No-Hassle Cards

Capital One has launched a significant print and direct mail promotion for its new ‘No-Hassle Platinum MasterCard’ which offers a package of unprecedented cardholder commitments not seen since the launch of the ‘AT&T Universal VISA/MasterCard’ in 1990. Among the unique features of the new program is the promise that consumers will not receive any telemarketing calls from Cap One. According to CardWatch ([www.cardwatch.com][1]), other Cap One ‘No-Hassle’ guarantees include no balance transfer fees, no cash advance fees, no annual fees, and no foreign exchange fees “ever”. The new ‘Platinum MasterCard’ also carries a fixed APR of 8.9% or 9.9% for new purchases, balance transfers, and cash advances. Cap One has been running full page ads in People and Newsweek with the message “Be Sure to Read the Fine Print” and “Introducing 7.2 Square Inches of Peace of Mind”.

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

Details

First CCS-Teller Sold

Greenland Corporation announced that Mr Ship N’ Chek, a nine store, Nevada-based financial services retail chain purchased the first Check Central Solutions-Teller retail package for approximately $56,000, including a two-year software support and maintenance agreement. The purchase agreement provides for the installation of Greenland’s new Check Central Solutions single store back office processing system, which supports up to three kiosk locations from one store, a MAXcash Automated Banking Machine kiosk, and a PC-based point-of-sale teller package.

With operations in Reno, Las Vegas, Albuquerque and Phoenix, Mr Ship N’ Chek was an early customer of Greenland, having purchased two MAXcash ABMs prior to the termination of Greenland’s call center and check cashing services in March of this year.

Mr. T.A. “Kip” Hyde, Jr., President and CEO of Greenland stated, “Mr Ship N’ Chek was among the first thirty-one Greenland customers negatively impacted by our suspending centralized check cashing operations earlier this year. With the purchase of our new CCS-Teller integrated systems package, they will now be able to resume self-service check cashing operations very quickly.”

Introduced at the recently held FiSCA National Conference and Exhibition, the Check Central Solutions product line is designed so that current check cashing services providers of virtually any size can easily incorporate a MAXcash ABM into their current operations. The back-office transaction processing system can be used locally in each store, or, large check cashing operators can install a network solution connected to a central processing center.

Mr. John Odin, President and CEO of Chekline, Inc., the corporate parent of Mr Ship N’ Chek, and current vice president of the Nevada Independent Check Cashing Association, said, “When my Director of Operations returned from the FiSCA show, he was very excited to tell me that we could now operate our own MAXcash terminals, using our existing staff and customer database. We had already recognized the value of self-service kiosks to our stores and customers, and were pleased with their performance. Now that we have the ability to manage our own terminals, we hope to expand our automation program into all of our stores, and potentially into other locations such as local grocers and convenience stores.”

Hyde ended, “As indicated during the panel discussions at the FiSCA conference, I believe that self-service check cashing will be of similar or even greater benefit to the check cashing industry, just as ATMs have been to the banking industry. We are pleased that Mr Ship N’ Chek has embraced this technology and is the first to start working with the Greenland team again.”

About Greenland Corporation

Greenland Corporation is a holding company whose wholly owned subsidiary, Check Central, is the developer and manufacturer of the MAXcash(TM) Automated Banking Machine(TM) (ABM(TM)) and related Check Central Solutions(TM) transaction processing system software designed to provide self-service check cashing, ATM functionality, phone card and money order dispensing, as well as the capability for other future products and services. The Company’s common stock trades on the OTC Bulletin Board under the symbol “GLCP.” Visit Greenland Corporation on the Internet at [http://www.greenlandcorp.com][1].

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

Details

BofA 3Q/01

Bank of America reported this morning that 3Q credit card receivables are up more than 21% over third quarter 2000. However chargeoffs have edged up nearly 16% over the same period. BofA also reported that card fee income is up 4% over the past twelve months. At the end of the third quarter, BofA had $25.5 billion in managed card loans compared to $24.9 billion for 2Q/01 and $21.0 billion for 3Q/00. Charge-offs for the third quarter stood at 4.81% compared to 4.94% for the prior quarter and 4.16% one year ago. BofA has approximately 25 million accounts and 29 million cardholders. During the third quarter Bank of America launched new national TV ads carrying the theme of “ingenuity.” The company also announced during 3Q that it is increasing its advertising budget from approximately $100 million to $145 million to promote the Bank of America brand in 2002. For complete details on BofA’s 3Q/01 performance visit CardData ([www.carddata.com][1]). (CF Library 8/14/01)

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

Details

Vital e-Connections

Vital Processing Services, a leader in technology-based commerce enabling services, today launched Vital e-Connections, an easy-to-use, powerful and flexible web-based information reporting and access service for acquirers and their merchant customers.

On-line, through a web site hosted by Vital, Vital e-Connections delivers to merchants and acquirers information that is critical to managing their business.

Merchants can now see all the detail behind their daily or periodic bank deposits, including credit card, debit card, fees, chargebacks, and other electronic transactions, making it easy for a merchant to reconcile daily deposits. Access to detailed transactions simplifies the entire process of transaction retrieval, which for many merchants will lead to reduced chargeback losses.

Vital s acquiring clients derive many benefits from Vital e-Connections. In addition to the obvious fee income opportunity, acquirers realize productivity improvements in back-office operations and in customer service, as web-based access to transaction information and reports helps to streamline work processes and exception handling, as well as to manage risk.

“Vital e-Connections is a giant step forward in answering acquirer demands for back office efficiencies, for tools to better manage their merchant portfolios and for quick and easy access to transaction data for them and their merchants. It provides both merchants and acquirers new opportunities for revenue and earnings growth. We anticipate Vital e-Connections to be highly utilized by Vital acquiring clients and we expect their productivity gains to be substantial,” said Denise Lewis, executive vice president of products and marketing, Vital Processing Services.

About Vital Processing Services

Arizona-based Vital Processing Services® (Vital®) is a leader in technology-based commerce enabling services. Vital s clients include acquirers and merchant service providers that offer electronic payment processing and related services to merchants. Vital provides leading point-of-sale (POS) products and services, electronic authorization and data capture; clearing, settlement and exception processing; accounting, billing and reporting; risk management; and merchant support services. Vital also provides POS equipment management services through its subsidiary Vital Merchant Services and a full suite of Information Services in conjunction with Vital’s wholly-owned subsidiary GRS. Vital is a merchant processing joint venture of Visa U.S.A. and TSYS® (“NYSE: TSS”), a global leader in payments processing. Additional information regarding Vital can be found at [www.vitalps.com][1].

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

Details

ePDQ PROCESSING

ClearCommerce Corp., a leading
provider of transaction processing and fraud protection software for
e-commerce, announced Barclaycard Merchant Services has selected and
implemented ClearCommerce’s online payment processing and fraud protection
software as part of its e-business initiative — ePDQ.

Barclay’s ePDQ product will provide online retailers with a hosted,
flexible e-commerce payment facility to enable them to trade on the Internet,
ensuring the secure transmission and custody of card data. The ClearCommerce
Engine(R), hosted by Barclaycard Merchant Services, will process all online
credit and debit card payments that occur at Barclaycard’s merchant websites
as well as provide the necessary fraud detection. Barclaycard Merchant
Services provides PDQ machines, which are used by shops and businesses to take
payment for goods by swiping the debit or credit card through the PDQ machine.
The ClearCommerce software will enable Barclaycard Merchant Services to offer
its merchants a virtual PDQ for their online stores — a natural extension to
their existing machines.

Both PDQ and online transactions are processed and handled by Barclaycard
Merchant Services. Currently, Barclaycard performs the role of acquiring bank
for a large number of manually-keyed Internet transactions. Using the
ClearCommerce Engine to drive the ePDQ initiative, Barclaycard can now manage
all aspects of security relating to the processing and transmission of data
and integrate this facility with its role as the acquiring bank.

Bill Thomson, Head of Internet Payments for Barclaycard Merchant Services
said, “ePDQ is being developed so Barclaycard Merchant Services can better
meet the demands and expectations of its merchant base by providing a simple
and effective online payment solution. By extending our role as the acquiring
bank and becoming involved at the transmission and secure transaction
processing level, we can add to the strength of our service and brand.
ClearCommerce has provided us with a highly functional solution that fits our
specific requirements to ensure ePDQ provides our merchants with highly
effective and secure online payment processing.”

Alan Scutt, vice president of ClearCommerce Europe said, “High street
stores are realizing the importance of an online presence and Barclaycard
Merchant Services is proactively addressing the needs of its merchants.
However, in order to succeed in the e-commerce market, payments must be
processed quickly and securely. ePDQ offers merchants highly effective
processing functionality and fraud protection with the security that it is
being offered by a trusted and familiar brand.”

Barclaycard Merchant Services is one of Europe’s largest acquirers and
processors of plastic card transactions. It is dedicated to providing a range
of e-commerce solutions to suit all types of business and was the first bank
to launch an Internet payment system, ePDQ. In 2000 1.2 billion purchases
were made with credit and debit cards in the 131,000 outlets belonging to
Barclaycard Merchant Services’ customers in the UK. Barclaycard Merchant
Services operates the largest on-line, real time bank owned EFTPOS (Electronic
Funds Transfer at the Point of Sale) system in the UK with a PDQ terminal base
of over 123,000.

Austin, Texas-based ClearCommerce is a provider of e-commerce transaction
software and services for enterprises and Commerce Service Providers,
including Apple Computer, Sony, Harrods, Chase Merchant Services, PETsMART.com
and EDS. ClearCommerce provides transaction management technology directly
and indirectly through Commerce Service Providers for merchants worldwide.
Providing the ClearCommerce Engine to more than 40,000 merchants, features of
the company’s software include real-time credit card processing and Internet
fraud protection, as well as online reports, storefront integration, back-end
integration and shipping/tax calculation. For more information, please visit
http://www.clearcommerce.com.

Details

Heartland Investment

Heartland Payment Systems Inc., an employee-owned, full-service credit card and payroll processing provider, Friday announced that it has received a $40 million private equity investment from Greenhill Capital Partners L.P., LLR Partners Inc., and their affiliated investment funds.

The $40 million infusion of new capital, representing a substantial minority stake, will be utilized to execute Heartland’s long-range strategic business plan. This plan includes continuing the build-out of Heartland’s national sales and service organization, developing the company’s innovative transaction processing platform, strengthening various vertical market partnerships, and retiring the company’s debt.

Brooks L. Terrell, Frisco-based chief technology officer, for Heartland Payment Systems, Princeton, N.J., stated, “The impact of this investment to our Frisco operation is significant. Heartland Payment Systems intends to continue to grow our face-to-face presence with local merchants and to expand our base of operations for both our Software Development Group and our Frisco-based Information Technology Team.”

Greenhill Capital Partners and LLR Partners share a focus on developing long-term partnerships with the management teams of portfolio companies, and supporting them in building their businesses through direct involvement from beginning to end of every investment transaction.

Additionally, both of these private equity groups have significant investment flexibility to structure transactions to meet the unique needs of business owners and managers.

Robert H. Niehaus, chairman of Greenhill Capital Partners, said, “Bob Carr and the world-class management team that he has assembled have built Heartland into one of the leading independent merchant payment processors.

“With one of the largest and most productive direct sales forces and a culture focused on customer service, Heartland is well positioned to capitalize on the robust growth in the payment processing industry.”

Mitchell L. Hollin, an LLR partner, said, “As a leading player in a fragmented industry, Heartland offers the scale and sophistication to leverage the trend toward alternative forms of electronic payments across its large and diverse merchant base.”

Launched in early 1997 as a merchant card processor, Heartland Payment Systems has now evolved into a multiple product transaction processor, and has recently introduced HPS Exchange, which offers the industry’s first client server based transaction processing platform.

“We are very pleased to find two strong financial partners to support our aggressive growth plans,” said Robert O. Carr, the chief executive officer and chairman of Heartland.

Carr continued, “We have built our portfolio to an annual run rate of nearly $13 billion over the last four years with minimal capital, and feel this equity infusion is the key to both expanding our sales program and introducing innovative technology solutions to our merchant clients. We also look forward to utilizing our financial partners’ substantial expertise in helping companies manage their growth.”

About the Investors

Greenhill Capital Partners

Greenhill Capital Partners is a $425 million private equity fund managed by Greenhill & Co., an independent merchant banking firm owned entirely by its partners. Greenhill Capital Partners identifies investment opportunities by focusing on the proprietary deal flow provided by Greenhill & Co.’s insights into, and relationships within, the telecommunications, technology, financial services and consumer products industries.

From their offices in New York, London and Frankfurt, Germany, Greenhill & Co. provides a broad range of advisory and investment services. They are a premier international merchant bank in the classic tradition — advising and investing, and when appropriate, committing firm capital alongside that of their clients. Their core principles include building important long-term client relationships and pursuing opportunities where they can add value. [http://www.greenhill-co.com][1]

LLR Partners

LLR Partners Inc. is a $260 million private equity firm providing capital to companies with strong growth potential, proven business models and outstanding management teams. LLR Partners primarily makes investments of $5 million to $20 million in a broad range of growth industries, with an emphasis on business services and information technology. Headquartered in Philadelphia, LLR Partners generally targets expansion capital investments, but will also consider recapitalizations and private investments in public companies. [http://www.llrpartners.com][2]

About Heartland

Heartland Payment Systems is a full-service payment systems solutions provider, handling merchant card and payroll processing services for over 50,000 merchants of all types and sizes. Using a strategically located national sales force, Heartland builds long-term business relationships in local sales territories to provide merchants with enhanced technology tools that assist them in more effectively operating their businesses. [http://www.heartlandpaymentsystem][3].

[1]: http://www.greenhill-co.com/
[2]: http://www.llrpartners.com/
[3]: http://www.heartlandpaymentsystem.com/

Details

ULTRACARD DEMO

UltraCard, Inc., a
subsidiary of Upgrade International, is pleased to announce that
it has been invited by officials in the Chinese Government Immigration and
Security offices to demonstrate the UltraCard reader/writer and UltraCard
technology during the first week of November, 2001. This demonstration will
showcase the UltraCard’s potential use as the Chinese national visa card for
immigration entry and exit across the Chinese border.

Mr. Arthur Zheng, Managing Director of UltraCard China, states, “UltraCard
technology could replace and dramatically improve the time-consuming and
antiquated paper/pencil entry process which is currently used. UltraCard has
already announced an ID-card pilot program in China, due to begin later this
year. Based on a successful demonstration and further negotiation, the
UltraCard ID pilot program may be expanded to include the Immigration
Department of China. Furthermore, a student visa and ID card is an obvious
application for the UltraCard.”

Tom Parkinson, Vice President of Business Development for UltraCard, Inc. adds,
“UltraCard has completed the demonstration software and we look forward to
presenting our technology to the Chinese government. We are confident that the
Chinese government will see the superior performance of our technology in the
visa and student ID applications.”

The UltraCard can store multiple factor biometrics such as FBI level
fingerprints, iris scans, and photographs, all on the same card, as well as
updatable border entry records, change-of-address, etc. Portions of the
UltraCard data memory can be rendered non-alterable, write-once, read-many
and/or re-write-able, similar to a hard disk drive in a computer. The data can
be encrypted and re-encrypted as required. The UltraCard technology, combined
with the appropriate initial identification and data base management process,
could prevent forgeries and duplication of immigration and entry records.
A unique application feature of the UltraCard is that due to its large data
storage capacity the use of a web-centric database is unnecessary. Unlike
current smart card technologies personal data stays on the card, not on a web
site, thus ensuring privacy and security.

About Upgrade

Upgrade International Corp. through its ownership interest in UltraCard Inc.,
Efornet Corp., and cQue Corporation is engaged in the development and
commercialization of a patented ultra high-capacity portable data storage
technology. UltraCard’s patented method for using existing hard disk storage
technology provides both highly durable media in a credit card format and an
inexpensive read/write device that together will become the next generation in
personal portable data storage for a broad range of existing and new markets.
Management believes that the UltraCard technology will potentially provide
numerous industrial users with a combination of high levels of security and a
vastly greater amount of personal transportable data storage at the lowest cost
in the industry. In addition the acquisition and development of existing
SmartCard solution providers represents a strategic market strategy designed to
accelerate the integration of the vastly superior technology inherent in the
UltraCard into existing and newly developing markets.

Details

Satellite Cards

Toronto-based Stratos unveiled the first prepaid calling card for the Iridium satellite network. The new phone cards will also serve other satellite networks, including Inmarsat-A, -B, -M, mini-M, and North America MSAT. The ‘Stratos Prepaid Calling Cards’ are targeted at vessel crewmembers and third party users of satellite phones. Users are greeted with automated voice prompts that provide English, French, and Spanish language options.

Details

BANKING WOES

The ongoing crisis in Argentina has led observers to focus more closely on
what has long been considered one of the strengths of the Argentine economy,
its banking system. In an earlier comment (`Fitch Comments on Argentine Banking
System Amid Tumultuous Markets’, July 31, 2001), Fitch, the international
rating agency, had reviewed the many reforms and the consolidation that
contributed to a substantial strengthening of the Argentine banking system
since the severe pressures it felt in the wake of the 1994 Mexican devaluation.
In a subsequent comment issued today, Fitch has evaluated various scenarios for
the Argentine banking system over the coming months as the economy struggles to
return to sustainable growth under a heavy debt burden.

While banking sector reforms enacted over the latter half of the 1990s and
increased foreign participation have undoubtedly improved the system’s
strength, pressure has risen over the past year in parallel with deteriorating
sovereign creditworthiness. Argentina’s foreign currency credit rating was
downgraded to `B-`, Rating Outlook Negative in July and Fitch’s international
ratings on Argentine banks have also moved downward over the course of the last
year. Among these ratings are still strong support ratings for the subsidiaries
of major foreign banks.

Significantly, the banking system’s single largest exposure is to its own
government, and this has been the principal source of balance sheet expansion
during the prolonged recession. Thus, growing fears of sovereign default have
been accompanied by significant deposit flight – down 15% since their peak
earlier this year – funded by the outflow of an important portion of previously
comfortable liquidity reserves. Although deposit flight has been stemmed since
the announcement of enhanced financial support from the IMF in August, a large
portion of which was earmarked to restore banking system liquidity, the
potential for negative events to trigger further pressure on deposits still
exists.

As was the case in the 1995 Tequila Crisis, anecdotal evidence points to
institutional investors’ withdrawal of funds from the banking system as the
primary reason for the deposit fall. However, renewed falls are quite likely to
result in deposit flight quickly spreading to retail depositors, potentially
leading to a rapid snowballing which would renew the drain on liquidity. This
could force banks to look to their less liquid assets (loan and securities
portfolios) for the liquidity necessary to honor potential deposit withdrawals.
It is these very assets that have come most under stress as a result of
continuing economic stagnation.

The two asset classes most under stress in the current environment are:
–Credit extended to the Argentine national and provincial governments; and,
–Private sector loans in largely stagnant loan portfolios.

Of most immediate concern is exposure to the public sector, estimated at 174%
of equity for the system as a whole. While government securities are a
relatively small proportion of total bank assets, total public sector exposure
also includes loans to the provinces secured by future tax flows and is a much
greater proportion of balance sheets. Even for the most conservative banks it
exceeds current levels of equity and is particularly pronounced for banks in
the public sector, at 271% of equity, compared with 148% for private banks.
Banks would be directly affected by any restructuring of existing debt, with
any potential reduction (or `haircut’) likely to absorb an equivalent part of
banks’ equity bases. Lengthy grace periods on new classes of government debt
would reduce banks’ cash flows, and negatively affect the ultimate liquidity of
such securities. Fitch believes such events may lead to continued regulatory
forbearance as to bank accounting, which could hide the potentially significant
reduction in the cash flows available to the banks and in the realizable value
of these assets. Much of the public sector exposure in bank portfolios is in
the form of advances made to provinces against the flow of tax payments to the
provinces, and a reduction of such flows, as currently being contemplated, will
certainly mean, at least, a significant rescheduling of current terms on these
exposures; again, potential losses in value of these exposures could translate
to hits against current equity bases.

Adding to the potential pressure on the banks from their public sector
exposures is what will certainly be pressure on the asset quality of existing
loan and contingent exposures to the private sector, as the prolonged recession
is made sharper by recent events, and the return to sustainable growth appears
to be still some time off. Published figures through 30 June, 2001, have not
shown evidence of substantial credit quality deterioration, with loan
portfolios already tested and seasoned by the prolonged recession. However,
Fitch expects pressure on credit quality to persist, as evidenced by some
well-publicized bankruptcies among higher profile corporate credits.

The precise behavior of impaired loans in coming months is impossible to
predict. However, recent banking crises in Mexico in 1995 and in Asia in 1997-9
give some indication of the potential for impaired financing to increase. Fitch
has therefore analyzed the impact of a doubling and tripling of impaired loans
as a way of illustrating the potential stress on the system. A doubling of
impaired financing would take them to 25% of total financing, around the level
reached in Asian countries less badly affected by the Asian crisis, such as
Malaysia. A tripling would represent a more serious outturn, such as
experienced by Thailand. As regards the public sector banks, were gross
impaired financing to double (x2), that sector’s gross exposure would equate to
US$12.5 billion (EUR13.7 billion), or 295% of equity (compared to 87% for
private banks and 136% for the system). A tripling of gross impaired financing
would increase the public banks’ gross impaired financing to 442% of equity
(compared to 130% for private banks and 204% for the system). The public banks
appear to have little cushion to absorb an inevitable increase in problem
assets. The private sector banks, which have generally been aggressive in
maintaining or increasing reserve levels and in attacking their stock of
impaired loans with heavy chargeoffs, appear to be much better positioned to
absorb substantial increases in impaired credits in the private sector,
although a haircut to government exposure combined with a substantial increase
in impaired loans could also lead to significant hits to equity
Fitch points out that the impact of a devaluation of the Argentine peso would
be even more damaging. Although such an option has been ruled out by the
government and will be strongly resisted, such an outcome cannot be entirely
discounted. Any devaluation would likely be substantial, and given that nearly
75% of total loans are extended in US dollars, with over 90% of the systems’
portfolio of securities also denominated in dollars, the effects of a
devaluation would be very damaging and place further pressure on an already
strained banking system.

Details

FCNB & CardSite

Incurrent Solutions, Inc., the leading provider of on-line cardmember self-service solutions to credit card issuers and transaction processors, announced that First Consumers National Bank, a subsidiary of Spiegel, Inc., is now utilizing Incurrent’s CardSite platform to deliver online customer self-service at [http://www.fcnb.com][1]. Managing receivables of over $3.3 billion, FCNB is the 24th largest bank credit card issuer in the nation(1) and is the nation’s tenth largest issuer of private-label credit cards(2). FCNB provides credit card services to a nationwide customer base of secured and unsecured MasterCard and Visa accounts, as well as to Spiegel, Eddie Bauer, Newport News, and Crate and Barrel customers.

“Our strategic objectives focus on providing diverse, value-added products to our customers that bring convenience to the shopping process,” said Greg Aube, FCNB’s President and CEO. “We offer a wide variety of choices to meet the specific needs of our customers and now, by teaming up with Incurrent, we are able to offer a higher level of convenience to our customers through the Internet.”

FCNB’s CardSite customer self-service solution gives its bankcard and private-label credit customers full access to their balance information in real time through the FCNB Web site ([www.fcnb.com][2]). In addition to being able to view their transaction history online, customers also have the ability to perform sort and search functions on their transactions. Some other self-service features include online address changes and requests for credit limit increases.

“Incurrent is delighted to play a key role in creating FCNB’s online customer self-service solution,” said Loren Hulber, Incurrent’s President and CEO. “FCNB is an unique financial institution that serves a diverse mix of bankcard and private-label credit customers. Working together, we have created a content-rich Web site that will provide FCNB’s customers with a convenient choice while helping FCNB reduce its customer service costs.”

FCNB Chooses CardSite for Quick Deployment and Advanced Technology

Before selecting CardSite as its customer self-service platform, FCNB examined several vendors’ products as well as the possibility of building in-house technology. “Our decision to use Incurrent Solutions was based upon its business model of offering a complete turnkey operation. In addition, Incurrent has a solid understanding of bank requirements and it offered flexibility in meeting our needs,” said Don Sasaki, Vice President of the Internet Group for FCNB. “We began working with Incurrent in March. By August, we were up and running with a redesigned site, complete with new content and functionality. With Incurrent, we’re dealing with a highly experienced group that can provide the latest technology. This decision also gave us the ability to introduce new customer self-service functionality without having to buy equipment and hire and train new personnel to manage it.”

CardSite provides FCNB bankcard and private-label credit customers with the ability to:

— View transaction detail with up to twenty-four months of account history — Statement-sort by expense categories, merchant, or description with printable reports — Query for individual transactions or other transaction history — View charts of spending patterns — Set up e-mail alerts for designated account conditions or events — Submit a change of address online — Submit an online request for a credit limit increase

About Incurrent Solutions

Founded in 1997, Incurrent Solutions ([www.incurrent.com][3]) provides advanced online cardmember self-service solutions to credit card issuing banks, retailers, and transaction processors. Incurrent’s clients include Sears, MBNA, Fleet Credit Card Services, NextCard, Metris Companies, Certegy, Fiserv, and other major card issuers. The volume of cardholder accounts serviced on Incurrent’s CardSite(TM) platform has grown from 15 to 100 million in less than year, reflecting a rapidly growing card industry demand for the valuable customer service extension CardSite provides to issuers.

CardSite is a cutting-edge, e-service solution that greatly enhances the cardholder’s online service experience, resulting in increased retention at a cost significantly lower than traditional customer interaction methods. Cardholders enjoy access to real-time account information, statements, bill payment, secure e-mail, reports, searches, and other service-enhancing tools.

About FCNB and The Spiegel Group

The Spiegel Group is a leading international specialty retailer marketing fashionable apparel and home furnishings to customers through catalogs, more than 580 specialty retail and outlet stores and eight e-commerce sites, including eddiebauer.com, newport-news.com and spiegel.com. The Spiegel Group’s businesses include Eddie Bauer, Newport News, Spiegel and First Consumers National Bank.

A national bank specializing in the issuance of credit cards, First Consumers National Bank (FCNB) plays a dual role within The Spiegel Group, supporting the marketing efforts of the Group’s merchant companies with private-label credit programs and offering unique bankcard credit programs that target under-served market niches. FCNB’s Web site address is [www.fcnb.com][4].

[1]: http://www.fcnb.com/
[2]: http://www.fcnb.com/
[3]: http://www.incurrent.com/
[4]: http://www.fcnb.com/

Details

US CARD ORDER

Oberthur Card Systems received its first order to
provide smart Visa cards for Providian Financial Corporation. “Providian,
which issued its one millionth smart Visa card in June 2001, is one of the
first banks in the United States to issue smart Visa cards.

“Providian is a clear leader in the Smart Visa push and is building strong
ties to its existing customers while paving a road to a new generation of Visa
customers,” noted Philippe Tartavull, president & CEO of the American division
of Oberthur Card Systems. “Oberthur has extensive experience with large scale
deployment of smart cards and is very pleased to become one of the suppliers
who will assist Providian in advancing smart cards in the U.S.”

The smart Visa card enables Visa financial institutions to combine the
purchasing power of traditional payment cards with smart chip technology to
offer added security, utility and convenience to consumers. With the growth
in e-commerce, new and technologically-enhanced payment products such as the
Smart Visa card will meet the evolving needs of consumers for greater
convenience, control and highly personalized services. Visa projects there
will be about seven million ‘smart Visa’ cardsinforce by year’s end among all
of its current issuers.

“As one of the country’s leading issuers of Visa cards, we are glad to
welcome Oberthur on board the Providian smart Visa program,” said Elizabeth
Tse, senior vice president at Providian. “Their experience and breadth of
knowledge in the financial services market was a key factor in our decision to
work with Oberthur.”

About Oberthur Card Systems

Oberthur Card Systems (Paris Stock Exchange – Code SICOVAM 12413), a
global leader and the innovator in the smart card industry, is shaping the
future by offering the ultimate in SIM, WAP, 3G (IMT-2000/UMTS), e-wallet
technologies & Internet-based card management services coupled with a firm
commitment to open standards.

Championing EMV migration, Oberthur is the world’s #1 supplier of
MasterCard and Visa cards, #1 in banking, e-commerce, m-commerce and pay-TV,
Oberthur is also the #1 in Java(TM) and GSM technologies.

Oberthur Card Systems has an international reach ensured by 30 sales
offices and 20 manufacturing sites across the five continents. Oberthur Card
Systems had sales of 451.1 million Euros in 2000.

About Providian Financial

Winner of the 2001 Rochester Institute of Technology/USA Today Quality Cup
for excellence in customer service, San Francisco-based Providian Financial
(http://www.providian.com) is a leading provider of
lending and deposit products to
customers throughout the U.S., and offers credit cards and deposit products in
the U.K. and Argentina. Providian Financial has been named one of America’s
Most Admired Companies in a survey by Fortune magazine, one of the nation’s
top financial institutions by U.S. Banker magazine, and one of the most
technologically innovative companies in the U.S. by Information Week magazine.
The Company has more than $36 billion in assets under management and over
18 million customer accounts.

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Cap One Biz Awards

Capital One Financial Corporation announced it has been recognized as one of the most innovative users of information technology by InformationWeek magazine for the fourth year in a row and by Darwin magazine in the debut of its “Fittest 50.”

“These awards recognize Capital One’s leadership position in applying technology to marketing financial services,” said Nigel Morris, President and COO. “It’s a testament to Capital One’s entrepreneurial culture, created to foster continuous innovation by our 20,000 associates.”

The 13th annual InformationWeek 500 lists the most innovative users of information technology — companies that are considered masters in combining information technology and business savvy to build profitable and successful customer relationships. InformationWeek ranks companies on both the size and complexity of installed information technologies, as well as on the tangible business benefits created by technology.

Darwin’s Fittest 50 are chosen based on their ability to use IT to adapt, survive and thrive in a changing economy. Nominations by a panel of 15 experts, including academics and business consultants, as well as Darwin editorial staff, were narrowed down to the top 50 after extensive research by Darwin editorial staff.

“Capital One’s IT work is driven by our desire to deliver superior products, services and value for our 38 million customers,” said Marge Connelly, Executive VP, Domestic Card Operations and IT Operations. “This makes the Information Week and Darwin recognitions even more gratifying.”

Laura Olle, Senior VP Systems Development and Senior Business Information Officer, said: “Capital One’s culture of a true partnership between IT and the business means we have the in-house expertise to pull together in a spirit of collaboration and pursuit of a common goal.”

Capital One was recently recognized by another measure of information technology innovation — CIO 100, CIO magazine’s yearly list of the top 100 most innovative companies in the world.

Headquartered in Falls Church, Virginia, Capital One Financial Corporation ([http://www.capitalone.com][1] ) is a holding company whose principal subsidiaries, Capital One Bank and Capital One, F.S.B., offer consumer lending products. Capital One’s subsidiaries collectively had 38.1 million customers and $35.3 billion in managed loans outstanding as of June 30, 2001. Capital One, a Fortune 500 company, is one of the largest providers of MasterCard and Visa credit cards in the world. Capital One trades on the New York Stock Exchange under the symbol “COF” and is included in the S&P 500 index.

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

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