E-PURSE PC RELOADS

Atos Origin and Wave Systems have teamed to develop a new cashless
electronic purse transaction application that could have a stored value
smart card reloaded from a home personal computer.
An electronic purse or e-purse is typically a smart card that has stored
money value and that can be reloaded at a bank or terminal in a retail
store. The electronic wallet, for which Atos Origin is technical operator,
is currently being deployed in France. Wave is the developer of the
“EMBASSY Trust System” and the “EMBASSY 2100” secure e-commerce chip.
“EMBASSY” chips may be embedded in such products as
computer keyboards, smart card readers and other computer components. When
the “EMBASSY” system secures a device such as a personal computer, personal
information such as credit card numbers, PIN numbers and other end user
secrets are protected from theft. An “EMBASSY”-enabled trusted PC features
an e-purse, a secure wallet, secure identity, secure e-mail and secure
shopping capabilities.

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SESAMES 2002

The annual “Sesames” awards were handed out this week at the “Cartes 2002”
expo at the Paris-Nord Villepinte Exhibition Centre on the fringes of
Paris. The “Best Technological Innovation” award went to Infineon
Technologies/Sony Corporation for the “my-C/FeliCa” card and the “Best
Banking/Finance Application” was won by Proton World for “EMV Plus.” The
competition for the “Best Technological Innovation” award included
SchlumbergerSema for its new “SIM2SIM” transfer technology, and ASK S.A.
for its “Roll-to-Roll” manufacturing process. The “Best Banking/Finance
Application” competition included Oberthur Card Systems for its “IDOne”
product; MCO Groupe for its “Visubank” product; and Thales E-transactions
for its “Artema” product. Other “Sesames” winners were: Retail Logic’s
“Smart-Solution” for “Best Software”; Activcard’s “Activcard Gold 2.0” for
“Best IT Security Application”; Sita’s “C-Travel” for “Best Transportation
Application”; Technopuce’s “Hemo-TAG” for “Best Health Care Application”;
Oberthur Card Systems’ “My Personal SIM” for “Best GSM Application”; Caisse
Nationale des Caisses d’Epargne’s “ID-Tronic” for “Best E-Commerce
Application”; Xiring’s “Fan Reader” for “Best Customer Loyalty
Application”; and finally, Technopuce’s “Hemo-TAG” for “Best Applications
of the Applications.”

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Iraq Factor

The monthly consumer survey conduced by a MA-based consumer credit counseling firm revealed that 27% of Americans would reduce their use of credit cards to make major purchases if America goes to war with Iraq. The “Cambridge Consumer Credit Index” says it also found that 3% of consumers would spend more on their credit cards due to patriotism. The Index says during November, 38% of Americans plan to take on more debt, with 11% taking on a lot of debt, and 27% taking on a little more debt. In contrast, 62% of Americans plan to pay off debt in the next six months, with 48% expecting to pay off a little and 14% expecting to pay off a lot. In October, 36% of Americans planned to take on more debt, while 64% planned to pay off debt. The monthly consumer survey is released to piggyback on the monthly Federal Reserve consumer credit data.

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Slow Rebound

Americans added $5.6 billion to revolving credit during September compared to a nearly $1 billion contraction during September 2001. The economic pause that occurred one year ago as a result of the terrorist attacks contributed to the contraction. However, compared to September 2000, the 2002 data was encouraging. During September 2000, American’s added $4.2 billion to revolving credit. According to figures released Thursday afternoon by the Federal Reserve, revolving credit is now growing at an annual rate 9.3%, compared to 0.6% one year ago. Since the first of this year consumer revolving credit has grown $36.6 billion. Bank credit card debt at mid-year was $611.4 billion according to CardData ([www.carddata.com][1]). Bank credit card outstandings at mid-year were growing at an annual rate of 7.8% while overall consumer credit was growing at an annual rate of 6.9% in September. According to the government figures released yesterday, American consumers were $1.733 trillion in debt, exclusive of home mortgages during September.

REVOLVING CREDIT HISTORICAL
($billions)
Sep02 Aug 02 Jul 02 Jun 02 May 02 Apr 02 Mar 02
GRWTH: 9.3% 10.0 8.9 6.0 4.1 8.0 4.8
$OWED: $729.0 723.4 717.4 715.6 712.1 708.7 705.4

Feb 02 Jan 02 Dec 01 Nov 01 Oct 01 Sep 01 Aug 01
GRWTH: 2.2% 1.8 -9.7 12.7% -7.1 0.6 -2.2
$OWED: $705.0 702.4 692.4 698.0 686.4 692.7 693.5b

Source: Federal Reserve; revised figures as of 11/07/02; For complete
historical data visit CardData (www.carddata.com).

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

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3Q/02 Volume

At the end of the third quarter, bank credit card volume was growing at an annual rate of 7.3% among issuers with the highest transaction levels. However the growth figure is about half as much if MBNA, Capital One, and Chase are discounted. Chase volume increased more than 20% due to its acquisition of Providian accounts. American Express and Discover both posted weak growth in transaction volume, while Citigroup turned in a 3.1% increase in volume, according to CardData ([www.carddata.com][1]). Based on preliminary figures, U.S. Bancorp, the king of business bank credit cards, turned in a 13% gain over last year.

Top Ten Year-to-Date Card Volume
ISSUER 3Q/02 3Q/02 CHNG
1. American Express $171.2b $168.6b +1.4%
2. Citigroup $166.8b $161.8b +3.1%
3. MBNA $116.1b $103.1b +12.6%
4. Bank One $107.9b $102.1b +5.7%
5. Discover $ 71.9b $ 71.2b +0.1%
6. Chase $62.7b $ 51.7b +21.3%
7. Capital One $50.0b $35.7b +40.0%
8. Bank of America $35.9b $35.7b +0.1%
9. U.S. Bancorp $34.2b $30.1b +13.6%
10. Household $26.5b $25.3b +4.7%
Totals: $843.2b $785.5b +7.3%
Source: CardData (www.carddata.com)

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

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Tourist Gift Card

The West Michigan Tourist Association is offering a gift card that can be redeemed at more than 300 attractions, stores, restaurants, resorts, campgrounds, canoe liveries, golf courses, across the west half of Michigan’s Lower Peninsula. The “WMTA Gift Cards” are available in $25 increments and are redeemable for one full year from the date of purchase. The card can be purchased online. A nonprofit membership organization, WMTA has promoted West Michigan as a travel destination since 1917. The association is best known for its annual publication of free seasonal travel guides for the past 85 years.

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ORIGIN-J

UK-based ID Data Technology, Atmel, and OneEighty Software have teamed to deliver “true Java” technology to smart cards. The companies have successfully reduced the code size of Java to 50 kilobytes. The jointly-developed “ORIGIN-J” supports multiple applications, which enable mobile phone users to talk on the phone, play on-screen games, and make e-payments at the same time. The product uses the Atmel “AT90SC6464C” chip since it uses a Flash and EEPROM memory configuration.

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