VA-based CardSystems unveiled its premier merchant fraud monitoring system. ‘eCardSMART Merchant Monitor’ is a Java-based, Internet-enabled fraud management system, which provides an early warning for chargebacks, improves efficiency by summarizing and presenting all pertinent case data, and allows immediate action against high-risk transactions-before actual chargebacks take place. CardSystems’ customers will have access to ‘Merchant Monitor’s’ ability to provide consistent evaluation of data using card association rules plus the customer’s own business rules-offering highly flexible and customizable alert criteria based on over 1,200 pre-defined and unlimited user-defined parameters. ‘Artificial Neural Networks’ power ‘Merchant Monitor’s’ transaction scoring to predict risk. The ‘ANN’ will forecast the probability of a transaction becoming a chargeback and/or retrieval and will also supplement VISA and MasterCard’s ‘High Risk Merchant Monitoring Programs’.


Raskind to Head NCC Cards

National City Corporation announced that Peter E. Raskind will join the company on September 1 and will serve as executive vice president with responsibility for the consumer finance line of business. Raskind, 43, spent the last 17 years with U.S. Bancorp in Minneapolis. He was named a vice chairman of that company in 1999 and most recently led a refocusing of its branch and telephone banking network.

As head of consumer finance at National City, Raskind will oversee the company’s credit card, dealer finance, nonconforming mortgage, education finance and national home equity businesses.

National City is one of the top five originators of federally guaranteed student loans in the country; and in dealer finance, it is the fifth largest non-captive originator of retail loans and leases. With First Franklin Financial Companies and Altegra Credit Company as part of his portfolio, Raskind will lead a business line that is among the top nonconforming mortgage originators in the country. The consumer finance line of business represents approximately 15 percent of National City’s annual net income.

“I am delighted that Peter has decided to join National City because he brings a banking perspective that aligns well with our goals and aspirations,” said David A. Daberko, chairman and chief executive officer. “Peter has a broad banking background and his recent responsibilities show clearly that he is customer-focused. We look forward to having him on our team.”

During his 17-year career with U.S. Bancorp, Raskind gained extensive experience in corporate trust, treasury management services, strategic planning, corporate and international banking, foreign exchange, corporate finance and loan syndication. Earlier in his career, he spent four years with Harris Bank in Chicago where he held various positions in corporate finance and cash management services. He is a native of Boston with an undergraduate degree in economics from Dartmouth and an MBA from Dartmouth’s Amos Tuck School of Business Administration.

About National City

National City Corporation (NYSE: NCC) is an $85 billion financial holding company based in Cleveland, Ohio. The company offers a full range of financial services including investment banking, brokerage, mutual fund, insurance and traditional banking services to individuals and businesses. National City has offices in Ohio, Pennsylvania, Michigan, Indiana, Kentucky and Illinois. National City can be found on the World Wide Web at [][1].



Firstar Goes Falcon

Firstar Corporation has taken a significant step in the battle against payment card fraud. HNC Financial Solutions, a division of HNC Software Inc., announced today that Firstar has selected Falcon, HNC’s industry-leading fraud detection system, to protect its credit and debit card portfolios from fraud. Firstar made the selection of Falcon in order to meet its needs for advanced fraud detection to match the company’s recent growth.

“The Falcon system provides us with the most flexibility and value compared to the other fraud detection systems we evaluated,” said Pat Wesner, Executive Vice President of Firstar’s Card Services Division. “Due to recent mergers and our rapid card account growth, we require the protection of a superior fraud detection system for the benefit of our customers. Through its use of neural network technology, we believe Falcon to be the most sophisticated fraud detection system available today.” Michael Chiappetta, HNC Financial Solutions Group Vice President of Risk Management Solutions, added, “Firstar has traditionally been aggressive in battling fraud and keeping fraud losses below financial service industry norms. Falcon will provide Firstar a next-generation fraud detection system that will serve them well as Firstar continues on its aggressive growth path.”

Falcon, a neural network-based predictive software system that examines transaction, cardholder, and merchant data to detect a wide range of payment card fraud, currently protects more than 300 million payment card accounts worldwide.

Firstar will implement the Falcon system for fraud detection of its entire card portfolio within its Firstar entities, including its First Bank USA and Elan Financial Services divisions.

Firstar has nearly 1,200 full-service banking offices and more than 2,200 ATM locations in Ohio, Wisconsin, Missouri, Kentucky, Illinois, Indiana, Iowa, Minnesota, Tennessee, Arkansas, Arizona, and Florida. Firstar offers a comprehensive line of consumer and commercial banking products and services, personal and commercial trust, investment management, insurance, securities brokerage, mortgage, credit card, cash management, international banking, and other financial services. For more information, visit the Firstar website at [][1] .

HNC Financial Solutions is a leader in the development of intelligent customer value management software solutions for the financial services and e-commerce industries. Its powerful suite of real-time decision platforms and predictive business solutions allows firms to automate new account decisioning, optimize marketing efforts, detect fraud, predict profitability, and manage the customer lifecycle. HNC Financial Solutions supports this suite of solutions with a full range of consulting services.

Headquartered in San Diego, California, HNC Software Inc. is a leading provider of predictive software solutions for service industries, including financial, insurance, telecommunications, and e-commerce. HNC’s suite of predictive software solutions can provide real-time insight into customer relationships based on transaction-level data, helping companies manage their relationships with individual customers. By accurately predicting customer behaviors, these companies can create initiatives to mitigate risk and attrition; improve customer service; develop marketing programs to enhance profitability; and detect fraudulent customer transactions. For more information, visit HNC’s web site at [][2] or contact Melinda Bateman, HNC Software Inc., 5935 Cornerstone Court West, San Diego, CA 92121, (858) 799-3880. For the investor relations hotline, call (800) 396-8052.



Trial Curtain Closes

Testimony in the government’s antitrust suit against VISA and MasterCard came to a close yesterday as MasterCard presented its final witness. The trial will be in recess until Oct. 16 when all the parties involved will present their final oral arguments. Legal experts speculate it is possible a ruling could be issued immediately following final oral arguments but most likely the judge’s decision will be handed down near the end of the year. Yesterday, MasterCard’s sole expert witness, Robert Pindyck of the Sloan School of Management at MIT, strongly suggested that if the government succeeds at ending the dual governance structure of VISA and MasterCard it will also mean the end of dual issuance. Pindyck also reinforced earlier testimony that the end of duality may also mean the end of MasterCard.


PREDICTA Hits Columbia

Trans Union LLC and DataCredito, Colombia’s largest credit reporting agency, recently announced the availability of the South American country’s first generic, credit bureau-based scoring model called PREDICTA.

Built on local credit bureau data supplied by DataCredito, PREDICTA rank orders the likelihood an account will go delinquent. With this predictive tool, Colombian credit grantors will be better able to manage risk and make faster, more informed and reliable decisions.

‘As Colombian credit grantors strive for greater precision in booking new accounts and more effectively managing existing accounts, they have shown a great deal of interest in PREDICTA,’ said Chet Wiermanski, Vice President of Trans Union’s Analytical Services Group. ‘When the five largest Colombian banks reviewed validation results demonstrating PREDICTA’s effectiveness, they agreed that the process of analyzing an applicant’s creditworthiness and likelihood to repay an obligation will be greatly improved. There is clear recognition that PREDICTA’s features and capabilities can be a valuable tool to prevent delinquencies, reduce losses and increase revenue.’

DataCredito formed an alliance with Trans Union in April 1999 to tap into its proficiency in understanding how credit bureau information is used to predict consumer behavior in emerging world markets.

Trans Union’s Analytical Services Group, based in Chicago, has vast experience in providing both domestic and international customers with credit information, risk assessment products and decisioning services. In 1998, the Analytical Services Group formed the Trans Union Modeling Group (TUMG), which has developed and marketed several generic risk scoring-models for the domestic market, including:

· TransRisk Account ManagementSM A risk model specifically designed for existing accounts. It predicts the likelihood of existing accounts becoming 90 or more days delinquent within 24 months.

· TransRisk AutoSM A risk model specifically designed for non-prime auto accounts. It predicts the likelihood of those types of accounts becoming delinquent within 12 months.

· TransRisk New AccountSM A risk model specifically designed for new accounts. It predicts the likelihood that a new prospect or applicant will become 90 days delinquent within 24 months of opening an account.

· Trans Union’s Income Estimator® (TIE) is an income model that is marketed in both the U.S. and Canada.

About Trans Union

Trans Union is one of the nation’s leading information companies, serving all 50 states through its own sales offices and independent credit bureaus. The company provides a broad range of industries with products and services that include credit reports, risk scoring models, target marketing systems, pre-employment evaluation reports, skip tracing and search tools, customized lists, as well as other information-based products. Trans Union has operations in Puerto Rico, Canada, Mexico, Costa Rica, Chile, Spain, Italy, South Africa, Kenya and Hong Kong. For more information about TU’s products or services, visit the company on the Internet at [][1].

About DataCredito

Bogota-based DataCredito, the first credit information company in Latin America, has emerged as Colombia’s leader in information technology. It’s the only South American Credit bureau providing both positive and negative aspects of consumers’ credit history. The bureau has more than 1,000 institutional customers, including banks, financial service grantors, retailers, cellular and telecommunications providers and auto dealers. DataCredito maintains a database of financial information on more than 25 million consumers and processes an average of 1 million inquiries per month.



DataKay PKI Card Deal

Datakey, Inc., an international leader in smart card solutions for Public Key Infrastructure, today announced that it received an order for 10,000 PKI smart cards from one of its partners for a new and innovative e-commerce application within the financial services industry.

“Datakey is proud to have been selected as the smart card provider for this cutting-edge application, and we believe it has excellent growth potential,” said Carl Boecher, president and CEO of Datakey, Inc.

About Datakey, Inc.

Datakey, Inc. is a leading international provider of smart card solutions for PKI. Headquartered in Minneapolis, Minn., the company offers a family of smart card-based information security and digital signature products under the SignaSURE(R) umbrella. Using state-of-the-art cryptographic technology, these products fill growing market needs for secure, smart card-based user authentication and data privacy for business-to-business e-commerce. Datakey’s smart card-based information security products play an integral role in any PKI system by providing two-factor security — something that is owned (a smart card) and something that is known (a password).

Shares of Datakey’s common stock are traded on Nasdaq under the symbol DKEY. You can find more information on the Datakey Web site at .


Diebold CashPoint Select

CashPoint has signed an agreement with Diebold, Incorporated for the development of automated teller machine software that will enable financial institutions with Diebold ATMs to fully participate in the CashPoint Select network.

CashPoint Select is a comprehensive content management system that allows financial institutions to deliver customer-specific, targeted content for viewing at different stages of the customer’s visit to the ATM.

![][1] The Diebold-developed software will enable ATMs to communicate with the CashPoint Select network and provide real-time multimedia content for the ATM customer along with actionable coupons. CashPoint Select can be used with the bank or credit union’s current ATM network infrastructure and does not affect the flow of financial transactions between the terminal and the host processor.

“This is a major step in facilitating the rollout of CashPoint Select,” said J.J. Manning, CashPoint’s CEO. “Financial institutions with Diebold ATMs can take full advantage of communicating with their customers through innovative marketing programs on their ATMs.”

“The interface to CashPoint Select is another example of the flexibility of the open systems capability that Diebold ATMs provide,” said Bill Aitken, vice president of systems integration and services at Diebold. “Diebold is able to provide the right combination of standard software, custom applications, and services to meet customer requirements.”

CashPoint is currently certifying CashPoint Select in their laboratories for three major financial institutions, with plans to rollout more than 1,000 ATM locations by the end of the first quarter of 2001.

About CashPoint

CashPoint is the nation’s leading provider of advanced communication solutions that bring banks closer to their customers through programs delivered at the ATM. Using audiovisual messaging and actionable coupons allows both the banks and third-party advertisers to communicate with targeted ATM customers on a one-to-one basis.

CashPoint offers the only national network through which advertisers can reach 38 million consumers each month. The CashPoint system was designed to utilize existing ATM technology, along with expanded communication capabilities to reach 149 million Americans over the age of 18 who have an ATM card.

CashPoint is headquartered in Seattle and has regional offices in San Francisco and Chicago. Additional information may be obtained by calling 206-829-0400 or by visiting their Web site at [][2].

About Diebold

Diebold, Incorporated is a global leader in providing integrated self-service delivery systems and services. Diebold employs more than 11,000 associates with representation in more than 80 countries worldwide and headquarters in Canton, Ohio, USA. Diebold reported revenue of $1.3 billion in 1999 and is publicly traded on the New York Stock Exchange under the symbol “DBD.” For more information, visit the company’s Web site at [][3].

[1]: /graphic/diebold/diebold.gif


VISA Strategy

To bolster its defense of antitrust charges it was revealed yesterday that VISA funded, provided much of the data, and promoted a book on the credit card industry that directly attacked the work of the DOJ’s expert witness. The book, “Paying With Plastic”, was released in December and was written by a highly paid consultant contracted by VISA. Richard Schmalensee, dean of MIT’s Sloan School of Management and professor of economics at MIT, spent most of his time on the stand yesterday attacking the testimony of Professor Michael Katz of the University of California at Berkeley, an expert witness for the Government. Schmalensee testified that the payment card industry is one of the most competitive industries in the economy with no need to change its current business structure. In cross-examination it was revealed that Schmalensee is paid $800 per hour and has testified in a number antitrust trials, including the Microsoft trial. Schmalensee was previously hired by VISA as an expert witness for the 1992 antitrust litigation with Sears’ Discover, for which he received $400 per hour. Schmalensee’s book was produced by MIT Press and distributed to the news media before this year’s trial by a PR firm hired by VISA. One month before the trial, VISA also founded and funded the Washington, DC-based Americans for Consumer Education and Competition non-profit organization. ACEC issued news releases and ran full page ads in major publications to attack American Express during the trial. The ACEC group is headed by former U.S. Rep. Susan Molinari. The group’s stated mission is “fostering consumer education and financial literacy while promoting competition in the marketplace”.



National Data Corporation announced a two-year transaction processing agreement with U.S. Wireless Data. Under the terms of the agreement, NDC eCommerce will offer wireless, high-speed credit card authorization services utilizing U.S. Wireless Data’s Wireless Express Payment Service, to new and existing merchants of NDC eCommerce through its network of banks and acquirers. Initially, it is expected that more than 3,000 wireless terminals will be activated through WEPS to deliver transactions to NDC eCommerce.

![][1] Commenting on the agreement, USWD Chairman and CEO Dean Leavitt stated, “We are very excited about our relationship with NDC and see this partnership as yet another strong endorsement of our technology, service and distribution model.”

“Clearly, wireless credit card processing technology is generating heightened interest,” said Paul R. Garcia, CEO of NDC eCommerce. “NDC eCommerce is excited about the new opportunities we now have because of the new merchant segments WEPS allows us to address.”

WEPS provides a seamless interface among a merchant’s wireless point-of- sale terminals, wireless carriers, and credit card transaction processors. It enables credit, debit, and other card transactions to be processed almost as fast as cash, without the cost and inconvenience of being tethered to telephone or electricity lines. In fact, WEPS is opening new markets for card payments among merchants and venues for which telephone dial-up is not feasible, by providing both the speed and mobility needed to make card transactions practical. These include taxis and limousines, delivery services, quick service restaurants, home maintenance and repair services, outdoor fairs and markets, sports stadiums and arenas, performance halls, and outdoor recreational facilities such as golf courses and amusement parks.

U.S. Wireless Data, Inc. ([][2]) markets proprietary technology that brings together three large, rapidly growing industries- transaction processing, wireless data transport and the Internet-to enable wireless payment processing. The Company’s WEPS technology enables businesses that require mobility and/or faster transaction speed to accept wireless point-of-sale payments, and provides Internet-based real-time transaction monitoring, remote diagnostics and automated terminal activation.

National Data Corporation is a leading provider of electronic commerce solutions and health information services that add value to its customers’ operations.

[1]: /graphic/uswirelessdata/uswireless.gif


Mondex Venezuela

Mondex announced Monday that ACI Worldwide has been chosen to provide back office and card management solutions for the Mondex smart card processing infrastructure for Venezuela. The Mondex Venezuela includes: Banco Mercantil; Banco Universal, S.A.C.A.; Banco Union; Consorcio Credicard.; Banesco; and InterBank. The ACI system will have the ability to handle Mondex smart card processing through traditional ATM and POS channels, as well as Mondex value transfer and customer service via the Internet. In addition to implementing the core Mondex smart card infrastructure, ACI will upgrade the ‘BASE24’ processing systems of Mondex Venezuela members to enable the processing of Mondex value transfer. This gives members the ability to trade electronic Mondex value utilizing their existing channels.



Digital Courier Technologies, Inc., a leading provider of advanced e-payment services specializing in fraud and risk management, announced that John Hanlon, formerly Sr. VP and CFO at Personic, Inc., has been appointed Chief Financial Officer of the company effective August 21, 2000. Mr. Hanlon will be based out of the San Francisco, CA office.

“We are pleased to welcome John as Chief Financial Officer to our team. John brings a strong portfolio of operational and finance skills from both public and pre-IPO companies that will be critical to managing our continued growth,” said Becky Takeda, COO of DCTI. “He is a powerful addition to our senior management team, and will help DCTI extend its lead in the e-payments space,” continued Takeda.

“DCTI is an exciting company in a rapidly growing space with great opportunities and I’m thrilled to be joining its management team,” said John Hanlon, Chief Financial Officer of DCTI. “I look forward to contributing to the growth of the company, and to helping DCTI reach its full potential as a market leader,” continued Hanlon.

Mr. Hanlon has over 13 years experience as a Chief Financial Officer, and is a Certified Public Accountant with experience in public offerings, private placement activities, acquisitions, mergers, and joint ventures. Prior to joining Personic, Inc. in 1998, Mr. Hanlon was Sr. VP and Chief Financial Officer of MDL Information Systems, a publicly traded company prior to it being sold to Reed-Elsevier in 1997. After overseeing MDL’s IPO in 1993, Hanlon oversaw the finance, legal, contract administration, MIS, Facilities, Investor Relations, Corporate Communications departments.

About DCTI:

DCTI is an emerging e-payment market leader providing an advanced, fully integrated e-payment service for merchants and financial institutions. The DCTI services feature a unique fraud protection and risk management system. DCTI has a growing list of over 600 merchant customers, representing more than $70 million in transactions processed monthly and spanning every e-commerce market segment. DCTI has greatly expanded its sales and marketing reach through reseller relationships and strategic partnerships with ACI Worldwide, the global leader in ATM services; Equifax; Innuity; NDC e-Commerce; Visa International; and others. DCTI is headquartered in Park City, Utah, with offices in San Francisco, California, Clearwater, Florida and in West Sussex, England. For more information, visit DCTI on the Web at .


Discover Shut-Out

U.S. District Judge Barbara Jones issued her “Opinion and Order” last Thursday denying Discover’s request to intervene in the ongoing VISA/MasterCard antitrust trial. Jones says that the government represents the public interest in competition, unless a private party makes an extraordinary showing to the contrary. Jones says that Discover has made no such showing. She also wrote that Discover cannot seek intervention on the grounds of its private interests since Discover’s interests as a competitor are not the subject of this case. Jones concluded her ruling by saying that to permit Discover’s intervention would unduly delay or prejudice the adjudication of the rights of the original parties. She said it would impose additional and unnecessary burdens, in the form of new discovery, evidence, and even legal issues. Jones said, however, the Discover is permitted to make an amicus submission by Sept. 22.