mail (S/MIME) and secure transport, authentication and authorization (SSL) and object-signing. NetSign interoperates with VeriSign’s Class 1 Digital IDs to provide portable and secure smartcard-based storage of digital certificates.

“Digital certificates provide users with a powerful, flexible means for authenticating identity over an intranet, extranet or the Internet,” said Taher Elgamal, chief scientist at Netscape. “Litronic and VeriSign’s integration of digital certificates into smartcard technology through RSA’s PKCS #11 standard makes it even easier for Netscape Communicator users to access encrypted information from a protected network while on the road.”

“We’re happy to be partnering with Litronic to provide our customers with one-stop shopping for certificates and smartcards to give them the added security and portability they are looking for,” said Richard Yanowitch, vice president of marketing for VeriSign. “Litronic’s NetSign is a convenient, manageable and inexpensive solution to secure Internet and enterprise communications.”

“VeriSign and Litronic have joined forces to leverage the complementary expertise and capabilities of our two organizations to provide smartcard-driven security products to the Enterprise, merchant, and consumer marketplace,” stated Eric Greenberg, Chief Operating Officer of Litronic. “Digital certificates on smartcards allow users to securely logon to networks providing the portability and physical security of a user’s identity. Our joint product offerings will build on Litronic’s capabilities in the network security arena and on VeriSign’s digital certificate expertise.”

Based on Litronic’s smartcard API, called CryptOS™, and leading industry standards including Secure Sockets Layer (SSL), Secure Multipurpose Internet Mail Extensions (S/MIME), RSA’s Public Key Cryptographic Standards (PKCS #11), x.509 certificates and the Common Data Security Architecture (CDSA), NetSign allows users to download VeriSign Digital IDs onto smartcards. NetSign is a convenient, manageable and inexpensive means to secure Internet and enterprise communications. NetSign comes in a “ready to use” package including a Litronic smartcard reader, a Cryptoflex smartcard, and Litronic’s smartcard-enabling Netscape drop-in software, device driver and VeriSign Digital ID.

About Litronic, Inc.

Litronic, Inc. provides real world security solutions within a multi-platform, standards-based framework through enterprise security middleware, software developer toolkits, supporting hardware and professional services. Litronic’s products and services seamlessly add smartcard capabilities and integrate legacy security applications for the enterprise, the U.S. government, and banking and financial industries by supplying integration with standards including Secure Sockets Layer (SSL), Secure Multipurpose Internet Mail Extensions (S/MIME), Object Code Signing, PC/SC as well as FORTEZZA solutions. More information about Litronic can be found on the Internet at [http://www.litronic.com.][1]

About VeriSign, Inc.

VeriSign is a leading provider of digital certification services for Internet access and electronic commerce. Its corporate digital certificate solution, announced in January, is helping fuel the growth of Internet commerce and secure communication by making an Internet security requirement — digital authentication — readily available and easily customizable for corporations. In addition to customizable digital certificate programs, VeriSign also provides Web-server authentication through its Secure Server IDs and Global Server IDs, and secure e-mail authentication through its Digital IDs for S/MIME. The Server IDs let Web users engage in secure sessions between their browsers and Web servers. VeriSign’s Global Server ID lets users invoke strong encryption (128-bit) for international electronic commerce and communication. The e-mail IDs allow for privacy and authentication when sending electronic mail.

[1]: http://www.litronic.com

Details

Credit Store Update

Credit Store, Inc., a national credit card company that markets unsecured credit cards to individuals who have experienced difficulty in meeting their debt obligations, today released unaudited results for the first quarter of its fiscal year 1998, which ended Aug. 31, 1997.

For the three months ending Aug. 31, 1997, the first quarter of the 1998 fiscal year, Credit Store, Inc. reported revenues of $3.834 million. Net interest and other expenses of $4.453 million, and general and administrative expenses of $3.834 million. Net interest and other expenses for the quarter was $721,674.

The company reports that a significant portion of the operating, general and administrative expenses were attributable to costs associated with continuing to expand the work force and to build infrastructure to keep pace with business needs and expansion plans. The net loss for the period applicable to common stock was $5.415 million, or a loss of $0.17 per common share. Although the net loss for the period was $5.415 million, the cash used in operating activities was $3.512 million, principally because of non-cash expenses represented by provision for credit card losses, deprecation and amortization and cost recovery of the investment in credit cards.

Reviewing the period Jan. 1, 1997 through Aug. 31, 1997, Credit Store, Inc. accounced the following highlights and trends:

–More than $913 million in non-performing consumer debt portfolios have been acquired since Jan., 1997 (purchased at substantial discounts).

–Monthly gross cash-flow-before-expenses from credit card payments has increased from $670,000 in Jan. 1997 to $1,657,792 in Aug. 1997. In addition, monthly gross cash-flow-before-expenses from non-card holders increased from $36,516 in January, to $138,485 in August. Thus, total gross cash-flow-before-expenses increased from approximately $706,000 in January to $1.796 million in August.

–The amount of cash needed monthly to fund credit card purchases and cash advances increased at a slower rate than gross payments, from $405,000 in Jan., 1997 to $1.309 million in August. This has allowed monthly net cash flow (monthly gross credit card and non-credit payments, less monthly funding of credit card purchases and cash advances) to increase from $301,000 in January to $487,000 in August.

–Since Jan. 1, 1997, the Company has generated $39.0 million in face value of new credit card receivables before reserves, increasing the Company’s face value of total receivables outstanding before reserves to $59.8 million at Aug. 31, 1997. The Company has increased the number of its credit cards outstanding from 16,131 at Jan. 1, 1997, to 39,998 at Aug. 31, 1997.

–As of Aug. 31, 1997, the Company’s net investment in non-performing consumer debt portfolios, based upon purchase price, was $25.9 million. At the same time, the Company’s face value of gross credit card receivables before reserves was $59.8 million. In addition to interest collected on the face value of the credit card recievables, the Company expects to record a gain net of reserves and other expenses based on part of the difference between the company’s gross credit card receivables and its investment in the purchase of consumer debt portfolios.

Credit Store, Inc., based in Sioux Falls, S.D., extends unsecured credit cards to persons who, because of a change in their economic fortunes, have been unable to meet their debt obligations. The Company purchases charged-off debt from major national credit institutions at a fraction of their face value, and through a sophisticated process of sorting and marketing, converts the charged-off debt into performing credit cards that generate interest and fee income for the company.

“Given the rapid growth in consumer debt delinquencies and defaults, Credit Store is positioned to take advantage of expanding opportunities to purchase charged-off consumer debt,” Burke said. “And by offering consumers access to unsecured credit cards, we are giving them an innovative and practical way to restore their credit worthiness and their financial dignity.”

Credit Store, Inc.’s stock trades on the Electronic Bulletin Board under the symbol “PLCR”

The unaudited consolidation financial statements for the first quarter are available from the Company upon request.

This press release contains forward-looking statements that involve risks and uncertainties, including but not limited to, risks and uncertainties relating to financing, timing and management of growth, historic and future default and delinquency rates and losses, the market for and market value of the Company’s credit card receivables, the competitive enviornment and other risks. Future trends and results may differ materially from disclosures contained in this press release.

Details

ARKSYS European Expansion

ARKSYS announced Thursday the expansion of its European office to serve the company’s growing Europe, Middle East and Africa (EMEA) client base. Located in Budapest, Hungary, the office will provide on-site technical support for clients throughout the region.

“ARKSYS wants to provide high quality support and assistance for our clients,” said Donald B. Hatfield, President and CEO of ARKSYS. “Our expanded office will enhance our ability to more completely understand and support the specific needs of our EMEA clients.”

Over the past three years ARKSYS and its European distributors have added over 30 new clients in the EMEA region. The clients include some of the largest banks in several countries and some very sophisticated card and EFT/P0S solutions. The need for local support has continued to grow with the complexity and sophistication of our client’s products,” said Hatfield.

In addition, ARKSYS is committed to expand the support for authorized distributors in the region. The ARKSYS office is housed in Budapest with Polygon Informatikai Kft. Polygon implements and supports six clients with ARKSYS solutions in Hungary and has recently commenced operations with Polygon Polska for implementation and support of customers in Poland. ARKSYS also has distributors in Bosnia-Herzogovina, Croatia, Egypt, Greece, Jordan, Pakistan, Romania, Russia, Turkiye and Ukraine.

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

Details

BofA HomeBanking

Yesterday, Bank of America’s ‘HomeBanking’ service dropped all access fees, reduced fees for online bill payment and added a new service enabling customers to view credit card account information. California-based checking account customers can now access ‘HomeBanking’ via the Internet, direct dial-up or via America Online without charge. Online customers can also sign up for the BofA bill payment option which has been reduced for $6.50 per month to $5.95 per month. VISA and MasterCard account information is also now available for no additional fee. BofA credit cardholders can now view up to seven months of credit card activity, download information into financial management software programs, and email messages to customer service.

Details

Accrediting Digital Certificates

Utah has become the first state to enact legislation defining the role of digital signatures in electronic commerce. In a ceremony Thursday the Governor of Utah issued the state’s first digital signature certificate using ‘Certification Authority’ technology provided by NY-based CertCo. The Digital Signature Trust Company, a new subsidiary of Zions First National Bank, became the first digital signature Certification Authority licensed by the Utah Department of Commerce to do business in Utah. The first application for the new Utah public key infrastructure will be an electronic court filing system for legal documents. CertCo, spun out of Bankers Trust last year, is the root Certification Authority for the VISA/MasterCard ‘SET’ infrastructure.

Details

Small Bank Issuers

While the $50-$100 million peer group is dominated by credit unions a look at bank issuers reveals sagging portfolios.

$50-$100 MILLION PEER GROUP (banks only)
Issuer (State) Receivables Actives
97 96 97 96
3Q 4Q 3Q 4Q
FirstMerit (OH) 91 90 +1% 61 56 +8%
Franklin Bank (CA) 78 88 -11% 52 67 -22%
Trustmark (MS) 58 64 -9% 50 52 -3%
Wilmington Trst (DE) 58 64 -9% 43 46 -6%
Totals: 285 306 -6% 206 221 -6%
receivables in $millions; active accounts in thousands

Details

IrisCodes in CyberSpace

GTE and NJ-based IriScan, Inc. began a partnership yesterday to combine GTE’s proprietary digital biometric certificates with IriScan technology to create the e-commerce equivalent of legal tender. The combination will require the sender and receiver to be verified and confirmed by their ‘IrisCodes’. Both firms say when the iris recognition process is bound to the digital certificate, the entire value of the transaction may be fully insured by underwriters. A major application will be credit card transactions over the Internet. A prototype is planned for the first quarter of next year.

Details

Intellect/G&D Team

Intellect Electronics, Inc., a leading provider of smart card enabling terminals and solutions, and Giesecke & Devrient America, Inc. (G&D America), a world leader in the development of cards and card systems, Thursday announced a joint marketing agreement to increase the acceptance of smart card and electronic payment systems.

The non-exclusive agreement will provide the expanding Americas electronic commerce market with unified solutions from Intellect and G&D America featuring seamless connections between smart cards and terminals.

The agreement allows for a more comprehensive consultation approach with customers in the early stages of project development.

The combination of joint technical development and leading terminals from Intellect and G&D America provide customers with increased opportunities for multi-function cards and multi-application schemes.

The combined systems will feature an open architecture that is integrated and transparent to the customer or user.

“G&D America and Intellect are working closely together with the goal of combining our unique and complementary products and solutions to create transparent electronic payments applications for the customer,” said Volker Bartholomaei, president of G&D America.

“The joint marketing agreement demonstrates both companies’ commitment to enabling greater acceptance of smart card systems through solution integration, loyalty programs, and joint project management and marketing efforts.”

As part of the agreement, G&D America is integrating Intellect’s 8515–an ergonomic, multiple scheme terminal with a powerful 32-bit processor and up to 2 MB of memory– into enhanced versions of G&D’s smart card dispensing machine.

The combined solution will provide stored value load-on-dispense and post-dispense card revalue capabilities in a single terminal.

“We see the relationship with G&D America as a natural fit for product implementation and marketing programs to support more complete and accepted payment and transaction solutions,” said Thomas G. Ream, president of Intellect Electronics, Inc.

“We can provide integrated solutions and take advantage of our combined expertise to serve an expanding base of customers and card applications.”

As part of their marketing effort, G&D America and Intellect have developed a variety of templates for smart card payment schemes, including customer loyalty programs.

The companies also will conduct joint customer calls and provide project management support in addition to delivering enhanced services and solutions for electronic payments and transaction processing customers.

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 Germany, Belgium, Spain, Mexico, China, Russia, Singapore, Australia, South Africa, Canada, and the United States.

The rapidly expanding G&D America manages 950 employees and is a wholly- owned subsidiary of Giesecke & Devrient.

The Virginia-based company focuses its North American sales and development efforts on products for G&D’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, Mass.; and Philadelphia; as well as in Toronto and Mexico City.

For further information, please contact G&D’s home page at .

About Intellect

Intellect Electronics, Inc. is a subsidiary of Intellect Holdings, Ltd., a publicly-traded Australian corporation. Intellect products range from smart card readers, payment systems, electronic wallets and mobile terminals to cryptographic processors that secure facilities such as banking networks.

Intellect products are sold in more than 25 countries, including Brazil, The Netherlands, Belgium, Norway, Australia, Singapore, and the U.S. For further information, contact Intellect’s home page at .

Details

Link CD-ROM

New CD-Rom Product Improves Data Management Capabilities

A new First Data product, Link CD-ROM, is helping financial institution clients significantly improve operational efficiencies and customer responsiveness by allowing instant access to a large number of differently formatted files on a single CD-ROM. The product can store thousands of pages of credit card statements, cardholder reports and other scanned images of different file formats onto a single disc, with a common index and viewer for instant query and retrieval of any document. For example, a financial institution using Link CD-ROM can verify a cardholder payment by quickly accessing a full color replica of the statement and the scanned image of the cardholder’s cancelled check, simultaneously on the same CD-ROM. Previously, a financial institution would need to search through seperate paper documents, computer files, microfiche and other sources to find the same information they now can access within seconds on a single CD-ROM.

Details

ECHO Up 30%

Joel M. Barry, chairman and chief executive officer of Electronic Clearing House Inc. , Thursday announced both record revenue and net income for the fiscal year ended Sept. 30, 1997.

Total revenues for fiscal year 1997 increased 30 percent to $18,623,000 from $14,342,000 for fiscal year 1996. Bankcard processing and transaction revenue increased from $11,918,000 in fiscal 1996 to $16,006,000 in fiscal 1997, a 34 percent increase.

Terminal sales and lease revenue increased from $2,189,000 in fiscal 1996 to $2,348,000 in fiscal 1997, a 7 percent increase. Overall, net income for the fiscal year 1997 was $328,000, as compared with a net loss of $599,000 for fiscal year 1996. Earnings per share for the fiscal year 1997 were $.025, compared with a net loss per share of $.053 for the fiscal year 1996.

“We are very pleased with the results for the fiscal year ended 1997,” said Barry. “This is the first time since fiscal 1988 that the company is reporting a net income. Price Waterhouse, our outside auditors, has advised us that the going concern opinion that has been a part of the company’s financial statements for the last 11 years, will be lifted for fiscal year 1997. This signifies a significant turnaround in the financial strength of the company at all levels.”

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

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

Details

New MBNA Card Bonds

MBNA Corporation announced Thursday that MBNA America Bank, N.A., its wholly owned subsidiary, priced $900 million of three-year floating rate credit card asset backed securities. The securitization from the MBNA Master Credit Card Trust II consists of two classes of publicly traded securities (Class A and Class B) as well as a privately placed collateral invested amount.

The transaction, Series 1997-N, includes $765 million Class A (Senior) floating rate asset backed certificates, $67.5 million of Class B (Subordinate) floating rate asset backed certificates and a $67.5 million privately placed floating rate collateral invested amount.

The 3.0 year Class A certificates accrue interest at 7 basis points over the three month London Interbank Offered Rate (“LIBOR”). The 3.0 year Class B certificates accrue interest at 23 basis points over the three month LIBOR. Both the Class A and Class B certificates were priced at par. The transaction, which is scheduled to close December 9, 1997, was lead managed by Merrill Lynch & Co. and co-managed by Bear, Stearns & Co. Inc., Blaylock & Partners, L.P., Deutsche Morgan Grenfell, Lehman Brothers, J.P. Morgan & Co. and Salomon Brothers Inc.

MBNA Corporation, a bank holding company and parent of MBNA America Bank, N.A., a national bank, has $46.2 billion in managed loans. MBNA, the country’s second largest credit card lender, also provides retail deposit, consumer loan, insurance, and card acceptance services.

Details