CHEXpedite

Electronic Clearing House released an online check processing product yesterday. ‘CHEXpedite’ enables online shoppers to access funds from their checking accounts to pay for Internet purchases. The system encrypts the data using SSL encryption and transmits it to ECHO’s secure server for processing through Magic Software Development Inc. ECHO’s Albuquerque-based check processing subsidiary. ‘CHEXpedite’ also offers an automatic second presentment of items returned by the consumer’s bank due to non-sufficient or uncollected funds. When a second presentment is returned, an integrated collection process is employed to verify funds at the checkwriter’s bank before attempting a third and final presentment. ‘CHEXpedite’ was developed under an exclusive five-year processing and software development and license agreement with TX-based National Bank Drafting Systems. NBDS will promote the Internet check processing product through its nationwide network of over 1,500 licensees.

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ACE Card Suit

Two stockholder lawsuits were announced yesterday against Dallas-based, sub-prime, credit card issuer UICI. Two weeks ago UICI, issuer of the ‘ACE VISA’ card, acknowledged that it expects to post a $79 million loss for the fourth quarter. The loss was attributed to the combination of rapid account growth and a simultaneous sharp rise in chargeoffs for UICI’s subsidiary, United CrediServ. The news sent UICI’s stock from approximately $25 per share to less than $10 per share over the past two weeks. The complaints charge that UICI falsely reported its results for the first, second and third quarters of 1999 through the use of unjustifiable assumptions to calculate its reserves for credit card losses, thereby materially overstating its net income and EPS in at least the first three quarters of 1999. The suits allege that the scheme unraveled this month as UICI was forced to reveal that it would record a charge in the fourth quarter. The ‘ACE VISA’ program offers a $400 minimum credit line to credit impaired consumers who agree to initially charge a $300 personal finance educational program and other fees to the credit card. (See CF 12/10/99)

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100 Million Chips

Smart card manufacturer Gemplus confirmed this morning that its year-old Singapore plant has produced its 100 millionth smart card chip, reaching the target six months ahead of schedule. Gemplus Microelectronic Asia, the company’s manufacturing facility, is Singapore’s first and only smart card plant. GMA opened in Nov. 1998 with a staff of 30 and one smart chip manufacturing line. Today, the plant has two lines and full assembly and more than 200 employees. Over the past year, more than one million smart cards have been manufactured and approximately nine million have been personalized at GMA. Gemplus also has a chip manufacturing plant in La Ciotat, France which produces over half a billion smart chips a year.

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OPC Signs Two States

Official Payments Corporation announced Tuesday that it has signed separate agreements with the Connecticut Department of Revenue Services and the State of Illinois Treasurer’s office. Official Payments Corp. will provide those states’ taxpayers with the ability to pay 1999 income tax balance-due payments by credit card. Official Payments Corp. has existing contracts with the United States Internal Revenue Service and the District of Columbia, as well as the states of California and New Jersey, for similar programs to collect balance-due payments.

Taxpayers in Official Payments Corp.’s partner states will be able to make their balance-due payments by dialing 1-888-2PAY-TAX.(SM) Information on the new payment options will be included in tax instructions, which will be mailed by the state governments to taxpayers in January, or taxpayers can find it by visiting [www.OfficialPayments.com][1] on the Internet.

Official Payments Corp. charges consumers on average a 2.5% convenience fee for processing these credit card transactions. For example, a taxpayer who owed the government $1,400 and charged their taxes, would find a total of $1,435 on their credit card statement — $1,400 for the tax bill and $35 for the convenience fee. American Express, Discover(R)Card and MasterCard(R) are the credit cards accepted by the program. Taxpayers using credit cards with bonus rewards programs can, depending on their card’s program, earn points, cash-back or airline frequent flyer miles for paying their taxes.

“Taxpayers have three motivations for using our service: convenience, cash management and rewards. We offer a proven, secure, reliable and convenient way to pay taxes, with added benefits from credit card reward programs,” said Thomas R. Evans, Chairman and Chief Executive Officer of Official Payments Corporation.

The Connecticut Department of Revenue estimates that 475,000 taxpayers will owe $448 million in balance due tax payments for 1999. “We are constantly taking steps to provide enhanced services to our citizens to streamline voluntary compliance. This new tax payment option gives them an innovative alternative to traditional payment channels,” said Gene Gavin, Connecticut Tax Commissioner. “It’s a win-win deal for both Connecticut and our taxpayers.”

In Illinois, the Department of Revenue estimates that 2.3 million taxpayers will pay approximately $529 million in balance due payments for tax year 1999. “We are taking real steps to make the process of paying taxes efficient and convenient for our citizens,” said Judy Baar Topinka, State Treasurer of Illinois. “Our 1-888-2PAY-TAX.(SM) number provided by Official Payments Corp. delivers on our promise of making it easier to pay your taxes.” The Official Payments Corp. contract with Illinois is in conjunction with National City Bank (NYSE: NCC) for processing credit card payments.

About Official Payments Corp.

Official Payments Corporation (formerly U.S. Audiotex 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 United States Internal Revenue Service, several state governments and 450+ municipal and county entities, in which it collects property taxes, real estate taxes, parking fines and other government fees by credit card over the telephone and the Internet. Official Payments Corp. is committed to making payments to the government go fast, smart and safe.

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

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DiscoverCard.com Passes 1 Million

Discover Financial Services announced that the DiscoverCard.com Account Center has officially registered over one million users. Over 250,000 of them registered in the first 90 days of Discover Card launching Discover Inter@ctive, a feature that offers cardmembers a menu of free e-mail notifications or reminders to regularly inform them about the status of their Accounts.

Discover Cardmembers, who are registered online with the Discover Card Account Center, are enjoying at least one of the four different e-mail reminders being made available:

— Nearing Credit Limit – an e-mail reminder that you are approaching your Account credit limit, based on a dollar amount that you select.

— Statement Available – this e-mail informs you that a new statement has been mailed and your Account Summary, which includes detailed account activity, is ready to view online in the Account Center.

— Payment Posted – an e-mail notification that your payment has been received and posted to your Discover Card Account.

— Minimum Payment Not Received – this e-mail alerts you 5-7 days prior to your due date if your minimum payment due has not been received.

“We are constantly looking for new ways to deliver smart financial services solutions that are easy for our Cardmembers to understand and even easier for them to use,” says Colleen Zambole, vice president, Electronic Commerce, Discover Financial Services, Inc. “Discover Inter@ctive is a simple financial management tool that can contribute to Cardmembers’ everyday personal and financial well-being.”

The Discover Inter@ctive feature is also highlighted in the Discover Card commercial, Friendly Reminder, recently launched on network and cable stations nationwide. In the commercial, a man named Mr. Hill is entertaining a group of people at a restaurant when the maitre d’ approaches and asks to speak with Hill privately. At that very moment, the restaurant patrons become silent and all eyes are on Hill. The maitre d’ proceeds to inform Hill that his credit card has been DECLINED, news that seems to echo throughout the restaurant and the city at large. The voiceover then asks viewers, “What if a credit card company could send you an e-mail reminder before you reached your credit limit? Discover Card can do just that. A friendly credit limit reminder. There’s Always Something More To Discover(SM).”

In addition to the e-mail reminders, the Discover Card Account Center gives Cardmembers free access to their Discover Card account information to check current and past transactions and sort them by date, description or amount, get available balance information. They can also pay their Discover Card bills online via the SmartCheck(SM) payment option at no cost. Also on discovercard.com, Cardmembers can find exclusive online discounts and special Cashback Bonus(R) awards on thousands of products at the Internet ShopCenter(SM).

Discover Financial Services, a business unit of Morgan Stanley Dean Witter & Co., operates the Discover Card brands with more than 47 million Cardmembers and the Discover/Novus(R) Network. The Network is the largest independent credit card network in the United States with more than 3.5 million merchant and cash access locations.

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Destiny New Hires

As part of its continued growth, Destiny, a leading provider of e-business services to financial institutions, announced Tuesday the additions of three senior executives. These appointments bring Destiny’s staff to 80, more than doubling Destiny’s numbers in the past year.

Gregory J. Bell has joined Destiny as Chief Financial Officer, bringing 17 years of financial experience with entrepreneurial companies. As CFO, Gregory will lead ongoing accounting, funding, and merger and acquisition initiatives. Prior to joining Destiny, Greg was Chief Financial Officer of FNX Limited, a global financial services software company. Before FNX, Greg served as Vice President-Finance and Chief Financial Officer at Strategic Diagnostics Incorporated (SDI), where he directed the company through multiple acquisitions and a merger that resulted in SDI becoming public. Greg received his BS in Accounting from Pennsylvania State University and is a Certified Public Accountant.

Surya Kolluri has joined as Destiny’s Head of Strategy, and oversees the development of Web strategy for Destiny’s financial services client engagements. Surya will direct Destiny’s engagement teams in the areas of strategic innovation, marketing, branding, and organizational development strategies. With more than 11 years of experience in Strategy, Technology and Operations, Surya joins Destiny from A.T. Kearney, Inc. where he was a Principal Management Consultant. He earned an MBA from the Wharton School of Business.

Walter Sarkees joins Destiny as Head of Human Resources, and will lead Destiny’s recruiting, training and assimilation, and retention activities, while maintaining Destiny’s unique culture during the organization’s rapid expansion. With more than 25 years of consulting and Human Resources experience, Walt joins Destiny from Cap Gemini America where he was Regional Director of Human Resources. He earned his MS in Organization Dynamics from the University of Pennsylvania.

“We are very pleased with these recent additions to our senior team,” said Lucinda Duncalfe, Destiny’s Chief Executive. “As our client roster grows rapidly, these hires are key to building the management infrastructure to ensure continued outstanding client service.”

About Destiny

Destiny is a leading provider of e-business solutions to the world’s premier financial institutions. Through its integrated set of e-business services, which include strategy, web design/branding, architecture consulting, electronic relationship management, and systems integration, Destiny helps financial services companies build competitively differentiated web businesses. Destiny’s extensive experience and innovative approach to working with clients, WebCycleSM, ensures the utmost in speed to market and flexibility. Destiny’s clients include Bank of America, The Northern Trust Company, Chase Manhattan, Fleet Financial, and First USA (a Bank One subsidiary). The company’s web site is located at [www.destiny.com][1].

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

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NRA to RMA Finalized

Deluxe Corporation announced Tuesday that it has completed the sale of National Revenue Corporation to Risk Management Alternatives, Inc. of Atlanta, Georgia. Deluxe was advised by the investment firm Kaulkin Ginsberg Company of Bethesda, Maryland. Terms of the sale were not disclosed.

Deluxe announced on April 22 that it would sell NRC, a collections business headquartered in Columbus, Ohio, as NRC did not fit with Deluxe’s new corporate strategy and holding company structure.

In an agreement separate from the sale transaction, eFunds Corporation, a business unit of Deluxe, negotiated a multi-year agreement for NRC to perform collections on behalf of eFunds and eFunds’ financial services company clients.

Commenting on the transaction, Dennis Cunningham, RMA’s President and Chief Executive Officer, said, “The NRC acquisition is another step in achieving our long-term goals of completing creative acquisitions that bring synergy, marketing opportunities and customer satisfaction in both the pre- and post-charge off accounts receivable marketplace. NRC and its subsidiaries (UCA, UCAI, NCSC, NCS) present an opportunity for best practices utilization and domestic and international cross selling.” Geoff Finkel of Kaulkin Ginsberg Company added that, “The acquisition of NRC makes RMA one of the 5 largest debt collection firms in the industry.”

About Deluxe Corporation

Deluxe Corporation (NYSE: DLX) is a holding company composed of four business units: Deluxe Paper Payment Systems, eFunds Corporation, iDLX Technology Partners and Deluxe Government Services. These businesses are leaders in providing paper payments and related products, electronic payment solutions, IT software consulting and electronic delivery of government benefits. More information about Deluxe can be found at [http://www.deluxe.com][1].

About Risk Management Alternatives

RMA is a leading provider of accounts receivable management services to healthcare, telecommunications, retail, bankcard, government, utility, transportation, and commercial clients. Headquartered in Atlanta, Georgia, the combined RMA-NRC will have 24 operating branches strategically located throughout the United States and Europe.

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

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Annual Dividends

Canada’s CIBC announced this week that its ‘Dividend’ and ‘Dividend Platinum VISA’ credit cardholders will receive approximately $17 million from ‘CIBC VISA’s’ second-annual dividend payout. Since the program began in April, 1998, the ‘CIBC Dividend VISA cards’ have paid out more than $20 million in dividend dollars. The average ‘Dividend Platinum’ cardholder earned a cash dividend of $147 this year compared to $61 in last year. The ‘Dividend’ program offers 1% cash-back for standard VISA cardholders and 2% cash-back to ‘Platinum VISA’ cardholders.

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Cheap Tiny SC Reader

Celo Communications, a leading global provider of security products for Internet commerce and communications, Monday launched the CeloCom Smart Card Reader 200, an aggressively priced, Internet-ready, miniature device for authentication and digital signing. The CeloCom Smart Card Reader 200 is fully PC/SC compatible and works with all leading Web browsers, making it an ideal tool for secure online banking and stock trading, as well as for government and healthcare organizations.

CeloCom Smart Card Reader 200 is specially designed for highly secure smart card applications, and provides a cost-effective and safe interface between smart cards and PCs. Its small size makes it ideal as a built-in component in other systems. The CeloCom Smart Card Reader 200 works with CeloCom Web, companion software for e-commerce security with X.509 certificate authentication and digital signing.

“Smart cards offer the best way to achieve security and non-repudiation for online transactions, but until now the readers have been too expensive and difficult to install,” said Sven Hammar, CEO of Celo Communications Inc. “The CeloCom Smart Card Reader 200 is a real breakthrough in price, size and user-friendliness.”

The CeloCom Smart Card Reader 200 installs easily between the PC and the keyboard, and receives power directly from the host PC, eliminating the requirement for bulky power converters. Using the companion software, CeloCom Web, the reader is plug-and-play compatible, and conforms to the PC/SC and PKCS#11 standards, ensuring it will work with all standards-based PCs, smart card applications and online payment systems.

For pricing details, please contact sales@celocom.com.

About Celo

Celo Communications is a leading provider of e-commerce security transaction solutions, based on certificates and digital signatures. Celo’s product suite uses public-key-infrastructure (PKI), the industry standard for conducting secure Internet transactions. Celo’s security solutions integrate easily with legacy systems, providing important time-to-market advantages for its customers. Celo’s customers include leading European and American banks, insurance companies, e-commerce companies, online gambling companies, military networks, European governments and Internet service providers. Celo has strategic partnerships with VeriSign, Globalsign, Baltimore, Xcert, RSA Security, IBM and others.

Incorporated in October 1997, Celo Communications has offices in the U.S., Ireland, Sweden, the Netherlands and Germany. For more information, please visit [http://www.celocom.com][1]

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

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FDC Goes Wireless

First Data Merchant Services is launching its first large-scale effort to penetrate the expanding wireless payment market. Yesterday FDMS introduced the hand-held ‘Cell Trek Explorer’ produced by Lipman USA. The POS terminal has been enabled for use on the nationwide BellSouth ‘Intelligent Wireless Network’. First Data’s digital wireless product offering includes the ‘Cell Trek Explorer’ as well as the Nurit ‘2090 Wireless POS/EDC Terminal’. Both provide merchants the flexibility to accept all major credit and debit cards virtually anywhere in the country that BellSouth Wireless Data offers coverage, which is currently 93% of the U.S. urban business population. First Data will also be supporting MasterCard and VISA commercial cards. When a commercial card is presented to a merchant, the terminal will prompt for the sales tax amount and a purchase order number. This data is passed back to the cardholder’s bank electronically, automating their accounts payable function. FDMS says it will also provide its clients with full product deployment and maintenance.

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Creditrust Meltdown

Creditrust Corporation announced Monday that it has engaged Goldman, Sachs & Co. to serve as the exclusive financial advisor to Creditrust’s Board of Directors. Goldman, Sachs & Co. will advise the Board on various strategic alternatives, including the potential sale of the Company or a significant equity stake in the Company.

About Creditrust

Founded in 1991, Creditrust Corporation acquires, manages and collects delinquent consumer receivables utilizing an information-driven strategy. The Company uses proprietary technology to acquire receivables primarily consisting of charged-off Visa(R), MasterCard(R), and private label credit card accounts issued by major banks and merchants. Creditrust was added to the Russell 2000 Index(R) in July of this year.

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