MerchantOnline Gets Angel

MerchantOnline.com announced the appointment of Angel M. Rodriguez as vice president of credit/debit card operations. Rodriguez, with more than 30 years’ experience in banking and credit card operations, will report to Jim Gitney, chief operations officer.

“Angel brings a wealth of knowledge to the transaction and service side of our business,” Gitney said. “This move provides us with a focused expertise on a critical part of our long-range business plan.”

Rodriguez joined MerchantOnline.com in January 1999 as operations manager, following 10 years with MasterCard International Inc., where he served as vice president of operations for Latin America and the Caribbean. In that post, Rodriguez was responsible for setting up Latin American operations in Miami, playing a major role in establishing credit card duality (MasterCard and Visa) in Brazil. He was active in credit/debit cards, telecommunications, technology and customer service.

Between 1969 and 1998, Rodriguez was vice president of operations for three divisions of Citibank, NA, managing Travelers Checks, Bankcards and Consumer Lending. Rodriguez is a former U.S. Marine, a Vietnam veteran and received his education at New York’s Hunter College.

Founded in December 1997, MerchantOnline.com offers one-stop solutions for merchants who want to set up and maintain a store on the Internet. It provides businesses with real-time secure credit and debit card processing, shopping cart services and online checking transactions.

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Top Ten 99

The ten largest issuers of general purpose credit cards now control more than 77% of the market according to year-end 1999 statistics gathered by CardData ([www.carddata.com][1]). Last year was a particularly strong year for sub-prime specialists. Providian watched receivables grow more than 60%, while Capital One experienced a 15% increase. Meanwhile American Express card loans soared by 40% to end the year at $23.4 billion versus $16.7 billion for 4Q/98. MBNA continued its steady course, posting a 17.5% increase in outstandings.

TOP TEN U.S. ISSUERS EOY 1999
Rank/Issuer Card Loans Gross Accts YTD Volume
1. Citibank $74.2 billion 40.6 million $162.3 billion
2. Bank One/First USA $69.4 billion 43.1 million $142.7 billion
3. MBNA $63.1 billion 28.9 million $102.8 billion
4. Discover $38.0 billion 38.5 million $ 70.6 billion
5. Chase Manhattan $33.6 billion 20.5 million $ 53.8 billion
6. American Express $23.4 billion 23.5 million $186.4 billion
7. Bank of America $20.9 billion 21.0 million $ 50.3 billion
8. Providian $18.7 billion 15.2 million $ 20.3 billion
9. Capital One $16.4 billion 22.0 million $ 32.6 billion
10. Fleet $14.3 billion 8.5 million $ 17.0 billion
Totals: $372.0 billion 261.8 million $838.8 billion

Source: CardData (www.carddata.com)

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

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NYCE CAS Expands

NYCE is expanding participation in Card Alert Services to all NYCE Network card issuing financial institutions in the Midwest. Under a new Network rules change, these participants become automatic subscribers. Universal participation in CAS was launched by NYCE in its Northeast service area in April of last year. With the Midwest roll-out, all of the Network’s 2,300 participants are now in CAS. As part of its fraud detection services, CAS receives a subset of switch transactions from NYCE and other participating shared networks. These transactions are filtered through software programs developed and continually modified by CAS to help identify suspicious transactions. In the usual CAS process, the issuing participant is notified of suspect transactions and asked to verify the transactions and respond to CAS. If it is concluded that transactions are being conducted with counterfeit cards, CAS then attempts to determine when and where the compromise occurred, identifies card numbers that were likely involved in the compromise, and sends a list of suspected compromised card numbers to the financial institutions impacted.

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Delegate Access

A privately-held Atlanta company was issued a utility patent yesterday for a payment execution system useful in banking, deposit access or debit transactions. Delegate Systems, Inc. received a patent titled “Process for Executing Payment Transactions.” The patent provides consumers with an alternative to ordinary credit and debit cards by enabling them to capture and segregate funds in their bank or other accounts into restricted funds sub-accounts from which they or other authorized users can draw funds. The company says the ‘Delegate Access’ system enables a parent to provide a real or virtual ‘Allowance Card’ to a child or a teenager, adding or subtracting value from the card at will. The card system can be applied to mag stripe cards, smart cards or Internet cards.

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Platinum Lexus

In an effort to put more shine into its Platinum card, American Express will unveil today a new series of ads that offer a free ‘American Express Platinum’ card to new Lexus owners. Lexus will launch a special promotion starting today that will feature a ‘Platinum Series’ of its four luxury sedans. The new ‘Platinum Lexus’ will include special paint, upgraded leathers and other amenities. Part of the package is an ‘American Express Platinum’ card with no-annual-fee for the first two years. AmEx normally charges a $300 annual fee for the card. Lexus purchasers who fail to qualify for the AmEx card will be awarded AmEx gift certificates. AmEx indicated that most Lexus owners already have an American Express card product and the Platinum card would be considered an upgrade. The Lexus ‘Platinum Series’ promotion will end in July. During July, Lexus will unveil its all-new ‘IS 300’ compact sport sedan which offers entry prices to younger buyers.

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NextCard Flooz

NextCard and Flooz.com have formed a strategic e-commerce marketing alliance. NextCard also announced it has made a significant minority investment in Flooz.com. It is the first equity investment in an e-commerce company by NextCard. Under terms of the deal NextCard will integrate Flooz.com’s online gift currency into NextCard’s e-Commerce platform, cardholder services and ongoing promotions. In addition, Flooz will exclusively market and promote the NextCard to its customers and pay NextCard a referral fee for each new Flooz customer generated from either NextCard’s application process or current cardholder base.

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Adams Re-Joins AMS

American Management Systems announced Tuesday that Paul E. Adams re-joined the company as vice president of strategic business ventures within the Consumer Financial Services Group. In this capacity, Mr. Adams will develop new ventures and opportunities synergistic with the group’s focuses in customer relationship management, electronic commerce and consumer credit management, as well as develop wholly new targets of opportunity.

“In the last two years, we have successfully launched several new ventures and partnerships, strongly positioning AMS in new growth areas in financial services such as the ASP market,” said Sandra L. Devine, general manager of the firm’s Consumer Financial Services group. “We have an explosion of ideas in incubation stages, and Paul’s leadership and forward thinking perspective will enable us to rapidly get the best of these new ventures to market.”

One of Mr. Adams’ initial focuses will be to expand AMS’s leadership in the area of online consumer credit. “The financial services industry is poised for explosive growth in the area of interactive credit,” said Mr. Adams. “AMS has already made great strides in meeting these new demands for its clients and has strategic partnerships in place to capitalize on this trend. This, coupled with the terrific team AMS has in place, made the decision to return to the company an exciting one.”

Mr. Adams has more than 20 years of experience in the financial services industry. He first joined AMS in 1987, where he focused his business development efforts on the company’s strategic clients and was instrumental in building AMS’s Credit Risk Management Practice. Most recently, Mr. Adams was Director of Sales and Marketing with Affinity Technology Group, Inc. Prior to joining AMS, Mr. Adams led the sales efforts for automated credit systems at the Fair, Isaac Companies. Mr. Adams is a frequent speaker at industry conferences on the subject of credit management and the application of new technologies.

About AMS

AMS is an international business and information technology consulting firm — one of the 20 largest such firms worldwide. AMS is the premier provider of next generation enterprise business and technology solutions that dramatically improve business performance and create value for clients. AMS’s suite of eBusiness strategy, management and technology services make business reinvention possible in Internet time for large organizations. Founded in 1970, AMS is headquartered in Fairfax, Virginia, with over 8,000 employees and 57 offices worldwide. AMS had 1998 revenues of $1.06 billion, with eBusiness- related revenues representing 20%, an increase of almost 150% over 1997. Forbes magazine ranked AMS among the best-performing big companies in the U.S. in their “Best of the Biggest,” and FORTUNE magazine placed AMS on its list of the “100 Best Companies to Work for in America” in 1999.

AMS is traded in the Nasdaq over-the-counter market under the symbol AMSY. AMS can be found on the World Wide Web at amsinc.com

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Interbank

National InterBank began full operation of its online, Internet-based consumer bank yesterday. The new Internet bank offers no-fee banking which includes no-fee interest checking accounts, no-fee Money Market savings accounts, free online bill payment services and a no-annual-fee credit card. Additionally, the bank provides free ATM/Debit card replacement, free cashier checks, free stop payments, and free account research services, such as past statement reprints and copies of cleared checks. National InterBank also reimburses customers $6 per month for fees incurred during any ATM transaction.

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Hitachi Employee ID Cards

Mondex International announced Tuesday that the Japan Mondex Consortium has joined forces with Hitachi Limited to carry out a corporate campus project, rolling out thousands of MULTOS cards to the employees of Hitachi System Plaza Shinkawasaki in Kawasaki City. The Employee ID Card system is a card that acts as a staff ID and payment card, and has been on limited trial within Hitachi’s company complex since April last year. The cards are being issued by Hitachi Credit Ltd. The aim of the cards is to regulate company infrastructure and to enable employees to make cash-less payments within the facility.

The new Hitachi Employee ID Card System will mark the first phase of the full-scale launch of the Hitachi Employee ID Card System and the first large-scale deployment of Mondex cards in Japan. This initial phase will include up to 100,000 users within the Hitachi Group, and this figure is expected to grow to approximately 300,000 users in the near future.

Like the trial cards, the new MULTOS cards will be used for Mondex electronic cash and also for other functions such as employee ID. There are plans to introduce a building access function by April of this year that utilises the Mifare contactless module of the cards. Employees may also soon be able to make use of the secure sockets layer (SSL) encryption function for the secure transmission and authorisation of information.

“This initial implementation is known as the ‘Hitachi Core Project’, and it represents the first major deployment of Mondex in Japan,” said Yuko Ochi, Mondex International. “This is a very exciting development for Mondex, and we expect to see many other multi-application projects launching in Japan in the near future.”

MXJ was launched last October to encourage the spread of Mondex electronic cash and MULTOS in Japan. At of the start of this year, the list of member companies participating in the Consortium reached 134. MXJ is seeking to make Mondex the de facto standard for smart card payment functions in Japan by working with Japan’s key manufacturers and service providers.

“We plan to introduce the Mondex application system in other companies of the Hitachi group in the future,” said Mr. R Satoh, Hitachi Ltd. “Through the knowledge we gain from our own Employee ID Card System, we will be able to deliver the best solutions to clients wishing to utilise either Mondex electronic cash or the MULTOS card.”

Companies involved in the Hitachi Employee ID Card System Implementation project include the following: Apex Co., Ltd.; Sapporo Breweries Ltd.; Sanwa Bank; National Vending Co., Ltd.; Hitachi Credit Co., Ltd.; Hitachi Kyoushou; Honda Foodland Co., Ltd.; and MasterCard International

About Hitachi

Hitachi, Ltd., headquartered in Tokyo, Japan, is one of the world’s leading global electronics companies, with fiscal 1998 (ended March 31, 1999) consolidated sales of 7,977 billion yen ($65.9 billion*). The company manufactures and markets a wide range of products, including computers, semiconductors, consumer products and power and industrial equipment. For more information on Hitachi, Ltd., please visit Hitachi’s Web site at http://www.hitachi.co.jp. * At an exchange rate of 121 yen to the dollar.

About Mondex International

Mondex International Limited (MXI) is a world leader in the provision of a global, multi-channel, electronic payment system for the real and virtual worlds. Headquartered in London, the company is a subsidiary of MasterCard International. MXI products are being developed in over 80 countries around the world. Mondex electronic cash is a cost-effective, secure, and immediate payment tool, which can be used across open networks such as telephony or the Internet. Mondex is ideal for high volume, low-value payments for arenas such as digital television, Internet payments, and closed-campus sites.

In September 1999, Mondex? and the MULTOS? operating system became the first commercial products ever to be awarded ITSEC Level E6 (Information Technology Security Evaluation Criteria), the highest ITSEC security rating level available. Further information regarding MXI, Mondex? electronic cash and other MXI products is available at: [www.mondex.com][1] or [www.mondexinternational.com][2].

MasterCard International

MasterCard International has the most comprehensive portfolio of payment brands in the world. With 23,000 member financial institutions, serving consumers in 220 countries and territories, MasterCard is the industry leader in quality and innovation. Nearly 700 million MasterCard, Maestro, Cirrus and Mondex” cards are in circulation today. With more than 16.2 million locations, no card is accepted in more places and by more merchants than the MasterCard Card. In 1998, gross dollar volume exceeded $650 billion. MasterCard can be reached through its World Wide Web site at [http://www.mastercard.com][3].

[1]: http://www.mondex.com/
[2]: http://www.mondexinternational.com/
[3]: http://www.mastercard.com/

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Kroger U-Scan Suit

Neldon Johnson, president and chief executive officer, International Automated Systems, Inc. announced Tuesday that the company has filed a civil action complaint in the United States District Court for the District of Utah Central Division against The Kroger Company alleging patent infringement arising under the patent laws of the United States, and more specifically, under Title 35, U.S.C., section 271, 281, 283, 284, and 285.

“We are disappointed in what we believe to be an intentional disregard of IAS’s U.S. patent rights. After reasonable notice to Kroger, we believe that by its continued use of the U-Scan system, we are left no choice but to pursue our rights under the law,” said Johnson. “We are confident in our ability to establish ourselves as the first to develop an automated checkout lane that specifically and individually identifies each item by its recorded weight.”

The automated express lane industry offers an estimated $3 billion in equipment sales. This calculation is based upon the assumption that only 25-30% of the total checkout lanes of each store could be automated. Since the IAS automated system gives the option of toggling between self-service and full-service with a simple push of a button, 100% of a supermarket’s checkout lanes could be replaced with the IAS system. Hence, the company’s potential market could be expanded three- or four-fold.

In addition, IAS’s system is designed to facilitate a fully automated store. The company estimates, based upon projected cost reduction, that this format can profit in approximately 17,000 new locations throughout the United States where a traditional supermarket would find it cost-prohibitive.

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Mobile VISA

E-commerce via mobile phones took a closer step to reality this morning as VISA International and Nokia announced a cooperation agreement to introduce payment solutions for mobile electronic commerce. Under the agreement, Nokia and VISA will introduce a standardized means of making secure payments using a mobile phone, meeting different market requirements for security, risk management and dispute resolution. As well as conducting joint marketing and business development activities, Nokia and VISA will collaborate to simplify the payment process by developing a mobile e-wallet. Nokia will also provide server applications based on WAP which will transmit payment data securely over wireless networks to financial institutions. A pilot of the technology will take place later this year with MeritaNordbanken in Sweden and Finland. Nokia is developing and testing various implementations of secure card payments in the mobile environment, including a pilot of VISA card payments via the dual-chip GSM mobile phone.

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