Gemplus & GeldKarte

Gemplus, together with Philips Semiconductors, has become the first card manufacturer to be certified for the new, type 1 GeldKarte (the German e-purse system), which will be available from October 2000. The Zentraler Kreditausschuss (ZKA – Central Credit Committee) has certified the hardware/software combination that consists of the operating system for the new GeldKarte, developed by Gemplus, and the highly secure and efficient Philips Semiconductors chip card IC P8WE6017. This solution is now officially approved for use on Germany’s banking chip cards.

![][1] With the new operating system the GeldKarte type 1 is ready for the introduction of the Euro and the increasing internationalisation of payment methods. A cross-border pilot project called PACE (Purse Application for Crossborder Use in Euro) has already started. Future security of the GeldKarte payment system has also been improved within the scope of the terminal software update and the adaptation of the background systems. One example of this is the additional authenticity check when a payment is made.

The GeldKarte type 1 operating system – developed by ODS prior to its take-over by Gemplus – is based on the revised interface specification for the 4.x version ZKA chip card. The approval was based on the positive acceptance test on functionality and the security expertise on hardware and software developed in close co-operation between Gemplus and Philips Semiconductors.

About Gemplus

Gemplus ([][2] ) is the world’s number one provider of smart card based solutions for security, wireless and e-business applications. Offering consultancy services, design, software, hardware, personalization and full implementation, Gemplus works with its customers around the world to deliver comprehensive, integrated and tailor-made smart card based systems. The Group’s customers use Gemplus memory and microprocessor smart cards, smart contactless cards, electronic tags, smart objects and magnetic stripe cards to simplify and secure a wide range of applications. From Web based and mobile commerce to financial transactions, loyalty, transportation, education healthcare, identity, pay TV and physical and logical access control, Gemplus provides intelligent end-to-end solutions that bring security, convenience and ease-of-use to millions of people worldwide.

Founded in 1988, Gemplus had sales of over 767 millions of Euro ($US 817 millions) in 1999, and employs almost 6,300 people in 17 manufacturing facilities, 7 R&D centers and 44 sales and marketing offices located in more than 37 countries.

[1]: /graphic/phillips/philips.gif


Cyota Nabs Heatherington

Cyota, a provider of online payment security solutions, announced the appointment of Gary Heatherington as Chief Executive Officer. Mr. Heatherington, former President & CEO of Bank One International in Canada, will have responsibility for overall strategic direction and operational management of Cyota. He will be headquartered in the company’s New York office.

“Gary’s vast e-commerce and payment systems experience is a tremendous asset to our team,” said Naftali Bennett, co-founder and President. “As the global e-marketplace continues to thrive, we are confident that he will help establish Cyota as the leader in online payment security.”

Cyota recently introduced its groundbreaking advance in online payment security, SecureClick, a software solution that allows consumers to shop online without revealing their real credit card number.

“Online security concerns are a major impediment to online purchasing,” added Mr. Heatherington, “with SecureClick and Cyota, I look forward to making internet transactions completely safe.”

Mr. Heatherington brings to Cyota a legacy of experience in banking, payment systems and e-commerce. As President and CEO of Bank One International in Canada, he established a subsidiary of the world’s largest Visa issuer. Prior to that, in his role as Executive Vice President, Global Markets at MasterCard International, Mr. Heatherington managed the MasterCard, Maestro and Cirrus brands in Canada and played a leading role in developing MasterCard’s global market strategy.

“The addition of Gary to the already stellar management team positions Cyota for success in the online payment security market,” says Ira Rimmerman, former President Citibank Credit Cards Worldwide, and Cyota Director.

About Cyota

Cyota is an online payment security company founded in 1999 by four veterans of elite intelligence units in the Israeli Defense Force. SecureClick, developed under the supervision of a world leading security expert, Prof. Adi Shamir, is Cyota’s flagship product that provides credit card issuers and their customers complete online fraud protection. The company is headquartered in New York City with an R&D subsidiary in Israel. Cyota is a privately held company, backed by a global venture capital corporation. For more information, please contact Cyota or visit our web site at [][1].

SecureClick is a registered trademark of Cyota.



Advanta 2Q/00

Advanta confirmed this morning it is delaying the results of its second quarter due to the ongoing review of the company’s subprime lending operations with regulators. However the company’s business card portfolio is not affected by the review. Advanta did confirm that second quarter net operating income for its business card portfolio was $14.8 million, a 73% increase over the $8.6 million reported for the first quarter of 2000 and a 206% increase over the $4.8 million reported for the second quarter of 1999. Managed receivables for Advanta’s business cards at the end of the quarter were $1.4 billion, an increase of 17% over the first quarter of 2000, and 61% over the second quarter of 1999. For complete details on Advanta’s historical statistics visit CardData ([][1]).



Sears Rebound

Improving credit quality contributed to Sears, Roebuck and Co.’s record second-quarter net income of $388 million. Credit operating income increased by 26.3% due to higher revenues, improved portfolio quality, securitization activity, and reductions in selling and administrative expense.


2Q/00 2Q/99
Receivables: $25,144,000,000 $26,103,000,000
Chargeoffs: 5.09% 7.11%
Delinquency: 7.15% 7.29%
Net Interest Margin: 13.80% 13.63%

Source: CardData (


CardData 2Q/00

Strong second results continue to be reported across the industry. Among major issuers reporting last week in ‘CardData’s 2Q/00 Portfolio Survey’: Household, Wachovia, Wells Fargo, First National Nebraska.

Household $ 13,660,396,000 $8,202,428,000 17,308,000 8,133,000
Wachovia $ 7,787,803,270 $2,396,976,113 7,769,274 2,763,510
Wells Fargo $ 4,527,535,308 $2,162,003,878 4,568,998 2,832,425
Frst Natl NE $ 3,119,500,000 $1,187,399,000 3,520,417 1,515,888

Source: CardData (


Fingerhut Credit

Federated Department Stores confirmed last week that credit delinquency problems are plaguing its Fingerhut subsidiary. The company said Friday it has identified the key contributing factors as: conversion from closed-end installment to revolving credit; implementation of late fees; aggressive deferred-credit offerings for newer customers; and economic conditions (higher interest rates and gas prices) that are beginning to make it harder for lower-income customers to meet credit obligations now. Fingerhut says it is addressing the problem by: increasing collections activity; lowering credit lines and tightening initial granting of credit; introducing new credit scoring criteria for moving credit lines up or down; initiating aggressive address verification practices for all new accounts; reducing deferred credit offerings and introducing a minimum-purchase requirement for deferred credit.



VISA U.S.A. and Compaq Computer introduced Friday the ‘Internet Commerce Program’. Under the new eCommerce program merchants will be able to obtain scalable hardware, software and services needed to enable secure credit and debit card transactions via the Internet. The ICP offers businesses a choice of pre-configured Compaq hardware platforms that are ready to run in any environment. VISA says its goal is to offer its member banks increased opportunities for differentiation and profitability as they develop their own merchant programs. The ICP’s pre-bundled solutions can also enable VISA’s member banks to attract and retain merchant partners. Working through VISA’s distribution channels, Compaq will also offer merchants the opportunity to take advantage of special discounts on Compaq products and services that are usually reserved for large companies.


E-Funds Report

In its first earnings report as a publicly traded company, eFunds Corporation reported Friday second quarter revenues of $101.0 million. Electronic Payment Solutions second quarter revenues increased 22.6% to $72.1 million. Higher inquiry volume coupled with a price increase, increased full-service collections activity, the DebitBureau agreement with the information solutions provider, and higher software sales contributed to second quarter growth, with risk management products seeing the highest growth. EFT transaction volume increased 16.6% over the second quarter of 1999 and 19.6% over the first six months of 1999. Account verification inquiry volumes increased 13.6% versus the second quarter of 1999 and 17.6% over the first six months of that year. For complete details on eFunds 2Q/00 data as well as 2Q/00 details on Deluxe Corp. visit CardData ([][1]).



LML Gets Tech Check

LML Payment Systems Inc. is pleased to announce the acquisition of Check Technologies Inc. of Dallas, Texas.

Check Technologies Inc. is a 15 year-old check verification and recovery company with a client base primarily in Texas and Louisiana. Check Technologies adds an impressive list of household name retailers to the LML Payment Systems roster. Clients include: Dominos Pizza, Centennial Liquor, Whole Foods Market, Drug Emporium and Paragon Cable. Check Technologies President, Roger Jahnel, will assume a marketing and sales role with LML, focusing on both internal and external growth strategies.

“I have been in this business for quite some time, and for the past 12 months I have watched the approach LML has taken and continues to take toward the industry. It is both fresh and impressive. What particularly pleases me about this opportunity is LML’s growing infrastructure including management, client base, service offerings and intellectual property. I am excited to be a part of it and look forward to making a significant contribution,” said Jahnel.

“We are quite pleased with this transaction. Mr. Jahnel and his management team have done an impressive job. Roger is well known throughout the industry and we look forward to working with him in his new capacity,” said Corporation President and CEO, Patrick Gaines. “We also look forward to combining Check Technologies’ operations with our existing infrastructure in Dallas, with a view toward reducing redundancies, achieving economies of scale and positively effecting overall performance.”

LML Payment Systems is a financial payment processor specializing in providing end-to-end check processing solutions for national, regional and local retail merchants. The company’s processing services include traditional check verification and collection along with electronic processing services including Electronic Check Re-presentment (whereby returned paper checks are represented for payment electronically) and Electronic Check Conversion (whereby paper checks are converted into electronic transactions right at the point of sale). The Company’s intellectual property estate will include a recently allowed patent application regarding internet checking transactions, in addition to U.S. Patent No. 5,484,988. U.S. Patent No. 5,484,988, describes a “Checkwriting point of sale system,” which, through a centralized database and authorization system, is capable of providing and administering various electronic payment services for customers and businesses.


Real-Time Lawsuit

Welcome Real-time, a leading provider of loyalty software for smart cards, launched proceedings against Catuity Inc, CAT (its R&D development subsidiary) and CiT being another company in the Catuity Group for infringement of its smart card loyalty system patent. The action has been filed in Australia where Catuity’s software development is located.

Proceedings request that the court order Catuity to pay damages for the infringing activity, grant an injunction to restrain the use of the patented operation and supply of hardware and software, the use of which would involve infringing activity, order Catuity to deliver up all materials in its possession, the use of which would be a breach of those injunctions and pay Welcome Real-time’s costs.

Aneace Haddad, President & CEO of Welcome Real-time, said, “We are absolutely committed to protecting our intellectual property. Catuity has been aware of our patent claims since early 1999 and has chosen to ignore our intellectual property rights. At this point, we had no alternative but to bring this action.”

The suit charges infringement of one of Welcome Real-time’s Australian patents that broadly covers the emerging use of smart cards to deliver, store and process frequent shopper incentives. The patent covers the subject matter of Welcome Real-time’s French patent, filed in early 1996. In addition to Australia, Welcome Real-time’s extensive smart card loyalty patent portfolio covers numerous other regions, including the US, Europe and Asia.

About Welcome Real-time

Welcome Real-time is a leading provider of marketing software and services to drive consumer behavior across the online, offline and mobile worlds. The company’s software leverages the banking industry’s emerging smart card infrastructure to create a cross platform electronic promotion infrastructure.

Customers use their smart payment cards to store and process frequent shopper incentives at merchant payment terminals, web sites, mobile phones, set top boxes and vending machines.

Welcome Real-time is headquartered in Aix-en-Provence, France. Management includes smart card marketing pioneers who have been running electronic cash programs since 1987 and smart card electronic couponing applications as early as 1993. The company has delivered its software on close to 4 million smart cards used by specialty retailers, airlines, movie theaters, quick service restaurants and supermarkets. Welcome Real-time has been granted several patents covering smart card based electronic couponing.

For more information, visit the company’s website at


Hypercom & AdForce

Hypercom Corporation, and AdForce, LLC, a majority-owned operating company of CMGI, Inc. and a leading online provider of centralized outsourced advertising management and delivery services announced an alliance to deliver targeted digital advertising, marketing and promotional messages to consumers at the retail point-of-sale via Hypercom’s ePic (ePOS-infocommerce) Internet appliance card payment terminals. AdForce will collaborate with Hypercom’s recently announced subsidiary, ePicNetz, in this initiative.

Hypercom, together with AdForce, is focused on reaching a large, untapped market and enhancing the consumer experience at the checkout line. With approximately 20 million retail point-of-sale terminals worldwide today, and corporate demand for more lucrative and effective avenues to drive advertising, the opportunity to reach consumers with digital advertising is immense. An average of ten debit or credit transactions are processed per day, through each terminal, making the global audience for point-of-sale based advertising about 1.4 billion consumer impressions per week. In addition to its vast reach, the medium is especially suited for the delivery of targeted advertising, without the need for consumer tracking.

“Hypercom and AdForce share a vision for delivering new services to the consumer and, more importantly, to generate new and recurring revenue streams for merchants and their service providers as they expand their businesses over the Internet,” said Jairo E. Gonzalez, Senior Executive Officer, Hypercom Corporation. “AdForce’s strategy, leadership and global presence makes them a natural partner to team with in this exciting venture.” “Our partnership with Hypercom provides a tremendous opportunity for advertisers to reach their target customer base at the physical retail environment,” said AdForce Executive Vice President Dee Cravens. “Hypercom’s ePic framework and ePicNetz service company allow us to deliver messages to a larger and more targeted population while they are actively involved in the buying process,” said Cravens.

Hypercom’s ePic represents a comprehensive framework that consists of browser-equipped ICE touch-screen terminals, which are increasingly consumer operated, and can connect to the Internet and deliver Internet-enabled applications at the point-of-sale through a set of web-enabled servers.

These servers, collectively called ePicPortz, support a broad range of screen and application gateway functions for translation, routing, payments, programs and security. In addition, Hypercom’s ePic enables e-commerce, e-mail, electronic receipt capture and Internet-based advertising and coupons via the point-of-sale (POS) terminal, and accept credit, debit, EBT and e-cash transactions. ePic also enables merchants to integrate their physical and Web-based storefronts using a single web appliance, the Hypercom ICE card payment terminal.

Working with Hypercom and its ePicNetz subsidiary, AdForce will provide advertisers with the ability to deliver and measure the effectiveness of targeted advertising, self-select coupons, loyalty programs, promotional messages and other content. Hypercom and its ePicNetz subsidiary will provide retailers with a more highly interactive shopping experience which they can leverage to drive additional purchases.

About AdForce (

AdForce, LLC”, a majority-owned operating company of CMGI, Inc., is “The Force in Digital Marketing”” and a leading provider of centralized online advertising services, enabling publishers, rep firms and advertisers to leverage the unique advantages of the Internet as the first fully interactive medium. Deploying advanced scalable technology and backed by robust data centers, the AdForce service delivers billions of impressions monthly for some of the Internet’s most prominent advertisers. AdForce provides a comprehensive suite of products, which allow advertisers and publishers to target, deliver, measure and analyze Internet advertising programs for the best results. AdForce has offices in Cupertino, CA, Costa Mesa, CA, New York, NY, Europe and Hong Kong.

About Hypercom (

Hypercom Corporation is a global provider of end-to-end electronic payment solutions, including card payment systems, peripherals, network products, software and e-commerce payment solutions that add value at the point-of-sale for consumers, merchants and acquirers.

Headquartered in Phoenix, Arizona, Hypercom markets its products in more than 70 countries through a global network of affiliates and offices in Argentina, Australia, Brazil, Chile, China, Germany, Hong Kong, Hungary, Japan, Mexico, Puerto Rico, Russia, Singapore, Sweden, the United Kingdom and Venezuela. Hypercom’s Internet address is


MI Natl Awarded

Visa U.S.A. has awarded Michigan National with two 2000 Member Service Quality Performance Awards. This marks the ninth consecutive year that Michigan National has won awards for achieving the best chargeback and copy request performance by an acquirer with annual Visa sales between $2 billion and $5 billion.

“Once again, Michigan National has been recognized by Visa for superior performance,” said Marc Belsky, senior vice president of Payment Products and Services for the bank. “This recognition demonstrates the exceptional depth of experience of our team and the consistent focus we place on merchant education and training.”

These awards reflect Michigan National’s ability to provide world-class service by educating merchants on Visa card acceptance procedures and the importance of providing adequate transaction description information for the cardholder’s benefit.

“Our team is dedicated to our customers,” said Jackie Jason, director of Acquirer Operations. “Making customer needs our number one priority allows us to consistently win these awards.”

“Michigan National’s outstanding operating performance mirrors its continuing commitment to excellence, both to its customers and to the Visa payment system,” said Matt Price, senior sales director, Visa U.S.A. “The end result of Michigan National’s efforts is a cost-effective program that delivers optimal value and convenience to its customers.”

For nearly a decade, Visa and its member financial institutions have worked together to maximize profitability and back office operating efficiency by reducing unnecessary copy requests and chargebacks and increasing authorization approval levels without increasing risk.

Since 1992, Visa has recognized superior operating performance by U.S. issuers and acquirers in key operating areas. Michigan National is one of 34 financial institutions from Visa’s United States membership that has won awards in one or more categories this year. Members qualified for service quality awards during the May 1999 to April 2000 period.

Visa is the preferred payment brand and the largest consumer payment system worldwide. It plays a pivotal role in advancing new payment products and technologies to benefit its 21,000 member financial institutions, their cardholders, and the global economy. Visa is the only consumer payment system to facilitate $1 trillion worth of purchases of goods and services in a fiscal year. Visa’s 660 million cards are accepted at more than 14 million worldwide locations, including 370,000 ATMs in the Visa/PLUS Global ATM Network. Visa’s Internet address is .

Michigan National provides diversified financial services and offers creative ideas and product options designed to help consumers and businesses meet their financial goals. A member of the National Australia Bank Group, Michigan National is an $11.2 billion-asset financial services corporation with 187 financial centers and more than 300 ATMs. Michigan National is committed to being the bank of first choice in its markets and provides the leading-edge products and services that customers expect from a member of a global financial network. Visit Michigan National’s web site at