Virtual MasterCard

MasterCard said yesterday that the new American Express ‘Private Payments’ is not breakthrough technology. Currently, a number of virtual account number and pseudo account number programs are available to MasterCard issuers. These include the ‘Virtual MasterCard Program’, as well as pseudo account number systems available from third parties such as Cyota. MasterCard said it is also evaluating and developing a security solution that relies upon virtual or pseudo account numbers and message authentication codes or digital IDs to reduce risks associated with sending live account numbers over open networks and also to authenticate the cardholder. MasterCard said these solutions are elements of a global security continuum infrastructure that also includes chip cards, digital wallets, digital certificates and its work on SET. Meanwhile Cyota’s flagship product, ‘SecureClick’, has been on the market for over a year and allows consumers to shop online without revealing their real credit card number. Under Cyota’s solution the customer’s real credit card number is replaced with a one-time transaction number, which expires after each transaction. New York City-based Cyota is an online payment security company founded in 1999 by four veterans of elite intelligence units in the Israeli Defense Force.

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APT Patent

Advanced Precision Technology Inc. a Livermore based developer of innovative identity verification systems using biometrics, announced the granting of its seventh U.S. Patent.

Advanced Precision was granted U.S. Patent #6,111,671 on August 29, 2000, for Matched Filters for a Real Time Fingerprint Sensor and Verification System, filed November 18, 1999, as a divisional patent application of U. S. Patent #6,002,499 for Real Time Fingerprint Sensor and Verification System, granted on December 14, 1999. The systems use innovative holographic optics to capture an undistorted fingerprint image that can be compared directly to a previously loaded ink-based print or “filter” that is stored as a hologram.

These patents were developed by Dr. Ramendra Bahuguna, Ph.D., of the Department of Modern Optics, College of Science, San Jose State University, while working under contract with APT. Dr. Bahuguna is continuing to work with APT on innovative fingerprint solutions and technologies.

“This additional patent continues to reflect our commitment to putting the science into the art of fingerprinting, and bringing to the world, cost-effective and reliable fingerprint identity verification solutions for the 21st century,” stated Bruce A. Pastorius, President/CEO of Advanced Precision. APT is currently bringing to market its APrinT(R) HoloPass, a high quality, interoperable front-end fingerprint capture device. This rugged device is plug compatible to existing high-end fingerprint readers and is designed to set new cost/performance standards in the fingerprint capture marketplace. The company looks to integrate the devices into large federal and state law enforcement and civil projects, as well as commercial applications in conjunction with child identification, Photo-ID cards and access control. APT has begun shipping units to key integrators, pilot programs, and end-users in key target segments.

Advanced Precision also announced it has rescheduled their annual shareholder meeting until the first week in June, 2001. For more information, contact Advanced Precision Technology, Inc., Bruce A. Pastorius, President/CEO, via telephone at 925/447-6900, fax at 925/447-6901 or visit their web site at .

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HH Retail Card CEO

Household International announced that Sandra Derickson will join the company as chief executive officer of Household Retail Services, the company’s Private Label credit card business. She will report directly to Rocco Fabiano, Group Executive — Retail Finance. Derickson will be responsible for overseeing the Private Label unit’s growth initiatives including signing new merchants, solidifying market share positioning and expanding e-commerce offerings. Household’s Private Label business offers customized financing programs for national-scale merchants and manufacturers including Best Buy, Micron Computers, Rooms to Go and Yamaha.

Derickson joins Household after twenty-four years with GE Capital, eight years of which were as an officer of GE. Most recently she served as president and general manager of GE Capital Auto Financial Services, the largest non-captive auto leasing business in the world ($25 billion in assets and 5,000 employees). In addition, she spearheaded the acquisition and integration of 21 companies, which launched the business into the global marketplace.

“Sandra brings to Household a wealth of general management, marketing and e-commerce experience,” said Mr. Fabiano. “We are thrilled to have her leading our Private Label business.”

Derickson graduated from Eastern Illinois University in Charleston, Ill., and currently resides in South Barrington, Ill.

Household International, through its subsidiaries, is a leading provider of consumer finance, credit card, auto finance and credit insurance products in the United States, United Kingdom and Canada. In the United States, Household operates under the two oldest and most recognized names in consumer finance — HFC and Beneficial. Household is also one of the nation’s largest issuers of private-label and general purpose credit cards, including the GM Card and the AFL-CIO’s Union Privilege card. For more information, visit the company’s web site at [http://www.household.com][1].

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

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Teen Card Report

U.S. teens continue to represent a gold mine for retailers. The challenge for online retailers to tap into this opportunity is to offer an online payment option for the teenagers, who are not old enough to have their own credit card. According to IDC, the teen payment issue is a problem for online retailers and an opportunity for financial institutions. IDC’s back-to-school shopping research shows a new target market and an untapped opportunity for financial institutions.

Several companies, such as MasterCard, are offering prepaid credit cards. They work in much the same way as prepaid phone cards — with a finite amount of cash paid in advance. These prepaid credit cards are marketed to parents to give to their teens as an alternative to cash or gift certificates. However, IDC believes that MasterCard and other companies should target the 15.4 million working teenagers directly.

According to IDC, credit card companies should work with banks to offer stored value cards as part of their teen-focused banking packages.

“Banks and credit card companies working together is a winning situation for everybody,” said Keith Waryas, research manager, IDC Consumer eCommerce Core research program. “It will simplify putting more money on the card for teens. Banks will be adding extra value to their offering, making them more attractive to potential customers, and credit card companies get early exposure to possible lifelong customers.”

The biggest winners, however, will be online retailers who will get access to a large percentage of the population that was previously closed off to them.

IDC’s new bulletin Insider: Back-to-School Preview of the Upcoming Holiday Season (IDC #B22943) examines how much money will be spent online during the back-to-school shopping season and examines the ramifications for the upcoming holiday season. To purchase the report, contact Demetra Georgakopoulos at 1-800-343-4952 extension 4496 or demetra@idc.com.

About IDC

IDC delivers dependable, high-impact insights and advice on the future of ebusiness, the Internet, and technology to help organizations make sound business decisions. IDC forecasts worldwide markets and trends and analyzes business strategies, technologies, and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC provides global research with local content through more than 600 analysts in 43 countries worldwide. IDC’s customers comprise the world’s leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at [http://www.idc.com][1].

IDC is a division of IDG, the world’s leading IT media, research and exposition company.

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

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Smart e-Wallet

ACI Worldwide , a leading international provider of enterprise e-payment solutions, introduced a smart e-wallet designed to make Internet transactions both simpler and more secure. The Personal Online Data (POD) e-wallet was unveiled Thursday at a press show for the upcoming Cartes 2000 international forum on card technologies and security in Paris.

Features of the ACI POD e-wallet include:

— Multidevice functionality. The ACI POD e-wallet can be used with computers, mobile phones or digital televisions

— Password-protected secure space on the Internet during transactions, with digital certificates for credit card user IDs

— Automatic logoff if wallet is open but unused for a set period of time

— Personal information storage, eliminating the need to log in and fill out forms

— Instant hard copy receipt and delivery docket for order checking

“There’s no doubt people have had an element of mistrust regarding Internet payments. Now we can help to put those fears to rest,” said Graeme Ward, chief strategy officer for ACI Worldwide’s Commerce business unit. “Our best-in-class security measures greatly reduce any chance of online fraud, and we’ve taken great pains to make the POD e-wallet more convenient than any other payment method, including other e-wallets.”

POD e-wallets can be provided by anyone involved in trading on the Internet, whether a credit card company, bank or individual retailer.

About ACI Worldwide

ACI Worldwide (Nasdaq:TSAI) is helping customers change the way the world works with solutions designed to improve the way we live, work and shop. Every minute of every day, financial institutions, retailers and networking industries rely on ACI e-payment solutions to smoothly move money and information. As a leading international provider of e-commerce and e-payment solutions, ACI maintains operations in the Americas, Europe/Middle East/Africa and Asia/Pacific. More than 2,300 customers in 79 countries use ACI distributed solutions. Visit ACI Worldwide on the Internet at [www.aciworldwide.com][1].

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

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VISA Winners

VISA International announced the 33 winners of the “VISA Olympics of the Imagination,” a 23-nation youth art competition that ran from late 1999 through June of this year. Each of these children and a parent will participate in the ‘2000 Sydney Olympic Games’ in Sydney, Australia, as guests of VISA. The VOI challenged school children, ages 9-13, to use their imaginations to create an original piece of art that represented what the Olympic motto of “Citius, Altius, Fortius” meant to them. The children’s winning art will be on display during the entire Olympic Games following a special opening ceremony on Sept. 15. VOI winners were selected from Australia, Bahamas, Barbados, Bonaire, Brazil, Canada, Cayman Islands, China, Czech Republic, Curacao, Finland, Germany, Hungary, India, Japan, Korea, New Zealand, Norway, Poland, Russia, South Africa, United States and Uruguay. VISA said it received more than 400,000 entries for the 2000 Olympic Games program.

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CheckFree Update

CheckFree Corp. said Thursday that the recent TransPoint merger will add approximately $0.5 million in incremental revenue. Approximately 30 of the billers previously committed to using TransPoint’s electronic billing and payment system will be net new billers to CheckFree. These join CheckFree’s base of 157 billers, for a total of almost 190 billers committed to EBPP using CheckFree’s end-to-end integrated billing and payment services. The company also announced its intention to be able to deliver the majority of the average consumer’s recurring bills by the end of fiscal 2001, through a combination of CheckFree and TransPoint billers, as well as bills obtained or scraped from biller web sites. CheckFree’s subscriber count of 3.5 million will not be materially changed by the addition of TransPoint subscribers.

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X-Rated Ripoff

The Federal Trade Commission announced Thursday it has won a $37.5 million verdict against a California-based adult Web site operation the FTC charged with operating an illegal credit card billing scam. The agency alleged the defendants repeatedly placed charges on consumers’ credit and debit cards for X-rated Internet visits they had not made and services they didn’t order. The FTC noted that thousands of those billed for visiting the Web sites did not own computers. According to the FTC, the defendants had purchased access to a database of three million credit card numbers provided by Charter Pacific Bank of Agoura Hills, CA. The FTC says the defendants illegally used the account numbers to place charges on the accounts and that 90.8% of the company’s $49 million a year in sales were actually unauthorized charges. At trial, the FTC showed that the defendants used at least five different merchant accounts and four fictitious business names. The court concluded that the defendants had processed bogus charges totaling more than $43 million. The $37.5 million damages verdict represents the illegal charges minus the amounts that consumers already received through chargebacks and credits. The FTC has identified in excess of $20 million in defendant’s assets. The defendants included Kenneth and Teresa Taves, and Dennis Rappaport and their businesses J.K. Publications, Inc., MJD Service Corp., Herbal Care, Inc., and Discreet Bill, Inc. Two other defendants in this case, Gary Mittman and Adult Banc, Inc., settled FTC charges in June 1999.

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MBNA IT Funding

Prometric announced Thursday its Training Funds Program for 2000.

Prometric is partnering with MBNA America Bank, N.A., in this new venture. The Training Funds Program is offered through participating Authorized Prometric Testing Centers to provide funding for students seeking information technology certifications. Prometric provides certification testing for numerous companies, including Microsoft, Novell, Lotus, CompTIA, Cisco Systems, and Oracle.

The Training Funds Program can also be used to acquire pilot certifications through participating flight schools.

Prometric, which launched its initial program in 1996, was the first company to offer financing for IT training, and Prometric continues to lead the field in IT training and funding. The Training Funds Program was designed with IT professionals in mind and incorporates the features most desirable to an IT audience.

MBNA’s lending philosophy combines sophisticated technology with individualized credit review. The Training Funds Program will be delivered instantly to customers through the Prometric site and through the APTCs. The online, paperless application process provides an immediate credit decision and access to funds.

Annual percentage rates vary, depending on the creditworthiness of the applicant, and there are no origination fees associated with the new program.

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AAA STV Cards

MBNA and AAA have teamed up to offer a suite of stored value cards. The new prepaid VISA cards include: ‘AAA Global Currency’, ‘AAA EveryDay Funds’, and the ‘AAA Gift Card’. The ‘EveryDay Funds’ and ‘Global Currency’ offer prepaid denominations from $5 up to $9,999 and can be accessed at 600,000 Interlink merchants in the U.S. and 625,000 ATMs worldwide. The ‘EveryDay Funds’ and ‘Gift Card’ also can be used at all VISA merchant locations. The ‘Gift Card’ can be purchased with any denominations from $25 up to $2,000. The ‘Global Currency’ card is available free at participating AAA club locations to AAA members with a minimum initial balance of $300 or more, or for $3 per card to non-members. The cards also can be obtained by paying a $2.95 shipping and handling fee via the Internet or by calling the toll-free order center. The new AAA stored value cards will be issued by MBNA and processed by WildCard Systems.

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Positive Card Stats

More U.S. consumers are paying their credit card bills on time and fewer are defaulting than in any period since early 1996. Chargeoffs should hold in the sub-6% level through year-end as the favorable economic conditions persist and bankruptcies remain in check. The conclusions are based on the latest stats from credit card asset-backed securities tracked by Fitch IBCA. Fitch’s chargeoff index fell nine basis points to 5.11%. Seriously late payments on card portfolios also fell to their lowest level in four years, with Fitch’s delinquency index dropping to 2.79% from May’s 2.89%. Despite slight monthly declines, portfolio yields and monthly payment rates remain healthy on a historical basis. Fitch’s yield index, which tracks finance charge and fee income paid each month, fell to 19.05% from 19.40% last month. The MPR index for July fell nineteen bps to 16.46%, yet edged past their year-earlier mark of 16.44%.

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