ORGA in South African ICT Venture

In the future, ORGA will have a physical presence in South Africa, one of the most important smart card markets on the continent. Involvement in the ICT joint venture, with headquarters in Johannesburg, will enable the smart card specialist to serve the region faster and more purposefully than ever before.

Involved in ICT alongside ORGA are Gieseke & Devrient, Nampak and also the South African partner Nasionale. While smart card manufacturers ORGA and G&D are bringing technological know-how and customers with them, the packaging specialist Nampak and the Nasionale Group, coming from the field of publishing, are contributing an extensive infrastructure to the success of the joint venture. Paul Hill, who manages the ORGA UK subsidiary and played a leading role in the creation of the new joint venture, sets high hopes for this partnership: “ORGA has been developing our presence in South Africa for over 5 years and has long recognized the potential for rapid expansion of chip card applications in this highly sophisticated marketplace. We are particularly excited to be participating in a collaboration involving such strong partners and look forward to a bright future in South Africa.”

ICT is the third international joint venture in which ORGA has been involved, following ORGA Zelenograd, Russia, Smart Cards & Systems (1996) and Shenzhen, China, ORGA Smart Cards & Systems (1997). Behind this lies the strategy to expand globally with international cooperation by setting up companies and joint ventures to serve regional markets fast and flexibly, in line with demand. ORGA intends to push ahead with this program in the coming years.

Paderborn-based ORGA Kartensysteme GmbH is one of the pioneers and market leaders of the smart card industry. It is jointly held by Preussag AG of Hanover (37.45%) and Bundesdruckerei, Berlin, (37.45%) and Bonn-based Deutsche Telepost Consulting GmbH (Detecon), a subsidiary of Deutsche Telekom (25.1%). With other subsidiaries and affiliated companies in Great Britain, France, USA, CIS, as well as a branch office in Singapore, ORGA enjoys a world-wide presence.

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Critical Smart Card Pilot

The most significant test of smart payment cards gets underway this morning in New York City as VISA, MasterCard, Citibank and Chase Manhattan join together to gauge acceptance of ‘VISA Cash’ and ‘Mondex’ cards by consumers and merchants. Reportedly 675 merchant locations have been enlisted as of this morning. About 50,000 smart cards will be in use with Citibank issuing 25,000 ‘VISA Cash’ cards and Chase Manhattan issuing 25,000 ‘Mondex’ cards. The proving ground will encompass the area in NYC west of Central Park between West 60th and West 96th Streets, also known as Manhattan’s Upper West Side. Besides testing acceptance the pilot is also aimed at testing interoperability between the two competing brands. The reloadable cards will accept up to $500 in stored value.

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Packing It In

he PacBell VISA and MasterCard is dismantling after four years. Household Bank and Pacific Bell are notifying cardholders this week the rebate period for the program will end October 30 with rebates honored through February 15. The estimated 300,000-400,000 PacBell accounts will be transferred to Household Bank. Both parties have established a special 800 number to answer cardholder questions. Household indicated Friday the termination of the program was mutual. The program offered a 10% cash rebate on calling card long distance calls and a 1% cash rebate on all other purchases.

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Gift Cards

Phoenix-based FAR POINT and Gemplus announced this morning a smart card-based electronic gift certificate system that consists of a Gemplus smart card, DataCard’s ‘Jigsaw’ smart card POS reader and FAR POINT’s software. Holiday Companies of Minneapolis, which operates a chain of convenience stores and gas stations throughout the Midwest, will roll out the system to about 250 locations early next year. The new system is being showcased at the National Premium Incentive Show, which gets underway this morning in Chicago.

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FUSA 9-Series Card Bonds Rated

First USA Credit Card Master Trust’s $500 million class A floating-rate asset-backed certificates, series 1997-9, are expected to be rated ‘AAA’ by Fitch. The corresponding $45.2 million class B certificates are expected to be rated ‘A+’.

Fitch’s expected ratings are based on the strength of the Visa and MasterCard collateral pool, available credit enhancement, excellent servicing capabilities of First USA Bank, and the solid legal and cash flow structures framing the transaction.

Credit enhancement supporting class A is derived from the subordination of the class B and collateral invested amount (CIA) certificates equal to 17% of the total initial invested amount. Class B investors are protected from losses by the 9.5% CIA certificates. The $57.2 million CIA certificates are interests in the trust subordinate in payment rights to class A and class B.

Several economic and credit stress scenarios were devised by Fitch to determine appropriate credit enhancement levels. The scenarios simultaneously stress yield, chargeoff and monthly payment rate steady state assumptions. In addition, to address the interest rate risk associated with uncapped floating- rate coupons, the coupon is stressed to worst case London Interbank Offered Rate (LIBOR) levels without a corresponding adjustment to yield.

Under the available enhancement, class A withstands a 35% decrease in yield, a 40% decline in payment rates and chargeoffs increasing to over 30% and still makes full and timely payments of investor principal and interest. Class B sustains a 25% decrease in yield, a 30% decline in payment rates and chargeoffs increasing to more than 20% without suffering a principal or interest loss.

Class A and class B investors will receive monthly interest payments of 0.06% and 0.33% over one-month LIBOR throughout the revolving and accumulation periods and on the scheduled final payment date in October 2004, provided an early payout event does not occur. Early amortization of the bonds may result from a deterioration in asset quality, transferor insolvency or servicer default.

Fitch also expects to affirm its outstanding ratings assigned to existing master trust series indicating that series 1997-9 will not result in a ratings reduction or withdrawal.

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New Electronic Loan Submission Program

Republic Mortgage Insurance Company (RMIC), one of the nation’s largest private mortgage insurance companies, introduced today at the 84th Annual Mortgage Bankers Association (MBA) Convention the Electronic Loan Submission(SM) (ELS) program.

ELS enables mortgage originators to transmit loan applications to RMIC using the Internet. ELS is a stand-alone software application that does not require custom programming by the lender.

RMIC is a leading provider of traditional contract underwriting and value-added links to Fannie Mae’s Desktop Underwriter and Freddie Mac’s Loan Prospector through its OASIS(SM) service. OASIS is used by mortgage brokers, retail lenders and correspondent lenders to secure underwriting decisions from Fannie Mae or Freddie Mac on behalf of the wholesaler.

With the integration of ELS and OASIS, loan originators will benefit from the elimination of manual forms and reduction of documentation. As a result, ELS will lead to a more timely and accurate response.

Electronic Loan Submission has gained support among many popular loan origination and point-of-sale software vendors. Testing is already complete with Byte Enterprises, Calyx, Contour Software, Genesis 2000 and Loansoft. Several other software vendors have also agreed to make ELS available to their users.

Andy Hiser, RMIC’s Management Service Group Manager, said, “ELS is a significant enhancement for our OASIS customers. We are making it easier for originators to submit loan applications for OASIS and mortgage insurance directly from their computer. By using the Internet, we can offer a lower cost, more affordable solution to our customers. The implementation of ELS will reduce duplicate data entry, eliminate faxed forms and provide a quicker turnaround.”

RMIC is a national, private mortgage insurer headquartered in Winston-Salem, North Carolina. RMIC’s private mortgage insurance coverage allows lenders to approve mortgage loans with smaller down payments making home buying more affordable. RMIC offers mortgage lenders an array of innovative products including ZIPS(SM) Monthlies, OASIS, Contract Underwriting, automated underwriting, customer training, quality services, and affordable housing programs.

For more information on Electronic Loan Submission or RMIC, contact Rob Showfety, Marketing Group Manager at (800) 999-RMIC (7642), fax (910) 661-2208 or write RMIC 4964 University Parkway, Winston-Salem, North Carolina 27106. Visit RMIC’s Internet site at [http://www.rmic.com.][1]

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

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EarthCard

European-based Melinex and Gemplus announced a jointly developed environmentally safe but extra durable plastic card this weekend. The ‘EarthCard’ incorporates a special Melinex polyester film featuring a chlorine-free and halogen-free composition that presents no risk of contamination if buried and, if incinerated, produces emissions comparable to those of wood or paper. Besides the ecological benefits, the ‘EarthCard’ also offers outstanding durability, able to withstand temperatures of up to 130 degrees centigrade with no change in physical properties. Most plastic cards today deteriorate at 50 degrees centigrade. Both firms have been working on the ‘EarthCard’ project for two years.

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New Global Card Processor Formed

Leading fuel card services company Harpur Group has launched a new international operation to manage clients’ card transactions and billing worldwide.

Harpur has identified the outsourcing of billing activities as a key strategic growth activity for the future. The Group is therefore re- engineering its billing capability and forming a new company, International Card Enterprises (ICE), to concentrate on outsourcing.

ICE will have an international focus, particularly in Continental Europe and the Far East. Incorporating the former Harpur Card Services (HCS) and Australian Card Services (ACS), it will concentrate predominantly on private label cards.

ICE will provide card processing and billing services, as well as offering consultancy to customers in the development of card marketing, and the provision of value added services to its card bases.

ICE will be headquartered in Sophia Antipolis, France, with operations in Europe, SE Asia and Australia.

Carl Clump, the Managing Director of ICE, said: “This is a major step for ICE. It is a refocusing of our activity and a new emphasis. ICE will be one of the largest private-label providers in the market place with a technology base well ahead of our competition. We see major opportunities in our new areas of expansion – such as the Asia Pacific region

– and in our established markets in Europe.”

The Harpur Group manages in excess of GBP 600 million in fuel sales per annum and employs 400 people. Operating in six countries, the Group has 33,000 corporate customers world-wide and manages a card base of 1.3 million on a global basis.

The ICE range of services will be:

– Card centre operation management

– Card transaction processing

– Software development

– Software maintenance

– Software licensing

– Payment system consultancy to card issuers

– Facilities management of software/hardware

– Facilities management of card operations

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