E-Check Booklet

The Federal Reserve Board on Thursday announced the publication of a guide to help consumers better understand their rights and responsibilities with regard to electronic check conversion transactions. The guide, “When is Your Check Not a Check? Electronic Check Conversion,” discusses what electronic check conversion is, how consumers can tell if their check will be electronically converted, some of the differences between a regular check transaction and electronic check conversion, consumers’ rights in an electronic check conversion transaction, and what consumers can do if they have problems with such transactions. In an electronic check conversion transaction, a consumer authorizes the use of a check to obtain information for initiating an electronic debit from the consumer’s account. “When Is Your Check Not a Check?” covers electronic check conversion at the point of sale as well as when the consumer has mailed a check to a company that uses electronic check conversion. The guide also provides a checklist for consumers to use before and after an electronic check conversion transaction, and items to review when they receive their account statements from financial institutions. Print copies of the guide are available from Publications Services, Mail Stop 127, Board of Governors of the Federal Reserve System, Washington, DC 20551. The first 100 copies are free. The guide is also available on the Board’s web site at . A PDF (Portable Document Format) version is provided on the web site so that consumer groups, financial institutions, and retailers can download and print copies for distribution to their clients and customers. It includes a space on the back panel for organizations to provide their own contact information.

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E-CASH-PAD SMART CARDS

Performance Technology announced the pilot using Gemplus GemExpresso lite smart chip and magnetic stripe cards (same cards used by leading US Banks and retailers such as First USA, Fleet, Providian, and TARGET, as part of the Smart Visa Program) with the eConnect (OTC Bulletin Board: ECNC) eCashPad and is scheduled to kick off April 8, 2002. The cards have a Europay, MasterCard, Visa (EMV) compliant debit/credit application, loyalty application, and other e-consumer services applications from Gemplus. Consumers will use their PlayersCash cards for payment, loyalty, and security at http://www.offtrackbettingonline.com and other OTB services. eGS, a gaming service subsidiary of eConnect, will service the pilot in partnership with Performance Technology. Pilot participants will access their account balance information, transaction history, and be able to load their card through the http://www.cashmover.net web site. Once loaded the value added PlayersCash card will then be used with the eCashPad to affect same as cash payments at participating OTB sites. “Gaming requires same as cash payments and since the usage of PIN debit over the internet with processing through ATM networks is not presently supported, the usage of the value added PlayersCash smart card and the eCashPad is a great alternative payment solution,” said Mr. McRae, CEO of Performance Technology. The eCashPad is a $59.95 full service terminal for home Internet usage and enables credit card swipes at Bank Eyes Only web merchant sites. Each eCashPad is injected with a working key which will enable same as cash Internet PIN debit at participating Bank Eyes Only sites once Regional ATM card networks support ATM card and PIN Internet usage. Same as cash at participating web merchant sites can also be effected by PlayersCash smart card usage at web merchant sites. Information on the eCashPad can be found at http://www.ecashpad.tv. About Performance Technology: Performance Technology, Inc. headquartered in San Francisco, CA is a Management and Technology consulting firm. Since 1991 PT has helped small to fortune 100 organizations through comprehensive analysis determine “where they are (point A),” focus their goals and objectives; “where they want to be (point B)” and all the necessary steps in getting from point A to Point B. (http://www.perfweb.com) In 2000 PT started a subsidiary named CashMover.net that provides private label payment, loyalty, and security magnetic stripe and smart chip based cards along with issuing processing services. (http://www.cashmover.net)

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FDC Renews FPB

First Data has signed a three-year contract extension with SD-based PREMIER Bankcard. Under the agreement, First Data will provide cardholder processing services for First Premier Bank’s more than 2 million active credit cards through 2008. First Data has provided cardholder processing services to First Premier since 1989 and also provides Quick Collect services through its Western Union subsidiary. PREMIER has been in the sub-prime secured and unsecured credit card market since 1989.

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RECON-NET 6.1

Trintech Group Plc, a global provider of
secure electronic payment infrastructure solutions, announced the launch
of ReconNET 6.1, the latest release of the industry-standard deposit
verification and reconciliation solution. ReconNET 6.1 incorporates a host of
new features, including an online browser-based application suite, Print to
Excel, Fast Find and Favorites functions. All these enhancements have met
with universal approval from one of the solution’s Beta customers,
Alabama Power.

The launch of ReconNET 6.1 is one of the highlights of the company’s sixth
annual ReconNET Customer Conference, which this year is being held at the
San Diego Marriott and Marina, San Diego, California, 17-20 March. The
ReconNET Customer Conference provides a forum to discuss best business
practices with other ReconNET clients, ReconNET consultants and leading
industry vendors through business sessions and industry networking
opportunities.

“I did not believe the product could get any better, but the new features
in 6.1 make ReconNET even easier to use and our routine operations much
faster,” said Marsha Fifer, at Alabama Power. “Due to the complexity of our
collection files, a simple search wasn’t sufficient to locate the sixty or so
EDIs (Electronic Data Interchange) that are credited to our bank account
daily. This process was very time-consuming since standard-matching
principles could not be used. Also in Version 6.1, I found the new online
application allows us to communicate for research purposes in a one-step
process instead of three. This coupled with the new Fast Find features will
definitely cut our reconciliation time significantly.”

“ReconNET 6.1 is all about meeting and exceeding our customer’s
requirements,” said Tom DeLany, Director of Product Management in the Funds
Management Systems Division at Trintech. “We are particularly pleased with
the overwhelmingly positive response we received from our Beta customers
regarding the new features we added, such as ReconNET Online, Fast Find,
Favorites and Print to Excel functions that make ReconNET 6.1 the most
advanced deposit verification and reconciliation product in the market.”

Among the more than 275 leading organizations using ReconNET are such
well-known companies as Target Corporation, Eddie Bauer, The Limited,
Radio Shack, Foot Locker, Best Buy, Hallmark Cards, Verizon Wireless,
Sprint PCS, Kroger, AMC Theaters, Budget Rent a Car, Outback Steakhouse,
Burger King, Wendy’s, and many others.

About ReconNET 6.1

ReconNET, part of Trintech’s PayWare suite of products, provides
business-to-business enterprise reconciliation and treasury platforms that
streamline the management of cash deposits, credit card payments and
disbursements. ReconNET 6.1 features improvements include support for
Microsoft SQL 2000, Windows XP Professional, and Crystal 8.5, extensive
usability enhancements and a web-enabled application for access to ReconNET
via the Internet.
For additional information about the ReconNET solution, contact Trintech
at 15851 Dallas Parkway, Suite 940, Addison, TX 75001 (Tel: 972-701-9802) or
on the Internet at http://www.trintech.com/ReconNET.

About Trintech

Founded in 1987, Trintech is a leading provider of secure electronic
payment infrastructure solutions for card-based transactions for physical
world commerce, eCommerce and mobile commerce. The company offers a complete
range of payment software products for credit, debit, commercial and
procurement card applications, as well as being a world leader in the
deployment of payment solutions for Internet commerce that are fully SSL and
SET(TM) compliant. Trintech’s range of scalable open systems architecture
solutions for UNIX(R) and Windows NT(TM) platforms covers consumer, merchant
and financial institution requirements for physical payments and the emerging
world of electronic commerce.

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Emergent Acquires BizPay

Emergent Financial Group, an electronic transaction data processing company for non-bank consumer financial services, has announced the execution of binding agreements to acquire the BizPay suite of online payment transfer technology.

The BizPay suite enables consumers to instantly and securely send money to participating merchants or any other e-mail user in the world, including those using Web-enabled cellular telephones, pagers, and other handheld devices. BizPay software also enables small- to mid-sized businesses and home-based businesses to participate fully in e-commerce without a traditional retail credit card merchant account. The technology also functions as a digital wallet solution where consumers may store cash value in their virtual BizPay account.

“BizPay fits hand and glove with our money transfer activities and extends our technology to the Web, where we can service targeted vertical markets,” said Jason Galanis, CEO of Emergent. “PayPal has been properly lauded for their email-based money transfer services popularized initially through online auctions like Ebay. In conjunction with our partners, Emergent management believes it has access to similar niche vertical market applications to exploit BizPay.”

Emergent plans to deploy BizPay immediately in connection with its previously announced agreements with Atlantic Payments Systems and Global Collect (see news March 18, 2002).

The Agreement provides for Emergent’s acquisition of the BizPay technology from Consygen in consideration for a long-term royalty agreement and an agreement to commercialize the product. To date, Emergent has invested capital to relocate the hardware and software platform to its headquarters in Boulder, Colorado, has provided for credit card processing agreements with a major bank with over $100 billion in assets and Emergent has agreed to maintain regulatory compliance for the money transmission components of BizPay. PayPal (NMS: PYPL), a competitive product, has recently received notification from certain state regulators about the applicable regulation of its online payment services as a Money Services Business. Emergent’s subsidiary is a registered Money Services Business.

BizPay is not currently generating any revenue for the Company, nor is there any assurance that it ever will or, if it does, that it will be successful. The Seller previously established formal agreements with Cardservice International, a division of First Data Corporation (NYSE: FDC), and EarthLink (NMS: ELNK) to offer the product, but was unable to raise sufficient capital to implement the developed technology or, recently, to secure the critical sponsorship agreements.

About Emergent Financial Group

Emergent ([www.emergentgroup.com][1]) is a holding company, which owns transaction processing subsidiary companies principally engaged in person-to-person (P-to-P) money transfers. Emergent is principally engaged in building a distribution network for non-bank financial services delivered through countertop point-of-sale devices in retail locations globally. We believe our proprietary technology is the only end-to-end fully electronic solution available for international wire remittances originated in-store. The Hispanic expatriate community in the United States is estimated to account for the majority of the $49 billion in cash transmissions originating from the U.S. in 2001, a market growing at 15% annually.

Emergent derives its revenues from transaction processing fees, net of commissions paid to certain selling agents, and/or for services such as non-bank wire transfer services.

More information is available from Emergent Financial Group, Inc., Boulder, Colorado, 303/544-0044.

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

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E-FRESH KIOSKS

VendTek Systems Inc. announces it has launched a Pilot of e-Fresh™ self-serve kiosks for the
distribution of prepaid wireless phone time in Beijing, China.

The e-Fresh system in China is branded “Yi Tong,” meaning “Easy Through.”
The Pilot consists of the deployment of 5 e-Fresh™ kiosks and is scheduled
to last three months. Each kiosk has Chinese character interface and
exterior graphics. The kiosks currently retail China Mobile prepaid wireless
time. The kiosks are deployed in a variety of locations in Beijing,
including a Department store, a China Mobile wireless phone store, and a
university site. The kiosks are connected via public phone lines to a
VendTek server also located in Beijing. In addition to the distribution of
electronic vouchers, the kiosks distribute traditional prepaid phone cards.

“We believe VendTek and its Chinese partner are the first to offer
electronic pin distribution in China,” says VendTek President, Paul Brock.
“The market potential in China is immense. With our Chinese partner we are
working with China Mobile, which has one of the World’s largest cellular
phone subscriber bases. Noted researcher Gartner Dataquest Asia-Pacific
recently revealed that pre-paid connections in China surged to 66 million in
the fourth quarter of 2001 compared to 12 million in fourth quarter 2000.
Our short term objective is to prove consumer acceptance of the new
distribution paradigm, which could lead to a large scale e-Fresh deployment
in Beijing and other major centers.”

The Company is also in early stage discussions with partners in China for
potential financing and production after the Pilot.

About VendTek and e-Fresh™

VendTek uses its expertise in payment and self-serve technologies, smart
cards and networking to develop systems for transaction automation.
VendTek’s secure proprietary systems reduce shrinkage, improve access for
consumers, increase the number of selling outlets and selling hours, and
enhance overall security making the systems superior to traditional
distribution and alternative channels. VendTek’s e-Freshä System enables
consumers to purchase prepaid services, such as cellular time, via POS and
self-serve terminals connected to a central server.

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ID Theft Fight

The nation’s largest credit reporting systems’ data shows that the majority of consumers who call their toll-free fraud numbers are doing so as a precautionary measure and not as ID Fraud victims, reported the Consumer Data Industry Association. Further, the Federal Trade Commission’s own ID Theft Clearinghouse data shows that fully 42 percent of crime victims who contact the FTC learned of the crime in less than a month. Equifax, Experian, and TransUnion did not waste any time in their adoption of key ID Fraud victim assistance initiatives. A specialized ID fraud task force was established in 1998 and on March 16, 2000, CDIA announced its first six-point program for victims. By January 1, 2001, the CDIA’s members were already providing nationwide voluntary victim assistance services. These voluntary initiatives pre-date recent Congressional proposals and they include but are not limited to: using fraud alerts on credit reports transmitted to creditors helping them to avoid opening additional fraudulent accounts; standardizing fraud alerts nationwide so that all creditors can recognize them; and expediting the removal of fraudulent data for victims who have police reports.

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SMART CARD TRENDS

SchlumbergerSema, a business unit of Schlumberger
Limited, unveiled its annual smart card market trends review, which
notes that the economic slowdown of the last year significantly affected the
industry’s results. As usual, this forecast focuses on volumes and yearly
periods, and does not include financial, pricing, margin, monthly or
quarterly anticipations about the growth trends in this highly cyclical
industry, which is traditionally slower in the first part of the year.

For 2001, year-on-year growth rates for the entire smart card industry fell
from typical +20% levels to what for this market segment is effectively a
flat line at just +3%. The most visible effect is expected to be greater
emphasis on a wider range of applications that go well beyond previous
years’ strong focus on mobile communications.

Hidden inside the overall picture are some significant trends and successes.
They include maturity for multi-application cards, with anticipated
dominance for the JavaCard platform; the continuing rise of the
Asia-Pacific region; and unstoppable momentum for banking applications,
which have long cycle times that seem to be immune to macro-economic
fluctuations. Looking forward two years, SchlumbergerSema expects smart
card-enabled PKI (public key infrastructure) technology to play a growing
role in the deployment of many 2.5 and 3G networks, the roll-out of national
ID card programs, and the implementation of smart card-based network access
for enterprise IT systems.

“Success is now heavily reliant on the ability of the industry’s major
players to offer end-to-end solutions embracing systems design, integration
and deployment, a trend which underscores the vision behind last year’s
Schlumberger Limited acquisition of Sema,” said Jorgen Rasmussen, president,
Cards, SchlumbergerSema. “Smart cards provide a key enabling technology
across many different industries, catalyzing profitability and operational
efficiencies. Moving forward, business success for smart card players is
going to rely largely on their ability to provide a full spectrum of
solutions — from simple, single applications to the most complex card
life-cycle management programs.”

Telecommunications: SIMs are Down, but Far from Out

After an amazing run of double-and triple-digit growth years, the SIM
(subscriber identity module) smart card market experienced an unanticipated
drop in 2001. The main reasons were low levels of handset renewals due to
the perceived failure of WAP, the non-arrival of 2.5G technologies, near
saturation of handsets in some countries, and the fact that many operators
had overstocked on SIMs to meet growth predictions that did not occur. In
combination with the general lack of confidence following events on
September 11, the result was a decrease of the market of around 10%. This
learning experience led operators and industry suppliers to revise their
forecasts; and the regular replacement forecasting models of the PC industry
are no longer in vogue.

For the wireless smart card sector, the growth outlook is now a modest 12%
for 2002, moving upward to 20% in 2003. The key factor driving this growth
curve is the arrival of higher bandwidth mobile network infrastructure,
which is expected to mature and result in volume handset orders during 2003.

There are some particularly bright spots that indicate that SIM cards are
possibly growing faster than some handset manufacturers might predict. Two
factors stand out.

The first is the strong growth of SMS (short message service) traffic. In
an overall disappointing year, this was probably the biggest success story
for mobile operators, with SMS traffic accounting for up to 10% of revenue.
As the value-added services (VAS) that facilitate this business are heavily
based on SIM ToolKit (STK) applications, SMS provides a healthy impetus for
SIM card growth, which can only be boosted with the current migration to 64K
SIMs, which SchlumbergerSema started shipping in 2001. This trend heralds
cards that support large numbers of VASs. The roll-out of
SIMalliance-compatible browsers based on STK is now starting to impact
shipments, further improving prospects.

The second factor is the adoption of GSM/GPRS technology by TDMA operators,
and the introduction of SIM cards by key CDMA operators, like China
Unicom,which has required the use of RUIM (Removable User Identity Module)
cards in its networks. This shift is now evident in North America, Latin
America, Asia Pacific, and Africa. Among operators adopting GSM technology,
AT&T and Cingular in North America provide very high profile examples. Such
moves are contributing to the widespread adoption of SIM-based technologies
by a subscriber base that previously was locked out of SIM-based solutions.

With the lack of impact from Windows for Smart Cards in the mobile
communications segment, Java has been further reinforced as the de facto
standard worldwide. JavaCard compatibility has become an unstoppable force
for high-end SIM cards following the release of the 2.1 specification, which
provides interoperability for deploying VASs and upgrading them in the
field. In 2001, JavaCards accounted for 60% of high-end multi-application
card shipments to the wireless industry. This trend is expected to
consolidate and rapidly lead to complete domination in 2003.

SchlumbergerSema pioneered JavaCard technology in 1996, and has
traditionally dominated this segment of the smart card market. For the
foreseeable future, SchlumbergerSema expects its total JavaCard shipments to
increase dramatically in the high-end SIM segment.

Considered geographically, consumption of SIM cards for mobile
communications applications in the Asia Pacific region matched the European
market in 2001, and is expected to outstrip other markets in the foreseeable
future. This is due to the large markets expanding and opening up in Asia
— particularly China, Indonesia, and India. Significantly, the Asia Pacific
region is starting to become a technology leader as well.

In North America, sales of its Simera Java-enabled SIM smart card are
expected to surpass ten million units sold in early 2002.

“As innovative mobile applications such as m-banking, m-commerce, and
location-based services continue to be adopted by operators in North
America, the SchlumbergerSema Simera Java-based SIM card is providing the
right foundation to fuel needed growth in these data-based services,” stated
Paul Beverly, vice president of cards and eTransactions, North America. “As
the wireless market in North America continues to mature, SIM cards and
SIM-based solutions will continue to enable wireless operators to meet
consumer demand for content, security, and convenience in real-time data
services.”

“Smart cards are now a worldwide phenomenon in mobile communications,”
commented Xavier Chanay, vice president, Mobile Communications products,
SchlumbergerSema. “The rapidly increasing capacity of cards, plus their
major role in supporting revenue-generating, value-added services make them
the ideal device for supporting the key business objectives of leading-edge
mobile communications companies.”

Turning to other smart card applications in the telecommunications sector,
the first trend of note is early signs of decline in the biggest single chip
card market: phone cards. Based on simple memory-only chips, this sector
accounts for well over half of the industry’s total card shipments — more than a
billion units in 2001. However, it only reflects a small portion of the
industry’s revenue, as phone cards have become a commodity product. The
phone card market, which has in recent years grown by around 10% per annum,
is now being affected by the increasing penetration of mobile phones. Other
factors impacting it include the growing ability to pay for calls via
multi-application cards, such as an e-purse or debit application on a
financial card. The phone card market now looks set for gradual
single-digit declines for the foreseeable future.

Banking – a Solid Business Case for Growth

The financial market represents the next largest application sector for
smart cards, and it is proving to be relatively immune to economic
fluctuations, largely because of the long cycle times associated with
projects. This market grew by 21% in the last year, a strong performance
driven by the country-wide projects that are replacing existing magnetic
stripe bank cards with smart cards — such as the UK’s conversion to smart
cards in 2001.

The EMV (Europay MasterCard Visa) specification continues to dominate the
industry, with Brazil, Korea and Japan emerging as the newest smart card
financial markets, and the UK entering a maturity phase. The case for smart
cards in the banking industry was originally built on controlling fraud.
Today, applications are increasingly focused on winning and retaining
customers by offering innovative multi-application cards with multiple
services, such as credit, debit, e-purse and cash dispensing facilities; new
functions such as loyalty, secure remote access to accounts; and even
non-banking applications like healthcare.

Technologically, a number of platforms – notably JavaCard and Multos — are
still competing for leadership in open standards, but none is expected to
become dominant in the near future. One prediction from SchlumbergerSema is
that the banking sector is likely to be the first volume adopter of the
company’s USB-compatible e-gate smart cards, which enable high security,
smart card-based services to be easily used over networks for authentication
and payment.

“The provision of end-to-end solutions for multi-application cards is now
key for financial institutions re-engineering their customer relationships
and deploying multi-channel access to reduce time-to-market for these new
services and cut total cost-of-ownership,” said Philippe Cambriel, vice
president, e-Transactions Cards, SchlumbergerSema.

Public Sector ID Cards Offer Growing Prospects

Although the government-driven card application sector involves large
volumes, and is the next largest consumer of microprocessor-based smart
cards after mobile communications and banking, it is still in its formative
years. This makes it extremely sensitive to individual projects, and
near-term growth forecast partially relies on an extension of existing
projects, such as the massive French health card project, which moved from
its roll-out to maintenance phase. From 2004 onward, however, overall
market prospects start to become immense.

Several countries are currently tendering for national ID cards, with some
projects expected to reach their roll-out stage during the next two years.
Numerous other countries are currently starting to consider options in this
area, partly as a result of heightened security concerns stemming from the
events on September 11. This is particularly true in North America, where
both government and businesses are exploring new ways to protect the
security of their IT networks and buildings without compromising the privacy
of individuals. In the US, the Department of Defense is rolling out Java
multi-application cards for physical identification and building/network
access.

Technologically and organizationally, this sector is one of the most
challenging for the smart card industry. From a technological standpoint,
the cards must support a sophisticated PKI to achieve the highest level of
protection against counterfeiting. This necessitates powerful on-card
cryptographic processing capabilities. The physical structure of the card
is also crucial — it must exceed normal durability standards, as well as
support graphical and printing techniques that provide equal or higher
security than bank notes.

A second factor is the public sector’s growing demand for end-to-end
support. As SchlumbergerSema predicted in past years, this drive for
complete solutions is a fundamental factor behind recent consolidation and
change in the smart card industry – with the Schlumberger acquisition of
Sema emerging as the highest profile example of this trend. Industry
survivors in this sector must offer end-to-end solutions that include
mini-smart card personalization factories, distributed network systems and
interfaces with back-office national computer systems.

Transport Applications are Moving Smoothly

The transportation sector has progressed to an interesting phase. The
established productivity and business benefits of contactless card
technologies for ticketing and tolling are now spreading out from
high-profile mass transit applications in major cities to numerous
smaller-scale projects in mid-sized cities and towns.

Four major RF (radio frequency) contactless technologies are competing for
business. Smart cards still have to overcome the cost barrier associated
with chips being more expensive than magnetic stripes, especially as it
relates to low-value tickets. A key factor in determining which
technologies and suppliers attain dominance is that smart cards enable
transit operators — which are usually government-sponsored in some form –
to increase profit by offering additional on-card applications to their
customers.

Although the complementary applications that will drive this emerging market
are still to be determined, they will almost certainly demand cards which
combine contactless and contact interfaces – such as the ones used in
Southampton, UK; Curitiba, Brazil; and the RATP program in Paris, France —
together with the associated multi-application operating systems, terminals
and systems integration support.

Smart Cards for Pay-TV Applications Ensure Security in the Digital Age
The pay TV market for smart cards is already substantial. Although it is
likely to grow only sporadically in the short term, it is potentially a star
in the smart card industry’s future as cable and satellite set-top box card
systems come up for renewal every two to three years.

Because they are simple to use, low cost and easily replaceable, smart cards
are now fundamental to security management for the pay TV industry. The
transition to all-digital delivery for terrestrial/national TV channels, the
emergent business models for digital rights management for high-value
content providers in areas such as sports and films, and operators’ desire
to leverage customer bases by marketing set-top boxes for Internet access
indicate enormous growth prospects for the smart card industry in 2005 and
beyond.

IT Security Emerges as Newest Major Application

For the first time in the annual SchlumbergerSema smart card review, IT
security applications are covered as a separate application segment.
Although still involving small numbers, smart card-enabled IT security is
experiencing explosive growth. Smart cards are providing a user friendly
and convenient tool for implementing enterprise-wide security for physical
access to premises, as well as logical access to computers and
private/public networks. Over the last year in particular, numerous
industry-leading enterprises have started to equip their IT systems with
smart card-based PKI applications, inspiring many more companies to adapt
this easy-to-use, secure option.

Market growth in this segment is enabled by the support for smart cards
built into the Windows operating system, which reflects the demand for
systems integration support from smart card vendors for applications such as
client sign-on and back-office integration with PKI resources. Global
around-the-clock support is another factor, especially for the current
initial wave of users, which are typically multinational corporations.

SchlumbergerSema expects the IT security sector to more than double each
year for the foreseeable future, and the technology is expected to start
penetrating mid-sized and smaller organizations over the next couple of
years. For corporate users, the new USB-compatible SchlumbergerSema e-gate
technology – which eliminates the need for a reader — is a key factor in
simplifying adoption.

Winners Will Deliver End-to-End Customized Solutions

The fast-growing markets and application sectors for smart cards generally
involve microprocessor-based technology and multi-application capabilities.
SchlumbergerSema predicts that by 2003, 50% of smart card shipments are
expected to support multiple applications. Moreover, the open JavaCard
standard for multi-application cards — building on its unchallenged
leadership in mobile communications — is expected to attain industry-wide
domination in the same timeframe.

The establishment of smart cards as the portable client device of choice for
automating consumer services and managing customer relationships is a
further indisputable trend, which has already led to the emergence of a new
breed of systems house.

“With very large rewards for card-adopting organizations, the challenge is
now one of design, integration and service,” stated Rasmussen. “The
successful card players of the next few years will be companies that can
provide optimal customized solutions, from the card itself through full
system integration to operational services.”

About SchlumbergerSema

SchlumbergerSema is a leading information technology services company
providing consulting, systems integration, managed services and products to
the telecommunications, energy and utilities, finance, transport and public
sector markets. With more than 30,000 employees serving customers in 65
countries, SchlumbergerSema is one of two business segments of Schlumberger
Limited, a global technology services company. For more information about
SchlumbergerSema, visit http://www.slb.com.

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CIM MF6000

Florida and Italy-based CIM has launched the latest of its Pro-Series multi-modular card printer systems. The MF6000 is a multi-feeder ideal for mid to high volume card production in that it allows the user to simultaneously feed and process up to six different cards into other embossers and thermal printers. The MF6000 has six input hoppers capable of holding 200 cards each for a combined total of 1200 cards, and 6 optional chip encoding stations for smart card personalization. This user friendly multi-feeder can be used as a stand alone unit or in-line with CIM’s wide range of Pro-Series embossers and thermal printers.

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Charge-Off Uptick

Signs of economic recovery are being tempered by rising chargeoffs and serious delinquencies. The latest credit card numbers validate the long held belief that not only do subprime borrowers default at a higher absolute level, they also deteriorate much more rapidly in stressful environments, even in the relatively brief and shallow one experienced to date. Fitch’s chargeoff index rose to 5.88% from last month’s 5.83%, while the greater than 60 day delinquencies index rose to 3.56% from 3.41%, its highest level in four years. Fitch’s prime credit card charge-off index rose approximately 17% over the past 18 months, while subprime credit chargeoffs increased 38% over the same period. Serious delinquencies in the subprime sector exhibited a similar meltdown, rising nearly 50% over the same period, compared to a 23% increase in prime sector late-stage delinquencies.

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DuoCash Raises Cash

DuoCash has announced the close of their Series B financing led by OCI Venture Group, an early stage strategic private equity group focusing on IT, communications and digital media industries, and the venture investment arm of OCI Group, a multi-national Asian conglomerate.

According to DuoCash CEO Victor Nappe, “We see the investment as another validation of our business model and the trend away from free content and advertising-driven media models and towards paid subscription and downloads.” Adds Nappe, “The challenge to date has been several fold: the inefficiency of small transactions, consumers lingering concerns about using their credit cards online, and the lack of access to credit cards by key markets such as teens.”

DuoCash is the developer of a proprietary micro-payment technology utilizing pre-paid phone cards — an untapped market of hundreds of millions of cards currently in circulation with more than $5.2 billion in stored value. Working with the major telco carriers, DuoCash is enabling these phone cards for online transactions — offering convenience and privacy for users, and providing a reasonable and cost-effective alternative to credit cards for websites selling subscription services and premium digital content, such as music downloads, streaming videos, online games, e-books, archived articles, shareware, etc.

This funding comes at a particularly critical time for media and internet companies, with major destinations such as Yahoo!, GeoCities, RealNetworks, Motley Fool, and Blue Mountain moving toward a paid content model. According to a forecast released today by Jupiter Media Metrix, paid content revenue is projected to grow to $1.4 billion in 2002, with categories such as digital music increasing by 179.2%.

Many in the industry feel that a micropayment solution is essential to fueling this growth. Most notably, renowned internet expert Jakob Nielson, the guru of web usability, who has predicted “the emergence of micropayments as one of the main business models of the web.” Says Nielson, “Offering free services on websites is not a sustainable business model, nor is advertising, which doesn’t work on the Web. Most Internet companies are now pursuing an enterprise strategy to make money, but they’ll soon begin turning to individual customers for revenue as well.”

DuoCash (), which was founded in February 1999, will use the funds to market their brand through their strategic and merchant partners, both online and at retail point-of-sale. Prior to this round, the company received series A funding in December 2000, which was led by OCI Venture Group.

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SunStakes Sweepstakes

MasterCard International is kicking off a multi-tiered marketing program for debit MasterCard in support of its dedication to building the category and helping consumers understand the benefits and convenience of using debit MasterCard instead of cash or checks. The centerpieces of the campaign include a new “Priceless” debit television spot, which makes its debut at the Academy Awards, and a SunStakes Sweepstakes, which will launch next month nationwide. The SunStakes Sweepstakes automatically enters consumers for a chance to win exciting prizes simply by using their debit MasterCard for qualified purchases between April 15 and June 30. Summer theme prizes include a 2002 GMC Envoy (grand prize), a high-performance personal watercraft (first prize), and ultra-premium gas grill (second prize). The sweepstakes will be supported via radio spots, which will air in select markets nationwide, statement inserts and messaging, in-branch materials, and direct mail.

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