Online Security

A new report from Gartner found that 86% of online American adults are very concerned about the security of bank and brokerage account numbers when doing online transactions. Almost as many, 83%, expressed the same concerns about the security of their Social Security and credit card numbers. Additionally, 70% are very concerned about the security of their personal information, including their income and assets. The report also indicates that approximately 60% of online adults say security and privacy concerns stop them from doing business on the Web. In addition, more than 50% of those who buy on the Web say they’ll enter their information, but admit they are not comfortable about it. The report is based on results from two Gartner consumer surveys of more than 7,000 online adults 18 years and older in the United States.

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DIGITAL SIGS

Identrus LLC, the leading standard of trust in global e-commerce, today
announced that the 50th financial institution has joined its global
network, an important milestone that demonstrates the company’s continued
growth and proven ability to leverage the trusted relationships financial
institutions enjoy with their corporate customers. Utilizing these
relationships, along with Identrus’ leading trust services technology, the
company has established the premier foundation through which secure
business-to-business e-commerce will be conducted.

Standard Chartered Bank, Chohung Housing Bank of Korea, and Korean
Exchange Bank have signed with Identrus in the last few weeks, joining 47
other financial institutions previously announced spanning 133 countries in
the two-year-old system. Identrus’ original founding members include major
financial institutions such as ABN AMRO, Bank of America, Bankers Trust
(since merged with Deutsche Bank), Barclays, Chase Manhattan, Citigroup,
Deutsche Bank and HypoVereinsbank.

“Our corporate customers are eager to realize the efficiencies, lower
costs and increased revenue opportunities arising from secure
business-to-business Internet commerce,” said Eric Steeghs, global head of
business development, Global Transaction Services, ABN AMRO. “With the
advances Identrus is making in helping to speed additional bank
participation, such as providing packaged implementation options and
e-payment and warranty solutions, we believe the next 50 financial
institutions will come to Identrus even more quickly than the first –
exponentially increasing the value of the entire Identrus system for our
customers.”

As Identrus Certificate Authorities, financial institutions in the
Identrus system issue their corporate customers secure electronic
identities called Identrus Global IDs. These digital certificates give
trading partners a single “e-passport” for business-to-business
communications and transactions, not just financial services.
“Given the scope of our undertaking – launching a global trust system
with extremely sophisticated technical, legal and business underpinnings –
we’re delighted to grow our membership so significantly already,” said Guy
Tallent, Identrus president and CEO. “Identrus has had a great first two
years. We look forward to doubling our success in the coming months.”
The Identrus system is the only global, multivendor public key
infrastructure (PKI) for digital certificates and signatures spanning all
business initiatives. With Identrus, trading partners can conclusively
identify one another on the Internet, prove their communications didn’t
change in transit, and automatically compile an auditable record of their
transactions.

“The unique capabilities of PKI to secure business-to-business
Internet commerce are well documented, and Identrus provides deep financial
institution backing to bring these capabilities to bear in business,” said
Meridien Research analyst Jeanne Capachin. “Identrus has the potential to
bring a ubiquitous presence and mature trust infrastructure to PKI.”

About Identrus

Identrus LLC is the leading standard of trust in global b2b
e-commerce. As the Internet’s only global trust system, Identrus allows
companies to transact with one another with certainty and effectively
mitigate e-commerce risks by leveraging their trusted relationship with
their financial institution. Identrus also eliminates the time, cost and
complexity of building trading relationships with customers and suppliers
around the globe. The world’s most prominent financial institutions and
technology companies are deploying a growing number of applications for
secure e-mail, e-marketplaces, international trade, contract signing,
online payments, commercial banking and more on the open Identrus
infrastructure. For more information, please visit www.identrus.com

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Dual Card Apps

Household also announced Monday it is expanding its credit card program with Rooms To Go. Under terms of the partnership, customers who apply for a Rooms To Go credit card at any of the retailer’s 70 U.S. stores will have the option to simultaneously apply for a Household Bank MasterCard. Household has been the principal issuer of the Rooms To Go branded retail credit card since 1994, and it expects to begin offering the dual credit card applications to Rooms to Go customers by the end of this year. Rooms To Go has become America’s fastest growing furniture company, with showrooms in only 5 southeastern states and Texas. Household’s retail services business includes 220 merchants with 48,000 retail locations in the U.S., U.K. and Canada producing more than 3.6 billion private label credit card transactions annually.

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GOLDFISH CARD

Household International and Centrica announced this week an agreement of
terms for the settlement
of litigation regarding their joint credit card program. Household, through
its United Kingdom subsidiary, HFC Bank plc, and Centrica are involved in a
joint venture to market the Goldfish credit card. Centrica will acquire HFC
Bank’s entire rights and interests in the Goldfish credit card. Under the
terms of the settlement, HFC will receive a consideration of 85 million pounds
sterling (net) in excess of the nominal value of the receivables of
approximately 650 million pounds sterling.

Household and Centrica (then British Gas) entered into a credit card
alliance in 1996, involving the launch of the Goldfish card. In December of
2000, Centrica announced its intent to terminate its relationship with HFC
Bank plc when the contract expires on September 3, 2001.

HFC and Centrica will work together to ensure an orderly transfer of HFC’s
interest in the credit card, including the receivables. Both parties have
agreed to ensure that customers experience no disruption to service while the
transfer process occurs.

Both Household and Centrica believe the settlement is fair and Household
will use the proceeds of the settlement for new growth initiatives in its UK
operation.

About Household

Household’s businesses are leading providers of consumer loan, credit
card, auto finance and credit insurance products in the United States, United
Kingdom and Canada. In the United States, Household’s largest business,
founded in 1878, operates under the two oldest and most widely recognized
names in consumer finance — HFC and Beneficial. Household is also one of the
nation’s largest issuers of private-label and general-purpose credit cards,
including the GM Card and the AFL-CIO’s Union Plus card. For more
information, visit the company’s Web site at .

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Goldfish Card

Household International is selling its United Kingdom ‘Goldfish’ credit card portfolio to Centrica (formerly British Gas) for $121 million as part of a lawsuit settlement. Both firms launched the Internet-based credit card program in 1996 under a five year contract. In December, Centrica announced its intent to terminate its relationship with HFC Bank plc when the contract expires on September 3, 2001. Household claimed breach of contract after Centrica relaunched Goldfish as an Internet joint venture with Lloyds TSB. In June, the High Court ruled that Household had control of cardholder data on Goldfish’s one million customers and the right to issue them with new credit cards. Household also issues another Internet-centric credit card in the UK under the ‘Marbles’ brand according to The RAM Report ([www.ramreport.com][1]). Under terms of the settlement reached this week, Centrica will acquire HFC Bank’s entire rights and interests in the ‘Goldfish’ credit card for consideration of 85 million pounds sterling (net) in excess of the nominal value of the receivables of approximately 650 million pounds sterling.

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

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Sub-Prime Rates

Despite overall lower credit card interest rates this year, punitive interest rates and fees among sub-prime issuers have been setting new highs. CompuCredit’s lineup of ‘Aspire VISA’ cards now carry APRs as high as 41% with $35 late fees and over-limit fees. The cards also carry 5% cash advance fees with a $2 minimum according to CardWatch ([www.cardwatch.com][1]). Atlanta-based CompuCredit now offers four versions of ‘Aspire VISA’ cards through Columbus Bank & Trust: ‘Classic’, ‘Diamond’, ‘Gold’, and ‘Platinum’. The sub-prime issuer offers cards with primary interest rates ranging from prime +8.75% with a 17% minimum, to prime +26% with a 35% minimum APR. Punitive interest rates range from 23% to 41%. At mid-year, CompuCredit has $1.7 billion in outstandings, a 42.6% increase over last year, according to CardData ([www.carddata.com][2]).

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

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Smart Card Survey

2001 The Smart Card Alliance today announced that it will undertake a survey to measure the usage of smart cards in the United States and Canada. The research will be conducted by KPMG.

‘As a strong voice for smart card adoption, the Alliance is proud to sponsor this original research that will provide the first concrete data on our industry in the 21st century. What we’re doing is establishing a benchmark,’ said Bill Randle, Chairman of the Smart Card Alliance.

The survey will ask the top ten smart card manufacturers supplying the US and Canadian markets to report on shipments according to ten specific industry categories, such as wireless, financial and retail. The initial survey will cover shipments made in 1999, 2000 and the first half of 2001. A follow-up survey covering the last half of 2001 will be made in the first quarter of 2002.

‘The US and Canadian smart card markets have experienced significant growth over the past several years’, said Dan A. Cunningham, Chairman of the Alliance’s Market Research Committee. ‘The purpose of the survey is to quantify this growth by industry, and distribute the results to our members and interested third parties.’

The survey is one of many initiatives of the Smart Card Alliance, a not-for-profit association formed earlier this year by the joining of forces of the Smart Card Forum and the Smart Card Industry Association. The goal of the Alliance is to promote the usage of smart card technology and related applications. The newly combined organization brings together all the players in the industry including leading banks and card issuers, technology firms as well as industrial and retail companies and government organizations interested in smart card development.

President and CEO of the Smart Card Alliance, Donna Farmer stated, ‘the combined resources and leadership of our new organization allow us to undertake projects like this survey, that neither predecessor organization could have done on its own.’

The results of the initial phase of the survey will be presented at the Alliance’s Annual Meeting in October 9-12th. The Alliance plans to continue the survey in 2002 and beyond to establish a well-defined trend line of smart card growth.

‘We’re excited about the opportunity to assist the Smart Card Alliance in this endeavor,’ stated Tim Harrison, a Principal in KPMG’s Information Risk Management group. ‘This survey will allow us to create a better understanding of the growth and use of smart card technology within the US and Canada over the past few years, ‘ he added.

About the Smart Card Alliance

The Smart Card Alliance is a not-for profit, multi-industry association of over 185 member firms working to accelerate the widespread acceptance of multiple application smart card technology. Through specific projects such as education programs, market research, advocacy, industry relations, and open forums the Alliance keeps its members connected to industry leaders and innovative thought. The Alliance also is the single industry voice for smart cards, leading industry discussion on the impact and value of smart cards in the U.S. More information about the Alliance is available at .

About KPMG

KPMG LLP is the accounting and tax firm that understands the needs of business in the global economy. We help our clients by devising results-oriented business strategies, providing insights that help them stay ahead of the competition and achieve market-leading results. KPMG LLP is the U.S. member firm of KPMG International. KPMG International’s member firms have more than 108,000 professionals, including 7,000 partners, in 159 countries. KPMG’s Web site is

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RPPS Partners

Citibank and Paytrust announced Monday they will join MasterCard’s ‘Remote Payment and Presentment Service’. Under this arrangement, Citibank will have access to MasterCard’s bill payment and presentment hub. With access to the MasterCard ‘RPPS’ hub, Citibank’s EBPP service, ‘Citibank Bill Manager’, which is provided through Paytrust, will be able to receive a greater number of bills electronically for presentation to its customers. RPPS provides participating financial institutions with flexibility and convenience to connect at one interface to reach multiple ‘Customer Service Providers’ and ‘Biller Service Providers’ to receive and pay bills.

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Lynk Award

Lynk Systems, Inc., a leading provider of electronic transaction processing services, has received Visa’s Service Quality Performance Award. On the heels of its 10th anniversary, Lynk has been recognized as one of Visa’s top performing processors. Lynk was selected among companies who have processed between $2 billion to $5 billion in annual Visa sales from January 2000 through December 2000.

The Visa award honors processors in three categories: lowest duplicate transaction rate, lowest assured transaction response rate and lowest authorization response time. Being recognized as the processor with the lowest duplicate transaction rate means that Lynk will minimize double charges and subsequent merchant credit and chargeback expenses, resulting in direct savings to the merchant’s bottom line.

“Visa cardholders and merchants can count on Lynk’s high level of service,” said Chuck Mann, senior vice president of Transaction Processing. “Lynk contributes to more efficient, cost-effective, and profitable card operations each time a Visa card is used at the point of sale. Lynk has always excelled on the authorization side of credit card processing, and this award is proof that our efforts to bring settlement processes in-house have been equally successful.”

The quality of service delivered to Visa cardholders and merchants is often the deciding factor in customer retention, brand loyalty and customer loyalty. The Visa Service Quality Performance Award not only acknowledges consistent, superior performance, it also emphasizes continued service quality improvement.

About Lynk.

Lynk is a proven leader in electronic payment, cash dispensing and e-commerce services. The company processes transactions initiated by credit and debit cards, checks, and other access cards from merchant point-of-sale terminals, ATMs and web sites. Lynk also provides related services such as the issuance of stored value cards that facilitate electronic funds distribution.

Lynk controls the entire processing sequence, including sales, merchant payment equipment, design and hosting of Internet store fronts, transaction authorization, capture, settlement and customer service. This “in-sourced” model facilitates a truly integrated single-source service that gives Lynk customers one-call support for all their processing needs. Lynk’s proprietary technology and comprehensive network connectivity offer customers of all sizes unsurpassed processing performance.

Founded in 1991, Lynk is located in Atlanta, Georgia and has earned recognition as one of the fastest-growing companies in America by Deloitte & Touche and Inc. magazine. For more information, please visit the company’s web site at .

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CompuCredit Card Bonds

CompuCredit Corporation announced that it has issued $500,000,000 of three-year credit card asset-backed securities.

The securitization from the CompuCredit Credit Card Master Note Business Trust features four classes of Asset Backed Notes.

The transaction, Series 2001-One, includes $305,000,000 of Class A floating rate asset backed notes rated Aaa by Moody’s and AAA by Standard & Poor’s; $70,000,000 of Class B floating rate asset backed notes rated A2 by Moody’s and A by Standard & Poor’s; $57,500,000 of Class C floating rate asset backed notes rated Baa2 by Moody’s and BBB by Standard & Poor’s; and $67,500,000 of Class D asset backed notes.

The Class A Notes, the Class B Notes and the Class C Notes were privately placed under Rule 144A and Regulation S and are priced at a spread of 39 basis points, 148 basis points, and 250 basis points, respectively, above the one-month London Interbank Offered Rate (“LIBOR”). The Class D notes are subordinate in payment to the Class A Notes, the Class B Notes, and the Class C Notes and will be retained by an affiliate of CompuCredit.

The Notes have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

CompuCredit Corporation is a credit card company that uses analytical techniques, including sophisticated computer models, to identify consumers who it believes are credit-worthy and are overlooked by more traditional consumer credit providers. CompuCredit markets unsecured general purpose credit cards through direct mail, telemarketing and the Internet. In July 1999, CompuCredit launched its consumer web site, www.aspirecard.com, through its Internet marketing services subsidiary AspireCard.com, Inc. Consumers can apply online and receive a credit decision within seconds. CompuCredit also markets credit life insurance, card registration, buying club memberships and travel services to its cardholders. Credit cards marketed by CompuCredit are issued by Columbus Bank and Trust Company under an agreement with CompuCredit. CompuCredit completed its initial public offering in April of 1999 and was included in the Russell 2000(R) Index in July 1999 and the NASDAQ FIN-100 Index in May 2000.

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Pay As You Go Card

Equitex, Inc. announced it has completed its acquisitions of Key Financial Systems, Inc. and Nova Financial Systems, Inc. of Clearwater, Florida. Key Financial Systems and Nova Financial Systems design, market and service credit card products designed for those who need to build or rebuild credit, offering an innovative credit card product to customers called the Pay As You Go credit card. The companies market through direct mail, telemarketing for financial institutions and the Internet through alliances with a number of popular Internet web sites.

On Friday, August 3, 2001, the Company completed the distribution of its assets and liabilities to Equitex 2000, Inc. Final distribution of the Equitex 2000 common stock to the Equitex stockholders, originally anticipated to occur on August 3, 2001, is now anticipated to occur upon the effectiveness of Equitex 2000’s Form 10 registration statement which is anticipated to occur on approximately August 21, 2001. Each stockholder of record at the close of business on Friday, July 20, 2001, will receive one share of Equitex 2000 common stock for each share of Equitex common stock owned.

Equitex, Inc. is a holding company operating through its wholly owned subsidiaries Nova Financial Systems, Inc. and Key Financial Systems, Inc. of Clearwater, Florida. Nova and Key design and service credit card products for those who need to build or rebuild credit marketed through direct mail, telemarketing for financial institutions and the Internet through alliances with a number of popular Internet web sites.

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ANZ ATM/POS NET

S2 Systems, Inc., a global provider of transaction processing, authorization and integrated solutions for the banking
and financial services market, today announced an agreement with Australia and New Zealand Banking Group
Limited (ANZ) to revolutionize its ATM and EFTPOS network. The joint initiative to replace ANZ’s existing
proprietary system and begin large-scale deployment of S2’s high-performance OpeN/2 application for
Windows(R) 2000 is expected to accelerate broader market transition away from traditional proprietary
implementations. ANZ is one of Australia’s leading banking and financial services organizations.
System performance, high support and maintenance costs in the existing proprietary system, coupled with a need
to enhance development lead times, compelled ANZ to seek a more advanced replacement solution. S2’s OpeN/2
transaction switching and payment authorization application enables financial institutions to handle extremely high
volumes of transactions with far greater speed, reliability, scalability and economy. The adoption of OpeN/2 for
Windows(R) by ANZ will speed the embrace of open platform replacement solutions in the banking and financial
services industry.

“Our strategic initiative with ANZ solidifies S2’s presence in Australia and signals a dramatic shift in the
competitive market landscape,” said Stephen Clark, president and CEO of S2 Systems. “This key implementation of
OpeN/2 in the Windows(R) environment will ensure its broader adoption as a proven solution within the region, as
well as the Americas and Europe, to facilitate expanded service delivery, improved customer service, and
significant reduction in the cost and complexity of transaction processing services. Most importantly, S2’s track
record assures institutions that migration to cost-effective platforms can be enabled by next generation
applications from a trusted industry leader.”

ANZ’s shift from proprietary systems to S2’s OpeN/2 marks an evolutionary milestone. The large-scale deployment
of OpeN/2 on the enterprise-class Windows(R) 2000 operating system leverages existing IT infrastructure in a
mission-critical environment and paves the way for integration with wireless and other evolving technologies.
ATMs, Point of Sale and other emerging devices provide expanded customer service flexibility at significantly lower
cost, which results in significant competitive advantage for banks.
“We are pleased with the functionality and scalability that S2’s solution provides,” stated David Boyles, ANZ’s CIO.
“The performance capabilities of OpeN/2 running in Windows(R) 2000 on SQL represent a new benchmark for the
banking and financial services industry. With this open architecture project, expected outcomes include lower
costs, improved customer service, quicker time-to-market, and positioning ANZ to integrate with an expanded
array of consumer-direct technologies.”

S2’s OpeN/2 transaction-processing engine is designed to meet the peak performance and scalability demands
required in today’s banking environment. The company’s robust payment switching solution is capable of driving
multiple applications for ATM and EFTPOS processing, and check management. Integration modules enable
seamless interoperability with disparate systems — and interfaces provide a customer link via ATMs, EFTPOS
terminals, card readers, Web browsers, mobile phones, PDAs, and other devices.

About ANZ

Australia and New Zealand Banking Group Limited (ANZ) is one of Australia’s leading banking and financial
services groups. ANZ offers a full range of financial products and services in Australia and New Zealand and has
overseas representation predominantly in greater Asia. With total assets of AUD 180+ billion, ANZ is one of
Australia’s Top Four banks. Visit their Web site at www.anz.com.

About S2 Systems

S2 Systems, Inc. is a leading global provider of e-business solutions for the banking, financial services, retail and
travel & hospitality industries. For more than 18 years, some of the world’s largest organizations have relied on S2
products to drive their high-volume e-commerce transactions. Today, our leading-edge technology enables
businesses worldwide to implement Web-based initiatives that improve operational efficiency, enhance customer
service and generate new revenue streams. S2 Systems is headquartered in Dallas, Texas and has offices in
Atlanta, London, Paris, Maarssen, Stockholm, Dubai, Riyadh, Hong Kong, Beijing, Melbourne, and Sydney. For more
information about S2 Systems, visit its Web site at www.s2systems.com

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