CUNA Smart Cards

CUNA Network Services has signed a deal to market, distribute and support SchlumbergerSema payment, IT and security related smart card-based solutions to more than 10,000 credit unions across the USA. As a result, credit union members will be able to use secure authentication to access financial portals to manage accounts for electronic payment, home banking and other registered financial services. Consumers who are members of participating credit unions can also use SchlumbergerSema smart cards as secure devices for storing and managing personal data, including favorite URLs, passwords, addresses and accounts. CUNA will also utilize newly released SchlumbergerSema ‘e-gate’ technology which enables a smart card to plug directly into the standard USB port on a PC, eliminating the need for a card reader, separate power supply and driver software. With e-gate technology, SchlumberSema says credit unions issuing MasterCard and VISA payment cards will have a clear migration path to future smart card and secure payment technology platforms.

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I-Cash Payment System

IPP of America, Inc., a nationwide network of walk-in bill payment centers, announced an agreement with Stone Mountain Data Centers, Inc. of El Segundo, CA, developer of Internet Cash Purchase System, to process their cash transactions and provide the infrastructure for the first system enabling consumers to make purchases on the Internet in cash. This system will enable cash-paying consumers to shop on the web, print out a receipt and complete their purchase in person at any of the 2000 IPP walk-in locations across the country. The agreement aims to establish ICPS and IPP as the recognized payment option for the credit-stressed public by offering the first system for cash purchases on the Internet.

“Millions of consumers are neglected in the online retail industry because of the barrier of current payment methods. Working with Stone Mountain enables IPP to provide yet another service to help bring financial equality to those without credit and to bring e-commerce into the homes of the underbanked,” commented Marvin Morris, IPP’s Chairman and President. “This agreement provides an opportunity for both companies to leverage IPP’s network of locally-established retailers to offer the underbanked public the convenience and power of shopping on the web in cash,” he continued.

Brad Parrish, Vice President — ICPS PayCenter(SM) Development added, “Our goal is to utilize the IPP network to reach lower and middle income populations that are otherwise difficult to reach through mainstream distribution. We intend to offer our cash-payment solution services on thousands of web sites, and to help these online retailers increase their revenue, diversify their clientele and grow their business by servicing the cash-paying consumer. Working with such a dominant provider electronic payment processing solutions with such an extensive network in our target regions as IPP is indicative of the merits of our unique Internet cash-payment solutions and the appeal of our technology to our mutual clientele,” he continued.

About IPP

IPP of America, Inc. is a leading provider of electronic payment systems and technology solutions that enable cash-paying consumers to make bill payments and product purchases at their local community stores. The company’s network currently extends to 24 states and over 2000 stores nationwide. Product and service offerings can be viewed at the company’s primary website, [http://www.ipppays.com][1] and vary from location to location. For your nearest IPP location, call 1-888-IPPPAYS (477-7297).

About Stone Mountain

Established in 1994, Stone Mountain Data Centers is a technology solutions provider responsible for developing the Internet Cash Purchase System(SM) (ICPS). Enabling people to pay cash for web purchases, the system is a unique, patent-pending payment processing system that addresses the needs of millions of adults and teens currently locked out from Internet retail because of lack of credit cards. ICPS is designed to provide online consumers with personal information privacy while virtually eliminating risks of credit card fraud for online retailers. For additional information, please log on to [http://www.smdci.com][2].

[1]: http://www.ipppays.com/
[2]: http://www.smdci.com/

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One Card Test Update

More than half of Americans in a recent poll stated they do not believe they could only use payment cards and electronic payments for all purchases over $10.

Knowing the value of payment cards for even the most harried lifestyle, Visa was determined to demonstrate that such a lifestyle is possible and today announced a program illustrating how easy, safe and convenient Visa cards and electronic payments can be for all consumer payment transactions. In Visa’s “One Year, One Card” program, three American hopefuls for the Salt Lake Olympic Winter and Paralympic Winter Games — Emily Cook (U.S. Ski Team), Jean Racine (U.S. Women’s Bobsled Team) and Mary Riddell (U.S. Disabled Ski Team) — were asked to use only their Visa cards or electronic payments for all of their purchases over $10, and have been doing so since March 1, 2001. “Just as athletic performance has improved, sports equipment has evolved and new sports have been developed, 106 years after the first modern Olympic Games, there are better ways to pay,” said Becky Saeger, executive vice president, brand marketing, Visa U.S.A. “This program reflects our long-standing promise of ‘It’s Everywhere You Want to Be.’ Wherever you go — from Salt Lake City to Athens to Beijing — if you have your Visa card, then you’ve got what it takes to live your life the way you choose.”

After beginning the program, all three American athletes made daily and monthly payments using their Visa Check cards, Visa credit cards and electronic payments from their financial institutions, living with Visa cards, electronic payments and minimal cash as they prepare for the upcoming Olympic Winter Games. The athletes have kept journals of their experience to date — nearly nine months — reporting that the transition from traditional to more contemporary payment methods took only minor adjustments, and quickly became a significant advantage for them in their lives and their travels. “With cash, I had no idea what I spent my money on,” said Jean Racine, a member of the U.S. Women’s Bobsled Team and the number one women’s driver in the world. “Now that I spend with my Visa card and electronic payments, I can track all of my expenses. This really helps with my budgeting.”

As a result of participating in the program, these American athletes found that using various Visa cards and electronic payments make managing a budget and making payments simpler. With Visa’s unsurpassed acceptance, the athletes in the One Year, One Card program were able to experience the ease, speed and security of paying from remote places like Finland, Australia and Belize. As the athletes near the completion of the One Year, One Card program, they acknowledge the positive impact the program has had on managing their payments. “Usually, I’m borrowing money from my dad,” said Mary Riddell, U.S. Disabled Ski Team. “He’s really happy because this program has really helped me with my budgeting. Paying with Visa gives me peace of mind because I’m now financially stable. I can view all of my purchases on one statement. I’m really in control.”

Easier Than They Thought It Would Be

All three athletes agreed the idea of living this way was somewhat daunting before the program began in March, but soon realized it was easier to change their habits than they thought it would be. Their initial apprehension mirrored the attitudes of many individuals in the U.S. According to a recent omnibus survey of 1,000 adults, more than half of Americans do not believe they could live using only Visa cards and electronic payments for purchases over $10. The November survey also indicated that more than two-thirds believed it would be difficult or very difficult to do so — something the athlete’s One Year, One Card experience contradicts. Visa knew this was not the case and set out to demonstrate the ease and convenience of such a lifestyle through the harried life of world-class athletes. “It’s so easy,” said Emily Cook, U.S. Ski Team aerialist. “I didn’t have to change a thing. All my Visa payments are viewable online so it’s extremely easy to track.”

A Changing Payment Mix

Currently, about 66 percent of all consumer payments are still made through cash and checks, though their dominance in recent years has steadily declined as more payments are made on cards. In 2001, cash represented 16.4 percent of all personal consumption expenditures in the U.S., down from 18.6 percent in 1994. Checks represent 49.6 percent of consumer payments in 2001, down from 57.6 percent in 1994. Conversely, payment cards rose to 26.4 percent of consumer payments in 2001, up from 18.5 percent in 1994. Visa cards alone accounted for approximately 12 percent of personal consumption expenditures in 2001. Part of the shift in spending is attributable to a dramatic rise in popularity of the Visa Check card and consistent growth in usage of debit cards. There are currently more than 100 million Visa Check cards in the market, compared to just over 32 million Check cards in 1995. Check cards represented 28 percent of all Visa cards in the market in 2000, up from 13 percent just five years earlier.

The One Year, One Card Program

Visa considered Olympic hopefuls to be perfect participants for the program. While they are world-class athletes that travel the globe, they are also real people with routines, bills, hobbies and interests, travel plans and a need for safe and convenient access to money. The participants were selected from Visa’s Gold Medal Athlete Program to represent different sports, including the Paralympic Winter Games and the Olympic Winter Games’ newest addition, women’s bobsled. All three athletes are being used in Visa marketing programs. “We thought this would be an excellent way to show consumers just how easy it is to use your Visa card and electronic payments in every-day life,” said Saeger. “These athletes are demonstrating that your Visa card gives you the world’s most accepted payment tool, and the convenience, control and security to make your day-to-day payments.”

The One Year, One Card program stipulates that participants can use electronic bill payments and recurring payments to augment their Visa card spending for items like rent or utility bills. This enables the athletes to track their spending from computers in any country, streamline their lives and achieve greater fiscal responsibility.

“In developing this program, we hoped to demonstrate that if three world-class athletes could live their lives using their Visa card and electronic payments — the average consumer could adapt their current lifestyle to reap the same benefits,” said Saeger. “While the program is intended to last a year, I think these athletes have already made the point: using Visa can add convenience and control to consumers’ lives.” “Overall, this challenge has made my life easier,” said Racine. “It has become part of my routine and will continue to be part of my life after this year.”

The Future of Payments

Acceptance: The reason this program is possible is because of the work Visa and its Member financial institutions have undertaken to increase the number of outlets and types of merchants that take Visa. Today, Visa is accepted for more kinds of purchases than ever before, and the company’s efforts to broaden its acceptance continue. In addition to everyday purchases and travel, Visa is growing as a way to pay for other types of transactions, like recurring bill payments, fast food restaurants and healthcare. These efforts reflect the company’s goal of enabling payments anytime, anywhere, and anyway that consumers choose. Visa cards have unsurpassed acceptance with more than 22 million merchant and ATM locations worldwide.

Choice: Visa cards offer consumers a choice in payments, with three ways to pay for their purchases: “Pay Now” with the Visa Check card (debit); “Pay Later” with a Visa credit card; and, “Pay in Advance” with a pre-loaded Visa stored value cards. All three types of payment cards are accepted anywhere Visa is taken and offer convenience, control and security.

Trust: One of the key benefits associated with payment card usage is the security cards offer above and beyond traditional payments. With Visa, consumers know if their card is lost or stolen, it can be replaced. Also, if unauthorized charges are made on a Visa card, consumers are protected by the company’s Zero Liability policy.

Rewards: In addition to security and convenience, Visa cards offer additional benefits, like loyalty and reward programs. Simply by using certain co-branded or affinity Visa cards, consumers can earn miles and points, receive discounts, route benefits to a specific organization and be automatically entered into promotions. Convenience: With more than 22 million places where consumers can use their Visa, it is a widely accepted, easy way to pay for day-to-day or monthly expenses. Purchasing with a Visa card provides shoppers a way to track their expenditures, providing a simple way to help practice responsible financial management. Using a card for payment also saves consumers time. With an average transaction approved in a few seconds, Visa cards are one of the fastest ways to pay.

Visa and the Olympic Games

Over the course of its 16-year association with the Olympic Games, Visa has enjoyed a significant increase in consumer awareness, preference and cards usage. According to internal research and cardholder tracking studies, Visa’s rating as the “best overall card” has risen 50 percent since 1986, to an all-time high of 60+ percent of all consumers. Its rating as “accepted by more merchants” rose from 35 percent in 1985 to 68 percent today. Consumer perception of Visa as ‘best overall card’ and consumers’ claimed Visa card usage both rise significantly among those aware of the Olympic sponsorship. Following the 2000 Sydney Olympic Games, Visa enjoyed an unprecedented 72 percent unaided consumer awareness of its sponsorship, and consistently rated the highest or among the highest awareness of any Olympic sponsor. In November 1999, Visa renewed its commitment to the Olympic movement as a TOP V (The Olympic Partnership) sponsor through the 2004 Olympic Games in Athens, Greece. The sponsorship extends Visa’s presence as the worldwide partner, official payment service and only card accepted at the Salt Lake and Athens Olympic Games.

About Visa U.S.A.

Visa is the world’s leading payment brand and largest consumer payment system, enabling banks to provide their consumer and merchant customers with a wide variety of payment alternatives. More than 14,000 U.S. financial institutions rely on Visa’s processing system, VisaNet, to facilitate over $835 billion in annual transaction volume — including roughly half of all Internet payments — with virtually 100 percent reliability. U.S. consumers carry 353 million Visa-branded smart, credit, commercial, stored value and check cards, accepted at approximately 22 million locations worldwide. Visa’s people, partnerships, brand, payment technology and security standards are helping to create universal commerce — the ability to safely conduct transactions anytime, anywhere, anyway. Please visit [http://www.visa.com][1] for additional information.

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

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NextCard IPO Suit

A New York law firm has filed a class action suit against NextCard and its investment banks over the “laddering” of NextCard’s stock price in its 1999 IPO. Lovell & Stewart alleges that NextCard violated securities laws by issuing and selling stock without disclosing to investors that several of the underwriters of the NextCard IPO had solicited and received excessive and undisclosed commissions from certain investors. To receive the allocations at $20.00 per share, the lawsuit says NextCard’s underwriters’ brokerage customers agreed to purchase additional shares in the aftermarket at progressively higher prices to drive NextCard’s share price to as high as $40.75 during its first day of trading and then dump the shares. The complaint also alleges the defendant underwriters required their customers to return some of their profits in the form of secret commissions. The complaint also alleges that NextCard was able to price its secondary offering at an artificially high $36.9375 per share due to the continued effects of the alleged violations. One month ago, NextCard announced a decision to explore opportunities for the sale of the Company following a clamp down by federal regulators. NextCard’s stock is currently trading around 75 cents per share and has plunged to as low as 62 cents since its 3Q/01 earnings report. (CF Library 10/31/01)

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AmEx NYC

American Express announced Friday it will return to the Three World Financial Center building in April. The decision to return followed a spat last week with New York’s mayor over security demands by AmEx. The security issues were resolved with NYC to provide more police protection. More than 3,000 employees will return as soon as repairs are made to the facade and the office cleaning has been completed. AmEx relocated its employees to other offices elsewhere in New York, Connecticut, and New Jersey following the Sept. 11th terrorist attacks.

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SF TransLink

A six-month test of a new universal transit smart card will begin in January in the San Francisco Bay Area. ‘TransLink’ will enable about 4,000 riders on six transit systems to pay with a contactless smart card. In 1999, BART hired Motorola to create and install the system, which it will also operate. ‘TransLink’ cost $61.4 million to build, and will cost $3.5 million a year to operate. ‘TransLink’ readers and ticket machines have been installed on select routes on AC Transit, BART, Caltrain, Golden Gate Transit, the San Francisco Municipal Railway and the Santa Clara Valley Transportation Authority for the test program.

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UATP & CROSSAIR

Universal Air Travel Plan, Inc. announced that the emerging flag carrier of
Switzerland, Crossair, will
work to maintain UATP as the dominant corporate form of payment for air
tickets in Switzerland. As the basis to build and track corporate loyalty
agreements, Crossair has formed a partnership with AirPlus International.
AirPlus operates the largest portfolio of UATP accounts.

Dr. Michael Peine, Managing Director of AirPlus International, said, “The
partnership we have built with Crossair will allow its corporate customers to
receive detailed data and robust reporting via our various UATP enhanced
product offerings.”

Stefan Gutknecht, Vice-President Sales & Marketing for Crossair, said, “We
feel UATP’s role in the Switzerland corporate marketplace is important to
preserve. We will continue to embrace UATP as a partner in establishing
ourselves as the flag carrier of Switzerland.”

Richard Crum, UATP President and Chairman, said, “Crossair has been a
member of the UATP global acceptance network for years. We are pleased with
their renewed commitment and increased recognition of UATP’s benefits to the
airlines and corporations which use the card as a preferred form of payment.”

Universal Air Travel Plan Inc., formerly known as Air Travel Card(R), is
the world’s first business travel payment system. Founded in 1936, UATP was
an innovator in the charge card industry, developing such standards as the
magnetic strip and lodged accounts. With annual global billings over USD 8
billion, UATP is owned and operated by each card-issuing airline and accepted
by virtually every airline in the world. UATP offers the most complete data
and lowest administrative cost of any charge product and is the industry’s own
solution to combat rising credit card costs. Multi-national corporations,
including 73 percent of the Top 100 Global, utilize UATP to better manage
travel expenses. Airlines currently issuing UATP accounts include Aer Lingus,
Air New Zealand, Alitalia, American Airlines (NYSE: AMR), Austrian Airlines,
British Airways (NYSE: BAB), Continental (NYSE: CAL), Delta Air Lines (NYSE:
DAL), Japan Airlines (Nasdaq: JAPNY), KLM Royal Dutch Airlines (NYSE: KLM),
Lufthansa German Airlines, QANTAS, Scandinavian Airlines System, United
Airlines (NYSE: UAL) and US Airways (NYSE: U). For more information, visit
http://uatp.com.

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Sony Credit Card

Sony Corp this week announced plans to introduce a new credit card next year in Japan. Sony Finance aims to issue two million cards in three years with a targeted volume of 450 billion yen, according to ‘The RAM Report’. It hopes to sign up 20,000 participating online merchants by 2004. The company will begin issuing cards to Sony employees in early 2002 with plans to take the program to the general public during the second calendar quarter. Sony currently has a number of co-branding relationships with bank issued credit cards. The Nihon Keizai Shimbun reported that in addition to the normal credit functions, the new cards will likely adopt ‘Edy’, the electronic money standard that the company has been promoting. The new credit cards will be accepted at all locations currently accepting cards issued by Sumitomo Mitsui Card Co. For international acceptance Sony is expected to sign a deal with VISA in association with Sumitomo.

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eConnect Ships Terminals

eConnect began delivering eCashPad USB terminals to participants in a 30-day tryout of the high-security devices designed to make Internet commerce safer for consumers.

The eCashPad USB units are the first commercially ready devices that support MSR, secure PIN and Smartcard features for home Internet financial transactions.

eConnect, which plans to distribute thousands of eCashPad USBs over the next few weeks for the trial, expects to generate revenues from sales of eCashPad USBs to consumers and from revenues from eCashPad USB usage at a growing list of sites using its Bank Eyes Only system.

The $59.95 eCashPad USB is a full-service credit card, ATM card and Smartcard hardware device that can be attached to a laptop or desktop computer with a USB port and enables Internet users to avoid giving their credit card data to web merchants. Instead, consumers’ credit card data is processed by eConnect’s Bank Eyes Only system.

When consumers swipe their credit card in the reader, the transaction is received by eConnect and the VeriSign gateway for credit card authorization.

Because the Bank Eyes Only transactions are considered as credit card-present payments by participating banks, they result in reduced charge-backs because they result in fewer disputed purchases. Such transactions also are fast and safe both for the consumer who originates a transaction and for the web merchant who receives the payment.

Sygenics.com provides web merchants with a quick and easy integration of the Bank Eyes Only system at the merchants’ web site.

eConnect has been in ongoing discussions with an ATM card network to begin a PIN pilot in early first quarter 2002. It also has engaged a member bank to sponsor merchants to participate in a pilot of online debit with ATM card and PIN payments using the eCashPad USB system.

eConnect expects to launch a Smartcard loyalty program with participating brick-and-mortar merchants who also operate e-commerce web sites. Under the program, consumers will receive loyalty points from web merchants to use their eCashPad USB at the merchants’ web site to effect a safe and efficient credit card-present Bank Eyes Only transaction.

The goal of the Smartcard loyalty program is to encourage Internet consumers to use their loyalty points at the merchants’ walk-in stores and to continue to shop at the merchants’ web sites using eCashPad USB-originated payments.

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WIRELESS JAVA

Gemplus S.A., the world’s number one
provider of solutions empowered by smart cards, has signed a Memorandum of
Understanding with K-Laboratory Co., Inc., the
leader in mobile Java development and mobile platform technologies in
Japan, to jointly study and develop a secure architecture for the provisioning
of applications in Java enabled handsets. So far e-commerce on the Wired
Internet has failed to ignite due to the lack of two things: security and
reliable revenue models. With the arrival of 2.5 and 3G services in Japan the
Wireless Internet infrastructure is now in place. In Japan, Java is the
language of choice for mobile services with millions of subscribers already
taking advantage of the creativity and flexibility of Java-based applications.
This phenomenon is set to recreate itself worldwide with 30 million Java
handsets already sold this year, rising to 400 million in 2003 and 1100
million
in 2006.(1)

In order for mobile business to take off it needs to come with the right level
of security to create an environment of confidence between suppliers and
customers. In such an environment end-users and handset manufacturers can rest
assured that they do not download malicious applications onto the phone while
operators and content providers can identify and bill users for the services
they use and manage copyright issues.

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Equifax & Intersection

Equifax Consumer Services, the leader in empowering consumers with credit information solutions and Intersections Inc., a premier provider of credit monitoring and fraud prevention services to consumers, announced a multi-year strategic partnership. The partnership will create a comprehensive suite of information services to meet the growing demand of consumers who wish to better manage their information privacy and credit health.

The partnership leverages the strong market positions of both companies while expanding both online and offline information services. In addition to direct marketing to consumers, the companies will broaden distribution channels for co-branded and private labeled services targeted to financial institutions, large employers and large consumer associations.

“Intersections is recognized for their excellent customer service process, consumer- friendly culture, strong product development skills and fulfillment platform which supports both online and offline consumer services,” stated Virgil Gardaya, general manager, Equifax Consumer Services, “They are a premier company and will add substantial new opportunities for our consumer services business.”

“Equifax was the pioneer in empowering consumers with online credit management services,” stated Michael Stanfield, Intersections’ CEO, “By forging a partnership with Equifax, Intersections will be able to leverage their world-class technology and data management capability. Our combined strengths will substantially increase the distribution networks for our products and services.”

About Equifax:

Equifax enables and secures global commerce through its information management, consumer credit, marketing services, business information, authentication and e-commerce businesses. As the leader in information services, Equifax adds value wherever customers do business, including the financial services, retail, telecommunications/utilities, information technology and healthcare industries, brokerage, insurance and business lending industries and government. Equifax also enlightens, enables and empowers consumers to manage and protect their financial health with services offered at [www.equifax.com][1]. The company ranked in the top five in return on equity among Business Week’s Best Performers for 2001. Equifax employs 5,600 in 13 countries and has $1.1 billion in annual revenue.

About Intersections Inc.

Intersections is a leader in providing consumers with comprehensive credit and privacy solutions. Founded in 1996, the company has served over 2.8 million consumers and has active service relationships with seven of the top ten credit and charge card financial institutions in the US. The company’s services include: daily fraud alert notifications, complete quarterly credit report updates, tracking and analysis of personal credit scores, theft of identity insurance, and fraud victim assistance. Learn more about Intersections at Intersections.com.

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

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