MerchantOnline Funding

MerchantOnline, a digital payment products and services provider, announced that it has received a $2 million financing commitment from a group of current MerchantOnline investors. These investors have agreed to purchase units of restricted convertible preferred stock and warrants. The first closing occurred today. This commitment supersedes all prior financing agreements or commitments.

“We look forward to proceeding with our revised business plan with renewed enthusiasm as we complete our restructuring. Our new management appreciates this vote of confidence during this time of significant market uncertainty,” said Jim Degracia, MerchantOnline CEO.


Founded in December 1997, MerchantOnline provides a secure transaction network that enables businesses and consumers to use one payment system for both their real world and virtual world needs utilizing credit card, ATM/debit cards, stored value cards, electronic cash and other payment technologies. Except for historical matters, the matters in this press release are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements reflect assumptions and involve risks and uncertainties which might affect the Company’s business and prospects and cause actual results to differ materially from these forward-looking statements. Investors are cautioned that all forward-looking statements involve risk and uncertainties, including those risk and uncertainties detailed in the Company’s Annual Report on Form 10-KSB for the year ended October 31, 2000 filed with the SEC.



Hypercom Corporation reported large scale deployment of its high-performance, touch screen ICE card payment terminals throughout Asia. More than 20 leading financial institutions, including the largest banks in China, the Philippines, Malaysia and Indonesia, have selected and deployed the browser-based terminals. ICE terminals now account for nearly 50% of all Hypercom’s shipments in Asia versus 3% less than a one year ago, indicating the broad acceptance of the value represented by the terminal’s value-added functionality and ability to combat credit card “skimming.”

Credit card skimming is an alarmingly escalating form of fraud that is victimizing consumers, causing havoc with merchants, and costing the industry hundreds of millions of dollars every year. Hypercom’s smart card-enabled ICE card payment terminals will play a key roll in stopping credit card skimming because they are tamper-resistant and customer-activated.

“Hypercom’s ICE technology is setting the standard for the electronic payment industry throughout this important region,” said Jeremy Su, president, Hypercom Asia. “We are bringing to market advanced, highly-secure card payment terminals and value-added wireless, Internet-based and smart card advanced applications that allow merchants to maintain and increase their competitive edge in the rapidly changing marketplace and combat credit card skimming, which is a major problem in Asia.”

The leading financial institutions now using Hypercom’s ICE terminals include The Industrial and Commercial Bank of China (China’s largest bank), The Agricultural Bank of China, Equitable Bank (the Philippines’ largest bank), Maybank (Malaysia’s largest bank), Bank Central Asia (Indonesia’s largest bank), Citibank Hong Kong; Standard Chartered Bank (The Philippines); Bangkok Bank, Thai Farmers Bank, Thai Military Bank, American Express Thailand, Bank International Indonesia.

Hypercom’s ePOS-infocommerce(TM) (epic) ICE devices are high performance, touch screen-based, Internet-enabled card payment terminals and web appliances that incorporate a firewall-protected multi-application operating system, EMV chip card capability, secure PIN pad, built-in HTML/HTTP web browser and integrated receipt printer. In addition to the embedded applications, Hypercom’s epic ICE terminals support a range of value-added applications and services including electronic signature and receipt capture, e-mail, on-screen advertising, interactive electronic coupons, and cash management reporting through a standard browser — as well as secure credit, debit and smart card functions.

Hypercom Corporation (NYSEHYC) is a leading global provider of electronic payment solutions that add value at the point-of-sale for consumers, merchants and acquirers. Hypercom’s products include secure card payment terminals and web appliances, networking equipment and software applications for e-commerce, m-commerce, smart cards and traditional payment applications.

Headquartered in Phoenix, Arizona, Hypercom maintains an installed base of 4 million card payment terminals which operate in over 100 countries and conduct more than 2.85 billion transactions annually. Hypercom’s Internet address is


Chargeoff Spike

Credit card charge-offs for card-backed bonds of U.S. banks rose by 60 bps in April to 6.7%. This level is the highest loss rate reported among these securities since February 1997. According to Standard & Poor’s ‘Credit Card Quality Index’, the monthly loss rates is also higher than the 6.2% peak reached in June 1992, in the wake of the last recession. S&P says aside from the soft economy, the rise in charge-offs is due to a short-term increase in bankruptcy filings fueled by reaction to the pending bankruptcy reform legislation. S&P notes that for prime credit card portfolios, approximately 35%-50% of charge-offs are a result of bankruptcy-related losses while the figure is about 20%-30% for sub-prime issuers.S&P says it is likely that some credit card trusts have yet to fully realize the effect of the increase in bankruptcy-related losses. It is expected that the spikes in bankruptcy filings will continue to affect losses in May and June. Meanwhile, delinquencies for April remained stable at 5.0% for the second consecutive month. However, 75% of the trusts reported improvement or no change in the number of accounts reported in the 60-plus day and 90-plus day delinquency buckets. These numbers may also support the theory that the recent jump in losses is due mainly to bankruptcy filings since charged-off bankrupt accounts are less likely to be counted in the later stage delinquency categories.

Performance month Apr 99 Apr 00 Feb 01 Mar 01 Apr 01
Yield (%) 18.8 18.9 20.0 21.1 19.9
Charge offs (%) 5.9 5.6 6.0 6.1 6.7
Delinquencies (%) 4.5 4.3 5.1 5.0 5.0
Payment rate (%) 16.2 15.4 15.0 16.6 15.6
SOURCE Standard & Poor’s


Intl Payments

Pitney Bowes this week launched a new foreign currency payment service for small to mid-sized businesses in the US. To manage payments in over 60 foreign currencies, customers simply complete a registration form to set up the account, and then call or fax the Pitney Bowes Bank to initiate foreign currency payments. Pitney says it also offers extremely competitive exchange rates, currently up to 5% lower than bank rates. Pitney Bowes serves over 2 million businesses through dealer and direct operations.



Swedish-based AU-System, a leading Mobile Internet consultancy, announced the opening of its North American subsidiary in San Diego.

“We are committed to AU-System’s growth in North America,” said Daniel Kivikas, president and CEO. “We are excited to make our home here in San Diego and to bring our expertise and knowledge to the U.S. market. AU-System has been at the forefront of the evolution of the Wireless Internet in Europe and we are looking forward to sharing our core competencies with technology companies, telecom operators and enterprises in North America.”

In addition to building the world’s first Internet bank with smart card security, AU-System has also created the world’s first commercially available WAP 1.1 browser and the world’s first secure wireless stock trading service. The company’s client list includes Ericsson, Telia, Singapore Telecom, Motorola, Hyundai, Compaq, Philips and Volvo.

AU System’s offerings encompass wireless application protocol (WAP), Bluetooth technology, embedded systems, telecommunications systems, portals, Customer Relationship Management (CRM), Operations Support Systems (OSS), security solutions and 3rd Generation (3G) wireless services. This includes technical and strategic evaluations, system design, software development, project management and turnkey solutions and support.

AU-System is publicly traded on the Swedish stock exchange and its major investors include Schroder Ventures, Ericsson and IBM. The company employs more than 1,000 staff in offices in Sweden, the United Kingdom, Italy, Thailand, Singapore and the U.S.



In the wake of a bankruptcy filing by PA-based Credit Card Center, TX-based Tidel Technologies said this morning it could incur a significant charge to earnings for the second quarter if the value of the collateral pledged to Tidel by CCC is insufficient. CCC has total assets of approximately $34 million and total liabilities of approximately $87 million. At yesterday’s hearing, the Court set June 15 as the date it will rule on CCC’s applications to retain legal counsel and use certain cash collateral to pay pre-petition wages for a limited number of employees. At the filing date, CCC owed Tidel the principal amount of approximately $27 million. The obligation is secured by a collateral pledge of accounts receivable, inventories and transaction income. Tidel has not received any payments from CCC on amounts due since January. Tidel has not shipped any products to CCC since December. Tidel reported in May a sharp decline in first quarter revenues and earnings due to the loss of CCC, as revenues declined from $18.6 million for 1Q/00 to $8.2 million for 1Q/01. (CF Library 5/11/01)


Hypercom Asia

Hypercom reported Wednesday a large scale deployment of its touch screen ‘ICE’ card payment terminals throughout Asia. The new generation terminals now account for nearly 50% of all Hypercom’s shipments in Asia versus 3% less than a one year ago. Among institutions now using Hypercom’s ‘ICE’ terminals: The Industrial and Commercial Bank of China; The Agricultural Bank of China; Equitable Bank in the Philippines; Maybank; Bank Central Asia; Citibank Hong Kong; Standard Chartered Bank; Bangkok Bank; Thai Farmers Bank; Thai Military Bank; American Express Thailand; and Bank International Indonesia. Hypercom says the sales of the terminals in Asia is driven partly by the increase in credit card skimming. Hypercom’s new terminals are tamper-resistant and customer-activated.



MasterCard International said last week that it expects explosive growth for ‘Maestro’ cards in the Asia-Pacific region, especially Thailand. The Asia-Pacific market has three billion consumers spanning 23 countries with only 9% using credit cards. MasterCard Asia-Pacific has launched, so far, 20 debit card programs in Hong Kong, Taiwan, Malaysia, India, Singapore and Australia. MasterCard also launched a pre-paid ‘Smart Money’ card in the Philippines, and a smart card with South Korea’s Kookmin Bank, which combines credit, debit, stored value and transport functions. In 2000, MasterCard’s charge volume in the Asia-Pacific region, excluding China, increased 53.9% in US dollars from 1999. Growth in North Asia was 64%, China other than the mainland 39%, Southeast and South Asia 27% and Australia and New Zealand 22%. Cards in circulation grew 27%.



Trintech Group Plc , a global provider of secure electronic payment infrastructure solutions for real world, Internet and wireless environments, announced it is a founding member of the TV Linux Alliance. Along with Trintech are 22 leading technology suppliers to cable, satellite, telecommunications and broadcast operators allying to produce Linux standards designed to improve product robustness in the advanced set-top box market.

Participation in the TV Linux Alliance extends Trintech’s commitment to its other tCommerce partners and initiatives with Philips Digital Networks and Network Entertainment of America, a division of Sony Electronics, Inc. Other members of the TV Linux Alliance include ACTV, ATI Technologies, Broadcom, Concurrent Computer Corporation, Conexant, Convergence Integrated Media, DIVA, Excite@Home, iSurfTV, Liberate Technologies, Lineo, MontaVista, Motorola, nCUBE, OpenTV, Pace Micro Technology, Qpass, Sun Microsystems, TiVo, TV Gateway and Worldgate.

Trintech is working within the alliance to help define a standard application programming interface (API) allowing cable operators and MSO’s (Multiple Service Operators) to select from a variety of vendors whose offerings are interoperable with the common API. Proprietary standards, which have been the industry norm, are costly to develop and reduces the time-to-market. This alliance plans to capitalize on Linux designs already underway among various founders and harmonize early work across the industry to ensure that Linux is delivered to the digital set-top box under a common framework of evolving standards-based specifications.

“Trintech is proud to be one of the founding members of the TV Linux Alliance,” said Trevor Healy, Vice President and General Manager ePayments Division for Trintech. “As a leading provider of secure payment systems globally, Trintech supports this open standard initiative that will aid the expansion of services offered by cable operators to their subscribers.”

Trintech’s involvement with the TV Linux Alliance provides an opportunity to further enhance the widespread adoption of its PayWare EveryWhere payment platform. PayWare mAccess, part of the PayWare product suite, is a modular, server-based multi-channel payment solution that enables “one touch” payment via any device including digital set-top boxes and mobile devices. Sophisticated built-in security features such as voice authentication provide a secure and convenient solution for the user.

By 2004, Forrester analysts estimate that tCommerce in the interactive television (iTV) market will amount to more than $5.5 billion. Acknowledging this growth potential, Trintech believes that this alliance is strategic to developing and capturing this emerging and captive market.

PayWare mAccess Product Overview

PayWare mAccess is a server-based product that seamlessly and securely authenticates the user and transfers payment details from digital set-top boxes and wireless devices through to the payment processor for settlement. It allows shoppers to simply drag-and-drop these virtual cards from their desktops or to ‘one-click’ purchase from their digital set-top box or wireless device to online merchant forms which will then be automatically filled out with the customer’s information.

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™ compliant. Trintech’s range of scalable open systems architecture solutions for UNIX® and Windows NT™ platforms covers consumer, merchant and financial institution requirements for physical payments and the emerging world of electronic commerce.