Smart-eCard

CA-based Global TeleMedia International said Friday it has completed the international testing of its ‘Smart-e-Card’ platform. The ‘Smart-e-Card’ platform currently interfaces with the STAR, Plus, MAC, Pulse Interlink and NYCE networks. The card offers Internet access and global calling plus international e-funds transfers of up to $5,000 per transaction for $12.95 and can be received at over 1,000,000 ATM’s world wide. The ‘Smart-e-Card’ can transmit e-funds in 11 seconds but recover them instantly in the event of an error.

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Oberthur CRM Acquisition

Oberthur Card Systems announced this morning it has acquired the other half of Rapsodia Software from its joint venture partner Prosodie. Rapsodia Software, was formed in May 1999. It will now become a fully integrated business division of Oberthur Card Systems under the management of Olivier Leroux its current managing director. Rapsodia Software operates within the wireless industry to provide software platforms for mobile value-added services. Headquartered near Paris in Boulogne Billancourt, Rapsodia also has an office in Hong Kong, employees approximately 50 people and generated revenues of $3.2 million in 2000. Oberthur is paying $3.3 million for the Rapsodia acquisition.

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Trintech VPA

Trintech Group Plc, a global provider of secure payment infrastructure solutions for real world, Internet and wireless environments, announced that their payment solutions support the Visa U.S.A. Payer Authentication Service which is based on the 3-D Secure Interoperability Standard. Visa Payer Authentication, part of Visa’s Secure Commerce Program, is designed to provide a more secure environment for consumers and merchants conducting electronic commerce.

Trintech’s 3-D Secure PayWare solutions enable issuers, acquirers, processors, telcos and merchants to quickly take advantage of Visa U.S.A.’s Payer Authentication Service, designed to help ensure secure online payment transactions. Solutions based upon Visa’s new authentication standard are both easy to implement and quick to market.

After enrollment with a participating card-issuing bank, cardholders can now authenticate themselves similar to the way they sign sales receipts in the physical world. Visa Payer Authentication will provide customers with a more secure online shopping experience by adding a layer of security that helps to reduce fraudulent use of Visa card numbers on the Internet, ultimately building consumer confidence for online shopping while reducing customer disputes and fraud losses for merchants.

“The key to eCommerce growth is consumer confidence in merchant website security and verification of a cardholder’s identity,” said Jim McCarthy, Senior Vice President at e-Visa. “We are pleased that Trintech is in full support of the Visa Payer Authentication Service. Visa is working with several technology partners like Trintech to help banks and eMerchants better secure cardholder information online, giving consumers a better online experience and merchants increased sales volume.”

“A secure and convenient purchasing experience is crucial for eCommerce to fulfil its true potential,” said John McGuire, CEO at Trintech. “Trintech is pleased to work with Visa to ensure that fraud is minimized and confidence in online shopping improves. Trintech PayWare solutions that incorporate Visa’s 3-D secure protocol will significantly strengthen the safety and security of business and consumer transactions on the Internet.”

The Visa U.S.A. Payer Authentication Service allows cardholders to shop online as they do now, adding items to a virtual shopping cart and proceeding to the merchant’s checkout page. Once the “buy now” button is selected, the authentication process confirms the cardholder’s identity to the Issuer through a password. Once the cardholder has been successfully authenticated, the card-issuing bank will transparently pass a notice of authentication to the merchant.

Products Overview

Trintech’s 3-D Secure solutions enable Issuers, telcos, merchants, acquirers and processors to take full advantage of the Visa U.S.A. Payer Authentication Service. Trintech’s range of 3-D Secure Issuer solutions, known as PayWare Guardian PA (Payer Authentication), provide a range of 3-D Secure solutions tailored to meet Issuer requirements. Issuers may choose to implement PayWare Guardian PA in conjunction with Trintech’s PayWare eIssuer product, a consumer eCommerce multi-device payment solution. Alternatively, they may choose a standalone solution that readily integrates with an Issuer’s legacy system, allowing Issuers to benefit from existing authentication systems and established cardholder records.

All parties, including telcos, will benefit from Trintech’s 3-D Secure mobile commerce solution. PayWare Guardian PA will be extended to the wireless Web to 3-D Secure enable mobile phones, personal data assistants and other platforms such as digital set top boxes. This will be provided in conjunction with Trintech’s existing mobile commerce solutions. Trintech’s 3-D Secure merchant solution (referred to as a Merchant Plug-In) provides merchants with a stand-alone solution that integrates with their existing payment software. Acquirers and processors may also host the Merchant Plug-In as a service. The Merchant Plug-In integrates with Trintech’s payment gateway and merchant hosting solution.

About Trintech

Founded in 1987, Trintech is a leading provider of secure electronic payment infrastructure solutions for card-based transactions for physical world commerce, eCommerce and mobile commerce. The company offers a complete range of payment software products for credit, debit, commercial and procurement card applications, as well as being a world leader in the deployment of payment solutions for Internet commerce that are fully SSL and SET(TM) compliant. Trintech’s range of scalable open systems architecture solutions for UNIX(R) and Windows NT(TM) platforms covers consumer, merchant and financial institution requirements for physical payments and the emerging world of electronic commerce. Trintech can be contacted in the U.S. at 2755 Campus Drive, San Mateo, CA 94403 (Tel: +1-650-227-7000) and in Ireland at Trintech Building, South County Business Park, Leopardstown, Dublin 18 (Tel: 353-1-207-4000). Trintech can be reached on the Web at .

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Carnegie Mellon Card

Carnegie Mellon University in Pittsburgh announced it has selected Student Advantage’s ‘SA Cash Program’ to launch an off-campus, stored-value program for its nearly 7,500 students and 3,000 faculty and staff. The program will be up and running at Carnegie Mellon in the fall. ‘SA Cash’ is a feature of the ‘Carnegie Mellon Card’, an enhancement to the stored-value account that already exists on Carnegie Mellon’s ID card, called ‘CampusXpress’. SA Cash will enable students, faculty and staff at the university to use their ID card to buy food, necessities and entertainment on campus and at off-campus merchants. Students currently use their ‘CampusXpress’ account for on-campus purchases at dining halls, the bookstore, and the computer store, among other on-campus locations.

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Tickets.com VPA

Tickets.com, a leading provider of ticketing software and services for live events, and Visa U.S.A., the world’s largest consumer payment system, announced Tickets.com as the first online ticketing company to adopt Visa’s Payer Authentication service, “Verified by Visa,” giving Tickets.com customers a safer online shopping experience. Verified by Visa, based on Visa’s 3-D Secure Interoperability Standard, adds a layer of security that helps prevent the fraudulent use of Visa card numbers on the Internet, and also helps Tickets.com reduce customer disputes and online fraud losses.

Beginning Fall 2001, Visa cardholders can register for Verified by Visa through their card-issuing bank, giving them the ability to make authenticated online purchases with their Visa card. Registered Visa cardholders will then be asked to enter a password every time they buy tickets at Tickets.com, thus authenticating their identity similar to the way a signature verifies a cardholder in the physical world. Registration for the program is easy for consumers and the process of entering a password during an online purchase will take only a matter of seconds.

“Whenever we speak to our customers, be they clients or consumers, the security of online ticket purchases is always top-of-mind,” said Andrew Donkin, president of Tickets.com’s Internet Ticketing Group. “With Verified by Visa, we can provide an additional layer of security to the ticket buying process which provides an added level of comfort for using our fast growing online distribution channel.”

“Securing the e-commerce channel for consumers and merchants is currently one of Visa’s most important priorities and we are seeking partners like Tickets.com who share this commitment,” said Jim McCarthy, senior vice president, e-Visa, a division of Visa U.S.A. “Visa Payer Authentication will help Tickets.com strengthen their online business by making consumers feel more secure when shopping online.”

The implementation of Visa Payer Authentication builds upon the strategic partnership between Tickets.com and Visa aimed at enhancing the live event ticketing experience for consumers throughout the nation. The two companies are also working together to roll-out integrated marketing programs which will encourage Visa cardholders to take advantage of the comprehensive offering of live events available through Tickets.com’s multi-channel distribution system.

About Tickets.com

Tickets.com is a leading business-to-business ticketing solutions provider for live events. The company facilitates the sale of tickets by enabling venues and entertainment organizations with proprietary and cutting edge software, retail outlets, call centers and interactive voice response (IVR) systems. Tickets.com builds custom private label Ticketing Gateways(SM) to enable live entertainment organizations with e-commerce distribution platforms. The company also sells tickets directly to consumers at , providing tickets and information on virtually all events and entertainment organizations, as well as offering related products and services. Tickets.com’s automated ticketing solutions are used by thousands of entertainment organizations such as leading performing arts centers, professional sports organizations and various stadiums and arenas in the U.S., Canada, Europe, Australia and Latin America. Currently Tickets.com is the official ticket supplier to the 2002 Olympic Winter Games as well as the exclusive online ticketing solutions provider for MLB Advanced Media.

About Visa U.S.A.

Visa is the world’s leading payment brand and largest consumer payment system, enabling banks to provide their consumer and merchant customers with the best way to pay and be paid. More than 14,000 U.S. financial institutions rely on Visa’s processing system, VisaNet, to facilitate over $810 billion in annual transaction volume — including more than half of all Internet payments — with virtually 100 percent reliability. U.S. consumers carry more than 353 million Visa-branded smart, credit, commercial, stored value and check cards, accepted at approximately 22 million locations worldwide. Visa has long led the industry in developing payment security standards, and has been named the most trusted payment brand online. Visa’s people, partnerships, brand and payment technology are helping to create universal commerce — the ability to safely conduct transactions anytime, anywhere and by any device. Please visit for additional information.

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Welcome Buys Axiomatique

Welcome Real-time said this morning it has acquired Singapore-based Axiomatique International. The combined company will have a shareholding structure with French marketing firm High Co; smart card manufacturer Gemplus; Standard Chartered Bank; Avenir Telecom; Dassault Multimedia, and TDF, a Singapore-based VC fund. The new company’s combined technology provides advanced marketing features and multi-program capabilities at the point of sale, which is Welcome Real-time’s core strength. It also includes comprehensive back-end program administration and management, as well as seamless integration of magstripe and smart card functionality at the back-end, which is Axiomatique’s core strength. American Express has licensed the joint solution for the Australian launch of ‘Blue’.

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Photo Check Cards

As part of its new “Why not bank your own way?” campaign, Bank of America is helping its customers avoid fraudulent use of their accounts by providing free Photo Security Check Cards and free upgrades to Photo Security credit cards. Additionally, free checking with direct deposit and free online banking are also on offer.

The cards operate in the same way as a typical check card in that purchase amounts are automatically deducted from the customer’s Bank of America account, and it doubles as a customer’s ATM card. The difference — and the impact — is in the photo.

“Cards with the customer’s photo and signature on the front greatly lessen the chances that the card can be misused by anyone else,” said John Rindlaub, president, Bank of America Northwest Region. “Washington and Idaho customers can get their photos taken at any of 255 banking centers across the two states, or at any of our 4,500 banking centers in our 21-state franchise, and the card arrives in the mail a few days later.”

Bank of America is one of only two banks in the U.S. to offer a Photo Security Check Card, and the only bank to do so in the Northwest. “The FBI says identity theft is the fastest-growing white-collar crime in the country,” said Rindlaub. “More than 500,000 Americans have their identities stolen every year and we want to do what we can to keep our customers from becoming part of this statistic.”

Why not bank your own way? is the bank’s largest, most integrated, customer-focused marketing campaign effort to date. It is tailored to time- starved persons who seek greater flexibility, convenience and value in their banking relationship. In addition to Photo Security Check Cards and credit cards, spearheading the campaign is an offer for MyAccess(TM) checking, free with monthly direct deposit.

Early results indicate that customers appreciate being asked how they like to bank. As of mid-July, more than 990,000 new checking accounts have been opened across the franchise, including 86,000 in the Northwest — a promising start for the campaign, which kicked off nationwide approximately 15 weeks ago.

To identify which products and services will best suit an individual consumer or small business, Bank of America representatives perform an initial needs assessment on each prospective customer at the beginning of the relationship. Fourteen days later, they place a follow up call to ask how the products are meeting the customer’s needs — and to see if additional products are needed.

“Our strategy is to prove to consumers that Bank of America has the unsurpassed ability to make checking and related services fit their lifestyle needs, coupled with the benefit of unmatched access and convenience,” said Rindlaub. “Our customers can make the most of their time and money because they can custom design their own set of financial products and access their money and accounts to fit their specific needs.”

Introduced in the Northwest on July 30, the new MyAccess checking, free with monthly direct deposit, is designed to attract prospective customers who are typically busy, on-the-go, between 25 and 40 in age and prefer the convenience of free 24-hour online, ATM and telephone banking to teller transactions. These customers also wish to avoid a monthly maintenance fee and want to “try a bank” before making a more substantial commitment. MyAccess enables them to do that by requiring a low minimum opening deposit — only $100 — and no minimum required balance.

To reward consumers for opening checking accounts, Bank of America offers:

* free Online Banking;

* free Online Banking with Bill Pay service for three months;

* free Photo Security Check Card (Bank of America is one of only two

financial institutions in the U.S. and the only financial institution in the Northwest that provides the Photo Security feature on check cards);

* free upgrade to Bank of America Photo Security credit cards; and,

* a fixed introductory APR on purchases and balance transfers on most new Bank of America credit cards, subject to approval.

“It’s all about being flexible and recognizing the individuality of each of our customers, which builds on Bank of America’s long tradition of ingenuity,” said Rindlaub. “We’re finding that more and more people prefer to visit an ATM on their way to work or pay bills and transfer funds online at night. Some want to keep limited funds in their checking account and others want an account that saves money on service fees and offers preferred rates. This campaign has been designed to meet the variety of personal preferences in today’s financial services industry and we expect it to be successful.”

To learn more about the “Why Not Bank Your Own Way?” campaign, visit .

One of the world’s leading financial services companies, Bank of America is committed to making banking work for customers like it never has before. Through innovative technologies and the ingenuity of its people, Bank of America provides individuals, small businesses and commercial, corporate and institutional clients across the United States and around the world new and better ways to manage their financial lives. The company enables customers to do their banking and investing whenever, wherever and however they choose through the nation’s largest financial services network, including approximately 4,400 domestic offices and 13,000 ATMs, as well as 38 international offices serving clients in 190 countries, and an Internet Web site that provides online access for more than 3 million customers, more than any other bank.

Bank of America stock (ticker: BAC) is listed on the New York, Pacific and London stock exchanges. The company’s Web site is . News, speeches and other corporate information may be found at .

Consumer Tips: Identity Theft and Credit Fraud

The U.S. government operates a Web site for information about identity theft at [http//:www.consumer.gov/idtheft/][1]. Some of the precautions they suggest include:

* Before you reveal any personally identifying information, find out who is asking for it, how it will be used and whether it will be shared with others. Ask if you can choose to have it kept confidential.

* Pay attention to your billing cycles. Follow up with creditors if your bills don’t arrive on time. A missing credit card bill could mean an identity thief has taken over your credit card account and changed your billing address to cover his tracks.

* Guard your mail from theft. Deposit outgoing mail in post office collection boxes or at your local post office. Promptly remove mail from your mailbox upon delivery.

* Put passwords on your credit card, bank and phone accounts. Avoid using easily available information like your mother’s maiden name, your birth date, the last four digits of your SSN or your phone number, or a series of consecutive numbers.

* Tear or shred your charge receipts, credit applications, insurance forms, physician statements, bank checks and statements that you discard.

* Give your SSN only when absolutely necessary. Ask to use other types of identifiers when possible.

* Order a copy of your credit report from each of the three major credit reporting agencies every year. Make sure it is accurate and includes only those activities you’ve authorized. The major credit bureaus are Equifax (800-685-1111), Experian (888-397-3742), and Trans Union (800-916-8800).

* If you think you’re a victim of credit card fraud, contact your creditors and file a report with your local police or the police in the community where the identity theft took place.

[1]: http://www.consumer.gov/idtheft/

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Providian Late Fees

One year after settling lawsuits over its credit card business practices, Providian announced it is tightening its policies on late fees. Providian said Friday it is ending its policy of allowing all customers an extra three days after their contractual due dates for their payments to arrive before assessing a late charge. Providian will now assess a $29 late fee for all of its accounts that are one day late. Prior to the end of the second quarter 2000, Providian reached a settlement agreement with the OCC, the San Francisco District Attorney’s office, the California Attorney General and the State of Connecticut over its credit card practices, including the timely posting of payments. Under terms of the settlement, Providian agreed to change some of its credit card business practices and to pay a one-time restitution of approximately $300 million, a $5.5 million civil fine to the San Francisco District Attorney’s office and $1.6 million to the State of Connecticut. In July, 1999 Providian admitted that the consumer lawsuits were primarily related to a “programming error”. Providian stated in its 2Q/99 earnings report that the “programming error”, which occurred over a period of months, resulted in the erroneous billing of late fees related to specific weekend days. Providian refunded $20 million in wrongly charged penalty fees. Providian also announced Friday plans to eliminate over-limit fees on its new super-prime ‘Platinum’ card offerings. (CF Library 7/23/99; 8/25/99; 6/20/00; 6/29/00)

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Digital Tickets

ContentGuard, Inc., a leading provider of comprehensive, flexible digital rights management technologies and solutions, has obtained a patent on “digital tickets” – a better way to track access to and distribute electronic content such as eBooks, images, music and video. ContentGuard’s digital ticket concept further establishes the company as a pioneer in digital rights management innovations.

A digital ticket is a code, embedded in a computer or in a plastic card similar to a credit card, that validates whether someone has certain rights to access specific digital content. For example, a person could use a digital ticket stored on a PC or other device to display an image, print a book or play music. When the ticket is presented, it is electronically “punched” to indicate that a right was used.

“Digital ticketing is a dramatic step forward in helping make more content available to consumers when, where and how they want it, while protecting the rights of content owners,” said Michael Miron, co-chairman and chief executive officer, ContentGuard.

Digital ticketing also permits the ticket information, including its “punches,” to always be associated or transported with the content whether the content is e-mailed, downloaded or copied. This allows the content owner to be paid even if copies are made. The invention covers use of digital tickets online and offline, such as a card that is inserted into a device.

The patent is U.S. patent 6,236,971 with a priority date of Nov. 23, 1994, which makes it an early patent in DRM and digital ticketing. It joins ContentGuard’s existing patent portfolio, which includes foundation patents in DRM based on research originally developed at Xerox Corporation’s Palo Alto Research Center.

ContentGuard intends to make the patent available for licensing by interested parties. ContentGuard is owned by its employees, Xerox Corporation, and Microsoft Corporation.

About ContentGuard

ContentGuard, Inc., launched in April 2000, is the catalyst for the revolution in eContent(TM). The company offers digital rights management (DRM) solutions designed to encourage Internet distribution of digital content such as music, eBooks and business reports. ContentGuard’s cross-platform technology and suite of services allow content owners to manage the digital distribution process by tracking usage, preventing unauthorized access, and enabling a range of business models for user access. ContentGuard has operations in Bethesda, Md., and El Segundo, Calif.

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Wachovia Card Sale

Bank One/First USA confirmed Friday it has completed its purchase of Wachovia’s credit card portfolio which provides some wiggle room over the agent bank relationship. The sale includes two components: the primary portfolio of $6.2 billion in receivables of card holders who are not customers of Wachovia’s retail bank and an agent bank portfolio of $1.3 billion. The transaction also includes an agent bank relationship however the agreement does provide for flexibility and protections for both parties to adapt the relationship to changes in circumstances. Wachovia intends to merge with First Union or may be forced to merge with SunTrust. Both First Union and SunTrust currently have agent credit card relationships with MBNA. Wachovia expects to realize a pretax gain of approximately $1.3 billion from Friday’s transaction. Bank One says it expects the transaction to add approximately $100 million after tax to its 2002 earnings. As of mid-year Bank One/First USA has $63 billion in credit card receivables. The acquisition will boost Bank One/First USA to about $70.5 billion, placing it in a virtual tie with MBNA for the nation’s #2 ranking of bank credit card issuers based on receivables, according to CardData ([www.carddata.com][1]). (CF Library 2/7/01; 4/9/01; 5/3/01; 5/22/01)

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

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HOME TRUST GROWTH

Home Capital Group Inc. announced results for the second quarter ended June 30, 2001. These results
were generated by the Company’s wholly owned subsidiary, Home Trust Company.

Home Capital Group Inc. Achieves Six Years of Consistent Quarter Over Quarter Earnings Growth

Home Capital Group Inc. is pleased to report its continued excellent
performance in the second quarter of 2001. The Company maintained its strong
momentum and achieved exceptional growth in earnings, earnings per share and
total assets.

Six Years of Consistent Earnings Growth
The Company, through its wholly-owned subsidiary Home Trust Company, has
now achieved consistent quarter-over-quarter increases in earnings for 24
consecutive quarters.

For the three-month period ended June 30, 2001, net earnings rose 42.7%
to $3,545,687 from $2,485,178 for the same period a year earlier. Earnings per
share were $0.24, a significant improvement of 41.2% over $0.17 in the second
quarter of 2000. Return on equity climbed to 26.3% in the second quarter, up
from 22.9% recorded last year.

Net income for the six months ended June 30, 2001 rose by 40.7% to
$6,763,902 from the $4,806,990 recorded through the first half of 2000. Net
income per share increased from $0.33 to $0.46 and on a fully-diluted basis
from $0.31 to $0.44.

Home Capital Exceeds $1 Billion in Assets

The Company recorded a significant milestone during the quarter, with
total assets exceeding the $1 billion mark for the first time. This represents
an increase of 28.4% over total assets on June 30, 2000.
Net impaired mortgage loans as at June 30, 2001 represented 0.43%, a
slight decrease compared to 0.48% on March 30, 2001. Charge-offs during the
first six months of 2001 fell to $70,000, compared to $142,000 for the same
period in 2000. The Company has increased its General Allowance from
$3,466,000 at June 30, 2000 to $4,881,000 at the end of the current quarter.
During the quarter, Home Trust’s core residential first mortgage business
recorded steady growth as housing demand remained strong and interest rates
remained stable. It also completed the issuance of its third Mortgage-Backed
Security in the amount of $11.8 million.

Home Trust VISA Accounts Reach 20,000

Home Trust’s VISA program experienced the most significant quarter of
growth since its launch late last September. The number of cardholder accounts
grew from 6,046 at March 31 to 19,440 on June 30, and subsequently passed the
20,000 mark in early July. Receivables grew from $1,317,601 at the end of the
first quarter to $5,961,243 on June 30. The Company is encouraged by the
market acceptance of our VISA products, which we believe serve the needs of a
large, underserved market across Canada. Projections for the remainder of the
year indicate continued growth and maturing of the portfolio, and we
anticipate profitability from credit card services in 2002.
Each element of the Company’s business performed well during the period
under review. To accommodate our continued growth, the Company’s staffing
levels increased from 91 at December 31, 2000 to 114 at June 30, 2001. We have
been fortunate in our ability to attract talented and experienced new staff to
assist in our future growth.

Increased Quarterly Dividend

The Company recently announced a quarterly dividend increase of 25% to 10
cents per share on an annualized basis. The first increased quarterly dividend
of 2.5 cents per share is payable on September 1, 2001 to shareholders of
record at the close of business on August 15, 2001.

Excellent Outlook for Continued Earnings Growth in 2001

Home Capital Group expects the earnings momentum of the first six months
to continue throughout 2001. There is very strong demand in the marketplace
for a national alternative to the offerings of traditional financial
institutions, and the Company has shown considerable success in understanding
and meeting the needs of this large target market.
Home Capital Group continues to exercise prudence in managing risk. The
Company is focused on strong lending fundamentals, and understanding and
meeting the needs of its market.
We are confident in our ability to continue our upward earnings growth.

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ORCC 2Q/01

Online Resources Corp. reported financial and operating results for the three months ending June 30, 2001.

— Revenues for the second quarter of 2001 increased 71 percent to $6.0 million, compared to $3.5 million in the second quarter of 2000.

— Gross profit for the second quarter of 2001 was $2.4 million, compared to $323,000 in the second quarter of 2000.

— Operating losses for the second quarter of 2001 declined 52 percent to $2.4 million, compared to a loss of $5.0 million in the second quarter of 2000.

— Net loss from operations in the second quarter 2001 declined 52 percent to $0.21 per share, compared to a loss of $0.44 per share for the second quarter 2000. After an extraordinary gain of $1.1 million from the repurchase of debt, the company’s net loss was $0.14 per share.

“Our strategic decision last year to concentrate on our existing business base is showing solid returns,” stated Matthew P. Lawlor, chairman and chief executive officer of the company. “Revenue growth continues to remain strong, despite the weak economy, and we have made substantial progress with our Five-Point Plan in reducing transaction costs and holding overhead spending constant. We are delighted with the resulting improvement in our bottom line and continue to track on plans to reach operating breakeven by mid to early 2002.”

The company also reported continued growth in consumer usage. Users increased to 421,000 in the second quarter of 2001, net of the loss of 35,000 Compubank users after its acquisition by another financial institution. Transactions increased to 13.2 million, including 170,000 transactions by Compubank’s users.

Consistent with its strategy to focus on its existing client base, 126 contracts for additional products, upgrades and other services were signed. The company added 52 clients to its co-funded marketing programs. It also signed 16 new financial institutions and renewed 18 client contracts, using the opportunity to move clients up to current market pricing.

The company reported further progress on its automation and cost control programs. The cost per transaction was reduced to $0.27, compared to $0.48 in the second quarter of 2000 and $0.31 in the first quarter of 2001. Overhead spending in the second quarter of 2001 declined 9 percent compared to the prior year, and declined 2 percent compared to the first quarter of 2001.

Lawlor added, “While there is strong focus on achieving near-term profitability, we are equally committed to delivering on our long-term vision. We are very excited about our eCRM programs to increase user adoption, and with the piloting this coming quarter of our new co-branded Quicken(R) product, expanded cash management capabilities, and MasterCard’s bill presentment enhancement. These products further leverage our operating base and potentially lead to high profitability.”

Third Quarter 2001 and Year 2001 Business Outlook

The following statements are forward-looking, and actual results may differ materially.

Third Quarter of 2001

— The company expects revenue to increase 6 to 9 percent versus the second quarter of 2001. This is consistent with revenue growth in the second quarter of 2001 over the first quarter of this year.

— Gross profit percentage is expected to improve from 41 percent in the second quarter of 2001 to approximately 41 to 43 percent. The company expects improved margins to continue as the growth in recurring user fees is leveraged against relatively fixed costs.

— Operating loss is expected to decline 8 to 12 percent versus the second quarter of 2001. The company’s losses continue to decrease because of the benefits of greater efficiencies in operations and control of overhead along with continued growth in revenue.

Full Year 2001

In January 2001, the company issued guidance for the full year 2001. There are no material changes in the outlook since that date, except that the ranges for that guidance have been narrowed to reflect actual results for the first half of 2001. The following therefore refines the company’s guidance for 2001.

— The company expects revenue to increase approximately 65 to 70 percent versus the prior year.

— Gross profit percentage is expected to improve to approximately 37 to 40 percent.

— Operating loss is expected to decline approximately 45 to 50 percent versus the prior year, leading to profitability in the year 2002.

Online Resources (Nasdaq:ORCC – www.orcc.com) is a leading outsourcer of e-financial services, with over 500 bank and credit union clients. The company’s comprehensive Quotien(SM) suite of services provides Internet banking, electronic bill payment-presentment, and other consumer and small business e-finance applications.

The company performs 24×7 customer care and consumer marketing services, giving clients the benefit of a single, integrated solution, backed by a unique end-to-end service guarantee and real-time transaction capabilities. Online Resources processes over 50 million e-finance transactions annually, including $3 billion in consumer bill payments.

For more information on Online Resources 2Q/01 data visit CardData ([www.carddata.com][1]).

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

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