Acquirer Rewards

MasterCard launched a contest yesterday offering more than $100,000 in prizes to U.S. acquirers and member service providers that sign new merchants or expand existing merchant programs. The ‘Recurring Rewards Sales Program’ includes two grand prizes of $10,000 each, ten first prizes of $5,000 and twelve second prizes of $2,000. The program runs from September 1 through December 31, 2001. All prizes will be distributed on MasterCard Pre-paid cards. Additional reward incentives include $200 to the first 75 Acquirers and MSPs signing on new or existing merchants. Also, prizes of $500 will be awarded each month to three Acquirers and MSPs that accrue the greatest number of points. Points are earned by signing new merchants to accept the MasterCard card and/or launching new recurring payments programs with new or existing merchants. MasterCard will award these points based on merchant size ranging from less than $49.9 million in total revenue to more than $100 million. All Acquirers and MSPs registered with MasterCard International are eligible to participate in this program.

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EURO & CARDS

Research conducted recently by Visa in the UK shows that many travellers to
Europe this winter are planning to rely on their Visa payment cards when
the new single European currency euro notes and coins are introduced in
Austria, Belgium, France, Finland, Germany, Greece, Italy, Ireland,
Luxembourg, The Netherlands, Portugal, and Spain on January 1, 2002.
Over half of the 1,000 adults interviewed in the UK said they will
use Visa payment cards to pay for goods and services overseas because they
are easy to use and will reduce the need to carry cash. For these two key
reasons, international travellers from around the world also are likely to
use Visa payment cards during this potentially confusing dual currency period.
Although euro was introduced in January 1999, no physical notes or
coins have yet to be issued. However, on January 1, 2002, euro notes and
coins will be introduced in all 12 European Monetary Union (EMU) countries
and will co-exist alongside their national currencies up to two months.
Effective January 1, 2002, all non-cash payments within the euro zone
have to be in euro. However national currency notes can still be dispensed
from a limited number of ATMs. It is anticipated that within the first week
of January, 90% of the euro zone ATMs will dispense only euro notes, and
the remaining will be modified to dispense euro notes by February 28,
2002*. After that date, the euro will be required for all purchases and the
national currencies will cease to be legal tender. At that point, the 12
countries will operate only in euro.

While the euro means significant changes in Europe, for consumers
using their Visa cards it will be business as usual. The Visa payment
system has been “ready for the euro” and handling euro transactions since
January 1, 1999.

“By February 28, 2002, the euro will be in full circulation within
the `euro zone,’ with the national currencies no longer available in those
countries,” said Hasan Alemdar, head of the single currency unit for Visa
International. “For the first time in history, consumers will be more
familiar with their Visa cards than with their new national currency.”
Since the euro’s introduction in 1999, Visa has processed over 16.7
million euro transactions across the European Union amounting to nearly E
920 million (US$802million)) – an increase of 550% during the last 12
months. In the first quarter of 2001, approximately 1.6% of the total
number of Visa transactions acquired in the European Monetary Union (EMU)
region were in euro.

Forty-three percent of the total value of euro transactions has been
acquired in France, the majority on Tolls and Bridge Fees. Germany acquired
the second largest value of euro transactions with 17%, followed by the
United Kingdom with 10%.

For Europe as a whole, 20% of the total euro transactions to date
relate to e-commerce purchases, showing that euro is fast becoming the
e-commerce currency throughout Europe. In fact, a 500% increase in euro
e-commerce transactions has been recorded since this time last year.
The euro was developed to make commerce more convenient for European
residents and travellers. With a single cross-border currency, it is easier
for consumers to compare prices and save currency exchange costs. In the
future, it is possible that interest rates and the price of retail goods
will decrease as cross-border competition increases.

Euro Dual Circulation Periods

About Visa

Visa is the world’s leading payments brand and the largest payments
system worldwide. Visa-branded cards generate almost US$2 trillion in
annual volume and are accepted at over 22 million locations around the
world. The Visa organization plays a pivotal role in advancing new payment
products and technologies to benefit its 21,000 member financial
institutions and their cardholders. Visa is a leader in Internet based
payments and is pioneering the creation of u-commerce, or universal
commerce – the ability to conduct commerce anytime, anywhere, over any type
of device. For more information on Visa, visit our Web site at
www.visa.com .For more information on the euro, visit Visa’s special Web
site www.visa.comeuro.

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Premier Goes ISS

InteliData Technologies a leading provider of e-finance transactional infrastructure, announced that Premier Bankcard, a leading credit card issuer, has chosen InteliData Card Solutions’ Internet Self Service suite of products to provide real-time account access and management capabilities to their over 1.6 million cardholders.

Internet Self Service will provide Premier Bankcard’s clients with the ability to manage their accounts by viewing balances, payment status, next payment due date, and cycle-to-date transactions.

“We selected InteliData Card Solutions for its ability to incorporate features that meet our needs at the initial roll-out, but still offer us the flexibility to expand our offerings in an opportune manner,” said Chris Slaba, Premier Bankcard’s Managing Officer of Business Requirements and Planning.

“InteliData was very receptive to addressing our unique requirements. This means we can offer our clients first-rate services now instead of years from now.”

InteliData’s offerings for card providers, including a customizable turnkey solution, their responsive staff, a proven track record for speed to market, and their corporate stability, were other key factors in the selection.

InteliData President and CEO, Al Dominick, stated, ” InteliData’s Card Solutions will help Premier Bankcard provide marketable products tailored to their client base.” Dominick continued, “This provides them with better tools to compete in a very competitive and very dynamic market place.”

About InteliData Technologies Corp.

InteliData (NASDAQ: INTD) provides Internet banking and card solutions plus Electronic Bill Payment and Presentment (EBPP) technology and services to banks, credit unions, and financial institution processors.

InteliData’s EBPP products offer banks, card issuers and other financial institutions an end-to-end solution for creating e-bills for billers, distributing e-bills and e-payments through multiple delivery channels, delivering e-bills to consumers, and enabling payment of bills through multiple payment processors utilizing OFX and IFX messaging standards.

InteliData’s Internet banking and card products provide large financial institutions throughout the U.S. with unsurpassed scalability, flexibility and security in supplying real-time, Internet based banking and card services to their customers. For more information about InteliData, visit the company’s Web site at www.intelidata.com.

About Premier Bankcard

First Premier Bank and Premier Bankcard is one of the fastest-growing financial services companies in South Dakota.

Headquartered in Sioux Falls, S.D., the organization has a proven track record of successfully serving customers in local, state and national niche markets.

First Premier Bank and Premier Bankcard offers a complete range of products and services and is known for actively supporting the communities it calls home.

First Premier Bank owns the credit card accounts and the credit card loans of Premier Bankcard. Premier Bankcard is one of the nation’s leading credit card providers, helping consumers establish or re-establish their credit history. Premier Bankcard is also the service provider for these credit card accounts. Their credit card service levels are among the highest in the nation.

The organization currently has assets of over $700 million and employs more than 1000 people in South Dakota. Currently they serve retail and business banking customers across eastern South Dakota and over 1.6 million cardholders nationwide.

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Semtek PDAs

San Diego-based Semtek Innovative Solutions Corporation has rolled out a three track magnetic stripe card reader/handheld computer packaged solution for the healthcare industry. The company will market both ‘HandEra 330’ and ‘TRGpro’ handheld computers, equipped with its ‘PDA Swipe’ card reader for ‘Palm Powered’ personal digital assistants. The total system price to the end user is less than $600. The ‘HandEra 330’ and ‘TRGpro’ fits into the PDA Swipe just as they do with the ‘HotSync’ cradle that enables bi-directional synchronization with the users’ desktop PCs. The card reader design allows the handheld computer to remain attached to the ‘PDA Swipe’ while performing the synchronization to the host PC in the HotSync docking cradle. When a card is swiped through the reader, data on the card is decoded and transferred to the handheld’s database.

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Scotiabank 3Q/01

Scotiabank delivered record earnings in the third quarter with net income of $554 million and diluted earnings per share of $1.04. In comparison to last year (excluding the one-time gains), both net income and diluted earnings per share rose by 12%.

Including last year’s one-time gains on the sale of the Bank’s stock transfer business and Solidbank, totaling 11 cents per share, net income increased by $6 million or 1% and diluted earnings per share were unchanged at $1.04.

For the nine-month period ended July 31, 2001, net income was $1,603 million or 16% higher than the same period a year ago, excluding the one-time gains. On the same basis, diluted earnings per share were $3.00, an increase of 41 cents, while return on equity was 17.4%, compared to 17.1%.

“Solid earnings and revenue growth continued across all business lines in the third quarter, keeping us on track to meet or exceed our performance targets for 2001,” said Peter Godsoe, Chairman and CEO. “Our broad-based revenue streams and a consistent focus on cost control have enabled us to maintain our strong earnings momentum.

“We continued to proactively manage our credit portfolios, resulting in a significant reduction in net impaired loans,” said Mr. Godsoe. “We strengthened our general provision by another $75 million this quarter. Our strong corrective action is keeping us on track to meet our credit quality targets for the end of the year.”

For complete details on Scotiabank’s latest results visit CardData ([www.carddata.com][1]).

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

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Ecount Hack

Philadelphia-based Ecount outsmarted a credit card hacker. The company confirmed that a hacker broke in and accessed Ecount accounts from a company server. However the company said the data retrieved was not credit cards numbers. Nevertheless the hacker attempted to extort funds from the company with the threat of publicly exposing the attack. Ecount says it never has nor will store credit card numbers. The company was able to block and reissue Ecount accounts without funds being used. Ecount’s products, Webcertificate.com and ecount.com, are similar to the pre-paid phone cards in that they have limited funds loaded onto the accounts.

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ATM Revenue

An informal NCR poll found that 82% of financial institutions rated “increased revenue streams at the ATM, such as third-party advertising or bank product sales” as “highly important” or “important.” Seventy-five percent rated “improved back-office processing, such as re-engineered cash and check deposit processing for ATMs,” as “highly important” or “important.” For non-financial ATM deployers, 93% rated “increased fee revenue generation through new transactions” as either “highly important” or “important.” However ‘Triple-DES’ encryption was the highest top-of-mind technical issue facing the ATM industry. Both MasterCard and VISA will require this high-security encryption standard on new ATMs in 2002 and existing ATMs by 2005. With 300,000 ATMs installed in the United States, all ATM deployers will need to make investments to activate ‘Triple-DES’ on both new and existing ATMs.

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Flooz Fleeced

As an online currency company folded this week there are reports that credit card fraud may be partially to blame for the company’s demise. Flooz.com shut down operations this week and intends to file for federal bankruptcy protection. Reportedly Flooz sold $300,000 of its online currency over the last 90 days to a group of credit card fraudsters in Russia and the Philippines. The ring of card thieves then redeemed the online currency for goods purchased at online stores that accept the ‘flooz’ money. The credit card processor handling the flooz account detected the fraud and promptly withheld daily disbursements to Flooz.com from credit card sales, and froze other accounts until the security account hit $1 million. The message on the Flooz.com homepage says: “We regret to inform you that Flooz.com, Inc. has ceased operations. The offices are closed and the company will file for bankruptcy protection. Flooz.com has been adversely affected by dramatic changes in capital markets and the general slowdown in the economy. Flooz.com had been in merger discussions with a number of companies but was unable to find a suitable partner.” The company used up about $50 million in venture funding.

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Stratus Card Funding

Skylight Corporation, a leading provider of PayCard Solutions announced that it has closed its Series B Round of venture capital financing. The $3.4 million round was led by Crossbow Ventures and includes The Walnut Group and other existing shareholders. The funds will be used for marketing and operations.

“We believe Skylight will be a dominant provider in this market in the next few years. Their understanding of the marketplace, their focus, technology, and their product mix clearly meet the needs of the corporate manager who wants to pay all employees via direct deposit, as well as those consumers who have no banking relationship due to their past credit challenges,” said Steve Warner, Chairman of Crossbow Ventures.

The Stratus Card provides a bank account to individuals whom would not qualify under their current status. The Stratus Card is a payment vehicle for employers to pay all their employees. The Stratus Card reduces check fraud, lost employee productivity on payday, and the expenses associated with issuing paychecks. It is also safer and more convenient for employees.

The market consists of an estimated 25 million individuals who are unable to qualify for a checking account. These individuals are forced out of the mainstream banking services and are required to conduct their banking transactions at fringe banking facilities such as check cashers, liquor stores etc. Also, most traditional banks are now charging to cash checks for non- customers.

“Skylight’s ATM PayCard targets those 25 Million individuals who are unbanked and have few options, other than expensive check cashers, to receive their pay. With the Stratus Card these consumers and the companies who employ them, can become a part of the traditional banking environment,” said Daniel Staton, Partner of The Walnut Group.

Skylight Corporation is a leading provider of ATM and PayCard Solutions for corporations and individuals. Skylight is located in Atlanta, Georgia. All ATM cards are issued through US Bank, N.A., the 8th largest US Bank.

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BofM 3Q/01

Bank of Montreal reported net income of $444 million, cash-based earnings per share of $0.88 and a cash-based return on equity of 17.8 per cent for its third quarter ended July 31, 2001.

“Excluding non-recurring items, cash-based earnings per share increased 24 per cent from the third quarter of last year, largely driven by higher earnings in the Investment Banking Group as well as improved results in the Personal and Commercial Client Group,” said Tony Comper, Chairman and Chief Executive Officer, Bank of Montreal. “Investment Banking Group results rose strongly, demonstrating the Group’s ability to perform well in a difficult capital market environment.

“The improved earnings in our Personal and Commercial Client Group reflected volume growth in our Canadian and U.S. network. The Private Client Group, which continues to build distribution capability that will ensure future success, shared in the industry-wide decline in client-trading volumes,” said Mr. Comper.

Third Quarter 2001 compared with Third Quarter 2000

Net income for the Investment Banking Group was $163 million in the third quarter, a $28 million or 20 per cent increase over the same period last year, reflecting improved performance in interest-rate-sensitive businesses and in client-driven trading activities.

Personal and Commercial Client Group results, excluding non-recurring items, were $13 million higher than in the third quarter of last year, as the Bank improved revenues from volume growth in Canada and the United States, while maintaining spreads. Revenue increases were partially offset by a five per cent increase in expenses from the same period last year, associated with the Group’s continued investment to support future growth.

In the third quarter, the Private Client Group remained focused on its long-term strategy – expansion of its distribution network, expansion of the U.S. wealth management business and leveraging its relationships across the full range of the Bank’s products and services. The Group’s financial performance was significantly affected by lower client-trading volumes and continuation of deteriorating market conditions and equity values. Net income in the third quarter declined to $29 million, from $44 million in the same period last year.

Third Quarter 2001 compared with Second Quarter 2001

Excluding non-recurring items, cash-based earnings per share rose ten per cent from the second quarter and cash-based return on equity increased 0.6 percentage points. Net income rose by $22 million or five per cent.

Improved results were driven by higher earnings in the Personal and Commercial Client Group and in Corporate Support, partially offset by lower net income in the Investment Banking Group and the Private Client Group.

The Personal and Commercial Client Group’s results benefited from higher revenues due to growth in product volumes and additional days in the third quarter. Volumes improved from the immediately preceding quarter, reflecting improved sales in Canada and continued growth in the United States.

Investment Banking Group results remained strong, particularly in the context of weaker capital markets, but were down from the record results posted in the second quarter. The decline was attributable to weaker client- driven trading activity in Capital Markets, lower merger and acquisition revenues from Investment Banking and lower trading revenue and commissions in the Equity Division.

Private Client Group net income declined as weaker market conditions and slower trading activities of the summer months resulted in lower trading volumes.

Reported results in the second quarter included non-recurring gains on the sales of Bancomer and retail branches, and a non-recurring increase in the general provision for credit losses.

Year-to-date Third Quarter 2001 Compared with Year-To Date Third Quarter 2000

Excluding non-recurring items, cash-based earnings per share for the nine months ended July 31, 2001 increased by eight per cent and cash-based return on equity increased by 0.1 percentage points from the comparable period last year. Net income of $1,269 million rose by two per cent.

Improved performance was driven by results from Investment Banking Group. Personal and Commercial Client Group’s results also rose, while Private Client Group’s net income declined.

Investment Banking Group benefited from improved results in Capital Markets businesses due to a more favourable interest rate environment and higher client-driven trading activity.

Revenues of Personal and Commercial Client Group increased due to higher volumes and improved spreads. Expenses increased due to higher costs of investing in initiatives and in increased front line sales staff.

Private Client Group net income declined from the prior year due to unusually strong equity capital markets last year.

The Bank indicated that due to slower economic growth in North America, excluding non-recurring items, the outlook for fiscal 2001 cash-based earnings per share growth is approximately six to eight per cent and the outlook for cash-based return on equity is approximately 16 to 17 per cent.

For complete details on Bank of Montreal’s latest quarterly results visit CardData ([www.carddata.com][1]).

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

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Beenz Been

Another online currency company went down in flames this week as its customers now hold worthless beenz. Beenz.com pulled the plug on its Website on Sunday after it became clear it could no longer raise funding. The company has raised more than $80 million in four rounds of funding. The company is now looking to liquidate assets within the next two weeks. Three months ago the CEO and president resigned and the work force trimmed. The company has offices in New York and London. The message on the Beenz.com homepage says: “No beenz earning or spending transactions will be honored after that date and time. Any beenz remaining in a Member’s account after 12:01 am (EST) on August 26, 2001 will be invalidated by beenz.com, and the Member will not be entitled to any compensation of any kind for such invalidated beenz”.

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Schlumberger on Campus

SchlumbergerSema said Tuesday that CyberMark will market, sell and support its entire range of smart card-based solutions for the college and university campus market in North America. CyberMark will begin supporting existing SchlumbergerSema smart card installations on 20 US campuses. CyberMark will market smart cards, readers, terminals and software that integrate physical ID with advanced network security, campus auxiliary services, and on- and off- campus convenience applications. Together SchlumbergerSema and CyberMark have a track record implementing 60 campus installations utilizing two million cards worldwide.

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