ICE Report

Hypercom confirmed Monday it has shipped more than 300,000 of its ‘ICE’ terminals to-date. Hypercom shipped the first ‘ICE’ terminals in 1999. Less than 12 months later, the company had introduced a full line of these high performance devices. By June 30, demand for ICE terminals had generated a $77 million product backlog. Today, shipments of the ‘ICE’ terminals represent 35% of Hypercom’s total worldwide shipments. With demand continuing unabated, that percentage is projected to top the 50% mark this year. Hypercom’s ‘epic (ePOS-infocommerce) ICE’ devices are compact, high performance, touch screen terminals. ICE terminals incorporate physical security features and Hypercom’s ‘TranSafe’ operating system that integrates firewall-protected, multi-tasking, multi-applications functionality, along with EMV chip card capability, a secure PIN pad, built-in HTML/HTTP web browser, and integrated receipt printer.


Cap One Auto Loans

Capital One has agreed to acquire PeopleFirst, a nationwide online provider of direct motor vehicle loans. The purchase price is 3.7 million shares of Capital One common stock or about $150 million. Cap One entered the auto finance business in 1998 when it acquired Summit Acceptance Corporation and is now growing the business as Capital One Auto Finance. San Diego-based PeopleFirst is privately held and has more than 270 employees. It will become a wholly owned subsidiary of Capital One. PeopleFirst has provided nearly $2 billion worth of motor vehicle loans since 1997.



VendTek Systems Inc. announces that the Product Supply and Exclusivity Distribution Agreement and
various Revenue Sharing Agreements, made between the Company and Rok, have
been terminated by mutual agreement.
“Our relationship with Rok has culminated in over $6 million in sales and
$450,000 in licensing revenues to the Company” says VendTek President Paul
Brock. “Together we pioneered new technology for payment solutions in the
prepaid cellular industry. The fast changing market conditions outmoded the
contractual relationship between our companies. As a result, the companies
have agreed to terminate their product exclusivity and revenue sharing
agreements and VendTek has entered into a new Support Agreement for the system
already sold and operating in the UK. Moving forward both companies now have
more flexibility in competing in this dynamic marketplace.”

About e-Fresh(TM)

The e-Fresh(TM) Network enables cellular and other prepaid service
providers to distribute services electronically to consumers via a proprietary
real time network of self-serve kiosks called e-Fresh Stations and POS
terminals connected to a central server. The system includes proprietary
encryption technology for securing the transmission of the transactions and
significantly reduces the operating costs for companies, improving
efficiencies and profits.

About Now(TM) Prepay

Now(TM) Prepay is a new subsidiary of VendTek Systems Inc. set up to
build a ubiquitous, North American electronic retail network of self-serve e-
Fresh(TM) stations and POS terminals for the delivery of prepay services, in
conjunction with strategic retail, prepay service and transaction processing
partners. Now Prepay has the exclusive license for e-Fresh(TM) in North

About VendTek

VendTek uses its expertise in payment and self-serve technologies, smart
cards and networking to develop systems for transaction automation. VendTek’s
secure proprietary systems reduce shrinkage, improve access for consumers,
increase the number of selling outlets and selling hours, and enhance overall
security making the systems superior to traditional distribution and
alternative channels.


Discover 3Q/01

Morgan Stanley reported Friday that its Discover credit card unit had net income of $196 million during the quarter ending August 31, a 14% decline from last year. MS says the depressed results are primarily due to higher net charge-offs partially offset by increases in net interest income, and merchant and cardholder fees. Managed credit card loans rose to $49.7 billion at quarter end, an increase of $4.9 billion, or 11%, from a year ago. The interest rate spread widened 79 basis points over the same period, as a result of the decline in interest rates that began in the first quarter. Merchant and cardholder fees rose 3% to $674 million. Transaction volume increased 6% from the third quarter of 2000 to $23.3 billion. The credit card net charge-off rate increased to 5.79%, 161 basis points higher than a year ago. The over-30-day delinquency rate was 6.31% compared to 5.47% a year ago. The increase in the charge-off rate reflected continued weakness in the U.S. economy and the adverse impact of the seasoning of cardholder accounts and a high level of national bankruptcy filings. Discover opened over 1 million new cardholder accounts during the quarter.

3Q/00* 4Q/00* 1Q/01* 2Q/01* 3Q/01*
Receivables: $44.8b $47.1b $49.5b $50.2b $49.7b
Volume: $21.9b $22.8b $24.4b $23.5b $23.3b
Accounts: 41.4m 42.6m 43.7m 44.7m 45.4m
Actives: 23.1m 23.8m 24.0m 24.3m 24.0m
Chargeoffs: 4.18% 4.57% 4.79% 4.98% 5.79%
Delinquency: 5.47% 5.92% 6.34% 5.84% 6.31%
Yield: 14.05% 14.13% 13.66% 13.34% 13.34%

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


Smart Card Boon

The recent terrorist attacks will most likely raise awareness and accelerate the adoption of smart card and biometric-based security systems. A government committee is gearing up to recommend the use of facial recognition technology next week, and some manufacturers of high capacity smart cards have been contacted by U.S. government officials. The government committee indicated Friday it will be presenting its report to the U.S. Department of Transportation on October 1, recommending the use of facial recognition technology at U.S. airports, especially Reagan National Airport and Logan International Airport. The facial recognition technology is being currently being piloted in check cashing machines and ATMs. Meanwhile Seattle-based UltraCard, Inc. says it has been contacted by government officials concerning security uses of the ‘UltraCard’ technology which has 600 times the data storage capacity of current 32kb capacity smart cards. The Smart Card Alliance said Friday it will hold its annual meeting from October 9-11, in McLean, Virginia to explore the critical role smart card technology can play in a new era of increased security. The conference program is entitled “A Future Built on Trust”.


GCA Signs The Palms

The Palms Casino Resort, scheduled to open in Las Vegas in December 2001, and nine other properties recently signed contracts to utilize the technologically advanced products and services of Global Cash Access, a supplier of cash access, financial management and customer relationship marketing technologies to the gaming industry.

Under the agreement, Palms Casino Resort will take advantage of GCA’s Casino Cash Plus 3-in-1 ATM and QuikCash Plus Web (QCP Web) products as well as Central Credit and Western Union. The casino will also utilize GCA’s new Guest Development Marketing service, QuikMarketing.

“As a new, state-of-the-art casino, we want to provide the best gaming experience to our customers,” said Al Zayas, director of cage operations at Palms Casino Resort. “GCA provides the most technologically advanced cash access services to the gaming industry, so it made perfect sense to install their products at our casino.”

Statistics show that approximately 30 percent of standard ATM cash request transactions at gaming properties are denied because of bad PIN numbers, exceeded limits or insufficient funds. GCA’s Casino Cash Plus 3-in-1 ATMs eliminate such denials through a patented roll-over feature, which gives patrons the option of obtaining funds via a POS debit transaction or a pinless credit card cash advance. The Casino Cash Plus 3-in-1 ATM has become widely accepted due to its convenience to casino patrons and proven profitability to casino operators.

QCP Web, a Web-based, full-service transaction processing system for cage operations, consolidates the products of GCA cash advances, Telecheck, Central Credit, Western Union, ACM enrollment and QuikCredit. It also tracks gaming patron marketing information across all product lines and reduces the need for multiple pieces of hardware in the cage.

GCA’s QuikMarketing service will aid Palms Casino Resort in promoting its grand opening with special offers, programs and events by using the gaming industry’s largest patron database to distribute marketing materials with pinpoint precision to targeted gaming customers.

Palms Casino Resort, located on a 32-acre site just west of the strip on Flamingo Road, in Las Vegas, embraces the pleasures of a resort get-away to provide a comfortable gaming experience. The casino will feature 2,400 slot machines, 55 table games, keno, poker and a race and sports book in 95,000 square feet of space.

In addition to Palms Hotel Casino, properties that recently signed agreements with GCA are:

— Casablanca Resort and Casino – Mesquite, Nev.

— Casino Rouge – Baton Rouge, La.

— Grand Victoria Rising Sun – Rising Sun, Ind.

— Kla-Mo-Ya Casino – Chiloquin, Ore.

— Oasis Resort and Casino – Mesquite, Nev.

— Pompano Park – Pompano, Fla.

— Riverside Resort and Casino – Laughlin, Nev.

— Royal Club Casino – Seattle, Wash.

— Virgin River Hotel and Casino – Mesquite, Nev.

About Global Cash Access

Global Cash Access was formed in 1998 and is a joint venture of First Data Corp. (NYSE:FDC) and M&C International, Inc. Providing access to the gaming industry’s largest patron database, Global Cash Access uses Internet technologies to deliver funds transfer, financial management and customer relationship marketing services to more than 1,000 gaming properties nationwide. More information on the company is available at [][1].



Diebold ADMs

Diebold, Incorporated announced it has finalized the sale of the assets of its MedSelect and SupplySource Plus product lines to Medecorx, Inc. The agreement also includes a multi-million dollar maintenance outsourcing agreement for Diebold, covering automated dispensing machines (ADMs) for drugs and medical supplies.

MedSelect systems facilitate the accurate and efficient distribution of pharmaceuticals and medical supplies in health care facilities through an automated point-of-care dispensing system. Industry leading MedSelect hardware and software enables improved security and control of medications and supplies to streamline processes and assist in reducing costs and medication errors. More than 100 facilities have installed more than 4,500 units of MedSelect equipment.

Medecorx, Inc. is a private, closely held health care corporation based in Atlanta, with offices in Cranberry Township, Pa., and Dallas. For more information, visit the company’s Web site at .

Diebold, Incorporated is a global leader in providing integrated self- service delivery systems and services. Diebold employs more than 11,000 associates with representation in more than 80 countries worldwide and headquarters in Canton, Ohio, USA. Diebold reported revenue of $1.7 billion in 2000 and is publicly traded on the New York Stock Exchange under the symbol ‘DBD.’ For more information, visit the company’s Web site at .


Charity Fee Waiver

In just 72 hours, the eBay community has responded enthusiastically to “Auction for America,” eBay’s online charity effort to raise funds for those affected by the horrific events of September 11. There are already more than 30,000 items listed on the site and more are added every minute.

The majority of the items in “Auction for America” come from private citizens throughout the country and represent almost every popular category on the site. Items currently up for bid include: an 1835 US gold coin; a 1958 Mickey Mantle trading card; a 25th anniversary basket from Longaberger; an American flag raised by Senator John Glenn that flew over the US Capitol; a black saltwater pearl necklace; a 1997 Superman comic book signed by the character’s co-creator Jerry Siegel; and six tickets to the February 12 Lakers vs. Wizards basketball game. Perhaps the most inventive idea to date is from an 8-year old Houston girl and her mother who have set up a “virtual soft drink stand” to sell “virtual beverages” and the girl’s own artwork to aid the effort.

New York Governor George E. Pataki and New York City Mayor Rudolph Giuliani both announced that they would sell items on eBay as part of “Auction for America.” Pataki is offering a photograph of himself and Joe DiMaggio riding together in a convertible during the 1999 ticker tape parade honoring the New York Yankees. Giuliani is providing from his own collection a baseball autographed by Yogi Berra and given to the Mayor at Yankee Stadium on “Yogi Berra Day.”

In addition, organizations across the country are also beginning to participate in “Auction for America”:

— Premiere Props and Universal Studios are listing key hero props and wardrobe used in the filming of the movies “American Pie 2,” “The Mummy Returns” and “Josie & the Pussycats.”

— Club Med is listing 50 travel packages at its Club Med Villages Turkoise, in Turks and Caicos, and Columbus Isle in the Bahamas.

— Palm is offering 100 handheld computers including 50 of the newly unveiled Palm m125 Handhelds.

— Professional women’s tennis Sanex WTA Tour is providing authorized memorabilia including Jennifer Capriati’s autographed shirt and baseball cap, and the ATP, the governing body of men’s professional tennis, is offering a tennis racquet autographed by Andre Agassi among other items.

— Tiger Woods Foundation is offering a 2001 US Open flag autographed by Tiger Woods.

In addition to eBay’s customer support available online, the company has set up a toll-free number to help new users who may not be familiar with the site to participate in “Auction for America.” Beginners will be paired with experienced eBay community members who have volunteered to help the effort. The number, 866-272-1053, is staffed from 5 a.m. to 11 p.m. Pacific Time, seven days a week.

Announced by Governor Pataki and Mayor Giuliani on September 17, “Auction for America” is eBay’s online charity effort that allows people around the world to buy and sell goods online to raise money for the victims, their families and communities affected by the horrific events of September 11. The company has challenged itself, through its community of 34 million registered users, to raise $100 million in 100 days.

One hundred percent of the proceeds will go to charity, including the September 11th Fund and the Twin Towers Fund. Billpoint, eBay’s online payment solution, and its partners, Visa USA, MasterCard International, Wells Fargo Bank and Discover Financial Services Inc. are waiving their customary fees for “Auction for America.”

The eBay Foundation has donated the first $1 million.

About eBay

eBay is the world’s online marketplace(TM). Founded in 1995, eBay created a powerful platform for the sale of goods and services by a passionate community of individuals and businesses. On any given day, there are millions of items across thousands of categories for sale on eBay, as well as on, eBay’s site dedicated to fixed price trading. eBay enables trade on a local, national and international basis with customized sites in markets around the world.


Card Bonds

Fitch says it does not anticipate any rating actions on credit card-backed securities in the next several weeks, however, the recent terrorist attacks will have both immediate and long term effects on the sector. Near term, the events and circumstances that followed will cause additional variance in September collections that will negatively impact credit card performance statistics for the month. Specifically, the curtailment of air service and resulting FAA restrictions on commercial airlines carrying mail is expected to cause payment disruptions industry-wide for the month. Fitch also says it anticipates performance results will show higher delinquencies and slower payment rates for the September collection period. Ancillary effects on portfolio yields will hinge upon whether issuers decide to waive late and other penalty fees, an action that is being encouraged by banking regulators. If such fees are waived for the period, the resulting decline in portfolio yields could temporarily pressure excess spread. Longer term, U.S. consumers and card performance trends could come under pressure if recent events spawn a more severe and prolonged recession than previously anticipated. Further slowdowns in consumer spending and, in turn, borrowing will compound the effects of a downturn, posing growth and credit quality challenges for even the largest industry players. The retail/private label card sectors are particularly vulnerable to such scenarios whereby declining retail sales force store closings and card portfolios begin liquidating. Also, travel rewards type cards could fall out of favor if business and leisure travel cutbacks persist, potentially resulting in slower payment rates industry-wide.


AmEx Pulls Emails

This past week has been very difficult for all of us due to the tragic events that took place last Tuesday. On behalf of the Affiliate Team here at American Express, we want to express our deepest sympathies to the families of the countless victims, as well as to all of our clients, customers and friends who have been affected by this terrible event.

Though this devastating event has had an impact on all businesses worldwide, the Affiliate Team is still committed and determined to serve our partners during this difficult time while maintaining the usual high standards of service. Our program has been and will be running as usual and all necessary contingency plans have been put in place to further serve our customers and partners.

We want to let all of our partners know that the Affiliate Program did not experience any disruption of service, all transactions have been and are being tracked and affiliates will continue to be paid in a timely manner.

Because of the sensitive nature of these events, we are asking our partners to refrain from email marketing through September 30th.

If you have questions or concerns regarding the American Express Affiliate Program, please contact or call 1-888-SHARE89 ext. 286.


Delinquency Soars

Further evidence of the current recession was produced Friday with the release of the American Bankers Association’s ‘Consumer Credit Delinquency Bulletin’. Based on the number of credit card accounts, 3.93% were overdue during the second quarter, the highest level tabulated since 1980. In the previous quarter and in the same quarter one year ago, overdue credit card accounts were 2.99%. Based on total dollars outstanding, second quarter credit card delinquencies were 4.13%, the same as the previous quarter but significantly higher than the 3.54% figure for 2Q/00. The ABA says the stagnant economy and increased layoffs are impacting consumer finances. The ABA also says banks will continue to review their lending standards in light of the economic slowdown.

(based on total dollars outstanding)
1999: 4.10% 1995: 3.58% 1991: 4.48% 1987: 3.28% 1983: 2.81%
1998: 4.57% 1994: 3.06% 1990: 3.46% 1986: 3.83% 1982: 3.03%
1997: 5.24% 1993: 3.86% 1989: 3.06% 1985: 2.88% 1981: 2.86%
1996: 4.61% 1992: 4.19% 1988: 3.44% 1984: 2.80% 1980: 3.25%
Source: American Bankers Association Delinquency Bulletin



Blueice Research, Compaq, Infovention and Intel have jointly created the
world’s first complete solution for mobile bank services. The solution that
goes under the name, “Bank in your hand” is secure, user friendly and fast.
No one else on the market can offer a similar total solution proving how
simple it can be to conduct secure wireless payments and transfers using a
handheld computer.

“With ‘Bank In Your Hand’ we want to show that there is a solution on
the market today that really makes it possible for banks to be available
wherever, whenever,” said Anna Hane, CEO at Blueice Research.
“Bank in your Hand” enables mobile services that require a high level
of security, thus primarily within the banking and finance sectors. Leading
vendors from their respective areas are contributing with products,
technical know-how, experience and knowledge. Blueice Research contributes
with its security product Multipass, combining high security and user
friendliness and offering the service provider independence from network
operators and other third parties. It is also compatible with the most
popular certificate authorities. Infovention has, with their vast
experience within the financial applications sector, created an intuitive
and functional bank application. Compaq contributes with their latest
handheld computer, the Compaq iPAQ Pocket PC, that comes equipped with a
W/LAN- and GPRS module and Intel’s StrongARM processor. The capabilities
provided by Intel Personal Internet Client Architecture (PCA) greatly
expand the opportunities for creating high-performance mobile Internet
products and services, both now and in the future.

“Blueice Research and Infovention have made the best mobile banking
service on the market. They are at the forefront of secure digital
transactions and realize the importance of combining security and
user-friendliness. Our joint ‘Bank in your hand’ project that will be
demonstrated at Networks Telecom shows the huge possibilities and areas of
usage there are for a Compaq iPAQ Pocket PC,” said Rikard Kindlund, Senior
Product Manager, Handhelds & Wireless, with Compaq.
“As a leader in Internet and wireless technologies, Intel is
committed to enable the evolution of mobile business solutions, based on
the next generation mobile client architecture, Intel PCA. This solution
emphasizes the need for powerful and scalable devices in order to conduct
secure end-to-end mobile banking transactions over a wireless media,” said
Ms. Michelle Pineda, M-commerce Business Development Manager at Intel
Wireless Competence Center (IWCC).

“It is very exciting to be able to present this complete solution.
Banks as well as other companies that have a need for secure communication
with their customers now can deploy this solution which is both cost
effective and user-friendly,” said Claes Puebla Smith, Director of Wireless
Solutions at Infovention.

“Bank in your hand” will be demonstrated at the Intel and Compaq
booths respectively at the Networks Telecom trade show in Alvso, Stockholm,
September 24-26.

About Blueice Research (
Founded in February 2000, Blueice Research develops security
solutions for all types of situations demanding digital identification,
signatures and receipts. The financial sector is currently the primary
target for these solutions. Blueice Research’s flagship product, the
Multipass, allows users of mobile phones and handheld computers to very
easily conduct secure transactions on the digital marketplace. The
Multipass is used to confirm the identity of the user and to create digital
signatures that cannot be later repudiated by any of the involved parties.
The Multipass runs on the most common operating systems that are used on
handheld computers today.

About Compaq

Founded in 1982, Compaq Computer Corporation (“Compaq”) is a leading
global provider of enterprise technology and solutions. Compaq designs,
develops, manufactures and markets hardware, software, solutions and
services, including industry-leading enterprise storage and computing
solutions, fault-tolerant business-critical solutions, communication
products, and desktop and portable personal computers that are sold in more
than 200 countries. Information on Compaq and its products and services is
available at .

About Infovention

Infovention is a Swedish IT consultant company that was started in
1997. The company works with all parts of the solution process, including
strategy development, process and organisational change activities, system
development, implementation and roll out. Infovention has a very strong
competence in managing larger projects on a fixed price basis, where also
advanced integration of underlying systems is critical. Important projects
are the development of Internet banks for Swedish Foreningssparbanken,
Norwegian SpareBank 1 Group and Firstviewbank in Denmark. Infovention is a
part of EDB Fellesdata AS, a leading IT systems and services supplier
within the financial services sector in Scandinavia.

About Intel

For more than three decades, Intel Corporation has developed
technology enabling the computer and Internet revolution that has changed
the world. Founded in 1968 to build semiconductor memory products, Intel
introduced the world’s first microprocessor in 1971. Today, Intel supplies
chips, boards, systems, software, networking and communications equipment,
and services that comprise the “ingredients” of computer architecture and
the Internet.

Intel’s mission is to be the preeminent building block supplier to
the worldwide Internet economy.