$3 Smart Card

The smart card price breakthrough announced last month by VISA and Gemplus is spreading across the industry. Yesterday four more smart card manufacturers agreed to produce ‘Open Platform’ multi-application smart cards starting at less than three dollars each. The news comes from VISA’s announcement yesterday that it is launching a new program to offer VISA member banks low-cost smart cards. ‘VISA Price Breakthrough’ is supported by IBM and Philips Semiconductors, along with four major smart card manufacturers including: Giesecke & Devrient, Oberthur Card Systems, ORGA and Schlumberger. The family of new smart cards is based on the ‘Java Card 2.1’ and the ‘Open Platform 2.0’ specifications. The price of the initial card includes two applications, such as VISA credit/debit and ‘VISA Cash’, loaded to the ROM with room for multiple applications in the erasable memory or EEPROM. Issuers can decide what additional applications to add, such as loyalty or secure Internet access. Applications can be securely added or removed after the card has been issued. Three more card products will be made available, all at significantly reduced prices. The second card will provide public key encryption while the third and fourth cards will see memory size increased from 48k ROM to 96k ROM and 16k EEPROM to 32k EEPROM. These cards will be public key and non-public key versions. Applications can be loaded after the cards have been issued or added to the ROM during chip production freeing EEPROM for other application or service data. The chips are manufactured by Philips Semiconductors and contain new technology developed by IBM. The average price of a microprocessor chip card is about six dollars. (See CF Library 9/12/00)


Captura Going Public

Captura Software, Inc. announced Thursday it has filed a registration statement with the Securities and Exchange Commission relating to a proposed initial public offering of its common stock.

All the offered shares will be sold by Captura. Captura(R), headquartered in Kirkland, Washington, is a leading provider of automated payment processing solutions for Global 2000 companies. Its technology platform automates the preparation, approval and processing of procurement, travel, entertainment and fleet transactions.

Banc of America Securities LLC will act as the lead underwriter of the offering. Other managing underwriters of the offering include U.S. Bancorp Piper Jaffray, Wit SoundView and Pacific Crest Securities. Prospectuses are not currently available. When available, prospectuses may be obtained from Banc of America Securities LLC at 600 Montgomery Street, San Francisco, CA 94111, phone 415/627-2220.

A registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may any offers to buy be accepted prior to the time the registration statement becomes effective. This communication shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State.


ACE Acquisition

ACE Cash Express, Inc., the nation’s largest check-cashing chain and a significant provider of related retail financial services, announced today that it has signed a letter of intent to acquire the assets of 107 check-cashing and retail financial services locations from five privately held companies. The majority of the locations are in California and Texas. The purchase price for the assets would be based on a formula, but it is currently expected to total approximately $30 million.

The letter of intent is subject to completion of due diligence, preparation and execution of definitive documents, arrangement of financing and approval by the boards of directors of the parties. The parties have requested and received early termination of the waiting period for the acquisition under the Hart-Scott-Rodino Antitrust Improvements Act.

“This single acquisition is the largest in ACE’s history and is greater than the total number of stores that the company has acquired in the past three fiscal years,” stated Jay B. Shipowitz, president of ACE. “This transaction which includes the acquisition of approximately 60 stores in Northern California and 40 stores in Texas compliments our existing store network and strategically positions ACE to further expand in these geographic areas. We intend to complete this transaction by the end of this calendar year.”

ACE Cash Express, Inc. is headquartered in Irving, Texas and is the largest owner, operator and franchiser of check-cashing stores in the United States. Founded in 1968, the company, as of August 31, 2000, has a network of 1,084 stores, consisting of 921 company-owned stores and 163 franchised stores in 33 states and the District of Columbia. ACE offers a broad range of financial and check-cashing services and is one of the largest providers of MoneyGram wire transfer transactions. In addition, ACE offers money orders, bill payment services, and prepaid local and long distance telecommunication services. Under ACE’s agreement with Goleta National Bank (GNB), GNB currently makes small consumer loans available to customers at various ACE company-owned stores. The company’s website is found at [http://www.acecashexpress.com][1].

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


Concordia VISA

Concordia University announced a new Royal Bank affinity credit card partnership. The university’s new affinity cards – offered in Visa Classic and Gold cards – provide the institution’s supporters with a simple, convenient way to link buying power with philanthropic habits. Each time the new card is used, the Concordia University Alumni Association receives funds through a marketing agreement that contributes to the growth of its programs and services.

“Many Canadians like Royal Bank’s affinity cards because they are a simple way to enhance revenues for the non-profit sector,” said Pierre Giroux, Royal Bank’s senior manager, affinity cards. “The cards provide organizations with a payment each time a new card is issued and every time it is used for a purchase. Affinity cards are an easy way for Canadians to supplement their support of some favorite causes.”

With its name drawn from the City of Montréal’s civic motto, “Concordia Salus,” Concordia University was formed in 1974, with the merger of Sir George Williams University and Loyola College. Both founding institutions are steeped in history. Originally part of Collège Ste-Marie, which was founded in 1848, Loyola College became a separate institution in 1896, moving to its present site in 1916. The origins of Sir George Williams University are tied to the founder of the YMCA and the evening classes it offered in 1873.

Today, Concordia has a school of graduate studies and four faculties in downtown Montreal. The university is celebrating its 25th anniversary in 1999-2000, building on the commitment of its founding institutions to open, accessible and innovative education.

Royal Bank of Canada (RY) is a diversified global financial services group and a leading provider of personal and commercial banking, investment and trust services, insurance, corporate and investment banking, online banking and transaction-based services including custody. The group’s main business units include Royal Bank, RBC Dominion Securities, Royal Investment Services, RBC Insurance and Global Integrated Solutions. The group has 49,000 employees who serve 10 million personal, business and public sector customers in 30 countries. For more information, visit Royal Bank’s Web site at [www.royalbank.com][1].

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


Italian AmEx Card

Deutsche Bank Italia and American Express Thursday launched the first AmEx card to be issued by a bank in Italy. The ‘DBI American Express Card’, which will be available at all of DBI’s 280 branches in Italy, will operate on the American Express global merchant network. DBI will be responsible for all servicing of the card, including billing, accounting, customer service and credit authorizations, as well as for all marketing activity relating to the product. ‘DBI American Express’ cardholders will automatically be enrolled in the ‘Targa’ rewards program, allowing them to earn points each time they spend at a wide selection of hotels, restaurants and gas stations. These points are redeemable against a Fiat group car. ‘Targa’ loyalty program partners include: Hertz, Esso, Shell, Starhotels, Alpitour, and Europ Assistance. The card also features an introductory interest rate of 0.8% per month on all purchases for the first six months, rising to 1.3% per month thereafter. The card carries a fee of 100,000 lira. Deutsche Bank, with its credit card division, is a service provider for more than 800 partner banks and Deutsche Bank Group has more than 2 million cardholders and 300,000 associated merchants.



O2Micro International Limited, a leading supplier of innovative ICs to notebook manufacturers, announces shipment of over 100,000 units of SmartCardBus controllers that contain industry standard smart card reader capability.

Sterling Du, Chairman and CEO of O2Micro, said today “O2Micro’s innovative new SmartCardBus, which provides built-in smart card reader technology for portable computers, simplifies the use of smart cards by eliminating the need for a costly external smart card reader.”

The demand for integrated smart card readers in portable computers is being driven by the acceptance of smart cards worldwide. Smart cards have been widely accepted for some time in Europe and Japan. Led by the American Express Blue Card, the United States market is rapidly moving forward due to the need for security and privacy.

Visa, USA, the U.S. division of Visa International, is also launching smart cards offering a suite of prepackaged services to be determined by its issuers. In fact, three of the ten largest U.S. credit card issuers, San Francisco-based Providian Financial Corp., FleetBoston Financial Corp. and the First USA subsidiary of Chicago-based Bank One Corp., have already announced major smart card programs in conjunction with Visa, USA.

Max Huang, Vice President, Intelligent E-Commerce division of O2Micro, stated, “Building on the success of the American Express Blue Card, Visa’s recent announcements are accelerating the momentum for smart cards in the US. O2Micro’s product strategy of providing low cost smart card readers for notebooks, desktop PCs and Internet appliances will be key to enabling smart card acceptance in the US.”

About O2Micro

Founded in April 1995, O2Micro designs, develops, and markets innovative peripheral components for Notebook computers, Internet appliances, LCD monitors, and wireless communications. Products include AudioDJ(TM), CardBus Controller, CCFL Backlight Inverter, and Battery Management ICs.

O2Micro designs products compliant with the System Management Bus (SMBus) and Smart Battery System (SBS) specifications, a subset of the ACPI specification (ACPI is a requirement for Microsoft’s PC98 and 99). O2Micro maintains an extensive portfolio of intellectual property with 205 patent claims granted, and over 250 more pending. The company maintains offices worldwide. Additional product information can be found on the web site at [www.o2micro.com][1].

[1]: http://www.o2micro.com/


YCard Changes Name

EarlyRain Inc., a company focussed on profitably implementing smartcard technology across North America – was publicly launched Thursday as shareholders approved the name change from Yes I.C. Technologies Inc. and the completion of its qualifying transaction.

EarlyRain at the shareholders meeting on October 11, 2000, approved the acquisition of all the issued and outstanding shares of Yes I.C. Smart Cards Inc. (“YCards”) and the name change to EarlyRain Inc.

“EarlyRain will now move strongly forward to profitably launch smartcard technology applications in our core specialized fields of healthcare, golf, and advanced retailing services,” said Hal Walker, a prominent Calgary businessman and chairman of the new company. “We intend to be an industry leader as the emerging benefits of cost-effective smartcard applications spread across North America.”

The purchase of all YCards shares effective October 12, 2000, was made pursuant to an Offer to Purchase and Take Over Bid Circular (“Offer”) made by the corporation dated September 20, 2000. The Corporation has as a result issued 8,105,217 common shares in exchange for all the YCards shares.

An aggregate of 5,690,065 of the common shares issued in connection with the Offer are subject to escrow provisions: 10% will be released following issuance of the Final Exchange Notice and an additional 15% will be released from escrow on the 6, 12, 18, 24, 30 and 36 month anniversaries of the date of the completion of the YCards acquisition.

In addition, the Corporation issued 744,000 options to purchase Common Shares to eligible employees, directors, officers and consultants of the Corporation and its affiliates. The options to purchase Common Shares are non-transferable and exercisable at a price of $0.20 per Common Share for a period of five years.

The Corporation is a capital pool company and the acquisition of the securities of YCards constitutes the Corporation’s qualifying transaction pursuant to the Policies of the Canadian Venture Exchange. On receiving the final approval of this transaction by Canadian Venture Exchange the Corporation will no longer be a capital pool company.

EarlyRain Inc., is a Calgary based company led by an accomplished well-known team of business executives, who combine a solid record of business success with industry-leading technological expertise in the smartcard field. Its board includes directors with solid expertise launching successful technology companies.

The primary focus of EarlyRain is to fully exploit the profitable implementation of affordable smartcard technology in the growing healthcare, golf, and leading edge merchandising sectors. Through existing subsidiaries, new acquisitions, and exclusive strategic alliances with established North American leaders, EarlyRain also has the ability to integrate the Internet, E-commerce, and advanced data exchange systems to provide cost-effective solutions.


Bankruptcy Bill

The U.S. House passed the bankruptcy reform bill yesterday and the U.S. Senate is likely to take its vote on the same bill next week. President Clinton immediately threatened to veto the 420-page bill. The White House says Clinton has problems with two provisions, one that permits wealthy bankruptcy filers to keep their homes and another that allows violent demonstrators at abortion clinics to use the bankruptcy laws to discharge fines and damages. In general, the bill makes it harder for consumers to file for Chapter 7 when there is some ability to repay debts. Many consumers will be forced into a Chapter 13 debt repayment plan. The bankruptcy reform bill has slowly made its way through the reconciling process after the House and Senate passed different versions of the bill early this year. The delay has been attributed to the inclusion of consumer-protection provisions such as the requirement that lenders disclose how long it will take to pay off a credit card, if only the minimum payment is made. Despite intense lobbying by the credit card industry, the bill passed yesterday does require card issuers to include on billing statements a chart that shows the costs associated with making minimum payments. (See CF Library 5/8/00)


Web Penetration

Paris-based NetValue released August Internet results for the US, the UK, France, Germany and Mexico this morning. The US remains way ahead in terms of Internet penetration with over 52 million households connected. The UK has 7.3 million connected households. Germany tops the European list with 8.8 million households. France has 4.2 million households online. Users across measured countries are connected an average of 9.9 days to the Internet per month, somewhat less than the average U.S. user, who is connected an average of 12.2 days. Internet usage by age, particularly in the 35-64 age bracket, varies only slightly in each country. In the U.S., Internet users who are 15 or under account for 8.1% of users; however, in Germany, this age group accounts for a mere 2.7% of Internet users. Interestingly, Internet users who are 65+ are far more advanced in the U.S (where they represent 5.5% of users), compared with Germany, where they account for less than 2%. In the UK, by contrast, ‘silver surfers’ are increasingly logging on to the Internet, and are rapidly catching up with younger users. Across all markets, the 35-49 age bracket makes up the majority of Internet usage, accounting for 29.8% of users in the UK. Internet users in Mexico tend to be much younger. 37% of Internet users are aged between 15-24, with 67% of all users aged 34 and under.


Online Pulse

Online buying continues to increase as the number of people coming onto the Internet grows. A new study by Harris Interactive shows there were 45.1 million browsers (online information gatherers and offline buyers) during the second quarter and 30.3 million online buyers. For 3Q/99 there were 48.5 million browsers and only 19.4 million buyers. Harris says more and more online shoppers are choosing to stay online to make a purchase rather than browsing online and going offline to a bricks & mortar store to buy. Consistent with this trend, Harris Interactive data also show that the ratio of online to offline spending is also decreasing over time. In 10 of 12 vertical markets tracked by Harris Interactive e.commercePulse, fewer dollars were spent offline (as a result of online shopping) per one dollar spent online. Using Harris Interactive’s Web-based technology, the survey for the second quarter of 2000 was conducted online with 97,633 adult online users at three different periods over the course of the quarter. The survey covered 266 e-commerce Web sites in 13 vertical markets.


OPC Signs KS

Official Payments Corporation announced the company has reached an agreement with the State of Kansas to collect retailer’s sales tax and individual income tax payments.

Taxpayers in Kansas will be able to make these payments with their credit cards on the Internet by visiting [www.officialpayments.com][1]. The new payment service for tax year 2000 is expected to launch early next year. Official Payments provides a variety of tax payment services to the Internal Revenue Service, the District of Columbia, and the states of Alabama, Arkansas, California, Connecticut, Illinois, Maryland, Minnesota, New Jersey, New York, Ohio, Oklahoma and Washington.

“We are pleased to announce an agreement with Kansas, our fourteenth state client,” said Thomas R. Evans, Chairman & Chief Executive Officer of Official Payments. “The Kansas Department of Revenue is renowned for innovation. With this new Internet payment system, Kansas taxpayers will have another convenient, safe, and reliable option for paying their taxes,” Mr. Evans added.

“For tax year 2000, anyone with an Internet connection will be able to conveniently make his or her tax payments, 24 hours a day, from either home or business,” said Karla J. Pierce, Kansas Secretary of Revenue. “The Internet payment service will be available to taxpayers who file either paper or electronic tax returns. The service is part of our sustained effort to provide the highest level of service to our citizens, while engaging in safe and sound financial practices,” Pierce added.

Last year, more than 600,000 taxpayers in Kansas made balance-due income tax payments with an average obligation of $890 to the state treasury. Nearly 460,000 quarterly estimated payments were made, representing $219 million. The Kansas Department of Revenue collects nearly $5.2 billion for the state.

Official Payments will charge Kansas taxpayers a convenience fee for processing these credit card transactions. The fee schedule can be found at [www.officialpayments.com][2]. For example, a taxpayer who owed Kansas $900.00 would find a total of $922.50 on his or her credit card statement: $900.00 for the tax bill and $22.50 for the convenience fee. American Express, Discover Card, and MasterCard are the credit cards accepted by the program. Taxpayers using credit cards with bonus rewards programs can, depending on their card’s program, earn rewards, points, and cash-back or airline frequent flyer miles for paying their taxes.

About Official Payments Corporation.

Official Payments Corporation is the leading provider of electronic payment options to government entities. The company enables consumers to pay government fees and taxes via telephone or the Internet, using their credit cards. The company has partnered with the Internal Revenue Service; several state governments, including Alabama, Arkansas, California, Connecticut, District of Columbia, Illinois, Maryland, Minnesota, New Jersey, Ohio, Oklahoma Washington state; and over 550 municipal and county entities, in which it collects income taxes, property taxes, real estate taxes, parking fines, sales and use taxes and other government fees by credit card over the telephone and the Internet. In the 1999 tax year, Official Payments collected and processed over $575 million in federal income tax payments on behalf of the Internal Revenue Service. The company is publicly traded on Nasdaq under the symbol OPAY. Official Payments Corp. is committed to making payments to the government go fast, smart and safe.

[1]: http://www.officialpayments.com/
[2]: http://www.officialpayments.com/


BofA Comm Card

Bank of America lifted the curtain Wednesday on the ‘Bank of America VISA Commercial Card’, the first card designed specifically for mid-size companies. The new card allows companies to streamline payment processes and reduce costs by combining multiple card functions into one program that integrates Internet reporting, automated card maintenance, multiple spending control options, security and expandability. The Internet reporting system allows companies to review employee expenditures and provides the means to manage the information via a basic output file that easily can be converted to merge into an existing accounting system. Cardholders can also have Web-based access to view their ‘Commercial Card’ accounts and, if authorized, to reallocate transactions. Cardholders can use the ‘Plan A Trip’ feature to shop for the best airfare, hotel and car rental rates, create their own itinerary and directly book their travel to the ‘Bank of America Commercial Card’ account. To view BofA’s new commercial card visit CardWatch ([www.cardwatch.com][1]).

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