OTI 1Q/01

OTI announced financial results for the quarter ended 31 March 2001 with
significant increases in both revenue and gross profit.

— Revenues for the quarter are up 297% to US $4.07 million (1Q2000 US $1.025

— Gross profit ahead 356% to $1.94 million (1Q2000 US $0.425 million).

— Operating expenses remain at a consistent level of $5.11 million according
to the company’s corporate strategy and level of operations and thus the
operating loss for the three months ended March 31, 2001 were $3.171 million.

— Net loss of $3.219 million (1Q2000 US $3 million) in line with company
expectations as a result of operating expenses and the inclusion of e-Smart’s
operating loss of $0.642 million. Given the current economic situation and
OTI’s conservative financial approach, the company has taken an additional
provision for bad debt in the amount of $0.5 million for customers who have
paid within 180 days and who the company believes might not have adequate

— These results are in line with the company’s expectations to break even and
reach profitability for the fourth quarter of 2001.

“We are continuing to grow and meet projections,” said Oded Bashan, President
and CEO of OTI. “Our revenues have almost quadrupled, and we have strengthened
our global operations and marketing network. We have launched additional
products that strengthen our position as the technology leader in our

Financial Review

OTI has initiated an expansion strategy in 2000 that has revolved around
investing in R&D, expanding marketing infrastructure and increasing the global
operations. As a result of such expansion, the company has reached a strategic
level of operation that incurs operating expenses of approximately $5 million
per quarter.
Revenues for the quarter ended 31 March 2001 were $4.07 million, an
increase of
297% compared with US$1.02 million for 1Q2000. The gross profit for the
grew by 356% to $1.94 million compared with $0.42 million in 1Q2000.

Operating Expense

Research & development expenses increased by 82% to $1.4 million from $0.79
million in 1Q2000. Marketing expenses rose by 66% to $2.306 million from
million in the same period, while general and administrative expenses
by 70% to $1.089 million compared with $0.64 million in 1Q2000.
The net loss for 1Q2001 was $3.219 million (1Q2000 US$3 million) up from
$2.993 million in the previous quarter. The increase in net loss was strongly
related to the investments made in marketing, infrastructure, and global
expansion including acquisitions, and research & development. These are
expenses and are in line with OTI’s expansion strategy. In addition, given the
current economic situation and OTI’s conservative financial outlook, the
company has taken an additional provision for bad debt in the amount of $0.5
million for customers who have not paid within 180 days and who the company
believes might not have adequate securities.

Reflecting the company’s strategy, the operating expenses remain at the same
level as in 4Q2000. The company ended 1Q2001 with operating expenses of $5.11
million and operating losses of $3.17 million. Including e-Smart’s loss of
$0.642 million OTI finished 1Q2001 with a net loss of $3.219 million.
OTI ended 1Q2001 with cash, cash equivalents, and short-term investments of
$15.5 million and total assets of $41.3 million.

Major Developments

Some of the major developments during the first quarter include

— Xerox Connect and OTI are providing payment and information solutions for
the U.S. campus market. The relationship provides end-to-end solutions for
universities and corporate campuses.

— City of Tel Aviv will equip two additional country clubs with OTI’s
contactless smart card campus solution.

— OTI and P-Card System will jointly launch the first Europe-wide
currency-independent contact/contactless smart card solution to issuers
throughout Europe.

— OTI acquired the remaining 49 percent of leading European smart card system
integrator InterCard Kartensysteme GmbH and electronic smart card hardware
manufacturer InterCard System Electronic GmbH.

— e-Smart System will commence a field test for OTI’s smart card and readers
for use in an automated fare collection service in CKI’s toll bridge in Panyu,
Guandong province of China.

— MediKredit Integrated Healthcare Solutions (Pty) Ltd and OTI Africa began a
pilot project for the introduction of OTI’s Medical Management Application.

— The Israel Postal Authorities are to market and distribute EasyPark
electronic parking cards nationwide.

— OTI launched its Saturn Reader, the first fully integrated smart card
to accept both ISO 7816 contact cards and ISO 14443 Type A, B, and D
contactless cards.

— OTI will provide the first contactless smart card supporting public-key
infrastructure (PKI) encryption, used for digital certificates in such secure
environments as Internet transactions and in government agencies.

— Hindustan Petroleum Corporation Ltd. (HPCL) is launching a
contactless smart card program throughout India offering a payment and loyalty
solution for use at HPCL’s retail petroleum stations.

About OTI

Established in 1990, OTI (On Track Innovations) designs and develops
contactless microprocessor-based smart card technology to address the needs of
a wide variety of markets. Applications developed by OTI include product
solutions for mass transit, parking, gas management systems, loyalty schemes,
ID and secure campuses. OTI has regional offices in the US, Europe, Asia
Pacific, and Africa to market and support its products. The company was
the prestigious ESCAT Award for smart card innovation in both 1998 and 2000.
Visit OTI on the Internet at www.oti.co.il.


TransPoint Retirement

CheckFree announced this morning it has successfully migrated TransPoint customers to its end-to-end electronic billing and payment platform called ‘Genesis’. The TransPoint platform will be retired by June 30, 2001. As a result of the migration financial services organizations previously supported by the TransPoint platform will be able to distribute electronic bills and statements from a larger base of national and regional companies. Approximately 30 biller organizations previously operating on the TransPoint platform will have the ability to distribute those bills to nearly 300 Web sites where consumers choose to receive and pay their bills. CheckFree and TransPoint announced their merger in February 2000. TransPoint was an EBPP joint venture between First Data and Microsoft. Citibank was a minority equity investor. The deal was valued at $1.2 billion. Following the transaction, Microsoft, First Data and Citibank together now own 23% of CheckFree. (CF Library 2/16/00)



Proton World announced that it had successfully implemented the new Open
Platform 1.5.4 Terminal Framework specification, developed by the Device
Committee of GlobalPlatform, a cross-industry organisation that owns and
develops the Open Platform specifications for multiple-application smart card

Proton World has developed and implemented OPTF-compliant modules for
e-purse load, purchase and balance reading, using both the Proton R3 and the
Proton Prisma technology releases. The modules are platform-independent, and
were created using the JavaÔ programming language and inter-application and
application-platform interfaces defined and specified by GlobalPlatform.
Proton World and GlobalPlatform believe that the existence of large terminal
infrastructures is key to the future development of large-scale smart card
systems. Until now, there was a lack of global standards for terminals, and
terminal development was a slow and costly process, often dependent on the
specific requirements of each customer or scheme. The OPTF standard is an
important step towards a new generation of smart card terminals that are
platform and vendor-independent. Its adoption means that costly development
work can be done once and then replicated in many different implementations.
It will also open the terminal development process to developers without
specific terminal knowledge.

The Proton World OPTF implementation was demonstrated at the Proton World booth
at the CardTech/SecurTech trade show in Las Vegas from 14-17 May. The
demonstration used a PC, a C-ZAM/Smash smart card terminal from Banksys and a
Proton Prisma smart card.

Yves Moulart, CTO at Proton World, said “We believe that OPTF solves many of
the problems associated with traditional terminal development, and opens the
door to a new generation of terminals, just like OP 2.1 and CEPS have led to a
new generation of smart cards. Both of these developments will help to realise
the full potential of smart cards.”

Bernard Morvant, Chairman of the GlobalPlatform Device Committee, said ” I am
delighted, but not surprised to see that Proton World are one of the first in
the world to implement OPTF. They have been very active members of the Device
Committee and this achievement confirms their commitment to remaining at the
cutting edge of international smart card standards development.”
Vincent Roland, Senior Vice-President, Terminal and Card Applications at
Banksys, said “Banksys is very pleased to have collaborated with Proton World
in this development, which clearly demonstrates the suitability of our
C-ZAM/Smash terminal for global deployment.”



During May and June, 100 selected Eurocard customers are testing the use of
a virtual Eurocard for payments via Ericsson’s R520m mobile telephone with
built-in Bluetooth technology.
This is the first time that an internationally valid payment form has been
used in such a trial.

Svenska Eurocard is seeking to test whether customers experience that
payment via the mobile telephone is an easier, faster and more convenient
alternative than other payment methods, such as cash or card. Four stores
in the Täby Centrum shopping mall near Stockholm – MQ, Ego, Teknikmagasinet
and Buketten – are involved in the test as well as the Statoil petrol
station adjacent to the Täby Gallop racetrack.

“For the customer, paying for purchases using a Bluetooth-equipped mobile
phone will enable them to pass through the store check-out much faster. If
there is a line-up, the wait will be shortened considerably – which
benefits both customers and stores. Payment by Bluetooth-equipped mobile
phone can shorten the payment procedure by one-half. Customers can also be
informed of any special offers the stores may have at the particular time
via their mobile telephones,” says Synnove Trygg, president of Eurocard AB
in Sweden.

“For the stores, payment by mobile phone with Bluetooth enables them to
serve more customers in shorter time. Since purchases are confirmed using
PIN codes, there is no need for the stores to check customers’ ID,” says
Synnove Trygg.

Bluetooth makes it possible to transmit wireless data over short distances,
quickly and free of charge – in this case, between the purchaser’s mobile
phone, which incorporates the virtual Eurocard, and the store cash register.
“The attempt is based on an Ericsson-developed payment platform for
financial transactions using Bluetooth. It is an example of how the new
wireless Internet technology can be used for users’ everyday tasks,” says
Orvar Parling, vice president in charge of sales with Ericsson Sverige AB.
Eurocard AB in Sweden’s tests are unlike other wireless-payment methods
that use mobile phones in that they involve Bluetooth technology. Other
ongoing attempts use the regular GSM network and often involve one or
several SMS services, which creates costs for the consumer and longer
transaction times.


NPC Hires Bouchard

National Processing Company announced the appointment of Laurent “Larry” F. Bouchard to serve as senior vice president – Direct Marketing. Bouchard, who will report to Mark Pyke, executive vice president of Merchant Services, will provide leadership and strategic direction as NPC aggressively expands into the direct marketing segment.

Prior to joining NPC, Bouchard held senior positions at leading companies in the acquiring industry. Most recently, Bouchard oversaw product development at Paymentech and prior to that served as Portfolio Manager for Litle & Company.

“With more than three decades of experience in the merchant services industry, Larry brings valuable knowledge and direction to NPC with regard to the direct marketing industry,” stated Mark Pyke, executive vice president of Merchant Services for NPC. “Larry’s experience in product development and specifically direct marketing will serve NPC well as we continue to grow our existing merchant base.”

“I’m proud to join one of the leading merchant processing companies in the world,” said Larry Bouchard, senior vice president – Direct Marketing for NPC. “My goal is to build upon the strong foundation NPC has established within the industry, and help take it to the next level.”

About National Processing, Inc.

National Processing, Inc. through its wholly owned operating subsidiary, National Processing Company (NPC(R)) is a leading provider of merchant credit card processing. National Processing is 87 percent owned by National City Corporation (NYSE: NCC) ( [http://www.nationalcity.com][1]), a Cleveland based $91 billion financial holding company. NPC supports over 500,000 merchant locations, representing nearly one out of every five Visa(R) and MasterCard(R) transactions processed nationally. NPC’s card processing solutions offer superior levels of service and performance and assist merchants in lowering their total cost of card acceptance through our world-class people, technology and service. Additional information regarding National Processing can be obtained at [http://www.npc.net][2].

[1]: http://www.nationalcity.com/
[2]: http://www.npc.net/



A new smart card ticketing system for bus and train passengers in Northern
Ireland is forthcoming during 2001. Poole-based Wayfarer Transit Systems is
the preferred suppliers for the £6m integrated ticketing system. The
Translink system will eventually enable passengers on Northern Ireland
Railways, Ulsterbus and Citybus to book through tickets through their
prepaid smart cards.


CISP Goes Atomic

AtomicTangerine announced that Visa U.S.A. will offer AtomicTangerine’s Information Security University (InfoSec University) as a component of its Cardholder Information Security Program (CISP) education package. The ISU courses will support Visa’s training efforts on the subject of Web-based security.

Visa launched the CISP as part of its Secure Commerce Program in September 2000, partnering with e-merchants to protect cardholder data online. The CISP entails a set of 12 e-Commerce security requirements for safeguarding systems from unauthorized use of card and account information. Visa is helping e-merchants and service providers comply with the CISP requirements, ultimately making online payments safer for consumers.

In order to help spread the CISP message among the e-merchant community, Visa is promoting AtomicTangerine’s InfoSec University as a knowledge source about each of the 12 CISP security requirements. The InfoSec University courses offer a comprehensive, easy-to-use curriculum designed and written by AtomicTangerine’s experts in information security and educational development. The courses, ranging from basic instruction in protecting data for all computer users to deeper technical content designed for IT professionals, will be accessible through www.visabrc.com.

“We are very pleased that Visa has chosen AtomicTangerine’s InfoSec University as part of its CISP education curriculum,” said Joe Deney, CEO AtomicTangerine. “It’s a perfect example of companies realizing that the protection of data, the privacy of customers, and a well-trained security-savvy workforce are essential for doing business in today’s world.”

“AtomicTangerine’s ISU application will play a vital role in educating the Visa community on CISP’s critical security endeavors,” said John Shaughnessy, senior vice president, Risk Management, Visa U.S.A. “Having this additional level of training available enriches our program by helping e-merchants deadbolt cardholder data and safeguard e-Commerce businesses.”

About AtomicTangerine

AtomicTangerine, a spin-off of SRI International, specializes in information security services and technology offerings both on-land and on-line for Fortune 1000 companies. The company has demonstrated worldwide leadership as a valued security resource and services provider.

AtomicTangerine offers a complete range of security solutions including risk assessment and management, security architecture and design, advanced technology implementation, public/private partnerships, executive programs, online training, products, and services. Online services include SecurityPortal — internationally recognized as the “focal point for security on the NET(TM)”, NetRadarEWS(TM) (intrusion detection), and InfoSec University an online security training and awareness program.) The SecurityPortal web site (www.securityportal.com) serves a broad audience of more than 250,000 IS professionals each month, and contains more than 40,000 pages of security information, e-newsletters and specially focused digests. For more information about AtomicTangerine, visit the website at [www.atomictangerine.com][1].

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



CommWorks Corporation, an industry leader in delivering Internet Protocol (IP)
based networking solutions to service providers, announced that its Total
Control 1000 transaction gateway is helping Visanet, a leading provider of
credit card processing services in Brazil, to reduce its transaction

Visanet operates payment systems for the more than 600,000 affiliates of the
Visa system in Brazil. Visanet has deployed the Total Control 1000 transaction
gateway in its point-of-sale (POS) terminals in Sao Paulo, Brasilia, Salvador,
and Rio de Janeiro. Today, one out of four Visanet terminals are equipped with
the CommWorks’ solution. That number is expected to grow to 80 percent of
Visanet’s 170,000 terminals in Brazil by the end of this year.
The Total Control 1000 transaction gateway is CommWorks’ solution for
transaction routing services. The gateway is designed to handle hundreds of
millions of quick, secure transactions involving the transfer of small amounts
of data in a single dial access session. These transactions include credit
authorizations, debit card fund transfers, health benefit authorizations,
electronic fund transfers, and other transactions.

“In comparison with other solutions currently in use by Visanet, we have
achieved a 60 percent cost reduction per port thanks to the CommWorks’
transaction gateway,” said Carlos Alberto Perna, Visanet’s telecommunications
and network director. “The transaction gateway features high performance and
fast connections, even for the different POS models of Visanet. It is also a
flexible platform, providing support for a great variety of protocols and
connection speeds, which is critical for PC connectivity to the network.”
“Customers are looking for updated concentrators that support older legacy
protocols as well as being fully compatible with existing POS terminals in the
network,” said Amit Tiwari, director, Enhanced Data Systems, CommWorks
Corporation. “The Total Control 1000 transaction gateway meets this need,
allowing customers to seamlessly migrate to newer more efficient technologies.
We are pleased that Visanet is the first transaction processor in South
to deploy our gateway.”

Visanet has already invested U.S. $2.5 million to implement this solution and
will be investing the same amount this year to extend it throughout its
installed base, according to Perna.
The Total Control 1000 transaction gateway runs on CommWorks’ award-winning
Total Control 1000 multiservice access platform, which has demonstrated its
reliability and performance for nearly a decade. Currently, more than 12
million Total Control ports are deployed by service providers around the world
to deliver a broad range of data, voice and fax services on a single platform
and using a common set of authentication and billing services.

About CommWorks Corporation

Headquartered in Mount Prospect, Illinois, CommWorks, a 3Com Company, supplies
network service providers around the world with access infrastructures and IP
services platforms that open new business opportunities and help them
unique positions in a competitive marketplace. With flexible multi-service
hardware platforms and modular software components, the comprehensive
architecture makes it possible for service providers to integrate their
existing infrastructures with innovative technologies to deliver an array of
next-generation IP-based enhanced services to their customers. For further
information, visit www.commworks.com

About 3Com Corporation

3Com simplifies how people connect to information and services through
easy-to-use, connectivity products and solutions for consumers and commercial
organizations. The company also provides access infrastructures and IP
platforms for network service providers. For further information, visit
www.3com.com or the press site at www.3com.com/pressbox.

3Com, CommWorks and Total Control are registered trademarks of 3Com
Corporation. All other company and product names may be trademarks of the
respective companies with which they are associated.


POS Patent

@pos announced that it has been awarded patent No. 6,234,389 by the US Patent and Trademark Office directed to a PCMCIA connection supporting secure POS transactions between personal computing devices and external transaction accessories.

The patent, titled “PCMCIA-Based Point-of-Sale Transaction Systems”, pertains to the coupling of personal and business computing devices including desktops, laptops, and PDAs via a PCMCIA port to external sale/purchase transaction accessories. External accessories supported include smart card and magnetic stripe readers, touch sensitive virtual keypad screens, small printers, signature pads, or bio-metric devices. The patent also addresses internal security and secure transaction software included in support of the connection.

“Receiving this patent reflects a significant investment and commitment by @pos to expand our intellectual property portfolio,” said Llavan Fernando, CEO of @pos, “This secure transaction technology provides an unprecedented alternative for traditional POS systems and underscores our intent to drive the industry with innovative technology leadership.”

@pos initiated an aggressive patent program when the company was founded in 1996 and currently maintains a patent portfolio of 4 issued and 20 pending patents.

About @pos

@pos (OTCBB:EPOS) is a leader in secure, interactive electronic transaction technologies. The company currently markets its products to the retail, government and banking segments. @pos delivers proven technologies that include signature capture pads, web-enabled platforms, smart card interfaces, and encryption engines supporting DES and Triple DES. In addition, @pos offers an extensive suite of software tools. For more information, see www.atpos.com



Euronet Worldwide, a leading provider of secure financial transaction
solutions, named Kendall Coyne as its Chief Financial Officer. Coyne brings
more than 20 years’ finance experience to Euronet, most recently from Aerie
Network Services, Inc. of Denver, Colorado, where he served as Vice President.
At Aerie, he was responsible for corporate structuring and financial
administration for the start-up fiber-optic telecommunications company.
Previous experience includes four years at Sprint PCS/Sprint as Vice
President and Director of Tax Policy. Prior to Sprint, Coyne served in
various tax management and executive management roles for Kansas City Power
and Light Company (KCPL), Public Service Co of NM, Albuquerque, NM, and
KPMG Peat Marwick, Albuquerque, NM.

“Kendall Coyne brings a wealth of experience ideally suited to his role at
Euronet, and we are fortunate to have him join our fast-paced team,” said
Michael Brown, Euronet Worldwide’s Chairman and CEO. “We expect him to play
an important role on the senior management team in moving Euronet forward
and building investor confidence and shareholder value.” Euronet Worldwide
also announced that since March 31, 2001, it had exchanged an aggregate of
DEM 35 million (US$15.5 million) face value of its 12 3/8% senior discount
notes for an aggregate of 1,225,000 shares of its common stock. The total
accreted value (through May 31, 2001) of the debt exchanged is DEM 26.6
million (US$12.0 million). The DEM 35 million face value exchanged includes
the DEM 23 million that was previously reported as a subsequent event in
Euronet Worldwide’s most recent Form 10Q.

As a result of these exchanges, Euronet’s long-term indebtedness will be
US$69.7 million in total face value (US$60.4 million in accreted value) as
of May 31, 2001. This compares to US$85.2 million in total face value
(US$72.3 million in accreted value) of total long-term indebtedness as of
March 31, 2001. The total decrease in the Company’s indebtedness will
result in an annual cash interest expense savings of approximately
$2,000,000 per year. “We are very pleased with these exchanges,” said
Brown. “They improve our balance sheet, reduce our long-term debt, are
accretive to the shareholders and will accelerate the Company’s move toward

About Euronet Worldwide

Euronet Worldwide is a global leader in the rapidly evolving arena of
electronic financial transactions. The company provides software and
service solutions to a wide array of industries from retail banking to
mobile operators, enabling them to offer customers secure access to their
personal financial information — any time, any place. Euronet operates
transaction-processing centers on three continents, including owning and
operating the largest independent ATM network in Europe. With corporate
headquarters in Leawood, Kansas, USA, and European headquarters in
Budapest, Hungary, Euronet Worldwide employs approximately 400 people in 15


Canadian Cards Expand

Hudson’s Bay Company and Imperial Oil have joined together to offer Canadians more choice, convenience and flexibility – as of May 31, 2001, over 5 million Bay and Zellers credit cardholders can use their card as a method of payment at more than 2,300 Esso-branded service stations across Canada.

“Hudson’s Bay Company offers Canadians the widest selection of goods and services available from any single retailer in Canada,” said George Heller, president and chief executive officer, Hudson’s Bay Company. “We see ourselves as the ultimate shopping solution for Canadians and with Imperial Oil, we are extending beyond our current product offering to meet even more of our customers’ everyday needs. We are pleased to extend the utility of our credit cards to Esso stations across Canada. Our goal is to make shopping easy and rewarding for Canadians and this agreement is an important initiative in achieving this goal.”

By linking their Bay or Zellers credit card to their HBC Rewards/Club Z card, cardholders will earn 25 HBC Rewards Bonus points for every dollar spent at Esso. HBC Rewards Gold members will receive 50 HBC Rewards Bonus points for every dollar spent at Esso when using their Bay or Zellers credit card. HBC Rewards members can redeem their points for over 600 items available in the HBC Rewards catalogue available at any of the Hudson’s Bay Company family of stores – the Bay, Zellers or Home Outfitters or online at the HBC Rewards website found at [www.hbc.com][1].

“Our research continues to show the importance consumers place on convenience,” said Roger Purdie, Imperial’s vice-president of marketing. “This agreement with Canada’s largest department store retailer reflects our goal of offering consumers more convenience with new payment options and a chance to collect rewards from both Imperial Oil and Hudson’s Bay Company when they come to our service stations and convenience stores.”

Bay and Zellers credit cardholders can also earn Esso Extra points if they swipe their free Esso Extra card on eligible purchases made at participating Esso stations. The Esso Extra loyalty program is a gasoline loyalty program that consistently offers its customers a chance to both accumulate points and enter exciting contests.

About Hudson Bay

Hudson’s Bay Company, established in 1670, is Canada’s largest department store retailer and oldest corporation. The Company provides Canadians with the widest selection of goods and services available through numerous retail channels including more than 500 stores led by the Bay and Zellers chains. Hudson’s Bay Company is Canada’s fifth largest employer with 70,000 and has operations in every province.

About Imperial Oil

Imperial Oil Limited is one of Canada’s largest corporations and has been a leading member of the country’s petroleum industry for more than a century. Imperial is the country’s largest producer of crude oil and a major producer of natural gas. It is also the largest refiner and marketer of petroleum products – sold primarily under the Esso brand – with a coast-to-coast supply network. As well, the company is a major producer of petrochemicals.

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