Schlumberger Limited reported first quarter operating revenue of $2.91
a 36% increase over the same period last year.
Net income for the first quarter was $261 million ($0.45 per share-diluted)
before a $25 million ($0.04 per share-diluted) charge for in-process
research &
development related to the Bull CP8 acquisition, compared with $136 million
($0.24 per share – diluted) last year.

Earnings per share, excluding acquisition related costs (in-process R&D,
amortization of goodwill and amortization of identifiable intangibles) was
$0.51 per share (diluted) compared with $0.27 per share (diluted) for the same
period last year.

Oilfield Services revenue increased 49% versus the first quarter of 2000 as
worldwide M-I rig count grew 30%. Compared with the fourth quarter of 2000,
revenue increased 13%.

Resource Management Services revenue was 5% lower than in the first quarter
last year. Test & Transactions revenue increased 14% versus the same period
last year.

Chairman and Chief Executive Officer Euan Baird commented:

“The continued surge in North American activity coupled with the start of
growth elsewhere, is clearly reflected in the results of Oilfield Services
quarter. Our efficient GeoMarket(a) organization has allowed us to maximize
performance in terms of year-on-year revenue growth and operating margin
improvements. These bullish trends appear set to continue unless a global
economic slowdown reduces growth in oil demand.

The acquisition of Sema was completed on April 6, 2001, less than two months
after the transaction was first announced, and the integration process is
already underway. Schlumberger Sema is an Information Technology products and
service company for the 21st century, which combines in-depth knowledge of
certain industries with world-class IT and networking skills. This unique mix
of expertise will allow our customers to e-transform their businesses and
realize substantial savings as they turn data into real-time decisions.”

Oilfield Services

Oilfield Services operating revenue in the first quarter increased 49%
year-over-year, with all four reporting Areas experiencing double-digit

Revenue increased 13% versus the prior quarter led by North America.
Year-over-year and sequential growth was driven by WesternGeco (formed late in
the prior quarter), increased activity, improved pricing levels, and
productivity gains from the use of advanced technologies. Worldwide, revenue
showed strong double-digit year-over-year growth in all product segments, and
grew sequentially in all product segments except Well Completions &
Productivity, which remained flat. The worldwide M-I rig count increased 30%
year-over-year and 8% sequentially. Pretax operating income in the first
quarter grew 134% compared to the same period last year and 21% sequentially.

North America

In North America, first quarter revenue of $924 million increased 81% compared
with the same quarter last year and 28% sequentially. The M-I rig count of
1,801 increased 37% year-over-year and 13% sequentially. Pretax operating
income of $226 million was 267% higher than the first quarter last year and
increased 57% sequentially.

Year-over-year revenue growth was led by strong double-digit growth in all
product segments except Integrated Project Management which remained flat.
Sequential revenue growth was led by WesternGeco, with strong contributions
from Wireline, Drilling & Measurements and Well Services.

Sequentially and year-over-year, all GeoMarkets recorded strong revenue and
pretax operating income growth well in excess of the increases in rig count.
This growth was driven by pricing improvements, the introduction of new
technologies and services, and increased non-rig related activity.

Latin America

In Latin America, first quarter revenue of $365 million increased 46%
year-over-year and 7% sequentially. The M-I rig count at 317 increased 36%
year-over-year and 1% sequentially. Pretax operating income in the first
quarter was $43 million, an increase of more than four-fold over last year and
an increase of 41% sequentially.

Year-over-year revenue growth was strong across all product segments.
Sequential revenue growth was led by Wireline and by Drilling Services, which
is primarily comprised of six Lake Maracaibo based Multi-Purpose Service
Vessels (MPSV). Resulting pull-through of other Schlumberger services by the
MPSV activity also contributed to the growth in the quarter.

Strong year-over-year revenue and pretax operating income growth was seen in
all GeoMarkets. Sequentially, the strongest revenue growth was in the
Venezuela/Trinidad /Tobago and Latin America South GeoMarkets, with pricing
improvements in most product segments contributing to the increase in results.

Europe/CIS/West Africa

First quarter revenue of $464 million in the Europe/CIS/West Africa Area
increased 37% compared with the same quarter last year and 1% sequentially.
M-I rig count at 273, excluding the CIS, was up 25% over the same period last
year and 2% sequentially. Pretax operating income of $57 million increased
year-over-year and decreased 26% sequentially.

Strong year-over-year revenue and pretax operating income growth was recorded
in all product segments except Drilling Services, which remained flat.
Sequentially, while revenue increased modestly, several factors led to a
decline in pretax operating income during the quarter. These factors included
adverse weather conditions in the North Sea and Russia, which affected most
product groups, a reduction in well testing operations and lower seismic
results in several GeoMarkets.

Other Eastern Hemisphere

First quarter revenue of $468 million in the Other Eastern Hemisphere Area
increased 23% year-over-year and 7% sequentially. The M-I rig count at 437
increased 9% year-over-year and was flat sequentially. Pretax operating income
of $92 million increased 43% compared with last year and 17% sequentially.
Compared to the same period last year, revenue and pretax operating income
growth was led by Well Completions & Productivity, WesternGeco and Drilling &

Year-over-year growth saw a strong improvement in the Australasia GeoMarket
most GeoMarkets in the Middle East. Sequentially, while most GeoMarkets in the
Middle East showed good growth, as did the Australasia and the
Brunei/Malaysia/Philippines GeoMarkets, those gains were partially offset by a
sequential decline in the China and the Japan/Korea/Taiwan/Sakhalin

Other Activities:

— The PowerDrive(a)900 steerable rotary drilling system set two new-world
records. In the Gulf of Mexico, more than 8,000 feet was drilled in one run
on a separate run the system functioned for a continuous period of 262 hours
below the rotary table. Since commercialization at the end of 2000, the
PowerDrive900 has completed 50 successful runs. It is the only rotary
system that provides full 3D directional control at all inclinations from
vertical to horizontal while rotary drilling in 12- 1/4 inch hole. This new
tool complements the existing PowerDrive*675 system for 8-1/2 inch hole and
extends the range to include hole sizes up to 17-inches.

— The Commander(a) telemetry control and monitoring system, in conjunction
with the SenTREE(a)7 subsea completion and test tree, successfully performed
its first operation from a dynamically positioned vessel in the Gulf of
This technology, the only proven deep water subsea completion telemetry
and monitoring system in the industry, allows the development of fields in
water that use cost-effective horizontal subsea xmas trees, and enables a
dynamically positioned rig to safely disconnect within 15 seconds from a well
in an emergency situation.

— signed an agreement with Veritas DGC Inc. and WesternGeco to
develop e-commerce standards and new technology to publish, market and license
multi-client seismic data online. Sellers will be able to create and manage a
private Seismic Storefront(TM) where they can reach a global pool of buyers,
exchange highly technical information with their clients and conduct secure
business transactions online. Together, Veritas DGC and WesternGeco own and
market multi-client seismic libraries totaling 3 million linear km of 2D data
and 540,000 sq. km of 3D data.

Resource Management Services

Resource Management Services (RMS) operating revenue decreased 5% compared
the same quarter last year and increased 6% sequentially. The majority of the
year-over-year revenue decline was due to the divestiture of the Gas Service
businesses in Europe during 2000. First quarter orders decreased 8% over the
same period last year and increased 13% sequentially. The pretax operating
in the first quarter was attributable to the amortization of acquisition
related costs.

In North America, first quarter revenue increased 57% year-over-year and 21%
sequentially, driven by increased communication module sales and automated
meter reading fees. Higher CENTRON* meter shipments, particularly to the PECO
Energy Company automated meter reading project, accounted for an
improvement in
electricity metering revenue. Orders during the quarter increased 30%
year-over-year and 38% sequentially due mainly to higher electricity metering
and automated meter-reading activities.

In Europe, first quarter revenue showed a 14% improvement sequentially, when
adjusted for the divestiture of the Gas Service businesses, driven by order
increases in Germany and France. Orders in the first quarter decreased 12%
year-over-year and increased 14% sequentially led by strong demand for gas

In Asia, revenue for the first quarter declined 4% year-over-year and 28%
sequentially due to lower exports of electromechanical electricity products
lower gas meter deliveries in China. Orders decreased 63% year-over-year and
45% sequentially due mainly to lower demand for electricity meters in Taiwan,
Sri Lanka and Malaysia.

In South America, first quarter revenue declined 10% year-over-year and 12%
sequentially due primarily to lower demand for electricity products in
Colombia, Uruguay and Peru. Orders in the quarter were down by 36% compared to
the same period last year reflecting the lower demand for electricity products
and the general slowdown in Brazil.

Test & Transactions

Test & Transactions operating revenue in the first quarter increased 14%
compared with the same quarter last year and fell 13% sequentially. The
sequential decline in activity was mostly due to the continuing down cycle in
the semiconductor industry. Orders were down 10% compared with the same
last year and up 9% sequentially.

In March, Test & Transactions acquired Bull CP8, a market leader in
microprocessor-based smart cards and associated systems applications for the
banking, mobile communications and network security industries. This
acquisition makes Schlumberger the clear leader in smart cards and adds unique
R&D and smart card technology capabilities in the banking segment where Bull
CP8 holds a strong, globally recognized position.

Cards revenue grew 20% year-over-year and declined 4% sequentially. The main
drivers of year-over-year growth were strong demand and increased volume of
high-end Java(TM)-based products for mobile communications and banking
applications. The anticipated seasonal volume decline in GSM cards was
partially offset by strong average sales price improvement due to the
mix of high-end and new products. Orders declined 21% year-over-year and 23%
sequentially, reflecting the current inventory of GSM cards held by mobile
telecom operators. Sequentially, orders for prepaid cards were up 12% and
banking card orders were up 55%. In North America, the increasing adoption of
the GSM standard, which provides mobile phone users with seamless roaming
across GSM networks worldwide, has generated significant opportunities for
product and service applications. Schlumberger signed a memorandum of
understanding with AT&T Wireless (NYSE: AWE) in March to provide SIM
(subscriber identity module) smart cards and related OTA (over-the-air)
technology to support AT&T Wireless’ new GSM network platform.

Network Solutions revenue grew 43% year-over-year driven by growth in Network
Services and Wireless Applications Services. Strong sequential growth in the
Network Services and Wireless Applications Services markets was mostly offset
by a decline in Public Telecom activity. Orders grew 31% year-over-year and
grew 69% sequentially on continuing higher activity for both Network Services
and the recently acquired Data Marine Services.

eTransactions Solutions revenue grew 47% year-over-year and increased 15%
sequentially, driven primarily by increased worldwide deliveries of MagIC*
e-payment point of sale terminals. In addition, European customers began
accepting previously postponed deliveries of new euro-compatible Pay &
on-street parking meters. Orders rose 48% over the first quarter of 2000 and
grew 25% sequentially. The growth came primarily from improved activity in the
off-street parking, e-Payment Terminals & Systems, and parking services

Semiconductor Solutions revenue was down 31% year-over-year and down 49%
last quarter as conditions in the semiconductor industry deteriorated.
Semiconductor manufacturers have implemented widespread cost control measures
and delayed capital spending and deliveries. Orders decreased 41%
year-over-year while the sequential increase of 13% was driven by seasonal
customer services contract bookings. During the quarter Schlumberger shipped
the first IDS(R) PICA revolutionary probing equipment for semiconductor design
validation and characterization. In addition, the new Schlumberger test
platform was selected by a leading microprocessor manufacturing company to
their latest generation of high volume processors.


PayPay Record

PayPal reported yesterday it has doubled its transaction volume in four months, hitting $2 billion in payments processed since launch of the service in November 1999. The online payment service now has more than seven million registered users. PayPal members spend approximately $8 million a day in more than 160,000 transactions. More than 85% of those payments go to businesses, which pay transaction fees for use of the service. PayPal is the settlement means used in more than a quarter of all eBay auctions. Since achieving its first billion dollars in transactions processed in December, PayPal has completed a $90 million strategic financing round, secured key domestic and international partners, and expanded to 38 countries. (CF Library 2/7/00; 4/6/00; 12/13/00; 12/22/00)



MoneyGram Payment Systems, Inc., has entered into an agreement with Bancomer
Transfer Services, Inc., a subsidiary of BBVA Bancomer, S.A., to provide its
electronic money transfer service for U.S. customers sending funds to Mexico.
BBVA Bancomer is the leading bank in Mexico and Latin America and is an
integral part of Grupo Financiero BBVA, one of the most successful financial
groups in the world.

Company officials at MoneyGram said the agreement uses MoneyGram’s Cambio Plus
(pronounced CAHM-beeyo ploose) service which allows customers to send any
amount of money to Mexico in 10 minutes for a flat $15 fee and one of the most
competitive peso payout rates in the industry. In addition, customers
receive a
free 3-minute phone call and an additional 5% discount off the fees when they
use their MoneyGram MoneySaver card.

The Bancomer agreement makes the MoneyGram agent network one of the
largest, if
not the largest, in Mexico, says Ann Doelling, MoneyGram’s vice president of
worldwide marketing. “Mexican customers have the increased convenience of
receiving funds from Bancomer’s excellent network of locations.”
Doelling said the major announcement follows the successful introduction of
Cambio Plus with its simple, flat-fee pricing and coincides with a new ad
campaign featuring Los Tigres del Norte, one of the most popular Norteno bands
in North America.

The Bancomer payment network includes 1,141 Bancomer bank branches, 162
Benavides Pharmacies and 197 Singer stores. Bancomer is the largest private
financial institution in Mexico with offices in London and Grand Cayman,
agencies in New York and Los Angeles and an office of representation in Sao
Paulo, Brazil. Additionally, Bancomer has a subsidiary bank in the Cayman
Islands called Mercury Bank & Trust Limited.

MoneyGram Payment Systems, Inc., a subsidiary of Travelers Express Company, is
a leading money transfer services company with more than 37,000 locations in
more than 150 countries around the world. Travelers Express is a subsidiary of
Viad Corp (NYSE:VVI) and provides payment services in the financial, retail
money transfer areas.

To find a MoneyGram agent or more information on Travelers Express go to on the Internet.


Grinch VISA Prizes

When Vic Cook checks in at the Ritz-Carlton in Pasadena today, he’ll leave a richer man. That is because the Citibank Visa cardholder today becomes one of 500 Visa cardholders to receive all of their November and December purchases made on their Visa card for free. Cook won over $30,000 in Visa and the Grinch Give Back the Holidays!, Visa’s national holiday promotion. Each time consumers used their Visa card during the promotion, they were entered to win the total dollar amount purchased on that one card throughout the holiday season. “It was like the holidays all over again!” said Vic. “It will be fun to figure out what to do with the prize money, which I plan to donate 10% to my local church and share the rest with my family.” Cook, a vibrant, athletic, 69-year-old retired educator, who founded the Meadow Oaks School in 1963, has been enjoying quality family time as well as pursuing his passions, sports and computers, ever since he sold the school last August. He used his Citibank Visa card during the holidays to purchase trips with his wife, gifts for his four children and eight grandchildren, lots of sporting equipment and the latest electronic gadgets for himself.

Mr. Cook will receive his prize money during an official Check Presentation Ceremony at 11:30 am on Thursday, April 19 at the Ritz-Carlton at 1401 S. Oak Knoll in Pasadena. Press note: Photo and interview opportunities will be available.

Visa U.S.A. partnered with Universal Pictures and Universal Studios Consumer Products Group to support the blockbuster live-action remake of the holiday classic, Dr. Seuss’ How the Grinch Stole Christmas, starring Jim Carrey as the Grinch. To promote this partnership, Visa designed a promotion that would reward its cardholders during the busy holiday shopping season. “We are delighted that by using his Citibank Visa card, Vic received all of his holiday purchases free,” says Rebecca Shore, VP Communications, Citi Cards. “This Visa promotion allowed Citibank to provide a unique holiday gift to some of our cardholders.”

In total, 500 winners had their purchases paid for by Visa in the nine-week national Visa and the Grinch Give Back the Holidays! promotion. Every time a consumer made a purchase with their Visa card from November 1 through December 31, 2000, they were automatically entered to win the total dollar amount purchased on that card throughout November and December. The more purchases made on the card, the more entries the consumer had into the Sweepstakes. A non-purchase method of entry was also available to consumers. “Our partnership with Universal Studios and The Grinch was designed to uniquely capture cardholder interest during a time of year when hundreds of brands are vying for attention and share-of-voice,” said Becky Saeger, executive vice president, Brand Marketing, Visa U.S.A. “Like our other marketing campaigns, this was designed to capture the awareness of cardholders and drive Visa card usage for the benefit of our Member financial institutions and merchants who accept Visa.”

Citibank is a registered service mark of Citicorp.

Citibank is part of Citigroup (NYSE:C), the preeminent global financial services company, providing some 120 million consumers, corporations, governments and institutions in more than 100 countries with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, insurance, securities brokerage and asset management. Major brand names under Citigroup’s trademark umbrella are Citibank, CitiFinancial, Primerica, Salomon Smith Barney, and Travelers. Additional information may be found at:

Visa is the world’s leading payment brand and largest 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 345 million Visa-branded smart, credit, commercial, stored value and check cards, accepted at approximately 21 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 [][1] for additional information. The number one box office attraction of 2000, Universal Pictures’ and Imagine Entertainment’s Dr. Seuss’ How the Grinch Stole Christmas! starring Jim Carrey, was directed by Ron Howard (Apollo 13) and produced by Brian Grazer (The Nutty Professor). Universal Pictures is a unit of Universal Studios ([][2]), a part of CANAL+, and TV and Film division of Vivendi Universal, a new global leader in media and communications.




MasterCard International announced
the deployment of a revolutionary new payment-processing platform that frees
member financial institutions to leverage technology in support of their
specific business needs. The comprehensive platform delivers unprecedented
levels of flexibility and enables mass customization of payment processing.

“With MasterCard, members are not held captive by a card association’s
technology,” said Rob Reeg, MasterCard senior vice president, Systems
Development. “With the new platform, members now have the flexibility to
customize processing to their business, allowing them to take advantage of
new opportunities, both locally and globally.”

“We have completed the most sweeping technological change in MasterCard
by developing the first integrated, global payment-processing platform,” said
Jerry McElhatton, MasterCard Global Technology and Operations Senior Executive
Vice President. “The days of ‘one size fits all’ are over. With the new
platform, our members’ business goals drive the technology, instead of
technology driving their business decisions.”

MasterCard’s Multi-Year Processing Strategy

MasterCard has initiated a three-step strategy for delivery of its new core
processing platform. These steps include:

– A massive, world-wide upgrade of Banknet, MasterCard’s global network, to
industry’s first virtual private network (VPN);
– Development of new customizable features and functionality through
proprietary modular software, focused on the introduction of a new clearing
– Distribution of network processing to Regional Service Centers, enabling
customized local processing.

New Functionality Gives Members Control Over Data

MasterCard is rolling out its new Global Clearing Management System (GCMS),
replacement for its previous clearing system, INET, with members and
processors. GCMS captures more information than ever during clearing, gives
members more control over how the data is handled and links authorization and
clearing messages. Thirty-three members already have committed to early
migration to the new clearing platform.

The platform sets the stage for members to participate in new business
opportunities — both globally and locally — and efficiently links members to
emerging payment channels, such as Internet and wireless applications.

Global Impact

A key benefit of the new platform is that international transaction processing
can be customized to local markets. This has major business implications for
financial institutions throughout the world, especially those with global
operations. Through MasterCard’s technology, members may move into new markets
quickly, as technological barriers to growth are removed.

“The new platform will help our members break through international processing
barriers that previously created expensive business challenges and even
prevented entry into some markets,” said Reeg. “We’re more than midway
this strategy, and our members tell us the MasterCard platform will change the
way they do business.”

Members will be able to dictate daily settlement times based on what makes
business sense for them, factoring in local holidays and time zones instead of
conforming to the U.S. clock and calendar. Also, members can determine which
currency they will settle in rather than being forced to convert to U.S.
dollars. Finally, the new platform provides support for local data practices,
local processing and local fees. The new platform will recognize a member as a
single entity, whether it operates in one or multiple countries. This means
member portfolios can be consolidated, even though they may be settled in
varying currencies.

MasterCard’s Regional Service Centers help members operate within local
guidelines. For example, they’ll make it possible to process transactions
completely within a country like Taiwan, as dictated by the country’s laws.
Operating Efficiencies
Members will experience increased operating efficiency, in daily activities
specific circumstances, such as partial portfolio sales. They will see
transaction-routing enhancements and elimination of batching transactions. The
new applications provide flexibility, allowing members to focus their internal
technology on features relevant to their business.
The new applications also will help members better manage customer account
performance. Technical details like easier transaction reversals translate
savings for issuers, who will have fewer inquiries and chargebacks to
manage as
incorrect charges can be resolved before posting to a cardholder’s bill.
Real-time, online access to transactional data will help issuers and acquirers
resolve cardholder and merchant inquiries immediately, often in a single phone
call, as opposed to time-consuming,
labor-intensive research that can drag on for weeks. An additional benefit is
fewer resources need to be committed to research and data storage.

Linking to Emerging Payments

The new platform is designed to accommodate any type of payment, including
those initiated through emerging and evolving payment channels such as the
Internet and wireless devices.

For example, one of MasterCard’s Internet gateways that is built into the new
platform helps members exchange information and files in a simple, consistent
way, regardless of system architecture. This allows acquirers to offer
customized services like card number protection to merchants.

The Architecture

The new platform sets the stage for the “next generation” of MasterCard’s
Banknet system, which will be transformed into a distributed network from its
previous processor-based architecture. It includes the payment industry’s
IP VPN, created in partnership with AT&T four years ago. In its first year of
operation, the VPN saved members 47.7 years of processing time by reducing
nearly in half the time it takes to process each transaction.
In addition, the system’s bandwidth on demand means an unlimited number of
transactions can flow through the system without risk of bottlenecks or other
congestion issues. “It’s virtually impossible for our system to reach
capacity,” said Reeg.

MasterCard’s core processing platform can process any type of transaction,
including credit and debit, or smart cards, and any channel, including
applications and transponders. The platform uses a mix of client-server and
mainframe technology, including Sun, Oracle, and Cisco routers.


MasterCard International is delivering new processing applications that allow
its 20,000 member financial institutions to better manage and grow their
business. The applications and recently completed processing platform provide
system flexibility and new data-management capabilities that benefit
members on
several levels.

Enabling Member Growth Both Globally and Locally

– Information and processes can be localized to meet member financial
institutions’ needs.
– Members choose settlement times and currency according to local needs
of conforming to U.S. standards.
– New Regional Service Centers throughout the world give banks a local
for processing and support.
– Members are treated as a single entity whether they are active in one or
multiple countries.
– Banks and their merchant customers can add new cardholder programs quickly
and efficiently.
– Banks can bring new business ideas to market more quickly since their
processing platform can be customized quickly to support their activity.

Savings Through Increased Efficiency

– Members can consolidate and streamline transaction processing.
– Members can more easily manage partial portfolio sales.
– Eliminates offline batching, a process that many banks and processors
typically spend several hours on daily.
– Split-authorization routing will enable transaction data to be sent to two
places simultaneously so issuers can get more and better information in the
seconds they have to authorize a transaction.
– The system’s flexibility allows members to focus their internal
technology on
the features relevant to their business.
– Members know their financial positions more quickly and accurately each
– Cardholder inquiries can be handled quickly and efficiently because banks
have online, real-time access to data.
– Customer service becomes more manageable: transactions are posted faster and
reversals are easier, so incorrect charges can be resolved before they show up
on a customer bill.

Paving the Way for New Payment Channels

– Paves the way for emerging payment channels, such as wireless and
– Consumers can pay anytime, anywhere with any device they want.
– Members can adapt new technologies quickly.
– With MasterCard’s Internet gateway, MasterCard’s member banks exchange
information and files in a simple, consistent way, without worrying about
system architecture.


The first step in the deployment of MasterCard’s core processing platform
included a massive,
world-wide upgrade of its Banknet network to a virtual private network (VPN),
the first such network in the industry, as well as upgrades to key pieces of

the infrastructure. Key completed infrastructure deliverables include:

– Deployment of the VPN (1996 — 1998)
– Replacement of 600+ interface processors world-wide (1995 — 1997)
– Enhancing the stand-in system (1996 – 1997)
Next, MasterCard began developing new features and functionality through
proprietary, modular software that delivers flexibility and mass customization
to members. MasterCard has begun the rollout of the new software, having just
completed the last release of upgrades to its venerable INET clearing system.
Rollout has begun and all applications will be fully deployed by 2003. Key
completed deliverables include:

– Rollout of the new Settlement Account Management System (1999)
– Deployment of the Global Clearing Management System (3Q2001)
– Introduction of Integrated Product Messaging based on ISO 8583-1993 format
– Delivery of a new Global File Transfer architecture (2000)
– Rollout of a new Member Parameter System (4Q2001 – 2003)
– New pre-edit and test tools (2000)
The third step in the strategy is to distribute network processing regionally
throughout the world, enabling local customization of processing. The first
such Regional Service Center is up and running in Australia, with others to
follow as business demands. Two key components are completed:

– Development of a Regional Service Center architecture (1996)
– Deployment of first Regional Service Center (1997 — 1998)
– Authorization system replacement (2003)

MasterCard International has the most comprehensive portfolio of payment
in the world. More than 1.7 billion MasterCard®, Cirrus® and Maestro® logos
present on credit, charge and debit cards in circulation today. An association
comprised of more than 20,000 member financial institutions, MasterCard serves
consumers and businesses, both large and small, in 210 countries and
territories. MasterCard is the leader in quality and innovation, offering a
wide range of payment solutions in the virtual and traditional worlds.
MasterCard’s award-winning Priceless® advertising campaign is now seen in 81
countries and in more than 36 languages, giving the MasterCard brand reach and
scope unrivaled by any competitor in the industry. With more than 21 million
acceptance locations, no card is accepted in more places and by more merchants
than the MasterCard Card. In 2000, gross dollar volume exceeded US$857


First Annapolis Execs

New Partner Joins First Annapolis Consulting

Michael K. Mulhern has joined First Annapolis as a Partner. Mr. Mulhern will focus on further expanding the firms’ merger and acquisition advisory services, electronic commerce, and commercial card practice areas. He will also play a lead role in expanding the firm’s reach into other segments of the financial services industry.

Previously, Mr. Mulhern was a Partner at Deloitte Consulting. At Deloitte, he served as a Partner in the Financial Services Practice where he advised clients on competitive strategy, eBusiness strategy and implementation, business process reengineering, and financial management in the financial services industry. He was the lead relationship partner for a number of client relationships.

Mr. Mulhern’s background includes management experience with Macmillan, Inc. in New York where he was responsible for all international finance activities, including foreign exchange trading, hedging, tax management, and profit ropatriation. He also has experience as a lending officer with Irving Trust Company, NY, NY.

First Annapolis Managing Director William J. Westervelt, Jr., states “We are very pleased to have Mike join the First Annapolis team. As a Partner, he will play an integral role in helping to shape the future direction of First Annapolis, and in providing excellent advice to our clients.”

Mr. Mulhern received a Bachelor of Science in Commerce degree from the University of Virginia and a Masters Degree in Business Administration from the Darden School. A native of Maryland, Mr. Mulhern is married and has four children.

First Annapolis is a management consulting and investment banking firm with a primary focus on the financial services industry. The firm’s principal specialties lie in advising clients in payment related industries — credit/debit/stored value issuers, transaction processing, electronic funds transfer, and emerging payment mediums such as the Internet. The firm’s clients include leading domestic and international companies in the financial services, retail, technology, and consumer goods industries.

First Annapolis Adds Seasoned Consultant to its Team

Ray Chinn has joined First Annapolis and will focus on the firm’s investment banking and electronic banking practice areas. In each of these practice areas, he will help expand the firm’s service offerings and deepen its expertise in specialized market segments such as smart cards and other emerging payment products.

Previously, Mr. Chinn was Senior Engagement Manager at Financial Institutions Consulting, Inc., in New York City. At Financial Institutions Consulting, he advised companies in the financial services industry by providing strategic growth and business design solutions. Recently, he advised several clients on potential opportunities with emerging payment products such as smart cards.

Mr. Chinn’s background also includes nearly eight years with Allfirst, a U.S. subsidiary of Allied Irish Bank. As a Vice President he play a leadership role in merger and acquisition projects and was responsible for directing acquisition analysis, post-merger integration, and strategic initiatives. He also served as an Assistant Vice President in retail banking.

First Annapolis Managing Director William J. Westervelt, Jr., states “Ray Chinn brings a unique combination of industry experience – both retail banking and consulting- to First Annapolis. We are confident that Ray’s client experience with emerging payment products such as smart cards will be an immediate asset to our existing practice areas.”

Mr. Chinn earned a Bachelor of Business Administration degree, concentration in Management and Law and a Masters Degree in Business Administration from Loyola College in Maryland. Mr. Chinn and his wife reside in Bethesda.

First Annapolis is a management consulting and investment banking firm with a primary focus on the financial services industry. The firm’s principal specialties lie in advising clients in payment related industries — credit/debit/stored value issuers, transaction processing, electronic funds transfer, and emerging payment mediums such as the Internet. The firm’s clients include leading domestic and international companies in the financial services, retail, technology, and consumer goods industries.


eCashPad Deal

Rick Wilson, president of Mediatechnics Systems Inc., Monday announced that Mediatechnics has made available through its e-Commerce site the ability for their distributors and end-user customers to purchase and implement eConnect’s eCashPad (OTCBB: ECNC) for secured payment options over the Internet.

Mediatechnics customer base includes companies such as Compuware, Electronic Arts, Intel, Oracle, Sybase, Unisys, and over 100 distributors worldwide. Mediatechnics has placed an order for delivery of 100 Mediatechnics labeled eCashPads that will be freely distributed to Mediatechnics customers in the second quarter The eCashPad is a secured payment-processing device designed to allow easy and secure transactions on the Internet. The eCashPad easily connects to your computer. Through the use of a built-in magnetic card reader, the eCashPad allows the use of a credit or ATM card for transactions over the Internet with eCashPad-enabled merchants.

The need to type your credit card information when making a purchase is elminated. The unique software of the eCashPad provides the same level of financial security that is available using an ATM at the grocery store or gas station. eCashPad provides a direct link between your card and the bank, protecting your information from theft or disclosure through its “Bank Eyes Only” transaction.

Wilson stated, “The eCashPad will improve our accounts receivable and provide a quick and easy payment solution for our customer base. Our market research shows that consumers who do not use the Internet for their purchases are mainly concerned with a lack of security for their financial information. “Our analysis of the eConnect technology has proven to us that they do have the level of security that the consumer requires, packaged in a high quality, affordable consumer device to provide security for their financial transactions. As a merchant, we now become proactive in providing additional solutions to our customers at lower merchant costs.”

Company Profile

Mediatechnics Systems Inc. is a privately held, California corporation with a charter to design, develop, manufacture and market highly efficient CD Duplication systems. In addition, Mediatechnics distributes Kodak CD Recordable media and high volume CD-ROM Replication and silk screening services for customers throughout the world.


MC Card

Mass Connections, a national marketing company specializing in Retailtainment and in-store sampling events, continues pioneering change in the industry with its launch of the new MC Card.

The MC Card developed by Mass Connections provides at-store accountability as well as flexibility in issuing funds to purchase sample product and supplies.

Event personnel are assigned an MC Card(TM). Funds are loaded on the card prior to the time of purchase. The date, location and amount used are transmitted real time to Mass Connections’ Corporate facilities, recorded and matched to in-store event assignments.

With 1,000,000 events produced annually, Mass Connections continues to pioneer changes in the industry with the launch of the new MC Card(TM) (patent pending). Mass Connections is the ONLY in-store marketing company providing store-connection real time data and accountability to the industry.

Number one with IVR reporting systems, electronically transmitted orders and interactive training through the Internet — Mass Connections continues to bring efficiencies and accountability to the industry. Mass Connections is your Product-2-Consumer liaison.

Mass Connections national Marketing Corporation started in 1991 introduced the ‘outsourced’ solution for in-store marketing.

With industry wide vision, Mass Connections has formed a strong and dynamic company, which has seen explosive growth. Mass Connections currently works with the nation’s top consumer products companies, manages in-store-marketing promotions for the largest retailers and mass merchants in the country. Mass Connections is the exclusive marketing company for all Wal-Mart in-store events.

Mass Connections the industry leader regarded for marketing insights and brand development expertise.

Founders of the National Association of Demonstration Companies.


Cap One 1Q/01

Capital One continued to keep the heat on during the first quarter, as marketing expenses topped $231 million, a 14.5% increase over 1Q/00. Bucking first quarter trends, Cap One also benefited from lower delinquency and chargeoffs in the first three months of 2001. As a result, Cap One turned in the best performance of any of the major credit card institutions in the USA. Earnings for the first quarter were $143.6 million, a 34.6% increase over last year’s first quarter. For the quarter, Cap One added 2.7 million net new accounts, bringing total accounts to 36.5 million. The company’s managed consumer loan balances, mostly credit card loans, increased by $2.0 billion to $31.6 billion. The managed net charge-off rate declined to 3.75% compared to 3.98% for the fourth quarter of 2000, and 3.87% for the first quarter of 2000. The managed delinquency rate (30+ days) also declined to 4.72% as of March 31, compared to 5.23% as of yearend 2000, and 5.26% for 1Q/00. However, the company’s managed net interest margin decreased to 9.21% versus 10.16% in the fourth quarter of 2000, and 11.23% in the comparable period of 2000. The NIM decline was attributed to stronger growth in the superprime portfolio and the company’s 0% APR teaser offers. For complete details on Capital One’s current and previous quarters visit CardData ([][1]).



Community Biz Card

American Express yesterday unveiled the ‘Community Business Credit Card’ for very small businesses. Designed for business owners interested in advancing the growth of small businesses, the new card contributes one percent of spending to select microenterprise development organizations that provide loans and technical assistance to microbusinesses. “Microenterprises” are businesses with fewer than five employees and capital needs of less than $35,000 a year. The new AmEx credit card has no annual fee and a 3.9% six-month intro rate followed by a prime +5.99% APR. (However, according to CardWatch [], the AmEx Web site lists a prime +3.99% go-to APR for the “Community Business Credit Card”.) AmEx has signed agreements with 11 organizations to market the new card to their members and to raise the awareness of microenterprise development. AmEx has also engaged three non-profit, national organizations as partners in the ‘Community Business’ program including: ACCION, Association for Enterprise Opportunity, and Count-Me-In for Women’s Economic Independence.


TU Ruling Upheld

The US Court of Appeals for the District of Columbia Circuit has upheld a FTC decision ordering Trans Union to stop selling consumer reports in the form of target marketing lists to marketers who lack an authorized purpose for receiving them under the FCRA. Last February, the FTC unanimously upheld an administrative judge’s opinion that Trans Union’s target marketing lists are “consumer reports” as defined by the FCRA. The case was argued this February and the court’s opinion was issued last week. As part of its argument in the case, Trans Union contended that neither the FCRA nor the FTC Order demonstrated a substantial government interest in protecting consumers’ privacy and, therefore, violated the Company’s right to free speech under the First Amendment. The case began in 1992, when the FTC filed an administrative complaint alleging that TU violated Sections 604 and 607(a) of the FCRA. Trans Union must halt the illegal sales within ten days of the Court’s ruling, or by April 23, 2001. (CF Library 3/2/00) ![][1]

[1]: /graphic/federaltrade/ftclogo.gif


Hypercom Canada

Hypercom Corporation announced the opening of its first sales, service and support office in Canada. Based in Toronto, Hypercom’s new office will build awareness and expedite the delivery of high-performance, high-speed card payment terminals that deliver value-added features to the merchant countertop.

“Canada is an exciting, robust and vibrant market. We are eager to demonstrate how our products can help the country’s important financial institutions and merchants save time and money, while simultaneously enhancing the consumers’ shopping experience,” said Jairo E. Gonzalez, president, Hypercom Transaction Systems Group. “We are delighted to be here, we are eager to introduce our products, and we are proud to announce this first Hypercom office in Canada.”

The introduction of Hypercom’s popular consumer interactive, touch screen-based, EMV-compliant ICE card payment terminals in Canada is already underway. . In the last three months alone, orders from Canada for the company’s ICE terminals have topped 10,000 as compared to 1,200 the prior year. The company has joined with Soft Tracks Enterprises to deploy Hypercom’s wireless ICE 4000 terminal to merchants and service providers. Hypercom has announced the availability of a certified payment application developed by TCS (Canada) Limited. Hypercom’s robust epic (ePOS-infocommerce) ICE touch screen card payment and web-enabled terminals are powerful, multi-function touch screen-based payment devices incorporating high-speed thermal printers, paper cutters, and Hypercom’s 9600 bps (bits per second) FastPOS modem technology lets merchants complete transactions in under six seconds. Together with Hypercom’s Term-Master Suite software application and networking products, the high-speed, easy-to-use ICE terminals allow processors to provide merchants with an array of value-added, revenue-generating services. These include electronic receipt capture (ERC), which virtually eliminates chargebacks; sales receipts customized with merchant logos which increase subsequent sales; and, on-screen advertising at the point-of-sale.

Coupled with these customer-directed features, Hypercom’s solutions enable processors to provide terminal-to-terminal e-mail, which improves communication, electronic bank statements, parcel tracking, and more. Completely customized high-speed networks are made possible with Hypercom’s award-winning and widely-used IEN (Integrated Enterprise Network) line of IADs (Integrated Access Devices).

Additionally, Hypercom has introduced a number of groundbreaking products and services in recent months. The company’s IEN View Security Manager, a new module for Hypercom’s full-coverage custom network management solution, allows network managers to set access permissions, and control from remote locations any changes made by network management clients. Another new Hypercom solution, called, allows network designers to create customized network blueprints tailored to their unique system requirements within minutes. Hypercom has also introduced Visual HDT (VHDT), a C-based package that gives software developers the ability to quickly and cost-effectively develop value-added applications for Hypercom’s ICE card payment terminals using Microsoft’s popular Visual Studio platform.

“We have the products, the software, and the networking to help processors and merchants compete in today’s increasingly competitive times, and we will be demonstrating all of these value-added, time-saving products and applications in the weeks and months ahead,” Mr. Gonzalez said. Hypercom Canada is located at 161 Bay Street, Toronto. Telephone: 416.572.2003. Facsimile: 416.572.2212.

Hypercom Corporation (NYSE: HYC) 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 more than 4 million card payment terminals which operate in over 100 countries and conduct more than 2.85 billion transactions annually.