National Australia Group Europe has inked a four-year contract with Schlumberger Smart Cards & Terminals for more than 2.5 million top-level security cards per year. The project marks the first time Schlumberger cards will be used to support dual currency, using pound sterling for UK transactions and euros for the Republic of Ireland. National Australia Group Europe will distribute Schlumberger’s “e-Galleon” card for enhanced security, comprehensive risk management and faster transaction times. National Australia Bank Limited ranks in the top 100 banks worldwide based on assets. The bank has a major presence in the UK and the Republic of Ireland through its ownership of Clydesdale Bank, Yorkshire Bank, Northern Bank and National Irish Bank.


Schlumberger Smart Cards & Terminals, a business unit of Schlumberger Limited, announced that it has signed a four-year contract with National Australia Group Europe to supply over 2.5 million of its top-level security e-Galleon cards a year.
National Australia Bank Limited ranks in the top 100 banks worldwide based on assets. The bank has a major presence in the UK and the Republic of Ireland through its ownership of Clydesdale Bank, Yorkshire Bank, Northern Bank and National Irish Bank.

The e-Galleon card from Schlumberger offers cardholders a range of features for enhanced security, comprehensive risk management and faster transaction times. “Security for our customers and eliminating fraudulent transactions is one of our highest priorities,” said Brent Skeffington from National Australia Europe. “The e-galleon smart card will be a key tool in enabling us to provide a secure service to our customers. We are looking forward to deploying these cards in our branches throughout the UK and Ireland over the next four years.”

“The move to EMV cards that enable the use of a PIN rather than a signature at the point of sale is the next step in the battle against card fraud,” said Howard Berg, regional director for the UK and Ireland at Schlumberger Smart Cards & Terminals. “As a worldwide smart card technology provider, Schlumberger is ideally positioned to partner with companies in the banking community, drawing on our business expertise across consulting and EMV project management to support our banking customers’ global activities.”

The project marks the first time Schlumberger cards will be used to support dual currency, using pound sterling for UK transactions and euros for the Republic of Ireland.

Schlumberger has a proven track record of delivering a wide range of business solutions, services and products that improve the competitive advantage of financial institutions, while providing them with the highest level of security possible.

About National Australia Group

National Australia Bank Group, (The National) is an international financial services group operating across four continents and 15 countries including Australia, the United States, the United Kingdom, New Zealand and Asia.

The National has an asset base of over GBP131 billion ($212 billion), assets under management and administration of more than GBP21 billion, assets under custody and administration of GBP127 billion. With almost 8 million banking and more than 2.8 million Wealth Management customers globally, it is ranked as one of the 50 largest banks in the world by revenue.

Financial Services Europe (FSE) is the retail banking arm of National Australia Group for Great Britain and Ireland. Following recent changes, FSE includes all European based consumer, business and agribusiness banking, together with cards, payments, leasing and shared services.

Members of Financial Services Europe include Clydesdale Bank in Glasgow, Yorkshire Bank in Leeds, Northern Bank in Belfast and National Irish Bank in Dublin.

About Schlumberger Smart Cards & Terminals

Schlumberger Smart Cards & Terminals is the world’s leading provider of microprocessor cards (Gartner 2003, Frost & Sullivan 2003) – the key to digital networks – and a major supplier of card-related terminals and transaction software. Its 5000 employees serve customers in more than 100 countries, with worldwide sales exceeding 2.6 billion smart cards to date. The company has more than 20 years’ experience in smart card innovation and leads its industry in security technology and open systems.

Schlumberger Smart Cards & Terminals continuously creates new generations of products for use in a variety of applications in the telecommunications, finance, retail, transport, entertainment, healthcare, personal identification, information technology and public sector markets. Smart card solutions provide convenience, security and privacy to public and private services operators, their customers and end users.


Fidesic Payments Targets Mid-Sized Businesses

WA-based Fidesic Corporation has launched Fidesic Payments to offer mid-sized companies an affordable system to automate the processes of creating, authorizing and sending payments. Fidesic Payments transforms the labor-intensive, paper-laden, traditional payment process into an efficient, automated operation. Fidesic Payments eliminates the need to have to print, fold, stuff and mail payments. Fidesic is certified by TRUSTe, and all data is encrypted, ensuring that customer information is both secure and private.



UK-based cashless payment specialist, CreditCall Communications, has partnered with North Carolina-based Nexus Software to create an “EMV Level 2” compliant solution for Nexus’ “INvolve” family of middleware and its more than 90,000 installations worldwide. The product, known as “EmvX”, is based on the “CreditCall CardEaseEMV” certified smart card transaction processing engine, which provides a straightforward means for financial institutions and payment machine operators to upgrade almost any existing Windows-based payment terminal, whether operating attended or unattended, to accept and process EMV cards. The “EmvX Toolkit” is aimed primarily at payment system developers.


Nexus Software, Inc., a provider of cross-channel client middleware for financial services delivery, announced a strategic alliance with Bristol, U.K.-based cashless payment specialist, CreditCall Communications, to create an Europay/Mastercard, Visa Level 2 compliant solution for Nexus’ INvolve(R) family of middleware and its more than 90,000 installations worldwide.

Through this alliance, CreditCall’s EmvX(TM) toolkit now fully supports INvolve and will facilitate a rapid and cost-effective path to full EMV compliance for any machines that utilize the INvolve single or cross-channel solution. The product, known as EmvX(TM), is based on the CreditCall CardEaseEMV(TM) certified Smart Card transaction processing engine, which provides a straightforward means for financial institutions and payment machine operators to upgrade almost any existing Windows(R)-based payment terminal, whether operating attended or unattended, to accept and process EMV cards.

“We recognized that the Nexus INvolve platform was innovative as well as trusted and that it was important to support it in our EmvX product,” said Nick McGarvey, managing director of CreditCall. “Given that both products are based on the same Microsoft(R) COM architecture, there was technical synergy from the outset.”

Europay International, Mastercard International and Visa International joined together in 1999 to create EMVCo, LLC. According to the company, it oversees the EMV Smart Card Specifications for Payment Systems as chip cards become more accepted and used worldwide. Mandating compliance with EMVCo specifications, guarantees that single terminal and card approval processes will develop along with cross-channel payment systems, so one does not outgrow the other.

The EmvX Toolkit is aimed primarily at payment system developers, giving them a powerful suite of software tools to allow EMV Level 2 compliance to be added to existing Microsoft Windows applications with the minimum cost and development time. By adding it to the INvolve family of cross-channel client middleware, Nexus connects financial services solutions to multiple and varied sets of banking-specific devices used with branch teller workstations, kiosks and automated teller machines (ATMs).

“As European financial institutions approach the 2005 EMV deadline and other financial companies around the world begin to adopt the standard, it was important that Nexus work with CreditCall to develop an efficient and cost-effective EMV solution,” said Robert Usner, marketing director for Nexus Software, Inc. “The INvolve family of products and EmvX compliance toolkit together provide a complete EMV-ready platform for any ATM or Smart Card solution.”

INvolve 3.2 is available immediately to existing customers and evaluation versions are also available. EmvX is a free download from CreditCall’s EMV Web site. The Trialware download includes a PCSC driver for any standard EMV Level 1 compliant card reader that supports PCSC.

About CreditCall Communications Ltd.

Founded in 1996, CreditCall Communications, a provider of credit and debit card-based solutions for the cashless society, is a major UK supplier of payment solutions for diverse applications including in-room card-based telephony solutions, Pay & Display car parking, E-TopUp, Vending, Ticketing and Pay TV.

CreditCall invests heavily in research and development and aims to provide facilities, which will allow any machine or device to be enabled to accept cashless payment, either via credit, debit, or micro payments.

For more information about CreditCall products and services visit www.creditcall.com. For more information on CreditCall EmvX visit www.emvx.co.uk.

About Nexus Software

Nexus Software is the world-leader in cross channel client middleware and related products and services for financial services providers that connect any solution to any device in any channel from any vendor. Nexus Software XFS standards-based, vendor neutral solutions are installed in more than 90,000 ATMs, Kiosks and Branch teller stations at over 580 financial institutions around the world. Nexus Software is headquartered in Raleigh, N.C., USA, with development offices in Portsmouth, England and Edinburgh, Scotland.

For more information on Nexus Software products and services, visit the company’s Web site at www.nexussoft.com.


Malaysia Leads EMV A-P Migration

Smart cards are gaining momentum in Asia Pacific, as evidenced by more than 12 million VISA-branded EMV smart cards issued regionally, alongside over 120,000 EMV POS terminals. VISA aims to migrate the majority of payment cards and terminals to EMV chip standards in Asia Pacific by end 2008. VISA recently sponsored a “VISA Smart Vendor Conference” in Kuala Lumpur attended by more than 120 chip and technology professionals from 70 international companies. More than 70 leading vendors already participate in the “VISA Smart Program,” and many are actively supporting VISA members in their coming launches of VISA EMV card programs. Besides global vendors, an increasing number of Malaysian vendors, such as Cassis, have recently joined the program. The migration to smart cards is gaining speed in Malaysia and the country could very well be the first country in the region to complete national migration to EMV. In Asia Pacific, VISA has a greater market share than all other payment card brands combined with 59% of all card purchases at the point of sale being made using VISA cards. There are currently more than 365 million VISA cards in the region. During 2002, US$700 billion was spent at point of sale or withdrawn from ATMs in Asia Pacific using VISA cards, an increase of 43% over the previous year.


NCR 2Q/03

NCR reported that its ATM division generated second-quarter revenue of $260 million, a 2% gain over the year-ago period. The company says revenue growth in the Americas region offset continued market weakness in Europe and the impact of SARS in China. The Retail Store Automation unit produced $204 million in revenue, up 17% from the second quarter of 2002. During the quarter, NCR signed $25 million of orders for NCR’s advanced-function ATMs for five large US banks. Internationally, the company inked a deal with the State Bank of India to install and manage 1,500 ATMs and also signed an agreement with the Bank of Communications and Agricultural Credit Union Bank in China for “Personas” ATMs and “APTRA” software. In the Company’s Retail Store Automation business, NCR was awarded a $40 million contract during 2Q/03 with the USPS for POS terminals and services including software development, project management, installation, help desk and maintenance. NCR also signed an UK deal to refresh Sainsbury’s POS technology in all of its 500 supermarkets and 200 gas stations with “RealPOS 80c” terminals and “RealScan” bar-code scanners.


NCR Corporation reported finalized results for the quarter ended June 30, 2003, including revenue of $1.37 billion, a decrease of 1 percent from second quarter of 2002 and in line with guidance. The 1 percent revenue decline includes a year-over-year benefit of 6 percentage points from foreign currency fluctuations.

Operating income for the second quarter was $16 million versus $51 million in the second quarter of 2002. Included in the reported results was a $43 million year-over-year decline in operating income resulting from pension expense of $24 million in the second quarter of 2003, versus $19 million of pension income in the second quarter of 2002.

NCR reported net income of $9 million, or $0.09 per diluted share, versus net income of $26 million, or $0.25 per diluted share in the second quarter of 2002.

“Every NCR business segment met or exceeded expectations in the second quarter,” said Mark Hurd, president and chief executive officer of NCR. “We are determined to achieve our objective of delivering superior customer value propositions and are making good progress towards reducing operating expenses $250 million by the end of 2005, of which $50 million to $60 million will be realized in 2003. Reaching these goals will significantly enhance NCR’s competitiveness while positioning the company to build value as business conditions improve.”

Operating Segment Results

The operating segment results discussed below exclude the impact of $24 million of pension expense in the second quarter of 2003 and $19 million of pension income in the second quarter of 2002. NCR excludes the effect of pension expense/income when evaluating the performance of and making decisions regarding its operating segments. Schedule B, found later in this earnings release, reconciles total “Income from operations excluding pension expense/income” for all of the company’s segments to “Total income from operations” for the company.

Data Warehousing Segment

Support services growth and cost, expense initiatives result in
improved operating margin

NCR’s Data Warehousing segment reported second-quarter revenue of $300 million, down 3 percent year-over-year. Second-quarter revenue included a year-over-year benefit of 5 percentage points from foreign currency fluctuations. Operating income of $32 million for the quarter increased $2 million from the second quarter of 2002 driven by 24 percent revenue growth in support services and on-going expense reduction initiatives.

NCR’s Data Warehousing business provides the market-leading Teradata(R) data warehousing database software, hardware platform and related services that enable companies to gain a competitive advantage by efficiently analyzing customer behavior and then delivering that business intelligence to company decision-makers.

During the quarter:

— Lloyds Bank, one of the largest financial services groups in Europe, expanded its Teradata enterprise solution.

— Bank of China, one of the top four banks in mainland China, selected Teradata warehouse and Teradata CRM solutions to build the customer service and sales system for its card business.

— The Salk Institute began using the Teradata data warehouse solution to allow scientists and researchers to use data-mining techniques to accelerate the pace of genetic research.

Financial Self Service Segment

Operating margin improved on slightly higher revenues

The Financial Self Service segment generated second-quarter revenue of $260 million, in line with guidance and up 2 percent from the year-ago period. Revenue growth in the Americas region offset continued market weakness in Europe and the impact of Severe Acute Respiratory Syndrome (SARS) in China. Second-quarter revenue includes a year-over-year benefit of 8 percentage points from foreign currency fluctuations. Operating income of $32 million improved from $25 million generated in the prior-year period.

NCR’s Financial Self Service business provides high-quality automated teller machines (ATMs) and the APTRA(TM) multivendor application software that delivers advanced functionality to banks, credit unions and retailers.

During the quarter:

— Five of the largest U.S. banks ordered more than $25 million of NCR’s advanced-function ATMs.

— The State Bank of India, the country’s largest commercial bank, selected NCR to supply, install and manage 1,500 ATMs.

— Both the Bank of Communications and Agricultural Credit Union Bank in China placed orders for NCR’s Personas(TM) ATMs and APTRA software.

Retail Store Automation Segment

Break-even operating income on better-than-expected revenue and
cost reductions

For the second quarter of 2003, Retail Store Automation generated $204 million in revenue, up 17 percent from $174 million in the second quarter of 2002, including a year-over-year benefit of 5 percentage points from foreign currency fluctuations. The break-even operating performance is a $13 million improvement from the operating loss reported in the prior-year period.

NCR’s Retail Store Automation business provides store-automation technologies such as point-of-sale (POS) terminals, bar-code scanners and software, as well as innovative self-checkout systems and other store-automation solutions to retailers.

During the quarter:

— The United States Postal Service, in Stage III of its POS One technology initiative to improve local Post Office operations and customer service, awarded NCR contracts totaling more than $40 million for POS terminals and services including software development, project management, installation, help desk and maintenance. Installation of these terminals will occur over the next several quarters.

— The refresh of Sainsbury’s POS technology in all of its 500 United Kingdom supermarkets and 200 petrol stations with NCR RealPOS 80c terminals and NCR RealScan bar-code scanners was completed by NCR. The deal with Sainsbury’s information technology partner, Accenture, also includes a six-year agreement for ongoing managed services provided by NCR.

Customer Services Segment

Operational performance improved, mitigating the impact of
continued pricing pressure

Customer Services revenue increased to $463 million, up 4 percent from the prior-year period including a year-over-year benefit of 6 percentage points from foreign currency fluctuations. Operating income improved to $7 million from the $6 million reported in the second quarter of 2002. Customer Service operating income continues to be affected by pricing pressures and an adverse mix shift.

NCR’s Customer Services Division provides hardware and software maintenance, deployment and managed services around the world for NCR’s Financial Self Service, Retail Store Automation and Payment and Imaging customers as well as for third-party technology providers.

During the quarter:

— Snap Appliance, a global leader in network storage systems, signed a contract for NCR managed services.

— Banco Popolare di Verona e Novara, one of the largest retail banks in Italy, signed a contract for maintenance of the bank’s entire installed base of 1,300 ATMs, 800 of which are units from an NCR competitor.

Systemedia Segment

Improved operating margin on lower revenues

Systemedia second-quarter revenue was $122 million, down 8 percent from the revenue generated in the year-ago period. The reported revenue includes a year-over-year benefit of approximately 5 percentage points from foreign currency fluctuations. This business segment generated $3 million of operating income, the same as reported for the second quarter of 2002.

Systemedia provides business consumables and products including ink-jet and laser printer supplies, thermal transfer ribbons, labels, paper rolls, ink ribbons, laser documents, business forms and retail office products.

Payment and Imaging Segment

Improved operating income on comparable revenue due to lower

Payment and Imaging increased operating income to $5 million from $4 million in the second quarter of 2002. Operational efficiencies drove the improved performance on revenues of $36 million versus the $35 million of revenue generated in the second quarter last year.

NCR’s Payment and Imaging business provides end-to-end solutions for both traditional paper-based and image-based item processing. This business utilizes advanced image recognition and workflow technologies to automate item processing, helping banks and other financial institutions increase efficiency and reduce operating costs.

During the quarter:

— The U.S. House of Representatives and the U.S. Senate passed versions of Check 21 legislation which must be reconciled in conference committee.

— Fifth Third Bancorp signed a $7 million contract to transform the bank’s check and remittance processing systems using NCR’s ImageMark(TM) Archive platform.

Non-Operating Items

Net Interest and Other Expense in the second quarter of 2003 was $4 million, down from $15 million in the prior-year period.

The weighted average number of diluted shares outstanding declined to 95.3 million from 100.5 million in the prior-year period due to the company’s share repurchase activity. During the second quarter, NCR used approximately $9 million of cash to repurchase approximately 385,000 shares.

Balance Sheet

NCR ended the second quarter with $585 million in cash and short-term investments, a $56 million increase from $529 million on March 31, 2003. As of June 30, 2003, NCR had short- and long-term debt of $312 million, down from $318 million on March 31, 2003.

Cash Flow

NCR generated $98 million of cash flow from operations in the second quarter of 2003, an increase from the $59 million of operating cash flow in the same period of 2002. Capital expenditures for property, plant and equipment, reworkable service parts and additions to capitalized software in the second quarter of 2003 were $45 million, versus $70 million of capital expenditures in the year-ago period.


Assuming 4 to 5 percentage points of benefit from fluctuations in foreign currency, NCR expects the following revenue trends in the third quarter.

NCR expects earnings per share for the third quarter in the $0.07 – $0.13 range. Historically, NCR’s second- and third-quarter revenue and operating performance have been similar in nature.

Based on year-to-date achievements, on July 9, NCR increased its expectations for full-year earnings per share to the $0.45 to $0.55 range.

Pension Update

Although the performance of the equity markets improved during the first half of 2003, lower interest rates and other changes in pension variables are likely to result in 2004 pension expense exceeding the $95 million of pension expense in 2003. More specific information regarding 2004 pension expense will be provided when NCR completes its annual pension calculations in January 2004.

Fox River Update

As previously discussed in prior periods and formally disclosed in NCR’s public filings with the U.S. Securities and Exchange Commission (SEC), NCR may be considered a potentially responsible party for environmental clean-up costs associated with the Fox River in Wisconsin.

During the next few weeks, the government is expected to release its Record of Decision (ROD), which will address the final clean-up plan for downstream areas of the Fox River. NCR will provide an update regarding the status of the ROD when the company files its second-quarter report on Form 10-Q. For further information regarding NCR’s potential liability and the factors relating to NCR’s potential liability associated with the Fox River, see the company’s previous public filings with the SEC.

The earnings-per-share guidance for the remainder of 2003, provided earlier in this earnings release, does not reflect any potential changes to the company’s environmental reserves.

About NCR Corporation

NCR Corporation (NYSE: NCR) is a leading global technology company helping businesses build stronger relationships with their customers. NCR’s ATMs, retail systems, Teradata data warehouses and IT services provide Relationship Technology(TM) solutions that maximize the value of customer interactions. Based in Dayton, Ohio, NCR (www.ncr.com) employs approximately 29,500 people worldwide.

For details on NCR’s 2Q/03 results visit CardData (www.carddata.com).


VISA USA Names BofA’s Phillips as Chairman

VISA USA has named Patrick Phillips, president of Card Services and e-Commerce at Bank of America, to the post of chairman of its board of directors. Phillips, who has been with Bank of America since 1973, served as president of NCNB Financial Products, president of NCNB Services Inc. and served in various other corporate banking and marketing roles. Phillips takes over as chairman of the board from Phil Heasley, the former CEO of Bank One Card Services. Phil Heasley resigned from the board after stepping down from his position at Bank One on July 16.


iDine Picks Affinium to Streamline

FL-based iDine Rewards Network has selected Unica’s “Affinium” to improve the efficiency and effectiveness of their on- and off-line marketing initiatives. The company also will use Affinium to track and measure campaign effectiveness for rapid learning and continual strategic improvement. Affinium will replace an older system that has become too restrictive and limiting. iDine will also be using Affinium’s Universal Dynamic Interconnect technology, which will allow it to seamlessly connect to and interact with multiple data sources on various platforms.


Global Axcess Branded Cash Program Signs VA Bank

VA-based Rockingham Heritage Bank has signed a two-year deal with Global Axcess Corp. and its Nationwide Money Services for an ATM “Branded Cash Program”. Under the terms of the agreement, Nationwide Money will install ten branded ATM sites in high-traffic areas, including nine Food Lion supermarkets. EFT Integration, Inc., Global Axcess’ subsidiary, will drive the transaction processing.


Citigroup European Cards Up 32%

Citigroup reported that credit card outstandings for the EMEA region were up 32% for the second quarter, while card loans in Latin America fell by 20% and down 9% in Japan. At the end of 2Q/03, Citigroup had 14.0 million credit card accounts outside of North America, a 7% increase over 2Q/02. Charge volume for international credit cards was up 10%, to $9.0 billion for the second quarter. Total outstandings for international cards were $12.2 billion as of June 30th, a 13% gain over one year ago, according to CardFlash International. In Japan, credit card loans were dipped below $1.0 billion. In the rest of Asia, credit card loans grew 9% to $6.3 billion. Citigroup holds $4.1 billion in card loans for the EMEA region and $400 million in Latin America. Delinquency and charge-offs increased during the second quarter for international cards. Delinquency (90+ days) increased from 1.97% in 1Q/03 to 2.04% for 2Q/03. Charge-offs increased from 4.09% in 1Q/03 to 4.60% for the second quarter.


SCA Promotions to Offer AmEx STV Cards

Dallas-based SCA Promotions, a specialist in contests and promotions, has teamed with American Express Incentive Services to offer a stored-value gift card. Under terms of the deal, SCA assume the risk of over-redemption, enabling it to offer the cards at very attractive pricing. Cards are available in a multitude of denominations. Sponsors determine the values, expiration date, graphics, logos and the delivery mechanism. AEIS’ patented filter technology also allows sponsors to determine whether cards are redeemable everywhere AmEx is accepted, or limited to a particular retailer or even store location. This feature supports sponsors’ co-marketing and trade marketing efforts. SCA clients include AT&T, Coors Brewing Company, Cumulus Media, General Mills, Grab.com, Hershey’s, Pepsi and Sony.


TowerGroup Membership Program Launched

MA-based TowerGroup has launched a “Membership Program” to offer financial services institutions greater flexibility in accessing research reports. The Program allows the institutions the to choose the research they need from all of TowerGroup’s research categories, as well as direct access to all of TowerGroup’s industry-leading analysts. The TowerGroup Membership Program is designed to address the unique needs of financial institutions as they look to compete in an increasingly converged and competitive marketplace.


Usage Patterns in China Have No Pattern

Cardholder activities among consumers in Shanghai, Guangzhou, Shenyang, Deyang, and Hangzhou vary widely according to a new research report. Holders of credit cards in Shanghai and Guangzhou use their cards more frequently for purchase transactions than do their counterparts in other major cities, with 71.7% of card holders in Guangzhou using their credit card at least seven times per month over a six-month period compared with just 25.5% in Deyang and around 30% in Shenyang. According to the study by the School of Management at Fudan University in Shanghai and underwritten by MasterCard, cardholders in Shanghai and Guangzhou use their cards more frequently for shopping than their counterparts in Shenyang, Hangzhou and Deyang, with cardholders in those three cities spending comparatively more, and using their cards more frequently, on hotel accommodation. Not surprisingly, taken across all cities expenditure on shopping and dining out accounts for most of the credit card transaction volume.