The Tokyo-based Tobacco Institute of Japan announced this week it will launch
an age-recognition system by the end of 2008 that will use smart cards.
According to The Daily Yomiuri, trial tests are slated for April in
Chiba Prefecture. Eventually, about 620,000 vending machines nationwide
will be
replaced with new ones equipped with the smart card system. One hundred and
sixty machines with the new system will be introduced in April
in Yokaichiba, and will be tested for a period of one year.


Online Q4 Forecast

Online consumer spending will hit $10.7 billion in the fourth quarter, a 20.2% increase over last year. Compared to last year’s holiday season, 14.1 million more people will buy online this year between October 1st and December 31st. In 2000, online Q4 spending rose 71% over 1999. NYC-based eMarketer yesterday said that the deteriorating economy will negatively impact online sales and as a result e-commerce this year will be more closely aligned with general patterns of consumer spending. eMarketer projected that 58.7 million US residents will buy online, spending an average of $182.25



Ernex Marketing Technologies Inc. announced the general availability of
its new loyalty database hosting services.
The company also announced it recently completed the first full implementation
of the hosting service at Royal Bank of Canada where it is used for the bank’s
points-earning premium Visa credit card databases. The service provides the
bank with a complete, real-time, points management system. Ernex has been
providing Royal Bank and its stakeholders with highly flexible and powerful
tools to efficiently manage the administrative, help-desk, partner redemption,
and catalogue rewards management tasks involved with the bank’s five discrete
credit-card rewards programs. The real-time hosting service provides Royal
Bank’s operators and partners with timely and accurate cardholder data, a
flexible infrastructure for scalability and modifications, and significant
savings from administrative and operational efficiencies.


Ernex’s loyalty database hosting service is designed to make it more flexible
and efficient for credit card rewards program operators to administer the
points-management cycle. The new offering from Ernex is a core component in
company’s strategy to provide innovative, real-time solutions to credit card
issuers and large membership organizations in North America.
The rigidity of many legacy systems restricts the ability of loyalty database
program operators to easily or cost-effectively make modifications in their
programs. With many legacy systems relying on batched-processed data, manual
administration, or departments operating in silos, current and accurate
information is usually difficult to obtain. These challenges can have a
negative impact on customer service and operations. To mitigate these
challenges, Ernex provides a suite of software and web interfaces, allowing
operators to communicate and perform transactions in real-time with a central
authoritative database.

An added dimension to an Ernex-hosted loyalty database is the opportunity for
loyalty program operators to add real-time marketing capabilities to their
programs with ERNEX Accelerator. This solution provides a point-of-sale
interface to the hosted database, allowing program operators to extend their
programs to merchant businesses for more points-earning opportunities for
cardholders, real-time sweepstakes, and other retention and loyalty
directly at the point-of-sale. Royal Bank today utilizes Ernex’s loyalty
database hosting service in conjunction with ERNEX Accelerator – offering
cardholders more rewards and prizes at more than 160 participating
merchants in


Ernex provides a suite of loyalty database management tools and services to
efficiently manage the following areas of a rewards program:

1. Help-desk customer service: a web browser interface that
allows customer service representatives to perform cardholder
lookups, adjust accounts, and more.

2. Redemption: a web browser interface that allows redemption
partners to redeem cardholder points for merchandise, travel
or other rewards in real-time.

3. Rewards-catalog management: online hosting, website design and
maintenance service for rewards catalogs.

4. Reward fulfillment processing and auditing: a system that
administers and monitors orders with reward fulfillment
partners, and manages the billing and reporting issues.

5. Database synchronization services: a system that synchronizes
third party cardholder databases with Ernex loyalty database,
and supports statement production processes.

6. Reporting: an online information sharing solution for
redemption partners and program operators to view operational
and business level reports.

For more information on Ernex’s Loyalty Database Hosting Service, visit


Ernex Marketing Technologies is a provider of innovative real-time marketing
solutions for merchants, credit card and bankcard issuers, and large
organizations. Its solutions include loyalty programs, stored-value gift card
programs, reward fulfillment services and loyalty database hosting services.
For more information, contact Ernex at 877-GO-ERNEX or visit
Ernex is a wholly owned subsidiary of Royal Bank of Canada.


VeriFone Revenues

VeriFone, Inc. reported on its financial results for the first full quarter of operations as an independent company. The period begins on July 20, 2001, the date Gores Technology Group acquired VeriFone from Hewlett-Packard Company, and includes the full quarter ending October 31, 2001.

Revenues for the period exceeded $100M. Earnings from operations excluding interest, taxes, depreciation and amortization (EBITDA) exceeded 10% for the period. Revenues were strong in all regions with particular strength in the U.S. marketplace where the company recorded several competitive wins and multi-million dollar orders.

“We are very pleased with the results for our opening financial period,” said Douglas Bergeron, Chief Executive Officer, VeriFone. “Revenues exceeded $1 million per day and the company demonstrated strong profitability and very respectable margins. Our strategy to re-invigorate VeriFone has been extremely successful and we have achieved our goals ahead of schedule.”

Key achievements for the period include:

— A rapid return of the business to an entrepreneurial management style and organizational structure that competes more successfully and is more attentive to customer needs.

— The announcement of the Omni 3700 family of payment devices that feature EMV smart card compliance and multi-application capability in a compact all-in-one design.

— Key competitive wins and substantial shipments to companies including: Ahold, Citgo, Concord EFS, Global Payments Inc., KFC, National Processing Company (NPC), Pizza Hut, Sunoco, and TeleCheck.

— The redoubling of the company’s focus on the payment appliance marketplace and the sale of the company’s enterprise payment solutions business to Trintech.

Mr. Bergeron concluded: “Our results for the period compare very favorably, both in terms of revenue and profitability, to our nearest competitors. These results have quickly re-established our historic role as the leader, innovator, and largest provider of payment solutions in the world. We are grateful to our customers and employees for the confidence and belief in our mission over the past several months and welcome them to a new era of sustained growth and profitability in the months and years ahead.”

About VeriFone, Inc.

VeriFone, Inc., ( [][1]) is the leading global provider of secure electronic-payment solutions for financial institutions, merchants and consumers. VeriFone has shipped more than nine million electronic-payment systems, which are used in more than 100 countries. VeriFone, Inc. is held by Gores Technology Group, an international acquisition and management company.

About Gores Technology Group

With headquarters in Los Angeles, Gores Technology Group (GTG) is a privately held international acquisition and management firm that pursues an aggressive strategy of acquiring promising high-technology organizations and managing them for growth and profitability. GTG has a proven track record of acquiring and successfully managing companies — including many divisions acquired from large publicly traded companies — through its commitment to customers, employees and continued development of intellectual property. GTG has acquired and managed approximately 35 interrelated but autonomous technology-oriented companies with locations throughout the world. Those companies provide a broad range of technology-based products and services to a substantial customer base representing millions of active users worldwide. Visit the company’s Web site at [][2].

For further information on Gores Technology Group please contact Michael Sitrick,, or Terry Fahn,, both of Sitrick and Company, 310-788-2850.




Online retailing in Latin America continues
to develop and revenues are expected to reach $1.28 billion (U.S.) by the end
of the year-more than double the $540 million in revenues achieved in 2000 —
according to a new report released this week. The report is titled Online
Retailing in Latin America 3.0: Breaking Constraints. It was prepared by The
Boston Consulting Group and sponsored by Visa International, Latin
America and Caribbean Region.

Brazil continues to lead growth within the online retail market in Latin
America, with $906 million in revenues predicted for 2001. The country has
actually increased its share of the region’s overall online market from
62 percent last year to 71 percent in 2001. Mexico ($134 million), Argentina
($119 million) and Chile ($45 million) round out the top four major markets.

While in 2000 only two online categories had revenues exceeding
$100 million, in 2001 there were four. The largest is automotive, with direct
sales likely to reach $504 million. Consumer auctions — the largest category
in 2000 — will follow, at $203 million. In third and fourth place are
travel, at $140 million, and computer hardware and software, at $139 million.

In contrast to North American online retail trends, the online grocery
category is comparatively strong in Latin America, especially in Argentina and
Brazil, where many consumers are already accustomed to having groceries
delivered to their homes. With sales estimated at $79 million by the end of
2001, however, the online grocery revenue estimates are still dwarfed by those
of the top four. Still, the online grocery category is the only online retail
segment this year with penetration rates comparable to those in the United

“In a sluggish local and global economy, it’s surprising to note just how
much growth is occurring in the Latin American region, and this growth is led
by incumbents using the Internet to create competitive advantage,” said BCG
vice president Jorge Becerra. “In the automotive category, for example,
manufacturers in Brazil have launched direct-to-consumer ventures with
penetration rates-and gross sales-unmatched in any other market, making Brazil
the world leader in direct online auto sales.”

According to the report, a select group of Web-based and multichannel
retailers selling goods and services online are finding new opportunities
within the increasingly competitive online retail landscape and are learning
to penetrate their existing markets more effectively. A small number of
leaders have found creative, alternative ways to use the Internet, such as
stand-alone Web kiosks, to expand their online retailing reach to the majority
of Latin Americans who do not have access to computers. Others are
instituting secure payment systems to alleviate consumer security fears. In
general, however, weaknesses in the offering and continued challenges with
payment systems, fulfillment, and customer service continue to limit the
growth of online retailing in the region.

“According to the study, 66 percent of online purchases are made with
credit or debit cards, about half with Visa-branded cards,” said Mario Mello,
executive vice president, Visa International, Latin America and Caribbean
Region. “Visa has been in the vanguard in changing consumer and retailer
misperceptions about credit card fraud in Latin America. For example, the Visa
Authenticated Payment Program is a comprehensive e-commerce program designed
to ensure safe and secure online payment transactions for merchants,
consumers, and member banks. The Visa Secure Electronic Commerce program,
which was launched in Brazil last year, is another tangible way to make using
credit cards worry-free for consumers as well as online merchants. The
success of the program in Brazil has made it possible for Visa to roll it out
in Peru this year.”

To date, the solid growth of Latin American online retailing has been
impressive, but for the market to develop further, the report urges online
retailers to give consumers a richer, more focused, better-executed
experience. In last year’s report, BCG conducted a “mystery shopping”
exercise that found considerable room for improvement within the typical
online shopping experience. The same exercise was repeated this year, with no
significant overall improvement in three critical areas: payment, delivery,
and customer service. For example 95 percent of sites accept credit cards, but
to some extent both consumers and retailers continue to be wary of credit card
transactions, despite the increasing use of secure systems and digital
certificates issued by third parties.

Although it’s true that the Latin American economy has softened,
especially in Argentina, growth prospects for online retailing next year are
positive. The report cites several opportunities for growth, including the

* With an underpenetrated population in Latin America, it is possible to
bring more consumers online using Internet kiosks and other creative
solutions to cross the digital divide in the region.

* With online sales representing less than 1 percent across all retail
categories, there is certainly room for growth, even if total retail
sales decline.

* Certain categories, such as consumer auctions, offer a bargain-an
especially valuable proposition during adverse economic times.

Online Retailing in Latin America 3.0: Breaking Constraints is the third
BCG/Visa International report focusing on the online retailing industry in
Latin America. Survey results include data provided by 60 online retailers,
supplemented by company data from public sources.



First Consumers National Bank announced that James E. Huston has joined the company as executive vice president and chief financial officer, reporting to Greg Aube, president and chief executive officer. Huston, 39, is responsible for all major areas of finance and accounting, including risk management, planning and project management, and financial reporting and controls.

“We are pleased that Jim Huston has joined the management team of FCNB,” said Greg Aube. “He has an excellent background in financial services management and will be a solid contributor to our organization,” he said.

With more than 20 years of financial management experience, Huston joins FCNB from Aames Financial Corporation where he had served as executive vice president and chief financial officer. Prior to Aames, Huston held a variety of financial management positions at Bank One Consumer Financial Services, most recently senior vice president and chief financial officer.

Huston earned a bachelor of science degree in business administration with a major in accounting from Franklin University and a master of business administration degree from the University of Virginia’s Darden Graduate School of Business Administration. He and his family are relocating to the Portland, Ore., area.

Headquartered in Beaverton, Ore., FCNB is a subsidiary of Spiegel, Inc. (Nasdaq: SPGLA) and has more than 1,300 associates providing credit-related services to Spiegel Catalog, Eddie Bauer, Newport News and FCNB’s MasterCard and Visa customers.



OTI has announced that
its wholly owned subsidiary InterCard has equipped the Hanover university and
Hanover technical college with OTI’s CampusOne, contactless smart card program
for the higher education market. The first application is a new cash register
system for the Campus Catering Services of Hanover`s student union with
contactless OTI Products. The whole system covers 13 cafeterias and canteens.
The first part of the project has an overall volume of 20,000 contactless
smart cards. The system also includes 24 checkouts and 12 loading
terminals at
which cash can be credited to cards. In this first stage, sales revenue from
the project totals roughly US$ 230,000.

The student union provides facilities for approximately 60,000 students and
staff at Hanover university, as well as the technical college and the college
of veterinary medicine. Between them they register about 6,000 students each
semester. The new campus solution based on OTI smart cards is focusing
initially on the card’s payment function. Future applications on the
microprocessor card can be extended to access control, time and attendance
recording, as well as payment at slot machines and copiers, etc. Users receive
their smart cards in return for a cash deposit. The student union is using
advertisements on the reverse side of the card to finance the investment into
the new payment system.

‘One main reason why Hanover’s student union awarded us is the extensive
experience our company has gained over many years in the campus solutions
sector, which has remained our core business for many years’, said Gerson
Riesle, Managing Director of InterCard. ‘The OTI Campus solution easily allows
us to extend the system into additional applications at any time. In the
year InterCard is expecting further orders from student facilities all over
Germany, based upon the official recommendation made by the Standing
of German University Principals, which has expressly endorsed the smart card
‘This project is a persuasive demonstration for the successful integration of
the OTI Campus solution, which generates benefits for the entire OTI group’,
emphasized Oded Bashan, President and CEO of OTI.

About InterCard

InterCard is a wholly owned subsidiary of OTI and is a worldwide supplier of
innovative and multi-usage card solutions.
About OTI
Established in 1990, OTI (On Track Innovations) designs and develops
contactless microprocessor-based smart card technology to address the needs of
a wide variety of markets. Applications developed by OTI include product
solutions for mass transit, parking, gas management systems, loyalty schemes,
ID and secure campuses. OTI has regional offices in the US, Europe, Asia
Pacific, and Africa to market and support its products. The company was
the prestigious ESCAT Award for smart card innovation in both 1998 and 2000.
Visit OTI on the Internet at


European Challenges

U.S. issuers seeking to build credit card portfolios in Europe, outside of the UK, face an uphill battle as debit cards remain the preferred payment method. Nearly three-quarters of all cards in the European Union, excluding the UK, are debit cards, versus only 27% that are revolving credit cards. (In the UK, 57% are debit cards versus 43% for credit cards.) Western Europeans favor the deferred debit type of card which allows issuers to deduct purchases made on a 30-day cycle directly from a cardholder’s pre-established account. A new research report, released Tuesday by the TowerGroup, says barriers for credit card growth in Europe include bank secrecy legislation which has made it difficult for financial institutions to execute the kind of direct-mail marketing campaigns that have driven credit card growth in the U.S., because those laws impede comprehensive statistical account scoring. TowerGroup also notes that the predominance of country-by-country card processing networks and lack of technical standards represents another roadblock. However, profitability may become a driving force for change. Western Europe’s total combined dollar volume for debit and U.S.-style credit will be approximately US$795 billion in 2001, versus U.S. dollar volume for credit alone of US$1.35 trillion. And though Western Europeans carry almost half the number of total cards as U.S. consumers, European banks’ IT expenditures for card processing will be 88% as much as U.S. processing costs this year.



VASCO, a global provider of
enterprise-wide security products that support e-business and e-commerce,
announced that it has sold more than 800,000 units of its award winning
Digipass 800 since its launch in Q4 2000. This is an absolute record for a
single member of the Digipass family in VASCO’s history. The Digipass 800 is
used by several top tier banking institutions worldwide and is strongly
appreciated by the banks and their clients for securing full access to
financial applications on the existing banking network via an existing smart
card, in a flexible, easy to use and cost-effective way. At this moment, over
170 financial institutions worldwide use VASCO’s products. VASCO has further
extended its leadership in the financial sector by developing new products
based on the successful DP 800-formula. Recently, VASCO launched Digipass
850, a connected version of DP 800 that offers a unique combination of
anywhere, anytime portability with USB connectivity.

The Digipass 800 is a secure, intelligent, universal platform that extends
strong authentication and digital signature capabilities to all market-leading
smart cards, enabling existing smart card environments to give safe and
flexible access to banking applications. As a hand-held and
platform-independent device, the Digipass 800 functions as a fully portable
“security portal” that eliminates the need for a smart card reader and
software for any smart card holder.

“With Digipass 800, VASCO successfully anticipated the explosive growth of
the worldwide smart card market,” said Jan Valcke, Executive Vice President
for Sales and Marketing for VASCO. “Our banking clients fully appreciate the
fact that Digipass 800 allows their customers to have secure access to the
banking applications they need, on the existing IT infrastructure via their
existing smart card. The current economic climate urges all types of
companies around the globe to search for cost effective security products such
as the Digipass 800. We predict that more and more banks and other
institutions will start using Digipass 800 in the short term. To achieve this
goal we have reinforced our partner-network dramatically, joining forces with
leading companies in the smart card sector, such as Europay-Mastercard.”


VASCO secures the enterprise from the mainframe to the Internet with
infrastructure solutions that enable secure e-business and e-commerce, protect
sensitive information, and safeguard the identity of users. The Company’s
family of Digipass(R) and VACMAN(R) products offers end-to-end security
through strong authentication and digital signature, enterprise Single
Sign-On, and LAN security, while sharply reducing the time and effort required
to deploy and manage security. VASCO’s customers include hundreds of
financial institutions, blue-chip corporations, and government agencies in
more than 50 countries. More information is available at


Free ATM Network

Washington, DC-based ATM National announced this morning it will introduce early next year the first new nationwide ATM network in over 20 years. The network will offer its members and their customers’ surcharge-free transactions and deposit sharing at more than 30,000 ATMs across the country. The startup company has formed an alliance with Diebold and EDS for technology and EFT network solutions in support of its operations and product offerings. The ATM National network will target financial institutions which have little or no ATM presence such as credit unions, community banks, Internet banks, brokerage firms, and insurance companies. The network will offer these institutions surcharge-free transactions and deposit sharing, accessible at ATM’s owned by the largest bank deployers across the country. Card-issuing members will pay a flat monthly fee to provide their customers with access to ATM National’s products and services. Bank deployer membership will be on a regionally exclusive basis, with one or two major deployers participating in each region of the country. The network’s bundled pricing strategy allows participating acquirers to generate a significant amount of incremental revenue from their current base of ATMs by replacing surcharge revenue with a greater fixed monthly revenue stream.


Palm Card Payments

LinkPoint International, Inc., a premier provider of traditional and Internet payment processing applications, and credit card transaction processor Cardservice International, in alliance with Palm, Inc., a leading provider of handheld computers, have introduced the Virtual LinkPoint for the Palm OS platform, a new software application that lets merchants process online credit card transactions using wirelessly enabled Palm Powered handheld computers. Virtual LinkPoint for the Palm OS takes LinkPoint International’s technology, versatility and performance to new heights by transforming wireless-enabled handheld devices, such as Palm(TM) VII series handheld computers, into virtual credit card payment processing terminals.

Virtual LinkPoint for the Palm OS combines the reliabilities and securities of the LinkPoint Secure Payment Gateway — the company’s state-of-the-art online transaction processing system — with the mobility of an integrated wireless handheld device.

“Virtual LinkPoint for the Palm OS is another example of our commitment to provide merchants with the maximum in technology, service and reliability,” said Caesar Berger, president of LinkPoint International. “Online merchants will now enjoy greater convenience, along with the highest levels of security and performance available in online transaction processing.” “We have tens of thousands of e-commerce and mobile merchants,” said John Burtzloff, Cardservice International’s senior vice president of Sales. “Virtual LinkPoint for the Palm OS enables these merchants on the go to enter orders and process credit card transactions wherever they have a wireless connection, with a minimal investment in point-of-sale hardware or software.” Burtzloff adds that a major benefit of wireless terminals “is that merchants will be able to receive the lowest-possible discount rate with this secure wireless solution.”

“LinkPoint has done extremely valuable work to introduce another first for e-commerce that will help make transactions even simpler for merchants and customers,” said Dennis Burns, director, business development, Wireless Enterprise Channels and Alliances, at Palm, Inc. “Cardservice International has one of the largest merchant sales organizations in the country. We are especially excited that the Cardservice sales team will carry the Palm VIIx, as this team actively sells the secure wireless payment processing solution to its vast merchant base.”

Features of Virtual LinkPoint for the Palm OS include wireless/Internet fraud protection; connection to the Internet where wireless service is available; real-time recordkeeping; chronological viewing of recorded transactions and sales; an integrated reporting capability; and sales reports accessible via a Web browser.

The end-to-end solution also features multiple operating modes, including an instructional mode for first-time users and a standard operating mode for advanced users; a transaction storage capability, which enables merchants to continue to process orders while outside of the wireless coverage area; and quick access to frequently asked questions (FAQs), e-mail support and customer service contact information.

Established in 1994, LinkPoint International, Inc. designs, manufactures, markets and supports comprehensive, integrated data solutions for payment transaction processing in both traditional and online marketplaces. The company’s point-of-sale hardware products include the LinkPoint 3000 terminal, PrintPoint 3000 printer, LinkPoint AIO, a state-of-the-art terminal/printer combination and BankPoint PIN pad. The company’s LinkPoint Secure Payment Gateway is a state-of-the-art system for online transaction processing, composed of four unique payment interfaces — Virtual LinkPoint, LinkPoint Basic, LinkPoint Select API and LinkPoint VirtualCheck. The company’s newest innovation, Virtual LinkPoint for the Palm OS platform, is a software application that enables online transaction processing via wirelessly enabled handheld devices, such as the Palm VII series handheld computers. LinkPoint International markets its products through direct sales. The company’s domestic and international distribution channels include financial institutions, payment processors and other system integrators or resellers. For more information, visit [][1].

Headquartered in Moorpark, Cardservice International provides a wide range of noncash transaction processing options to local, regional and national traditional and Internet businesses. With more than 125 million transactions annually — from point-of-sale credit card processing to e-commerce solutions

— Cardservice International is recognized as a leader in electronic commerce and payment services. Established in 1988, the company processes every type of electronic payment method, including credit, debit, electronic benefits transfer and electronic checks. In addition, Cardservice offers popular point-of-sale hardware and software for brick-and-mortar and Internet payment acceptance. To prevent and monitor fraudulent activities, Cardservice International has one of the largest chargeback and loss prevention departments in the industry. Cardservice supports its merchants with customer service 24 hours a day, 7 days a week, in 140 languages and dialects. First Data Corp., a global leader in electronic commerce and payment services, holds a 50% equity position with Cardservice. For more information about Cardservice International, visit

Palm OS is a registered trademark and Palm is a trademark of Palm, Inc.