April Retail Sales

Sales tax-free holidays and tax rebates buoyed back-to-school shopping this year resulting in a 3.0 percent increase in same-store retail sales for August — the strongest growth since April of this year, according to data compiled by TeleCheck Services, Inc., the world’s leading check acceptance company. The Southeast region led the nation, followed by the Southwest, the Midwest, the Mid-Atlantic, the Northeast and the West. The TeleCheck Retail Index is based on a year-over-year, same-store comparison of the dollar volume of checks written by consumers at more than 27,000 of TeleCheck’s 272,000 subscribing locations. Compiled on a calendar basis, TeleCheck’s index is based on a broad cross-section of retailers nationwide. Checks account for about one-third of retail spending and remain second only to cash as the most popular method of payment. TeleCheck is a subsidiary of Denver-based First Data Corp. (NYSE: FDC).

“Many states, including Texas and Florida which both saw significant sales increases, recognized sales tax-free holidays during the month of August which encouraged shoppers to spend,” said Dr. William Ford, TeleCheck’s Senior Economic Adviser. “Also, at least half of the 90 million Americans receiving tax rebates have them now. August’s moderate 3.0 jump in same-store retail sales, coupled with the Federal Reserve’s interest rate cuts, should encourage retailers as we approach the holiday shopping season.”

Sales in the Southeast region rose 3.6 percent. Sales grew 4.0 percent in Florida, 3.5 percent in Louisiana, 3.4 percent in Georgia, 3.3 percent in The Carolinas and 3.1 percent in Tennessee. Sales increased 4.2 percent in Miami/ Ft. Lauderdale, 4.0 percent in Tampa, 3.8 percent in Atlanta, 3.7 percent in Orlando, 3.4 percent in New Orleans, 3.3 percent in Memphis and 2.9 percent in Nashville.

Sales in the Southwest grew 3.4 percent. Sales increased 3.8 percent in Texas, 3.6 percent in Oklahoma and 3.0 percent in Missouri. Sales rose 4.2 percent in Dallas/Ft. Worth, 4.0 percent in both San Antonio and Oklahoma City, 3.6 percent in Houston and 3.5 percent in Austin. Sales increased 3.4 percent in Tulsa, 3.3 percent in Kansas City and 2.9 percent in St. Louis.

In the Midwest region, sales climbed 3.2 percent. Wisconsin’s sales climbed 4.2 percent, Minnesota’s sales rose 4.0 percent, Michigan’s sales climbed 3.5 percent, sales in Ohio were up 3.3 percent and Illinois saw sales increase 2.9 percent. Milwaukee’s sales were up 4.1 percent, Detroit’s sales grew 3.9 percent and sales in Minneapolis jumped 3.6 percent. Sales were up 3.0 percent in Cleveland and in Chicago, sales rose 2.5 percent.

In the Mid-Atlantic, sales grew 3.0 percent. Pennsylvania saw sales climb 3.6 percent, Virginia’s sales were up 3.5 percent, New Jersey’s sales rose 2.9 percent and Maryland saw sales grow 2.3 percent. Sales were up 3.9 percent in Philadelphia, 3.4 percent in Pittsburgh, 2.9 percent in the District of Columbia and 2.6 percent in Baltimore.

The Northeast region saw sales increase 2.7 percent. Sales rose 3.2 percent in Massachusetts and 2.6 percent in New York State. Boston saw sales rise 3.0 percent and New York City’s sales were up 2.4 percent.

Sales in the West grew 2.5 percent, with Hawaii’s sales up 5.4 percent, Arizona’s sales up 2.7 percent, California’s sales up 2.5 percent, Oregon’s sales up 2.3 percent, Colorado’s sales up 2.2 percent and Washington’s sales up 2.0 percent. In Los Angeles, sales jumped 2.7 percent, Phoenix saw sales rise 2.5 percent and sales in both Denver and the Bay Area were up 2.4 percent. Sales grew 2.1 percent in San Diego, 1.9 percent in Portland and 1.6 percent in Seattle.

In 2000, TeleCheck authorized more than $163 billion in checks, representing 3.2 billion transactions. For more information about TeleCheck, visit the Internet site at .

First Data Corp., with global headquarters in Denver, powers the global economy. Serving nearly 2.6 million merchant locations, more than 1,400 card issuers and millions of consumers, First Data makes it easier, faster and more secure for people and businesses to buy goods and services, using virtually any form of payment: credit, debit, stored-value card or check at the point- of-sale, over the Internet or by money transfer. For more information, please visit the company’s Web site at .

Dr. William Ford holds the Weatherford Chair of Finance at Middle Tennessee State University. Earlier in his career he was president of the Federal Reserve Bank of Atlanta and served on former Fed Chairman Paul Volcker’s Federal Open Market Committee.

Retail Sales
(Period: 8/1/01- 8/31/01)
September 5, 2001

NATIONAL 3.0%

SOUTHEAST 3.6% WEST 2.5% MIDWEST 3.2%
Florida 4.0% Arizona 2.7% Illinois 2.9%
Miami/ Phoenix 2.5% Chicago 2.5%
Ft. Lauderdale 4.2%
Orlando 3.7% California 2.5% Michigan 3.5%
Tampa 4.0% Bay Area 2.4% Detroit 3.9%
Louisiana 3.5% Los Angeles 2.7% Minnesota 4.0%
New Orleans 3.4% San Diego 2.1% Minneapolis/
St. Paul 3.6%
Georgia 3.4% Oregon 2.3% Wisconsin 4.2%
Atlanta 3.8% Portland 1.9% Milwaukee 4.1%
Tennessee 3.1% Washington 2.0% Ohio 3.3%
Memphis 3.3% Seattle 1.6% Cleveland 3.0%
Nashville 2.9% Colorado 2.2%
The Carolinas 3.3% Denver 2.4% MID-ATLANTIC 3.0%
Hawaii 5.4% District of
Columbia 2.9%
SOUTHWEST 3.4% Pennsylvania 3.6%
Texas 3.8% NORTHEAST 2.7% Philadelphia 3.9%
Austin 3.5% Massachusetts 3.2% Pittsburgh 3.4%
Dallas/ Boston 3.0% New Jersey 2.9%
Ft. Worth 4.2%
Houston 3.6% New York 2.6% Virginia 3.5%
San Antonio 4.0% New York City 2.4% Maryland 2.3%
Missouri 3.0% Baltimore 2.6%
Kansas City 3.3%
St. Louis 2.9%
Oklahoma 3.6%
Oklahoma City 4.0%
Tulsa 3.4%

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Taxi Cards

PA-based USA Technologies will install 15,000 ‘e-Port’ credit card terminals in taxis and limousines operating in New York City over the next three years. The $20 million deal signed Wednesday with the United Taxi Alliance is the largest contract for USTT’s ‘e-Port’, first unveiled less than two years ago. The ‘e-Port’ card reading device will be fitted in the front of the cab or limousine. Passengers pass their credit cards to the driver who then swipes the card through the device to activate the transaction before the trip begins. At the end of the trip the driver passes the passenger a complete receipt that itemizes the distance traveled and cost, and can also include the tip. An interactive screen can be fitted in the back of the cab for convenient viewing. The first of several thousand e-Ports could begin appearing in New York cabs and limousines in January 2002. Last month, the New York State Federation of Taxi Drivers approved a credit card program for livery cabs. About 29,000 livery cabs provide service in areas of New York where yellow taxis don’t operate for economic, safety, and sometimes racist reasons. Partners in the livery cab program, which utilizes wireless credit card terminals, include Cynergy Data, Lipman USA and U.S. Wireless Data. There are approximately 6,300 taxi companies transporting 1.4 billion passengers annually in the U.S. (CF Library 8/8/01)

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LML PATENT

LML Payment Systems Inc. is pleased to announce its subsidiary LML Patent Corp. has
received notification from the United States Patent and Trademark Office that
patent application Serial No. 09/562,303 was approved, resulting in the
issuance of United States Patent No. 6,283,366. The new patent addresses
electronic check conversion regarding corporate checks and electronic fund
transfers (EFT) and relates to existing United States Patent
No. 6,164,528 regarding Internet checking transactions and United States
Patent No. 5,484,988 regarding electronic checking transactions.

“The addition of this new 366 patent to our growing suite of intellectual
property complements and strengthens existing claims regarding the electronic
check transaction processes described in both the 988 patent and the
528 patent,” said Corporation President and CEO, Patrick H. Gaines. “We have
continued to seek added protection for our inventions and improvements and
look forward to practicing, protecting and realizing economic gain from our
innovations.”

The Corporation, through its subsidiary LML Payment Systems Corp., is a
financial payment processor providing check processing solutions including
Electronic Check Conversion (whereby paper checks are converted into
electronic transactions), electronic check verification, electronic check
re-presentment (whereby returned paper checks are re-presented for payment
electronically), and primary and secondary check collection to supermarkets,
grocery stores, multilane retailers, convenience stores and other national,
regional and local retailers. We also specialize in providing selective
routing, including real-time monitoring of check, debit, credit and EBT
transactions for authorization and settlement through our flagship transaction
processing product REPS (Retail Electronic Payment System). The Corporation’s
intellectual property estate, owned by subsidiary LML Patent Corp, includes
new U.S. Patent No. 6,283,366 regarding corporate checks and electronic fund
transfers (EFT), in addition to U.S. Patent No. 6,164,528 regarding Internet
checking transactions, and U.S. Patent No. 5,484,988 which describes a
“Checkwriting Point of Sale System” which, through a database and
authorization system, provides and administers various electronic payment
services for customers and businesses.

Details

Foreign Transactions

Merchants and acquirers who require multi-currency front-end and back-end payment processing now will be able to price goods and services in different currencies while also guaranteeing the exchange rate at the time of purchase. First Data Merchant Services and Ireland-based OMNIPAY have signed an agreement under which the two companies have developed a multi-currency end-to-end transaction and settlement infrastructure. FDMS and FEXCO, a foreign exchange business also based in Ireland, have signed a letter of intent to offer FEXCO’s cash management and treasury services in support of this program. OMNIPAY’s transaction-processing infrastructure handles multi-currency back-end functions. FEXCO’s multi-currency platform will support front-end dynamic currency conversion services, which e-commerce and brick and mortar merchants alike can utilize. FEXCO will manage the treasury operations, which include the guarantee of the currency exchange rate.

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HNC Board

HNC Software Inc. announced the appointment of Louis A. Simpson, president and CEO of capital operations at GEICO Corp., to its board of directors.

Prior to accepting his current position in 1993, Simpson served as vice chairman of the board, senior vice president and chief investment officer at the insurance company, which has been a wholly owned subsidiary of Berkshire Hathaway Inc. since January 1996.

Simpson has more than 30 years’ experience as an executive officer within the financial and insurance industries, previously serving as president and CEO at Western Asset Management and a partner at the investment firm of Stein Roe and Farnham. He also has served as an instructor of economics at Princeton University, where he received his master’s degree in economics. He serves as a director of AT&T, LM Institutional Fund Advisors 1 Inc., Pacific American Income Shares Inc. and SAIC.

“I am looking forward to my participation on HNC’s board of directors,” stated Lou Simpson. “I am impressed by HNC’s business model and believe its cutting-edge technology can offer great value to the financial and insurance industries.” “Lou has a phenomenal track record of success in financial and general management with a number of different businesses,” said John Mutch, chief executive officer of HNC. “HNC is very fortunate to have the opportunity to leverage his accumulated wisdom and judgement to build value for the company.”

GEICO is the largest direct marketer, sixth-largest private-passenger auto insurance company and 10th-largest property/casualty insurer in the United States. It is one of the fastest-growing auto insurers in the United States, with growth of 8.5 percent in 2000 and assets of $10.6 billion at year-end 2000.

HNC’s board now totals six members. In addition to Simpson, members of the HNC board are: Edward Chandler of Graystone Venture Partners LLC; Thomas Farb of Summit Partners; Alex Hart, an independent consultant to the financial services industry and former CEO of Advanta Corp. and MasterCard International; David Chen of GeoTrust; and John Mutch, HNC’s chief executive officer.

About HNC Software Inc.

HNC Software is a leading provider of Customer Insight solutions including decision management and customer analytics software that enable companies in the financial, telecommunications, e-commerce and insurance industries to acquire, manage and retain customers. For more information, visit [www.hnc.com][1] or contact Susan Roth at 858/909-4353.

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

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GalactIC VISA

VISA has certified the Oberthur ‘GalactIC 2.1’ payment card for the ‘VISA Smart’ range. The company also announced Wednesday it will consolidate its personalization services operations. The ‘Version 2’ Java-based, open platform, multi-application smart card enables secure multi-channel payment from any terminal, including PC, mobile phone, television or point-of-sale. Oberthur currently owns two of the four RSA Java-based cards that comply with VISA certification ‘Level 3’. The new version is a 32K card which enables card issuers and users to load more applications on the card and run several functions simultaneously, including authentication of the cardholder, security of the online transaction and completion of payment using debit or credit. The ‘GalactIC V2’ includes a key generator integrated in the card to allow local generation of keys up to 2,048 characters. Oberthur will transfer the personalization services conducted out of its Livermore, California plant to its facilities in Los Angeles and Naperville, Illinois. Based in the Oakland region of northern California, the Livermore facility is scheduled to close at the beginning of 2002. The Livermore plant was acquired when Oberthur took over De La Rue’s smart card operations in 1999.

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LML Patent

LML Payment Systems Inc. is pleased to announce its subsidiary LML Patent Corp. has received notification from the United States Patent and Trademark Office that patent application Serial No. 09/562,303 was approved, resulting in the issuance of United States Patent No. 6,283,366. The new patent addresses electronic check conversion regarding corporate checks and electronic fund transfers (EFT) and relates to existing United States Patent No. 6,164,528 regarding Internet checking transactions and United States Patent No. 5,484,988 regarding electronic checking transactions.

“The addition of this new 366 patent to our growing suite of intellectual property complements and strengthens existing claims regarding the electronic check transaction processes described in both the 988 patent and the 528 patent,” said Corporation President and CEO, Patrick H. Gaines. “We have continued to seek added protection for our inventions and improvements and look forward to practicing, protecting and realizing economic gain from our innovations.”

The Corporation, through its subsidiary LML Payment Systems Corp., is a financial payment processor providing check processing solutions including Electronic Check Conversion (whereby paper checks are converted into electronic transactions), electronic check verification, electronic check re-presentment (whereby returned paper checks are re-presented for payment electronically), and primary and secondary check collection to supermarkets, grocery stores, multilane retailers, convenience stores and other national, regional and local retailers. We also specialize in providing selective routing, including real-time monitoring of check, debit, credit and EBT transactions for authorization and settlement through our flagship transaction processing product REPS (Retail Electronic Payment System). The Corporation’s intellectual property estate, owned by subsidiary LML Patent Corp, includes new U.S. Patent No. 6,283,366 regarding corporate checks and electronic fund transfers (EFT), in addition to U.S. Patent No. 6,164,528 regarding Internet checking transactions, and U.S. Patent No. 5,484,988 which describes a “Checkwriting Point of Sale System” which, through a database and authorization system, provides and administers various electronic payment services for customers and businesses.

Details

SVS CONVERSION

Comdata Corporation announced its Stored Value Systems subsidiary will provide American
Eagle Outfitters with electronic point-of-sale currency conversion for its
Canadian-based stores. An SVS electronic cash card customer since 1998,
American Eagle Outfitters operates over 600 stores in the United States and
Canada.

“Currency conversion is a critical factor for the growing number of
domestic retailers that are expanding their operations to Canada,” said Mike
Berry, executive vice president and general manager, Stored Value Systems,
Inc. “Shoppers in American Eagle’s Canadian stores will enjoy faster check-
outs, while store managers will benefit from more accurate, error-free
accounting that SVS electronic cash cards provide.”

As the exclusive cash card provider with automatic currency conversion at
the point-of-sale, SVS first introduced the technology in Canadian Pier One
Imports stores last fall. SVS customers with currency conversion sell their
cards in the common currency of the country where the store is located. The
cards can be redeemed in either the United States or Canada. When a shopper
presents an electronic cash card for payment, the SVS system converts the sale
amount to the base currency of the card, deducts the amount of the sale, and
calculates the remaining balance in the base currency. The transaction is
conducted in real-time through the retailer’s point-of-sale device.

“Cross-border shopping is becoming more common today, especially in a
fluctuating economy,” said Berry. “SVS is working with domestic retailers
today to find new ways to capitalize on shopper trends. Our currency
conversion feature is the first in a series of exciting developments we are
introducing that add more value to retailers today challenged with incremental
sales growth.”

As the leading electronic cash card provider, current SVS clients include
some of the nation’s most acclaimed retailers, grocers and petroleum
providers. Current SVS clients include K-Mart, Target, Radio Shack, Kroger,
Lowes and Food Lion, all of which market the SVS product as private-label gift
cards, electronic replacements for traditional gift certificates.

About Comdata

Comdata Corporation, http://www.comdata.com/, is redefining the movement of money
and information through technology for businesses, customers and employees. A
leading provider of transaction and information services, Comdata provides
Comchek(R) credit and debit processing and reporting for commercial fleets and
merchants, SVS electronic cash, gift and chip card programs for retailers and
governmental agencies, Comchek(R) eCash payroll services for food, retail and
other service industries, and point-of-sale equipment for travel plazas and
convenience stores. Headquartered in Brentwood, TN, Comdata employs nearly
2,000 people throughout the United States and Canada. Comdata is a wholly-
owned subsidiary of Minneapolis-based Ceridian Corporation (NYSE: CEN).

About Stored Value Systems, Inc. (SVS)

Stored Value Systems (SVS), http://www.storedvalue.com, is the nation’s leading
provider of retail cash card services and chip card programs. Retailers
across America rely on SVS to create customer loyalty, increase transaction
volumes and strengthen their competitive position in the retailer marketplace.
The people of SVS are the undisputed experts at building retail brands and
keeping satisfied shoppers in stores. Headquartered in Louisville, KY, Stored
Value Systems is a wholly-owned subsidiary of Comdata Corporation.

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TRAIN CARD

East Japan Railway Co. is deploying a smart card in November, the first time such a system has been used in Japan’s train system. The ‘Suica’ card will used at 424 stations on 26 train lines in the greater Tokyo area. Plans call for the system to expand to more than 450 stations by next March. The card will be available in two versions. One will be for used only as a prepaid ticket card, while the other will function as a prepaid ticket card and a commuter pass. Tokyo Monorail Co., which links Tokyo International Airport to Tokyo, will also introduce the same smart card system for all stations of its Haneda line by April 2002.

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Market Pains

Credit card related stocks sank yesterday after Providian warned of lower profits. However the tumble eased somewhat by afternoon following a government report showing that manufacturing is recovering. While all the monolines fell yesterday, Citigroup and American Express eked out a small gain.

CARD STOCKS
Sept. 4
COMPANY CLOSE CHANGE 52wk Hi
Providian $30.36 -22.27% $67.00
Metris $24.74 – 9.04% $42.94
NextCard $ 8.35 – 6.49% $12.75
MBNA $32.76 -5.75% $40.12
Capital One $52.76 -5.12% $73.25
Household $57.06 -3.45% $69.98
Source: CardData (www.carddata.com)

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