Mid-Year Snapshot

Delinquency and charge-offs continue to improve this year. Since Jan. 1, delinquency (30+ days) has dropped a total of 19 basis points while charge-offs have declined 27 basis points according to CardData ([www.carddata.com][1]). However bankruptcy related charge-offs, as a percentage of total charge-offs, has edged up to 42.3% at mid-year compared to 41.8% for June 1998 and 41.6% for January 1999.

Jan 99 5.00% 5.46% 41.6%
Feb 99 4.96% 5.37% 41.9%
Mar 99 4.94% 5.32% 41.9%
Apr 99 4.95% 5.27% 41.9%
May 99 4.89% 5.24% 42.1%
Jun 99 4.81% 5.19% 42.3%

Source: CardData (www.carddata.com) * based on previous months experience

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

Saratoga To Target Hispanics

Saratoga International Holdings, Corp. released additional information concerning the operation of its recently acquired telecom operation through its wholly owned subsidiary, Saratoga Telecom Corp.

The Telecom industry and the purchase of the Telecom division of Internet Interview, Inc. which was closed last week, represents a major opportunity for the company. The company initially plans to market pre-paid long distance cards over the Internet to Spanish speaking countries.

The company’s operation within the pre-paid long distance telephone card arena will be the foundation from which SHCC will launch its Internet based business. The company is planning to concentrate on building by acquisition and by increase in market share within the Telecom sector of e-commerce. The Internet offers a multitude of commercial venture opportunities that have relatively low cost entry and huge upside potential.

SHCC’s association with major telecom industry companies lends credibility to SHCC’s entry into the e-commerce field. The company plans to offer its products and services to Central and South America initially with expansion to Europe and the Pacific to follow.

The company is pursuing selling other products on the net. Included is the selling of phone-to-phone service over the net. Negotiations are currently underway with several providers of telecom products and services. Industry analysts forecast that in two to three years telephony over the Internet will be the medium of choice for the movement of voice and data. At a fraction of today’s prices Internet phone usage is expected to explode. Several companies have such products available or under development. SHCC is of the opinion that the company would be ideally positioned to sell these exciting new services.. More details will be published, as they become available.

CheckFree Signs Navy FCU

CheckFree and Navy Federal Credit Union, the world’s largest credit union, Wednesday announced the availability of online electronic billing and payment (EBP) through the Navy Federal-branded Web Bill Pay service powered by CheckFree. The service became available to Navy Federal’s 1.8 million members worldwide in late December.

By using the Navy Federal Web Bill Pay service, members have access to their summary and detailed bill information, 24 hours a day, seven days a week. In addition, Navy Federal members are able to pay their bills with the click of a button. To register and begin receiving and paying their bills electronically, Navy Federal members can visit http://www.navyfcu.org under “Web Bill Pay.”

“With our members deployed around the world, Web Bill Pay, a part of Navy Federal Online, is another way to provide them 24 by 7 service,” said Franklin Myers, senior vice president of Research and Development at Navy Federal Credit Union. “Web Bill Pay and our other electronic services reinforce Navy Federal’s motto of ‘We Serve Where You Serve.'”

CheckFree now has contracts with more than 50 of the nation’s top 100 billers to present bills via Web sites such as Navy Federal that offer the CheckFree EBP service. These companies include: Ameren (Union Electric), American Electric Power, AT&T, Avista Utilities (Washington Water Power), BellSouth, Boston Edison, Chase Credit Card, Chase Mortgage, Columbia Gas of Ohio, Consumers’ Energy, Countrywide Home Loans Inc., Cox Communications, CUNA Mutual Group, Florida Power & Light, GPU Energy, GTE, Hawaiian Electric, HomeSide Lending, Illinois Power, International Billing Services, MCI WorldCom, Nevada Power, Northeast Utilities, Northern Illinois Gas (NICOR), Public Service Company of New Mexico, PGE, Small Business Administration, Southern California Edison, Southern Co., and Total System Services Inc. (TSYS).

“We are pleased to count Navy Federal as part of our growing distribution network for EBP,” said Lynn Busing, executive vice president of Account Management for CheckFree. “Credit unions have a long history of providing financial services for consumers; therefore, it is no surprise that industry leaders like Navy Federal are among the first to offer the future of electronic billing and payment to their customers.”

About Navy Federal Credit Union

Headquartered in Vienna, Va., Navy Federal Credit Union, with assets of $11 billion, operates 86 member service centers and 211 “No Surcharge” proprietary ATMs around the world. The credit union serves most military and civilian personnel of the Navy and Marine Corps and their families.

About CheckFree

Founded in 1981, CheckFree (http://www.checkfree.com ), the operating subsidiary of CheckFree Holdings Corporation, is the leading provider of financial electronic commerce services, software and related products. CheckFree designs, develops and markets services that enable nearly three million consumers to receive and pay bills over the Internet or electronically through a variety of bill aggregation points, including banks, brokerage firms, portals and interactive content sites on the Internet, and personal financial management (PFM) software. CheckFree’s range of services and products are focused on enabling customers to make electronic payments and collections, automate paper-based recurring financial transactions and conduct secure Internet transactions.

After more than a year of beta testing, CheckFree launched the nation’s first fully integrated electronic billing and payment solution, CheckFree E-Bill, in March of 1997. Today, the Company has multi-year contracts with more than 50 of the nation’s top billers to provide online billing and payment through the CheckFree distribution network.


CO-based ProCard, Inc. announced this morning the availability of ‘PVS Net Version 3’. ‘V3’ is the next in a series of enhancements to ProCard’s Internet offering that will give clients the ability to put a greater share of enterprise purchasing and travel expenditures on credit cards with no loss of control. PVS ‘Net Version 2’, which became available just a month ago, introduced a key automation tool to the market. For the first time, a web based commercial card application could determine how a credit card transaction should be allocated within an organization based on the expense type. In addition, Version 2 enhanced performance for member banks and their clients, while extending the amount of on-line transaction data to a full 13 months.

ECHO Database Agreement

Electronic Clearing House Inc. Tuesday announced the signing of a Database Access Agreement between Magic Software Development Inc. (“Magic”), a wholly owned subsidiary of ECHO, and Rocky Mountain Retail Systems Inc. (RMRS), a Colorado corporation.

Both companies provide retail merchants with check verification processing from point-of-sale terminals in retail establishments. This Agreement allows both companies to cross market these services, including access to each other’s databases through their respective systems, to their current and prospective members. By accessing both databases, merchants receive an increased level of protection.

“The teaming of these two companies is extremely rewarding in that this relationship will enable us to offer our customers one of the largest, quality, up-to-date databases in the nation at very competitive prices,” stated Kris Winckler, Magic president.

Electronic Clearing House provides credit card processing, check guarantee, inventory tracking services and various Internet services to more than 19,000 retail merchants and U-Haul dealers across the nation. ECHO also designs, develops and manufactures software and point-of-sale hardware that is utilized as credit card processing terminals, automated money order dispensers, inventory tracking devices, and casino cash advance systems.

To take advantage of the new “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, readers you are hereby cautioned that this release contains forward-looking statements that are based upon current expectations and involve a number of risks and uncertainties. Actual operations and results may differ materially from those expressed in the forward-looking statements made by the company.

Terabyte Harvesting

NCR Corporation unveiled Tuesday its ‘TeraMiner Stats’ data mining software for ‘Teradata Warehouse’ customers. ‘TeraMiner Stats’ includes scalable pre-processing components that address critical areas of data mining, including data description, derivation, reduction, reorganization and sampling/partitioning. By leveraging the inherent parallelism and processing power of the ‘Teradata’ engine, ‘TeraMiner Stats’ enables customers to use all their detail level data in performing complex data mining analyses, such as customer segmentation, propensity to buy, sales forecasting, attrition and retention. ‘TeraMiner Stats’ runs on the ‘Windows NT’ operating system and is priced from $5,000 to $40,000, depending on the number of nodes in the NCR ‘Teradata Warehouse’. Additional ‘TeraMiner’ products will be released in 2000 and provide statistical and machine-learning algorithms, as well as model deployment, monitoring and lifecycle maintenance.

Cybercash Acquisition

CyberCash announced yesterday it will acquire San Jose-based Tellan Software. The merger is expected to close by July 15. Tellan, a privately held company founded in 1992, produces payment processing software for Internet commerce, as well as global enterprises wishing to consolidate disparate payment applications into a centralized payment platform. The company’s leading brands include ‘MacAuthorize’, ‘PCAuthorize’ and ‘WebAuthorize’. CyberCash says the acquisition will consolidate its dominance in the payment software market, including physical points of sale and integrated enterprise payment solutions, and add to the company’s leadership position in Internet payment software and services.

USPS Contract

The United States Postal Service has awarded NCR Corp. a $67 million ‘Stage IIA Point-of-Service ONE’ contract extension that will enable the Postal Service to continue to expand the services it offers at retail customer windows. As options are exercised by the USPS, the ‘Stage IIA’ program would approach a $176 million contract value. ‘POS ONE’ is a major USPS initiative to replace current retail systems. NCR, along with IBM, was previously awarded the first ‘Stage’ of the ‘POS ONE’ contract. The three stage ‘POS ONE’ program calls for 73,000 POS terminals to be deployed in 20,000 postal retail units. The new retail systems will replace the more than 63,000 outdated retail terminals. The first ‘Stage’ rollout of NCR systems began in Ashland, VA., in January, 1998 and has extended to more than 1,000 post offices in the United States to date. Completion of the entire program is expected within the next five years.

Cardservice Partnership

Cardservice International Tuesday announced a technology- development partnership with Computer Associates International Inc. (CA) that will enable developers and end users to integrate credit card merchant accounts and secure payment gateway services into applications implemented with Jasmine, CA’s intelligent information infrastructure for e-business applications.

“Our partnership with Computer Associates underscores Cardservice’s commitment to providing our partners and merchants with the industry’s most advanced tools for rapidly enabling merchant payment acceptance and securely transporting transactions,” said Todd Whiton, senior vice president of the Internet Commerce Group at Cardservice International.

As a result of the partnership, merchants will be able to quickly and easily apply online for services such as setting up a merchant account via Cardservice WebApp(sm) and credit-card processing directly through Jasmine. These fully integrated payment solutions will enable approved merchants to begin accepting credit-card payments over the Internet within 24 hours of building their virtual storefronts.

Expanded processing services also include authorization, data capture and settlement services, and online reporting capabilities. These services complement the comprehensive suite of tools already offered through Cardservice International’s LinkPoint Secure Payment Gateway.

“The integration of Cardservice’s payment and merchant services enhances CA’s comprehensive e-commerce offerings,” said Mike LaTorraca, vice president, CA development partner program. “This partnership will empower enterprises using Jasmine as their electronic commerce infrastructure to easily and effectively enable credit-card transactions.”

The LinkPoint Secure Payment Gateway provides real-time processing, increased fraud protection and enhanced security. With the LinkPoint Secure Payment Gateway, funds are automatically authorized from the consumer’s credit card and set aside for the merchant to collect.

The collection or capture process is done entirely through the World Wide Web. No longer is there a need for separate credit-card equipment, or for printing orders and manually entering them into credit-card-processing machines. For consumers, the LinkPoint Secure Payment Gateway provides an extra level of security because the credit card is encrypted and is seen only by authorized gateway personnel.

Jasmine is the perfect solution for building and deploying intelligent, next-generation business systems over Internet and client/server computing environments. It offers developers an object- oriented platform ideally suited for dynamic multimedia applications while delivering the integrity and practical data management required for mainstream business solutions.

About Cardservice International

Cardservice International is a technology-driven, customer- focused company that provides merchant account services and secure transport of financial transactions for businesses in both the physical and virtual worlds. Cardservice International has headquarters in Agoura Hills, with 200 field offices throughout the United States. For additional information, visit .

Hypercom Korea

KS VAN, Korea’s leading service provider for issuer and acquirer banks, confirmed yesterday it will deploy 20,000 Hypercom ‘T77G-GS’ high-performance card payment systems to support 18,000 retail merchants throughout Korea. Hypercom’s card payment systems will process approximately 3 million credit, debit and smart card payment transactions per month. The deployment represents one of the largest ever conducted in the South Korean marketplace. It is expected to be completed within 12 months of a phase-one pilot program consisting of 2,000 terminals.

Low-Priced Contactless Cards

MA-based SatCon Technology Corp. announced that its subsidiary Film Microelectronics has developed a low-cost version of a ‘Radio Frequency Identification’ (RFID) card. Using proprietary thin film technology and a patent pending interconnect concept, FMI will be able to sell the 125kHz category card for about 25% less than current methods. SatCon says the new product could represent $5 million in annual sales in a year. The company notes that approximately 1 billion ‘RFID’ tags are being shipped per year.

Makowski To Household

Household International, Inc. announced yesterday the appointment of Gordon Cliff, 39, as Managing Director — Strategy and Development. Mr. Cliff joins Household from Andersen Consulting, where he was a partner in the firm’s Financial Services Practice in New York. He will report to David A. Schoenholz, Executive Vice President and Chief Financial Officer.

“In this position, Gordon will focus on initiatives to build profitable growth. He will help us define and exploit significant opportunities in a number of major areas including customer segmentation, electronic commerce, and efforts to cross-sell Household products to existing Household customers,” said William F. Aldinger, Household’s chairman and chief executive officer.

Mr. Cliff was at Andersen Consulting from 1996 until joining Household. At Andersen, he helped clients with customer relationship management issues as well as customer segmentation and cross-selling initiatives. From 1985 to 1996 Mr. Cliff worked in the New York office of McKinsey & Company. He began his career with Morgan Stanley & Company in 1981, focusing on mergers and acquisitions. Mr. Cliff is a graduate of Williams College and earned an M.B.A. from Harvard Business School.

Household also announced the appointment of Paul Makowski, 47, as Managing Director and Chief Credit Officer, also reporting to David Schoenholz.

Mr. Makowski joins Household from Fair, Isaac & Co., where he was a Principal with Credit and Risk Management Associates, Inc. (CRMA), the company’s credit risk management and technology consulting unit. He joined CRMA in 1992 and remained with the unit following its sale to Fair, Isaac in 1996.

Commenting on Mr. Makowski’s appointment, Bill Aldinger said, “The addition of Paul Makowski to our management team will help the company achieve long-term, sustainable business growth at acceptable levels of credit risk. Paul brings exceptional experience in credit risk management and in the use of credit risk tools to improve performance.”

Mr. Makowski has been involved in different aspects of credit risk management for 23 years, with leading firms including Montgomery Ward, Mathematica, Inc., American Management Systems and Fair, Isaac & Company. He is a graduate of Kenyon College and earned an M.B.A. from the University of Chicago.

Household International, through its subsidiaries, is a leading provider of consumer finance, credit card, non-prime auto finance and credit insurance products in the United States, United Kingdom and Canada. In the United States, Household operates under the two oldest and most widely recognized names in consumer finance — HFC and Beneficial. Household is also one of the nation’s largest issuers of private-label and general purpose credit cards, including the GM Card and the AFL-CIO’s Union Privilege card. For more information, visit the company’s web site at .