GEMPLUS 2Q/02

Paris-based smart card manufacturer Gemplus reported a second quarter operating loss, before restructuring charges, of US$25.1 million, almost half the losses posted in 2Q/01. The company also confirmed that its interim CEO, Ron Mackintosh, has decided to step down as of August 15th, with no apparent successor named till then. 2Q/02 revenue was up 19% to US$217.9 million, and gross profit was up 34% to US$50.3 million compared to 1Q/02. However, revenue for 2Q/01 was US$261.9 million and gross profit was US$96.3 million, significantly above current quarter levels. Since February, the company has gone through a restructuring that has reduced its operating costs by US$69.6 million annually. The company is seeking to cut $114.2 million from its costs by year-end. Gemplus also noted that it decided to include in its consolidated accounts for the second quarter a provision to cover the risk of possible non-reimbursement of a loan granted to Dr Marc Lassus, former Chairman and a current Board member, in the amount of US$69.5 million.

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OMNIPAY INVESTOR

Dublin-based international payment processor OMNIPAY has a new majority investor. US-based First Data has become the majority interest holder in the company. The majority interest includes a new equity investment FDC has made in OMNIPAY in addition to a prior, indirect investment through FEXCO, a financial services provider which previously served as the majority stakeholder. Last year, First Data announced partnerships with OMNIPAY and FEXCO to develop a multi-currency end-to-end transaction and settlement infrastructure that allows acquirers and merchants to authorize, settle and receive funding for transactions in any of the major world currencies. FEXCO, which will continue to hold a significant minority equity stake in OMNIPAY, also works with First Data subsidiary Western Union to offer Western Union Money Transfer services in Ireland, the United Kingdom, Spain, Malta and Gibraltar. OMNIPAY was established in Dublin in early 2000 by Brian Connolly and Hubert O’Donoghue.

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ScanMaster 2.0

NCR has introduced “ScanMaster 2.0,” an enhanced version of the company’s POS and store-automation software which runs on Microsoft Windows and can be customized to individual store needs, with multiple options and interfaces to a wide choice of additional applications. NCR ScanMaster is certified with NCR RealPOS terminals, including the recently introduced NCR RealPOS 7456, and is available with NCR’s industry-leading NCR RealScan bar code scanners as well as NCR RealPOS printers, displays and electronic payment terminals.

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Hypercom SST

Hypercom announced it has formed a Secure Systems & Transactions Group within the company to address growth opportunities in areas not traditionally associated with the payments market. The new group will integrate Hypercom’s recently developed biometrics, secure identification, age verification, and transaction security products and systems. The effort will be headed up by the company’s chief strategist, George Wallner. In the last three months alone, Hypercom has announced several collaborations that demonstrate the ability of its card payment terminals to go well beyond traditional credit and debit card payments. The company’s Web-enabled “ICE 6000” terminals began displaying images of missing children in a pilot with CVS and the National Center for Missing & Exploited Children. Hypercom’s “ICE 7000CE” terminal was selected to speed processing and reduce costs for millions of medical claims as part of the new Georgia Health Partnership. Hypercom and Identico Systems introduced a photo ID software application for use on the “ICE 7000CE.” In addition, the company’s card payment terminals and/or networking equipment are already supporting non-traditional payment activities ranging from the State of Texas EBT system and the Brazil Health Ministry’s national health card system to the Western Canada Lottery and Taiwan Lottery.

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Zions & Community Banks

After teaming with Concord EFS, the Zions Bank Correspondent Banking division is now gunning for community banks to offer comprehensive electronic merchant card processing, ATM access and driving, and credit card issuance. STAR, the nation’s leading PIN-secured debit network, will provide clients ATM access via STAR and a comprehensive merchant services program for community banks. Zions also provides a credit card featuring the local bank’s name on it allowing community banks to share the revenue with the credit card company.

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Concur Acquisition

WA-based Concur Technologies, a corporate expense management solutions provider, has agreed to acquire privately held Captura. The deal involves an exchange of stock giving Captura a 16.6% ownership of the combined company, plus approximately $2 million in cash. The deal is valued at between approximately $12.5 and 14.9 million. Captura’s 70 customers include Hewlett-Packard, General Motors, Ford Motor Company, Booz-Allen Hamilton, and Ericsson. Concur Technologies also announced that second quarter revenues of $10.8 million were up 13% from $9.5 million for the same quarter of 2001. The net loss for the quarter was $2.4 million compared to a net loss of $7.8 million for 2Q/01. Concur said it expects total revenues to be between $12.4 and $12.9 million for the current quarter. For complete details on Concur’s 2Q/02 results visit CardData ([www.carddata.com][1]).

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

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Lillian Vernon MasterCard

Sub-prime specialist, Metris Companies/Direct Merchants Bank, has signed a five-year, co-branded credit card agreement with Lillian Vernon. The new Lillian Vernon MasterCard will be launched in October. The card will feature a loyalty program that will allow cardholders to earn rewards on Lillian Vernon and other purchases made with their card. The rewards will be redeemable for Lillian Vernon gift certificates and other special Lillian Vernon-related cardholder benefits and promotions. Lillian Vernon is a 51-year-old catalog and online retailer that markets gift, housewares, gardening, Christmas, and children’s products. The Company is one of the largest specialty catalogs in the USA. In Janaury, Metris and Cendant Corporation signed a co-branded credit card agreement to issue the “Elite Rewards MasterCard.” The no-annual-fee “Elite Rewards” card was launched in April. (CF Library 1/30/02)

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Oberthur 2Q/02

Paris-based Oberthur Card systems reported second quarter revenues of US$118.5 million, a slight increase over 2Q/01. During 2Q/02, Oberthur partnered with Discover Financial Services on the manufacturing of the Discover “2GO Card.” The Discover 2GO Card, the first card of its kind in the credit card industry, has a unique, compact shape and is housed in a protective case that easily attaches to a key-chain, belt or money clip. Oberthur generated US$30.0 million in revenues in the Americas, a 21% decline from 2Q/01. However, card revenues in Asia/Pacific rose 54% to US$4.6 million, compared to US$3.0 million one year ago. Card sales in Europe, Middle East, and Africa rose 9% over the past year to US$84.4 million. During the second quarter Oberthur delivered 9 million smart cards worldwide. Oberthur has been reducing expenses this year, cutting its work force from 3,433 to 3,136 as of mid-year 2002. For complete details on Oberthur’s 2Q/02 results visit CardData ([www.carddata.com][1]).

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

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MegaRewards MasterCard

OH-based Charter One Financial has unleashed the “MegaRewards Business” program for its business debit cardholders. The card enhancement eables users of Charter One’s “SmartBusiness” or “Smart Business OneCard” to earn points toward free merchandise and travel benefits for every signature or non-PIN purchase they make. Under the “MegaRewards Business” program, Charter One small business checking customers will earn one point for every dollar they spend on a non-PIN MasterCard debit card transaction. Business customers can earn up to 10,000 points per month and a maximum of 100,000 per year. Points are valid for three years. Points can be redeemed for merchandise and travel on any airline. There is a $25 membership fee for the program annually that will be automatically deducted from each member’s checking account. The fee includes all enrolled cards on the same checking account. The annual fee is automatically waived for business customers who are active users of Charter One’s online bill payment program. In December 2000, the company was among the first in the nation to introduce a similar program for consumers.

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APAC 2Q/02

IL-based APAC Customer Services reported second quarter net earnings of $3.4 million and revenue of $94 million. Revenue declined since 2Q/01 related to weakness in the telecommunication sector and a reduction in services to certain lower margin clients. APAC Customer Services is a top provider of customer interaction solutions to the credit card industry. The company employs about 14,000 people and maintains 39 customer interaction centers across the nation. For complete details on APAC’s 2Q/02 results visit CardData ([www.carddata.com][1]).

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

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Coinstar Promotion

Coinstar will launch a special promotion between Aug 25 and Sept 21 in nearly 10,000 supermarkets and 250 store chains across the U.S. offering customers a chance to win groceries for a year and a Nissan Pathfinder. The sweepstakes will receive nationwide exposure via in-store advertising, a national full-page freestanding insert on August 25, and Coinstar radio ads in New York, Philadelphia, San Francisco, Boston, Washington D.C., Chicago, Dallas, Houston and Sacramento.

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