Fast-Food Terminals

VeriFone and National Processing Company confirmed this morning the installation of more than 25,000 VeriFone terminals to quick service restaurants nationwide. Most notably, Tricon’s KFC and Pizza Hut restaurants have selected the solution consisting of VeriFone ‘Omni 3200’ and NPC processing. KFC has deployed the solution to all 1,200 corporate stores and over 1,000 franchise locations, representing more than 5,000 point-of-sale installations.

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eGo Network

TransCore announced its new ‘eGo Payment Network’ this weekend. The wireless system combines low-cost tag technology with a nationwide payment network to enable customers to make cashless transactions automatically from their vehicles. TransCore notes that in the Dallas-Fort Worth area, motorists with ‘TollTag’ and ‘PassKey’ tags can establish an eGo account and use these tags within the eGo network, allowing quick-service providers to leverage the combined 400,000 local tag users.

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ATM Cash Security

NCR Corporation announced this weekend it has completed negotiations with Spinnaker International and has acquired the ‘Genesis’ and ‘Sentinel’ ATM cash solutions. With this new offering, cash is protected during delivery to the ATM, both in the vehicle and across the pavement by ‘Genesis’, as well as during replenishment and in operation at the ATM by ‘Sentinel’. Both products use indelible ink to spoil cash inside the cash unit during a physical attack, reducing losses as a result of criminal activity and the cost of cash delivery. ‘Genesis’ and ‘Sentinel’ will be marketed by a new UK-based company called Fluiditi.

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Providian Implosion

In pre-market trading Providian’s stock was on a slight rebound after being pounded on Friday to a new 52-week low of $4.75. As a result of its weak 3Q earnings report, the top ten card issuer has replaced its chairman and is now searching for a new CEO. The company indicated on Friday it will explore all strategic alternatives including the sale of its portfolio. Fitch announced Friday it has lowered Providian’s long-term rating to `BB+’ from `BBB’ and short-term rating to `B’ from `F2′. Also, the long-term and short-term ratings for Providian National Bank have been lowered to `BB+’ and `B’, respectively. In yet another development, Milberg Weiss announced Friday that a class action has been commenced on behalf of purchasers of Providian publicly traded securities during the period between June 6, 2001 and October 11, 2001. (CF Library 10/12/01)

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HSBC CLSO

Fair, Isaac and Company, Inc. this week said that London-based HSBC Holdings
plc, one of the world’s largest banking and financial organizations, has
signed
the first global agreement to purchase Fair, Isaac’s Credit Line Strategy
Optimization service to manage its credit card portfolios across its
worldwide network.

This agreement marks the most extensive deployment of Fair, Isaac’s new CLSO
service to date. Since its introduction four months ago, CLSO has been adopted
by three of the top 20 card issuers in the United States, including Fleet
Credit Card Services, First USA and People’s Bank in Connecticut.
HSBC will begin immediate deployment of CLSO in the U.K. within its Personal
Banking division to increase profitability of its credit card portfolio.

Deployment will follow in the U.S. and then in other parts of the Group. A
firm
timeframe for these additional rollouts has not yet been established.
CLSO helps credit card issuers improve account profitability through optimal
credit line assignments. It automates this complex process for the first time
and optimizes the results down to the individual customer’s account. CLSO is
the first application of Fair, Isaac’s breakthrough Strategy Science — termed
the “Third Revolution” in decision analytics because it enables customers to
model the decision itself. Through CLSO, strategic options are clearly and
concisely defined and openly identified. As a result, portfolio managers can
fully understand how their choice of a particular strategy will play out
against the business objective they seek to optimize. By using CLSO, a lender
can experiment with any number of “what if” scenarios before settling on
precisely the right strategy to meet the stated business objective.
“HSBC is at the leading edge in the use of advanced technologies to link its
global network,” said Tom Grudnowski, Fair, Isaac’s CEO. “CLSO is a perfect
complement to HSBC, both in terms of their understanding of how technology can
drive smart, bottom-line strategies as well as how the service supports a
diverse, global portfolio. We are delighted to have HSBC as our first global
customer,” Grudnowski said today.

Brendan Cook, head of HSBC Group’s Card division, said, “CLSO is the ideal
solution to take HSBC’s strategic use of technology in managing and linking
its
global business units to the next level. CLSO’s advanced analytical techniques
will enable us to better anticipate our customers’ requirements and needs.”

About Fair Isaac

Fair, Isaac and Company is a global provider of customer analytics and
decision
technology. Widely recognized for its pioneering work in credit scoring, Fair,
Isaac revolutionized the way lending decisions are made. Today the company
helps clients in multiple industries increase the value of customer
relationships. Fair, Isaac has made the Forbes list of the top 200 U.S. small
companies nine times in the last ten years. Headquartered in San Rafael,
California, the company reported revenues of $298 million for fiscal 2000. For
more information, visit
http://www.fairisaac.com.

About HSBC Group

Headquartered in London, HSBC Holdings plc is one of the largest banking and
financial services organizations in the world. The HSBC Group’s international
network comprises some 6,500 offices in 78 countries and territories in
Europe,
the Asia-Pacific region, the Americas, the Middle East and Africa. With
listings on the London, Hong Kong, New York and Paris stock exchanges, shares
in HSBC Holdings plc are held by around 200,000 shareholders in some 100
countries and territories. The shares are traded on the New York Stock
Exchange
in the form of American Depositary Receipts.

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Certegy 3Q/01

Certegy, formerly Equifax Card Services, reported third quarter net income of $24 million on revenue of $218 million. Card Services generated revenue of $146.6 million in the third quarter, an increase of 11.4%, over the prior-year quarter. Volume decline attributed to the terrorist attacks reduced Card Services’ revenue by an estimated $0.7 million and operating income by $0.3 million. Check Services generated revenue of $71.4 million for 3Q/01, an increase of 13.2% over 3Q/00. Volume decline in Check Services, attributed to the terrorist attacks, reduced third quarter revenue by an estimated $1.6 million and operating profit by $0.8 million. For complete details on Certegy’s current quarterly performance visit CardData ([www.carddata.com][1]).

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

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CELL PAYMENTS

Customers of the GSM wireless
network operator ENTEL PCS can now pay for subway tickets with a cell phone.
The solution was implemented on the basis of wIQ (wireless Information Query)
from ORGA Card Systems, Inc.

To purchase a ticket, the customer first chooses one of four fare types. Each
fare is identified by a three-digit number. To pay for the ticket, users just
key in this number and the number of the ticket machine on their cell phone.
The ticket is issued in seconds and is charged to the customer’s telephone
bill. “Other wIQ options include billing the purchase directly to an
e-Purse or
credit card,” said Frank Barbalace, Senior Business Development Manager, ORGA
USA.
ENTEL PCS, based in Santiago de Chile, developed this solution itself in a
very
short time on the basis of wIQ. Thanks to wIQ’s use of standard Internet
technologies such as HTML, Entel was quickly able to bring their solution to
the wireless market. Standard interfaces such as CGI or PHP can be used for
online access to a very wide range of background systems.

Customer acceptance depends to a great degree on the speed at which tickets
can
be purchased. wIQ uses the USSD channel (Unstructured Supplementary Services
Data), which is available in all GSM networks and permits interactive
information exchange with average response times of between two and four
seconds.

This means that customers spend no more time paying by cell phone than when
buying tickets in the normal way. “The goal is to beat `cash transactions’ or
the time required to use technology instead of cash, while adding a level of
personal security which wIQ offers. ” said Frank Barbalace.

Unlike WAP (Wireless Application Protocol) technology, users do not need a
specially equipped handset for USSD. “Most GSM hansdsets (USSD Phase II
compliance required) currently in the field could be immediate customers
and no
special SIM card is required,” said Frank Barbalace. As a result, services
such
as buying a subway ticket are available to all the network operator’s
customers
right away. Time to market is minimized, and every customer benefits
immediately from the new possibilities. “wIQ is a great solution to either
complement WAP or stand alone. It’s fast, 2-4 second responses when used in
the
local network and 5-6 seconds when roaming nationally or internationally.
Supports location based services, including advertising, info services and
m-Commerce. You can even have a conversation while surfing on wIQ. We are in
discussions with content providers who really like wIQ because they want a
fast, cheap and immediate mCommerce solution.”

ORGA Card Systems, Inc, part of the authentos group of companies, is one of
the
market leaders in the smart card industry. ORGA offers a full range of smart
cards, hardware, software, systems, system integration and solutions for the
telecommunications, banking, retail, healthcare and Internet sectors. ORGA is
headquartered in Paderborn, Germany, and operates its Smart Card Center in
Flintbek, in one of the world’s most modern production facilities for smart
cards.

ORGA is jointly held by Bundesdruckerei GmbH (89.96%), which in turn is fully
owned by APAX Fonds, and DETECON GmbH (10.04%). With a workforce currently
numbering over 1,600 employees worldwide, the ORGA Group posted record
sales of
EURO282 million in fiscal 2000. Subsidiaries, sales offices and joint ventures
give ORGA a strong presence in Great Britain, the U.S., France, Singapore,
Russia, South Africa, the United Arab Emirates, Denmark, China, Brazil, Hong
Kong, Italy, Portugal, Austria and Lithuania.

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People’s 3Q/01 Losses

Bridgeport, CT-based People’s Bank reported yesterday that its Credit Card Services division realized a net loss of approximately $11 million for the third quarter due to higher charge-offs and the impact of the recession. Charge-offs have soared by 60% over the past twelve months, rising from 4.77% for 3Q/00 to 7.58% for 3Q/01. Delinquencies rose from 3.12% to 4.19% over the same period. U.S. receivables have declined $541 million since last year dropping from $3.1 billion to $2.5 billion. People’s yield on managed U.S. credit card receivables decreased 40 basis points compared to 3Q00. People’s noted yesterday it realized a $17 million pre-tax gain on the sale of its interest in the NYCE ATM network. People’s has scheduled an analyst conference this morning. For complete details on People’s current and prior quarterly performance visit CardData ([www.carddata.com][1]).

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

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VISA TIBC-III

Datacard Group introduced a scripting process that makes issuance of
Visa branded smart cards faster, easier and less costly for Visa member
banks in Latin America.

The new version of the Datacard Script Builder is based on GlobalPlatform
standards and is used to generate data and personalize TIBC-III, Visa’s new
smart card designed exclusively for the Latin American market. The issuer,
without the need to buy anything new, can also use this scripting process when
moving to GlobalPlatform multi-application smart cards.

Datacard Script Builder includes a script interpreter (or script
framework), as
well as the scripts required for secure data generation and high-speed card
personalization. Member banks can use the process to issue Visa
TIBC-III-based smart cards that store applications such as Visa EMV
credit/debit, Visa Cash and a range of loyalty applications.

“Without the GlobalPlatform scripting process, card issuers would have to
create unique personalization applications for each smart card application.
This would pose significant obstacles in terms of both cost and production
time,” according to Bob Beer, vice president of smart card solutions for
Datacard.

“We worked closely with Visa and leading card issuers in Latin America to make
smart card issuance fast, easy and cost-effective,” Beer said. “Script Builder
achieves this by making the process generic. Card issuers can use a single,
easy-to-manage process to issue all Visa-branded smart cards.”
Visa International has been actively promoting its branded smart card products
in most major Latin American markets. Member banks are being encouraged to
issue EMV credit/debit and Visa Cash cards because smart cards offer a strong
line of defense against fraudulent activities such as “skimming,” which
involves the theft and duplication of magnetic stripe data. The smart cards
also increase consumer demand for flexible, powerful and highly personalized
financial cards.

“Smart card issuance represents a tremendous opportunity for Visa member banks
in Latin America,” Beer said. “Datacard’s goal was to create a simple, turnkey
personalization process that allows them to capitalize on it quickly and
easily.”

In addition to the new Script Builder, Datacard provides all the software,
systems and services card issuers need to issue smart card products. The
Datacard Smart Card Personalization Manager, the Datacard
Personalization Preparation Process, an integrated solution from
Thales e-Security, and Datacard’s family of desktop and high-volume card
issuance systems can be configured to meet the specific needs of any card
issuer.

“Our software and systems have been proven in the world’s most demanding smart
card programs. The reliability and simplicity of our solutions allows card
issuers to move quickly and with confidence,” Beer said. “Also, many card
issuers already use Datacard card personalization systems in their operations.
In most cases, they can simply add smart card modules to their existing
systems, which helps minimize their capital investment.”

Datacard Group provides financial institutions, corporations, consumer
marketers, governments, schools, healthcare providers, service bureaus and
other enterprises with the software, systems and professional services they
need to build successful card programs. The company’s portfolio includes the
world’s best-selling smart card solutions and card issuance systems, as
well as
a complete line of digital identity systems. Consultative services include a
smart card security laboratory that serves the world’s leading smart card
issuers. DataCard Corporation, doing business as Datacard Group, is privately
held and based in Minnetonka, Minn. Datacard Group serves customers in more
than 200 countries.
(http://www.datacard.com)

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Vcom Expands

7-Eleven, Inc. has added automated check-cashing capability to its Vcom financial kiosks in 36 stores in Fort Myers/Naples, Fla., following an initial launch in 58 Texas stores. This 94-store pilot test of the service includes an aggressive marketing effort and in-store greeters to promote customer awareness and trial of the service.

Vcom is 7-Eleven stores’ web-enabled, integrated financial services kiosk that merges ATM capabilities with the flexibility of Internet-based applications and 24-hour, touch-screen convenience. The current capabilities of the kiosks include ATM transactions, Western Union money orders and money transfers and check cashing through Certegy Check Services(SM), a division of Certegy Inc.. Future services may include telecommunications products and services, bill payment, event ticketing, travel directions and road maps.

During the pilot, 7-Eleven is offering free check-cashing membership enrollment and promoting the new service through advertising, in-store signs and special events … all aimed at consumers who use a check-cashing service. Also during the test period, a new customer’s first two payroll checks will be cashed free. According to recent industry publications, 30 million people cash 180 million checks valued in excess of $55 billion at check-cashing establishments.

“Self-service check cashing on Vcom is another innovation in 7-Eleven’s 75-year history of defining convenience,” said John Harris, vice president of 7-Eleven stores’ Florida division. “At the same convenient location where they stop for gasoline, milk or other convenience items, our customers can have immediate access to their cash, 24 hours a day, seven days a week, in a safe, secure neighborhood environment.

“We know thousands of our customers cash checks somewhere else but shop at 7-Eleven for basic purchases,” Harris said. “By offering check cashing on Vcom, we’re saving them time and an additional stop. This is a good customer value, and it just makes sense. We invite consumers to come in and see how fast and easy check cashing can be.”

To use the Vcom check-cashing service, a customer applies for membership and is immediately issued a Vcom card. Thereafter, the member can access the fully automated check-cashing service simply by inserting the card and check into the Vcom kiosk, then entering their PIN and pertinent information about the check via the touch screen. In moments the check is verified, authorized and, if approved, the customer receives the cash, minus a transaction fee. The membership requirements and transactions fees are comparable to other check-cashing establishments, but the typical Vcom self-service transaction takes less than two minutes.

About 7-Eleven, Inc.:

7-Eleven, Inc. is the premier name and largest chain in the convenience retailing industry. Headquartered in Dallas, Texas, 7-Eleven, Inc. operates or franchises approximately 5,800 7-Eleven stores in the United States and Canada and licenses approximately 16,000 7-Eleven stores in 17 other countries and territories throughout the world. During 2000, 7-Eleven(R) stores worldwide generated total sales of more than $29 billion. Find out more about 7-Eleven, Inc. on the World Wide Web at [http://www.7-Eleven.com][1].

[1]: http://www.7-eleven.com/

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ONE SUPER CARD

Scotiabank announced a Canadian first – one card that allows Canadians to
access debit, credit, electronic purse,
loyalty programs and other services.

“Scotiabank is the first Canadian bank to deliver on the promise of a one-
card debit and credit solution for our customers,” says Albert Wahbe, CEO of
e-Scotia, and Executive Vice-President, Electronic Banking, Scotiabank. “We
are putting debit, credit, micropayments, and loyalty programs on one card to
give Scotiabank customers the most convenient banking and payment solutions
possible.”

Customers will now have all functions on a single plastic card. Debit
card functions, such as ATM access and Interac direct payment, will be
accessed on the magnetic stripe. Functions, such as Visa credit, micropayments
and loyalty programs will be available on the microprocessor chip. Customers
will be able to add or delete chip applications at their discretion.

This week’s announcement builds on a pilot program for credit cards with
microprocessor chips announced earlier this year. The pilot will take place in
the region around Barrie, Ontario. It is expected that more than 12,000
Scotiabank customers will participate in the pilot. Current Scotiabank
customers will be able to sign up for the pilot by contacting their local
branch in Barrie or Angus.

“Customers are demanding ‘smart’ cards that are capable of meeting many
of their lifestyle needs,” adds Wahbe. “The choice and flexibility offered to
customers will be backed up with the highest levels of security and
authentication capabilities.”

Scotiabank is one of North America’s premier financial institutions, with
more than $271 billion in assets and approximately 51,000 employees worldwide,
including affiliates. It is also Canada’s most international bank with more
than 2,000 branches and offices in more than 50 countries. Scotiabank is on
the world wide web at
http://www.scotiabank.com.

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Simmons 3Q/01

Simmons First National Corporation announced earnings of $12,577,000, or $1.76 per diluted share for the nine-month period ended September 30, 2001. The diluted earnings per share reflect a decrease of 6.9% when compared to September 30, 2000 diluted earnings per share of $1.89. Earnings for the third quarter were $3,536,000, or $0.49 diluted earnings per share. These earnings are down $1,429,000, or $0.18 per share when compared to the same period of the previous year. The decrease in third quarter earnings was primarily attributable to continued pressure on net interest margin and a special $1.25 million provision to the loan loss reserve. According to J. Thomas May, Chairman and Chief Executive Officer, “The banking industry has had margin pressures most of the year due to the rapid decrease in interest rates. Simmons First has been impacted to a greater degree due to our usury law, which is tied to the Federal Reserve’s discount rate. Since December, the discount rate has dropped by 4.25%, thus we have been forced to decrease the rates in our credit card portfolio to a level significantly below the market.”

May also commented, “The third quarter earnings were impacted due to a special provision to the loan loss reserve for some problem credits identified at one of Simmons First’s affiliates.” May further stated, “The recent court ruling on the Gramm-Leach-Bliley Act amendment to the Arkansas usury law will give Arkansas banks greater flexibility to deal with interest rate movements like we’ve had this past year. Since rates will no longer be tied to the Federal Discount Rate, banks can control the pricing of their loans based on market verses an arbitrary formula. We estimate this will have a positive impact on earnings during 2002.”

Because of the Corporation’s cash acquisitions, cash operating earnings (net income excluding amortization of intangibles) are an integral component of earnings. Year-to-date diluted cash earnings, on a per share basis, as of September 30, 2001 were $1.97. Cash return on average assets was 0.99% and cash return on average stockholders’ equity was 10.66% for the nine-month period ended September 30, 2001. Diluted cash earnings for the third quarter of 2001 were $0.56 per share.

Total assets for the Corporation at September 30, 2001, were $2.0 billion, an increase of $167 million, or 8.9%, over the same figure at September 30, 2000.

Stockholders’ equity at the end of the third quarter of 2001 was $181.2 million, an $11.6 million, or 6.8%, increase from September 30, 2000. The allowance for loan losses as a percent of total loans equaled 1.64% as of September 30, 2001, compared to 1.63% for December 31, 2000. As of September 30, 2001, non-performing loans equaled 1.22% of total loans and the allowance for loan losses equaled 135% of non-performing loans.

Simmons First National Corporation is a financial holding company, with community banks in Pine Bluff, Jonesboro, Lake Village, Dumas, Rogers, Russellville, Searcy and El Dorado, Arkansas. The Company’s eight banks are conducting financial operations from 65 offices in 33 communities.

For complete details on Simmons 3Q/01 data visit CardData ([www.carddata.com][1])

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

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