MBNA 4Q Outlook

Super-prime and affinity credit card specialist MBNA reported this morning that as of December 18th, total managed loans increased $4.1 billion over the third quarter. At the end of November, MBNA had added 2 million new cardholders or 1.7 million new accounts during the fourth quarter. MBNA noted today it has received the endorsement of 33 new sports-related organizations this year and now has more than 600 total sports-related affinity card programs. More than 7.5 million sports sector cardholders carry $9 billion in loan balances on MBNA products. The affinity card king last week snagged the PGA TOUR card program from First USA and also recently signed the Seattle Mariners. Other sports affinity card programs signed this year include the Oakland Athletics, the Milwaukee Bucks, the San Antonio Spurs, and the United States Tennis Association. MBNA has renewed 18 agreements with sports organizations in 2001 including the Cincinnati Reds, the Philadelphia Flyers, the National Hockey League, NASCAR, National Hot Rod Association, the PGA of America, and Major League Baseball. MBNA also markets its card products to the college sports fans of more than 700 colleges and universities. Totally MBNA has about 5,300 affinity card programs in the USA, the UK, Ireland, and Canada. For complete details on MBNA’s 3Q/01 performance visit CardData ([www.carddata.com][1]). (CF Library 12/13/01)

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

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Toys R Us Gift Cards

The calendar tells the story. The holidays are here and shopping time is getting short. What can gift givers do to add a little something extra to that holiday gift? A Toys “R” Us gift card is the answer.

Toys “R” Us, Inc. announced a promotion with Walgreens that will allow consumers to purchase Toys “R” Us gift cards at all Walgreen locations throughout the United States.

“With the holiday season here, we are all in search for the perfect gift for that special someone on our list,” said Warren Kornblum, Executive Vice President – Worldwide Marketing and Brand Management. “This partnership with Walgreens provides Toys “R” Us and Walgreen shoppers with another convenient gift giving option. Having gift cards at all “R” Us locations as well as at Walgreens will give Mom, Dad, Grandma and Grandpa, and other family members another way to please the special child in their lives.”

Toys “R” Us Gift Cards are available in all of the 1,048 Toys “R” Us, Babies “R” Us or Kids “R” Us locations throughout the USA. This is the first time Toys “R” Us gift cards have been available through another retailer.

Toys “R” Us — The world’s leading resource for kids, families and fun currently operates 1,606 stores; 703 toy stores in the United States, 509 international toy stores, including franchise stores, 184 Kids “R” Us children’s clothing stores, 161 Babies “R” Us stores and 49 Imaginarium stores. The company also has Internet sites at [http://www.toysrus.com][1], [http://www.babiesrus.com][2] and [http://www.imaginarium.com][3].

[1]: http://www.toysrus.com/
[2]: http://www.babiesrus.com/
[3]: http://www.imaginarium.com/

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KEYCORP KOREA

Keycorp has sealed a deal for 1.1 million cards and modules to the Korean
consortium of Kookmin Bank, Korean Telecom Freetel and Mondex Korea.
The e-purse cards will use the ‘MULTOS’ operating system and an Infineon
processor. Under the $A6 million contract, the Keycorp smart cards will be
manufactured by Security Plastics in New Zealand. The cards will be used in
such applications as MasterCard’s ‘Mcard Select’, the Mondex e-purse
and a Korean National ID card.

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Browser-Free SSL

DE-based Electronic Payment Exchange this week introduced a method of transmitting Internet payments encrypted by ‘Secured Socket Layer’ that effectively separates ‘SSL’ from the web protocol it’s usually associated with. This enables merchants to send their transactions to EPX through an ‘SSL’ connection without having to wrap them in HTML code. The encryption also takes place at strictly a hardware level, rather than a web server level. To remove the task of encryption from the web server, EPX installed redundant ‘SSL’ accelerators specifically designed to encrypt and decrypt ‘SSL’. EPX’s front-end technology was designed to transmit ‘SSL’ transactions directly through these hardware devices, without using HTTP. Clients have the option of encrypting transactions with both ‘SSL’ and ‘Triple Data Encryption Standard’ for added protection.

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ePcard XML

GE Capital yesterday introduced a patented payment tool that automates settlement and reconciliation of transactions made through e-procurement systems. The company also confirmed Tuesday it is the process of cutting 3,000 jobs amid a restructuring of some businesses within its financial division. The new ‘ePcard XML’ system reduces errors and speeds up online purchasing by using machine-to-machine communication between the Oracle Procurement system and the MasterCard network. Currently most p-card transactions in e-procurement systems require the supplier to manually type the customer’s purchase order number at the point of sale. ePcard XML eliminates the need for suppliers to capture customer PO numbers. Instead, ‘ePcard XML’ automatically extracts the PO number from the e-procurement system, appends it to the MasterCard transaction record and transmits it to the customer’s accounting system for automated reconciliation. More than 800 online suppliers are enabled, currently settling orders worth several million dollars a month via ‘ePcard XML’.

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Incurrent TruSecure Certified

Incurrent Solutions, Inc., the leading provider of Internet-base d Cardmember Relationship Management solutions for the payment card industry, announced today that TruSecure Corporation has awarded Incurrent a TruSecure Service Provider Core Infrastructure Certification.

TruSecure Corporation is a worldwide leader in security assurance solutions for eBusiness corporations and is the only company providing independent testing and verification of all the dimensions of a service provider’s offerings. TruSecure’s certification process required five months of on-site scrutiny, and included detailed assessments of core router and management stations, physical security reviews, reviews of policies, procedures and architecture; evaluations and recommendations on overall network architecture and connectivity, including backup/failover systems, redundancy and environment al controls; and validation of policy compliance in human resources, Internet security, administration, remote access, helpdesk and physical security.

TruSecure measured Incurrent against 64 essential practices (for which there are 96 validation metrics) as part of this certification process.

TruSecure’s comprehensive report, evaluating the strengths and weaknesses of Incurrent’s hosting environment formally concluded that there were no weaknesses in the operation or its procedures. Incurrent’s information security operations were pronounced and certified as secure. TruSecure’s Service Provider Core Infrastructure Certification is valid for one year.

In order to maintain this certification, Incurrent will undergo quarterly vulnerability assessments by TruSecure and an annual re-certification audit.”If you’re going to host and operate mission critical business platforms for the largest financial institutions in the world, you have to be proactive in managing information security. You have to meet the highest standard,” said Loren Hulber, President and CEO of Incurrent.

“Earning the TruSecure certification validates Incurrent’s efforts to deliver world-class service to world class customers.”

About Incurrent Solutions

Founded in 1997, Incurrent Solutions ([www.incurrent.com][1]) provides advanced Internet, voice and wireless services to card-issuing banks and transaction processors. Incurrent’s clients include Sears Roebuck, NextCard, Certegy (formerly Equifax Card Services), Fiserv, Fleet Credit Card Services, Metris Companies, and other major card issuers. Incurrent has seen the volume of its clientele’s total cardmember base grow from 15 million to 100 million, reflecting a rapidly growing industry need for its services.

CardSite, Incurrent’s cutting-edge, Internet-based CRM solution, enhances cardholder experience and cultivates account loyalty at a cost significantly lower than traditional customer interaction methods. Cardholders enjoy real-time access to account information, statements, bill payment, secure e-mail, reports, searches, interactive sessions, and other service-enhancing tools for web, wireless and voice channels.

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

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@pos 4Q Estimates

@pos.com, Inc. ([www.atpos.com][1]), a leader in secure, interactive electronic transaction technologies, announced that it expects revenue in the range of $4.2M and $4.6M in the second fiscal quarter ended December 31, 2001. When combined with first quarter fiscal 2001 revenue of $2.8M, year-to-date revenue is expected in the range of $7.0M and $7.4M for the period ending December 31, 2001. This is in line with previous guidance indicating that the Company expected to complete projects totaling $6M to $7M in revenues prior to the end of the second fiscal quarter.

The Company expects net operating losses for the second fiscal quarter ending December 31, 2001 to be in the range of $.8M to $1.0M. Gross margins will be approximately 38% to 40%, in line with levels achieved in the first quarter. Operating expenses are expected to increase sequentially by approximately $.8M, as previously announced, primarily as a result of the Crossvue acquisition on September 28, 2001. When combined with first fiscal quarter operating losses of $602,000, the Company expects year-to-date operating losses of $1.4M to $1.6M for the six months ending December 31, 2001.

The Company currently forecasts a significant decline in third quarter revenues from the previous quarter, but believes that this forecast may be improved by contracts under negotiation. This decline largely reflects cutbacks and deferrals of capital spending in the retail industry. The Company expects the third fiscal quarter will represent a low point for shipments and that the overall outlook should improve in the fourth fiscal quarter.

In light of the expected weakness in third quarter revenue, Company management announced it will explore options to reduce expenses and raise equity to meet anticipated capital requirements.

About @pos.com

@pos.com (OTCBB:EPOS) is a leader in secure, interactive electronic transaction technologies. The company provides signature capture products, web-enabled payment platforms, smart card interfaces, encryption engines supporting DES and Triple DES, and an extensive suite of software tools. With complete end-to-end solutions, @pos.com offers internet-based, hosted services, under its Crossvue brand, for loss prevention and electronic receipt storage and retrieval. @pos.com currently services the retail, government and banking market for applications that include electronic signature capture, debit and credit payments. For more information, see [www.atpos.com][2].

[1]: http://www.atpos.com/
[2]: http://www.atpos.com/

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Canadian P-Card

Comerica has launched a new ‘Canadian Dollar MasterCard Purchasing Card’ to eliminate costs associated with currency exchange. Canadian-based business clients of Comerica will now be able to settle their purchasing card accounts in Canadian dollars. The new card comes with a number of Internet options, including ‘iTracer’, an online information reporting package that, among other features, enables program managers to isolate spending on a company-wide basis with a category of merchants or even a single supplier in order to negotiate volume discounts. The Comerica’s Canadian P-card also enables business managers to place a combination of limits on card use, such as by type of merchant and amount of purchase. These and other limits can be unique to each card. The ‘Canadian Dollar Purchasing Card’, ‘Purchasing Card’, ‘Fleet Card’, ‘Corporate Card’, ‘Multi-Card’ and ‘Comerica CompCARD’ comprise Comerica’s commercial card suite of business card products.

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ATM MANAGEMENT

First Data
Resources, the nation’s leading debit card processor and a subsidiary of
electronic commerce and payments leader First Data Corp., announced it has
signed a worldwide licensing agreement with Gasper
Corporation to use Gasper Manager — the leading ATM management solution.
First Data will make the advanced services available to clients representing
over 15,000 ATMs throughout the U.S. and Australia.

First Data will leverage its relationship with NYCE Corporation, an
existing user of Gasper products, that will provide fully-automated ATM
monitoring and dispatching services on behalf of First Data’s U.S. terminal
deploying clients. First Data will also implement and provide the services
through its operation in Australia, one of the largest electronic funds
transfer businesses in that country. The advanced monitoring services
identify ATM issues quickly and easily, which allows First Data to help its
clients decrease customer service calls, increase ATM availability, and lower
operational costs.

“First Data and NYCE understand that our client’s ATM availability
ultimately impacts its customer service and profit objectives,” said Diane
Piccolo, senior vice president of debit services for First Data Resources.
“Our agreement with Gasper will help clients maximize ATM availability and
further demonstrates the value that First Data and NYCE’s combined
capabilities provide to online and offline debit issuers.”

In addition to its automated monitoring capabilities, Gasper Manager
enables detailed reports on ATM availability, reasons for downtime and service
personnel responsiveness that help clients more effectively manage their ATM
programs.

“We are pleased to announce our relationship with industry leader First
Data,” said David Gasper, president and chief executive officer of Gasper
Corporation. “We look forward to providing them with a world-class solution
for their transaction processing network.”

First Data announced earlier this year that it acquired a 64% equity
interest in NYCE Corporation. In the U.S., First Data is the leading offline
debit processor, and with the addition of NYCE, First Data now touches well
over one billion online debit point-of-sale transactions each year. The
company established direct connections to five of the major U.S. debit
networks in 2001 to provide its merchant clients with the greatest level of
connectivity. Since 1992, First Data also has operated one of the largest
debit switches in Australia.

About Gasper Corporation

Gasper Corporation, a wholly-owned, independent subsidiary of NCR, is a
leading provider of Self-Service management software. Gasper offers
comprehensive solutions that are specifically tailored to solve Self-Service
management problems. The company’s solutions monitor Self-Service Terminals
(SSTs) and manage the entire support process to maximize availability,
profitability and customer satisfaction for Self-Service networks worldwide.
Headquartered in Dayton, Ohio, the company’s solutions are used to manage more
than 170,000 SSTs worldwide. Visit the Gasper Corporation web site at
http://www.gasper-corp.com.

About NYCE

NYCE Corporation is one of the leading electronic payments companies in
the United States, providing financial institutions and retailers with shared
network services for automated teller machines (ATMs), on-line debit point-of-
sale (POS) and emerging real-time payment solutions. In addition to
innovative product development, the company also provides processing services
that support ATM management and monitoring services, debit card issuance and
authorization solutions. NYCE’s strategic alliance with First Data
Corporation (FDC) is a unique model for the industry that combines the
strengths of both organizations through product development, service delivery
and complementary national/international reach. Comprising 2,400 financial
institution and retail ATM Participants, the NYCE Network processes
approximately 100 million transactions per month. NYCE Corporation is
headquartered in Woodcliff Lake, NJ, and can be found online at
http://www.nyce.net.

About First Data

First Data Corp. (NYSE: FDC), with global headquarters in Denver, powers
the global economy. As the leader in electronic commerce and payment
services, First Data serves approximately 2.6 million merchant locations,
1,400 card issuers and millions of consumers, making it easier, faster and
more secure for people and businesses to buy goods and services using
virtually any form of payment. With 28,000 employees worldwide, the company
provides credit, debit, smart card and stored-value card issuing and merchant
transaction processing services; Internet commerce solutions; Western Union(R)
money transfers and money orders; and check processing and verification
services throughout the United States, United Kingdom, Australia, Canada,
Japan, Mexico, Spain, the Netherlands, the Middle East and Germany. Its money
transfer agent network includes approximately 117,000 locations in more than
185 countries and territories. For more information, please visit the
company’s Web site at
http://www.firstdata.com.

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Motorola Falcon

HNC Software Inc., a leading provider of high-end analytics and decision management software, announced that Motorola has selected HNC Falcon Fraud Manager for Merchants to enhance its fraud detection capabilities on Internet transactions originating around the world.

Falcon Fraud Manager for Merchants provides credit card fraud detection and risk-management capabilities that lower fraud losses and increase revenues for online merchants and service providers.

![][1] “HNC has extensive experience detecting payment fraud patterns from around the world,” said Michael Schutter, Motorola’s planning manager. “HNC’s Falcon Fraud Manager will allow Motorola to provide a high level of fraud protection to consumers worldwide, while minimizing order cycle time and fraud risk.” Meridian Research projects annual online fraud to rise to US$9 billion by 2001 and $60 billion by 2005. In addition, a study by Datamonitor found that almost 50 percent of all credit card fraud occurs online.

“We developed Falcon Fraud Manager for Merchants to provide real-time detection of fraudulent payment activity regardless of the originating locale,” explained Michael Chiappetta, group vice president of HNC’s risk suite of products.

“Motorola’s selection of HNC further confirms our ability to provide a worldwide solution to global companies with customers on every continent.”

About HNC Software Inc.

HNC is a leading provider of high-end analytic and decision management software that enables global companies to manage customer interactions by converting data and business experiences into real-time recommendations. HNC’s proven software empowers Global 2000 companies in the financial services, insurance, telecommunications, health care, and other industries and governments to make millions of the right mission-critical customer decisions, and take action in real time, substantially improving financial performance, reducing costs and decreasing risk. For more information, visit [www.hnc.com][2].

About Motorola

Motorola Inc. (NYSE:MOT) is a global leader in providing integrated communications solutions and embedded electronic solutions. Sales in 2000 were $37.6 billion. For more information, visit Motorola on the Web at [www.motorola.com][3].

[1]: /graphic/motorola/motorola.jpg
[2]: http://www.hnc.com/
[3]: http://www.motorola.com/

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HOTEL CHECK-IN

While recent, more rigorous security
procedures have lengthened the amount of time spent en route, many travelers
may soon find a pleasant surprise once they reach their hotel. No lines at the
check in.

With NCR Corporation’s Xpress Hotel Check-In, a self-service
kiosk developed in conjunction with hospitality technology provider VingCard
Elsafe, Inc., hotel guests can bypass the front desk and check in or out at
any time — all without staff assistance.

“With tighter security and other safety measures now in place, travelers
need to factor in the length of time it takes to go from point A to point B,”
says Brian Sullivan, NCR Canada’s Vice-president of Retail Solutions. “By the
time they reach their hotel, the last thing they want to do is wait in another
line. By offering guests a self-serve option, hotel operators can provide
additional convenience and ensure that a pleasant stay begins the moment
guests arrive.”

To use NCR Xpress Hotel Check-In, guests simply insert a credit card into
the kiosk, which identifies and welcomes them while it processes the card
information. Guests are asked to confirm reservation details and are then
issued a room key. When checking out, the self-service kiosk quickly allows
guests to confirm charges and receive their receipt, on the spot.

NCR’s Web Kiosk is the base platform for the Xpress Hotel Check-In
program. Its multi-media functionality can be used to promote the hotel’s
restaurant, or provide information such as gift store hours or specials.
Advertisements for local attractions can give valuable information to guests,
while generating advertising revenue for hotels.

In a study conducted by Vanderbilt University, respondents placed “ease
of check in and check out” ahead of “friendly professional service” and
“price” as important attributes of lodging operations. Moreover, 53 percent
said they are likely to use a check-in kiosk.

“Offering self-service technology like kiosks can help provide hotel
operators with a competitive advantage, particularly at a time when many are
suffering from a decrease in business and leisure travel,” says Sullivan. “In
addition to potential advertising revenue, Xpress Hotel Check-In gives hotel
operators the ability to better utilize labour resources.”

“These days, time is our most valuable commodity,” says Anthony Pollard,
President of the Hotel Association of Canada. “In Canada, where use of the ATM
is the highest anywhere in the world, this time-saving initiative will be very
well received in our 7,000-plus hotels.”

About VingCard

The world leader in hotel security technology, VingCard Elsafe, Inc. has
products installed in more than 15,000 properties worldwide. As a subsidiary
of ASSA ABLOY, a public Swedish company traded on the Stockholm Stock
Exchange, VingCard Elsafe, Inc. is the world’s leading manufacturer and
distributor of locking systems and related products for the hospitality
market. The group’s international network consists of 12 subsidiaries and 75
distributors.

About NCR Corporation

NCR Corporation (NYSE: NCR) is a leader in providing Relationship
Technology(TM) solutions to customers worldwide. NCR’s Relationship Technology
solutions include the Teradata(R) database and analytical applications such as
customer relationship management (CRM) and demand chain management, store
automation systems and automated teller machines (ATMs). The company’s
business solutions are built on the foundation of its long-established
industry knowledge and consulting expertise, value-adding software, global
customer support services, a complete line of consumable and media products,
and leading edge hardware technology. NCR employs 32,900 in more than 100
countries, and is a component stock of the Standard & Poor’s 500 Index. More
information about NCR and its solutions may be found at
http://www.ncr.com.

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Discover 4Q/01

Morgan Stanley reported this morning that its Credit Services/Discover Card division posted fourth quarter net income of $193 million, a 31% gain from a year ago. Discover card receivables were up a modest 4.6% and credit card charge volume was down 3% from last year. MS says the increase in profits during the quarter ending November 30th was driven by higher net interest income and lower marketing and business development expenses, partially offset by an increase in net charge-offs. In addition, merchant and cardholder fees increased 12% from a year ago to $539 million. However higher cardholder fees were primarily responsible for the increase. Discover said the decline in transaction volume was largely the result of lower balance transfers. The chargeoff rate was essentially flat with the prior quarter, but up 128 basis points from a year ago. The over-90-day delinquency rate was 3.02% compared to 2.42% in fourth quarter 2000. The decline in credit quality reflects the weakness in the U.S. economy, a high level of national bankruptcy filings and the adverse impact of the seasoning of cardholder accounts. During 4Q/01, Discover opened 995,000 accounts and 161,000 new merchant locations. For complete details on Discover’s 4Q/01 current and historical performance visit CardData ([www.carddata.com][1]).

DISCOVER CARD PORTFOLIO SNAPSHOT
4Q/00* 1Q/01* 2Q/01* 3Q/01* 4Q/01*
Receivables: $47.1b $49.5b $50.2b $49.7b $49.3b
Volume: $22.8b $24.4b $23.5b $23.3b $22.1b
Accounts: 42.6m 43.7m 44.7m 45.4m 45.7m
Actives: 23.8m 24.0m 24.3m 24.0m 24.0m
Chargeoffs: 4.57% 4.79% 4.98% 5.79% 5.85%
Delinquency: 5.92% 6.34% 5.84% 6.31% 6.85%
Yield: 14.13% 13.66% 13.34% 13.34% 13.48%

*4Q/00 fiscal quarter ended 11/30/00; 1Q/01 fiscal quarter ended 2/28/01;
2Q/01 fiscal quarter ended 5/31/01; 3Q/01 fiscal quarter ended 8/31/01;
4Q/01 fiscal quarter ended 11/30/01.

Source: CardData ([www.carddata.com][2])

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

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