HyperSecur & Oberthur Sign Contract

HyperSecur Corporation (http://www.HyperSecur.com) announced today it has signed an International Agency Contract for Canada with Oberthur Smart Cards USA (http://www.oberthurusa.com/) based in Rancho Dominguez, California.

The Contract gives HyperSecur exclusive Canadian rights and non-exclusive worldwide rights to sell Oberthur Smart Cards’ magnetic stripe, memory and microprocessor card products and personalization services. “Having a company like Oberthur provides us the opportunity to have access to their product line and dramatically accelerates our business development timeline,” said Charles P. Villeneuve, President, HyperSecur. “We have discussed with Oberthur the possibility of manufacturing smart cards using our HyperProximity(TM) chip but no decisions have been made at this time.” “HyperSecur is a key element of our North American strategy,” said Philippe Tartavull, Chief Operating Officer, Oberthur Smart Cards USA. “Oberthur Smart Cards believes in partnering with companies offering innovative products and services that complement our own. Their geographic location enables us to increase our opportunities in the Canadian market. This is clearly a win-win situation.”

HyperSecur recently acquired HyperSecur (Canada), which represented that its major asset is the HyperProximity(TM) chip. This technology was introduced last month at the STMicroelectronics, Inc. (NYSE: STM) booth at the CardTech/SecurTech Conference held in Chicago. The technology will be implemented in the ST16HF52 contactless smart card from STMicroelectronics. The chip is a dual proximity level contactless solution based on ISO 14443 Type B. Samples of the HyperProximity(TM) chip should be available by the end of this month with deliveries of chip orders at the end of the year.

About HyperSecur Corporation

HyperSecur Corporation plans to exploit the technology with strategic partnerships to develop the hardware and software necessary to market the new technology to card manufacturers, system integrators and end users. The final product will be a new contactless chip and smart card based operating system supporting an innovative security structure. Presently, there is very limited use of the HyperProximity technology. At this time, the Company has not fully evaluated the market potential of the technology and, therefore, is not sure of its size. The Class A common stock of the corporation is traded on the Over-The-Counter Electronic Bulletin Board (“OTCBB”) system with the symbol: HYURA.

About Oberthur Smart Cards

Oberthur Smart Cards, a leading manufacturer, technology and solutions provider of microprocessor cards and systems, is a division of Francois-Charles Oberthur, one of the world’s leading high- security printers. Oberthur manufactures and personalizes smart cards and magnetic stripe cards in three production centers in the United States and Europe. Oberthur Smart Cards produced over 225 million cards worldwide in 1998, including 30 million microprocessor cards and 45 million memory cards. Founded in 1987, Oberthur Smart Cards has become the world leader in microprocessor transaction cards and is also present in other market segments such as telecommunications, GSM, Internet, e-commerce, government, healthcare, pay-TV and transit.


The Credit Store Board Member

Geoffrey A. Thompson has joined the Board of Directors of The Credit Store, Inc. Mr. Thompson is the retired former president and chief executive officer of Marine Midland Banks, Inc., Buffalo, NY, now HSBC Bank USA. With Mr. Thompson, The Credit Store’s Board membership now stands at five, including three outside directors. Thompson, 58, serves currently on the boards of several other private and public corporations and non-profit organizations, including the Near East Foundation, where he is chairman and chief executive officer. In addition to Marine Midland, previous positions include being a principal at the investment firm Kohlberg & Company, the head of the consumer credit subsidiary of General Electric Credit, and president at two executive search firms. He is a former director of the Bank Holding Company Association and the former vice-chairman of the National Second Mortgage Association and the New York Business Council. Thompson also has served on the Board of Directors at HSBC Holdings plc, London, the world’s most profitable bank. Thompson began his banking career at Citibank.

“We are gratified that Jeff Thompson will bring his significant credentials and skill to The Credit Store Board of Directors,” Martin J. Burke, chairman and chief executive officer of The Credit Store said. “In just under three short years, The Credit Store has defined a new and profitable niche in the consumer credit marketplace. Jeff Thompson, through his wide knowledge and experience, will bring exceptional insight and direction to The Credit Store over the years ahead.”

The Credit Store, Inc. is a nationwide financial service company engaged in the acquisition and collection of non-performing consumer receivables and the origination of and servicing of credit cards. The Company acquires portfolios of non-performing consumer debt at substantial discounts, and then uses its direct marketing expertise to contact and negotiate settlement with consumers, most of the time placing settlement on new unsecured credit cards offered through The Credit Store.


Royal Bank Getting CSI

Royal Bank of Canada Friday announced it will make an offer to acquire all the outstanding common shares of CSI Credit Systems International, for $1.30 cash per share. The net value of the transaction is estimated at $15 million. CSI is a Burnaby-based electronic marketing company that specializes in loyalty marketing solutions for retailers. With CSI’s ‘ERNEX’ point-of-sale software, merchants can, in addition to processing debit and credit card transactions, offer customers instant reward points, electronic coupons, electronic gift certificates, instant redemption and personalized receipt messages.


Healthy Benchmarks

Fitch IBCA reported Friday that given the abundance of positive market signals relating to delinquency, bankruptcy trends, and the ongoing strength of the US economy . . . credit card chargeoffs will continue to decline in the near term. Fitch also predicted that other performance measures will remain stable at their current healthy levels. The analysis was based on several factors including the fact that May credit card chargeoffs declined to 5.91%, the lowest level since Dec. 1996. The index is now 15% below its May 1997 peak and has registered 10 consecutive year-over-year and three straight month-over-month improvements. Fitch IBCA’s 60-day delinquency index posted its largest one-month decline in more than a year, trimming 12 bps to settle at 3.02%, its lowest level since Sept. 1996.


Apr99 5.91% 18.65% 15.96% 3.02% 5.64%
Mar99 5.94% 20.24% 16.87% 3.14% 5.92%
Feb99 6.05% 19.49% 15.44% 3.25% 5.69%
Jan99 6.10% 19.23% 15.82% 3.28% 5.37%

Dec98 6.00% 19.57% 15.62% 3.15% 5.34%
Nov98 6.27% 19.45% 15.06% 3.26% 5.15%
Oct98 6.20% 19.99% 15.87% 3.26% 5.20%
Sep98 6.35% 19.12% 15.09% 3.19% 4.94%
Aug98 6.29% 19.81% 15.65% 3.17% 4.82%
Jul98 6.30% 19.58% 15.99% 3.15% 4.59%
Jun98 6.72% 19.10% 15.34% 3.17% 4.14%
May98 6.63% 19.02% 14.88% 3.23% 4.40%
Apr98 6.58% 18.73% 15.21% 3.28% 4.57%

CO-chargeoffs; GY-gross yield; MP-monthly payment rate; DL- 60+ day
delinquency rate; SP-3-month excess spread
Source: Fitch IBCA


Philips Semiconductors Approved

Philips Semiconductors and ODS Landis & Gyr, an international smart card manufacturer, announced this morning that the German Central Credit Control Committee of Banks (Zentraler KreditausschuŸ, ZKA) has approved the hardware/software combination based on the new P8WE5032 high security crypto controller for the Geldkarte project. GeldKarte is currently the most widely used electronic purse in Germany


Bull Addition

Bull announced Friday that Philippe Cambriel has joined the company’s Smart Cards & Terminals division as director of marketing and sales. He takes over from Armand Malka and Jerome Janin, who have moved on to other positions. Previously, Cambriel was director of the Intel PC & servers business within Bull’s Servers division.

“My mission is to make the most of the formidable R&D know-how at Bull Smart Cards & Terminals to address market requirements, and consolidate our position as leader in smart card software,” said Cambriel. “The key to succeeding in this mission will be defining products and solutions, then marketing them world-wide. The Bull network, established in over 80 countries, provides extraordinary support. I am also going to be making maximum use of Bull’s core business – IT and systems integration – because the marketplace clearly demonstrates that these two areas are becoming critical to the deployment of smart card solutions.”

The Marketing & Sales unit is now structured around three major focuses: GSM (a complete offer including cards, OTA servers and integration services); Open Networks (electronic commerce and network access security); and Banking (where Bull is world leader).

An MBA graduate of the INSEAD business school, and holder of an aeronautical engineering degree from SUP’AERO, Philippe Cambriel began his career with aircraft manufacturer Aerospatiale. He then joined Compaq, where he was in charge of sales and marketing, first for Compaq France, then Compaq Europe, before being appointed chief executive of IPC France.

About Bull Smart Cards and Terminals

Bull Smart Cards & Terminals is the industry leader in the field of secured financial transactions. Bull designs, develops and markets global smart card solutions for financial, loyalty, transport, telecommunications, healthcare and other applications. Products include contact-contactless cards plus a full range of general purpose and EFT/POS terminals (in partnership with Ingenico), automated teller machines, as well as associated software and services. Bull Smart Cards & Terminals is the acknowledged industry leader in research, development and security related to smart cards & related terminals. The company is also the worldwide leader in electronic purse cards. Since inventing the microprocessor smart card in 1976, Bull has obtained more than 1,200 patents in the field, and has received certification for smart card security that is the highest level ever achieved by a smart card.

In 1998, Bull Smart Cards & Terminals had revenue of $246 million. By relying on Bull’s international network, the division achieves 80% of the revenue abroad. More information on Bull Smart Cards & Terminals can be found on the World Wide Web at: [www.cp8.bull.net][1], on Groupe Bull Web site: www.bull.com, and in the U.S. at [www.us.bull.com][2].

[1]: http://www.cp8.bull.net/
[2]: http://www.us.bull.com


The Kids and Teens Market

Kids and teens have become a growth sector for online shopping, according to Jupiter Communications. Jupiter’s research, which was unveiled today during the opening session of Digital Kids ’99, showed that marketers are actively targeting kids and teens for digital transactions. This marks a shift from more passive online advertising–and parents are concerned. Teens (13 to 18 years old) and kids (5 to 12 years old) are spending more time and money online. According to a recent Jupiter/NFO Consumer Survey, which queried 600 teens and kids, 67 percent of online teens and 37 percent of online kids indicate that they have researched or bought products online. Jupiter forecasts that teens will account for $1.2 billion and kids will account for $100 million of the e-commerce dollars in 2002.

“Similar to the off-line market, kids and teens have a profound impact on online purchasing decisions. Today’s kids are sophisticated and see the Internet as a preferred tool for information gathering; commerce is a natural progression,” said Anya Sacharow, an analyst with Jupiter’s Consumer Content Strategies. “Instead of grabbing parents’ coat sleeves, today’s digital kids ask parents for credit card numbers-in place of an allowance-and buy products online.”

Kids and teens are the two largest growth sectors of the Internet population, though they will directly account for less than five percent of the online shopping revenues in 2002. In 1998, approximately 8.6 million kids and 8.4 million teens were online. By 2002, 21.9 million kids (155 percent increase) and 16.6 million teens (97 percent increase) will be online.

This trend of kids’ growing sophistication and direct involvement in commerce will open doors for marketers but it is also a cause for concern to parents. Over the past year, parental concern regarding advertising to kids has more than doubled: from 17 percent in 1998 to 45 percent in 1999. Despite the lucrative revenue opportunity that advertising to kids presents, engaging kids in online spending is a challenging proposition. “Online players that are looking to target these younger consumers risk alienating parents, creating a negative brand image, and fostering greedy customers,” Sacharow said.

Sacharow advises companies that choose to target online commerce efforts toward kids to exercise responsible selling techniques: creating a transactional experience that helps kids grow as they learn about fiscal responsibility, the value of money, and evaluation of products. Such a strategy will prove to parents that sellers are delivering value not simply a product.

The presentation of Jupiter’s research on the digital kids market will kick off Jupiter’s Digital Kids ’99, which begins today in San Francisco at the Argent Hotel. Jupiter’s annual industry event is exploring the key strategic, creative, and business issues involved in constructing Web communities and entertainment for kids. With a focus on the coming broadband revolution, Digital Kids ’99 brings together the key players-from conventional media stalwarts to the hungry new media upstarts-to discuss the latest industry trends.

Digital Kids ’99 will feature keynote addresses from Peter Eio, President, LEGO Systems, and Chairman, Toy Manufacturers of America; Stan Lee, Chairman, Stan Lee Media; and Herb Scannell, President, Nickelodeon. Panel topics include Defining the Digital Kid; Marketing to the Postmodern Kid; Kids and the Consumer Internet Economy; Shopping: The Kid Factor; Regulation, Kids and Commerce; Commerce and the Networked Family; Sizing the Digital Kids Market; and Web Television: Kids Content Meets Convergence.

Digital Kids ’99 will feature more than 20 exhibitors showcasing innovative products and services for the travel industry. Primary sponsors of Digital Kids ’99 include: ALFY, Inc., Disney Online, Headbone Interactive, KiddoNet, Kids On-Line America (the KOLA Network), Mpath Interactive, NFO Interactive, Nickelodeon Online and Zeeks.com.

Jupiter will produce seven additional forums in 1999, including the Jupiter Online Advertising, Plug.In, Digital Hollywood, and Financial Services Forums. To register or to receive further information on Jupiter forums, contact Jupiter at 212-780-6060 x103 or 800-773-4545 x103, or visit Jupiter online at www.jup.com.


On-Line Safe Deposit Boxes

Net.B@nk, Member FDIC (http://www.netbank.com), the nation’s largest and first profitable pure Internet bank, announced today that it will provide to bank customers a new web-based safe-deposit box service for the secure online storage of valuable and confidential electronic documents. Net.B@nk has provided funding and distribution for safedepositbox.com (http://www.safedepositbox.com) through a new venture with Intellimedia Security, which developed this unique and innovative online service.

“Net.B@nk is dedicated to providing its customers with the same products traditional banks offer, but at a lower cost because of the Internet delivery system,” said D.R. Grimes, CEO of Net.B@nk. “Now, we’ve joined forces with Intellimedia to create a virtual safe deposit box that will provide Net.B@nk customers with the same peace of mind they get from safe deposit boxes at a traditional bank. Our investment in safedepositbox.com shows our commitment to providing innovative products and services to our customers and our belief that the future of banking is on the Internet.”

Safedepositbox.com will provide Net.B@nk customers with online safe- deposit boxes to protect important electronic documents while keeping the documents easily accessible. The service targets people who maintain tax returns, wills, legal documents, personal files and other documents in electronic formats. Safedepositbox.com guarantees users that their documents are always safe, secure, and easily accessible.

“We developed this breakthrough product with Net.B@nk customers in mind to better serve their online banking needs,” noted Ben Dyer, president of Intellimedia Commerce, parent company of Intellimedia Security. “It is our business to develop technology solutions for e-commerce sites, and we found this to be a particularly sound and interesting challenge.”

Intellimedia Commerce, Inc. is an Atlanta-based company that provides technology-based services for the four primary phases of the e-business cycle: customer acquisition, transactions, customer retention, and customer service. Intellimedia combines web sites, e-commerce engines, inbound “e-mail center” support, and outbound e-mail direct marketing in applications that generate revenue, reduce costs, and/or improve service quality. The company has completed nearly 100 projects across a broad spectrum of industries. See http://www.intellimedia.com.

Net.B@nk, Inc. is a financial services company whose sole subsidiary, Net.B@nk, Member FDIC, is the first profitable Internet-only bank in the country, having achieved profitability in the past four successive quarters. With more than 29,000 accounts and customers in all 50 United States and 20 foreign countries, Net.B@nk is the largest FDIC-insured bank operating solely on the Internet. In addition to checking and money market accounts and certificates of deposits with exceptional interest rates, Net.B@nk offers its customers the ultimate convenience in banking. Products and services include account access any time, anywhere, free unlimited online bill payment, free unlimited ATM use, VISA Check Card, VISA and MasterCard credit cards, online brokerage services, mortgage lending and business equipment leasing services. For more information on Net.B@nk, its products and services, visit the web site at http://www.netbank.com, or call 1-888-256-6932.


NATO Global Calling Cards

Franklin Telecom Thursday announced that it is making available free FNet calling cards to NATO troops stationed in the Bosnia, Albania and Macedonia region who have special needs to contact family and friends. The cards will be given to Chaplains, hospital officials and welfare officers for distribution to the appropriate NATO soldiers. Utilizing FNet’s VoIP technology phone calls are terminated to all NATO member countries through Franklin headquarters, in Westlake Village.


Telscape Internet Strategy

Telscape International, Inc., yesterday announced the launching of a comprehensive Internet strategy to capitalize on the growth and demand for Latin American eCommerce and Internet related services. enableCommerce.com, a standalone entity, is being created to enable companies, including U.S.-based, to penetrate one of the fastest growing and most attractive markets in the world.

Telscape has hired Mr. Ulises Barbosa, an eBanking expert formerly with Banco Santander, to spearhead this effort. Mr. Barbosa will be assisted by other experienced management, which he has recruited, as well as the dedicated efforts of Carlos de Lara and Jose Luis Apan Wong, both of whom have been with Telscape and have extensive Internet and systems integration experience.

Unique Approach to Market

The mission of enableCommerce.com is to become the leading provider of eCommerce outsourcing services for companies worldwide interested in pursuing the Latin American marketplace. Through an electronic business platform (“eBusiness Platform”), enableCommerce.com will assist companies in expanding sales by getting closer to and better understanding their customers, increasing operating efficiencies, improving response times and reducing costs.

The eBusiness Platform will be a high-volume eCommerce transaction processing system developed by enableCommerce.com to allow its business customers to achieve their objectives with reliability, security, scalability, economies of scale and technological adequacy. The Internet is the core of the eBusiness Platform; however, Telscape’s eCommerce strategy is broader and will provide for different means by which a customer may interface electronically with a business through the eBusiness Platform. These customer-facing technologies include, for instance, call centers, faxes, touch-tone phones, pagers, e-mail, kiosks, handheld devices, interactive TVs, smart cards, and the World Wide Web, some of which are being provided by Telscape today. The combination of a robust and flexible network, system security and infrastructure architecture plus the proper Business to Business and Business to Consumer application software, coupled with strong data warehousing capabilities will constitute one of the most advanced eCommerce initiatives focused on the Latin American market. The need for a central and external source for increasingly complex eCommerce projects, which go beyond simple web page design, is evident, and Forrester Research estimates that over 40% of Internet and internal corporate sites will be outsourced by 2002.

However, providing only a mechanism that enables customers to do business electronically with companies is not enough. Telscape either has launched or is developing solutions to two critical aspects of the eCommerce challenge faced by companies desiring to do business in the Latin American market.

1) Facilitate the Redesign of Business Process: A successful eCommerce strategy requires a company to streamline certain internal tasks. Since the eBusiness Platform centralizes the majority of the transaction processing, a high-speed (typically asymmetrical) telecommunications link has to be established between the eBusiness Platform and the business enterprise systems to facilitate the interaction of the company with the eBusiness Platform. In light of the lack of economical and reliable broad band corporate ISP services and last mile services in Latin America, enableCommerce.com’s product offering will include a low cost, high bandwidth, asymmetrical Internet service through satellite. This service will be provided by Telscape’s subsidiary, INTERLINK. For services being provided in Mexico, this product offering will ultimately be supported by Telscape’s fiber optic buildout.

2) Driving Customer Traffic: Customer traffic is key to any Business to Consumer eCommerce initiative and can be driven through advertising provided that the telecommunications and Internet infrastructure is in place to support it, which is not the case in Latin America where the infrastructure is poor and fragmented. enableCommerce.com plans to help its customers drive traffic by leveraging Telscape’s unique telecommunications assets in Latin America. In Mexico, Telscape intends to become an ISP to consumers and businesses through the utilization of its fiber optic network buildout. INTERLINK is a significant Network Service Provider (“NSP”) to ISPs in Latin America and will leverage those relationships to help enableCommerce.com to promote a partnership approach and change the ISPs’ revenue model from dial-up accounts to sell advanced Internet and eCommerce solutions to companies. For instance, either through a direct or partnership approach with ISPs, enableCommerce.com will offer to business customers creative marketing concepts to bundle eCommerce packages with discounted Internet dial-up accounts for their consumers.

Attractive Market

The growth of Internet usage in Latin America is expected to outpace growth of worldwide Internet usage over the next several years. According to Nazca Saatchi & Saatchi, the number of Internet users in Latin America is expected to increase from 7 million users at the end of 1997 to 34 million users by the end of 2000. This number could increase substantially with the proliferation of low-cost, non-PC Internet access devices. Latin America is comprised of 23 countries with a total population of 500 million people.

Unique eCommerce and Internet Assets enableCommerce.com will take advantage of the following Telscape strategic assets:

INTERLINK Communications, Inc. owns a satellite teleport facility in Mountain View, California, which has been operational for over fifteen years providing premium satellite communications services. INTERLINK is connected to the Tier One Internet Backbone via an OC-12 SONET fiber optic ring and has been providing high quality, high speed internet access as a NSP to internet service providers, corporations, universities, governments and local carriers throughout North, Central and South America.

Telereunion has begun construction of a state-of-the-art fiber optic long distance network in Mexico. The project is being engineered, furnished, installed and financed by Lucent Technologies, Inc. (NYSE:LU). In addition, through a recently announced fiber exchange with Avantel, S.A., the network will cover nearly 1,750 kilometers, resulting in a network that will reach 90% of the Mexican population.

Telscape de Mexico is one of the largest providers of complex systems integration solutions in Mexico for more than thirteen years. The Company has in excess of 2,500 commercial customers and a highly trained technical workforce of more than 130 people. Telscape de Mexico has engineered, furnished, installed and managed one of the largest asynchronous transfer mode/internet protocol (“ATM/IP”) metropolitan networks in Latin America for the National University of Mexico. Approximately 22,000 computers, 10,000 voice ports, and the largest NSP and distance learning videoconferencing network in Latin America are connected in a multi-protocol, multi-vendor environment. MS Noticias has been providing bilingual interactive voice response and help desk solutions to the U.S. Embassy through its call center. Through the utilization of Telscape de Mexico’s systems integration expertise, MS Noticias successfully re-engineered in a short period of time the appointment and information processes for nearly 2 million US visa applications per year. The call center provides a key customer-interfacing asset to enableCommerce.com and is a prime example of streamlining a business process consistent with customer requirements.

Management Team

Mr. Barbosa, formerly with Banco Santander in Mexico, has been intimately involved in the development, implementation and management of one of the most successful eBanking initiatives in Latin America. He has more than 13 years of experience developing and managing telecommunications and systems operations primarily for financial institutions. He also developed and implemented a very successfully asymmetrical, broadband satellite Internet and Wide Area Network service in the business environment.

Carlos de Lara founded NSI, a highly evolved, data systems integrator specializing in Wide Area Networks, which was acquired by Telscape in 1997. Mr. de Lara is currently chairman of the subcommittee for eCommerce and Secure Transactions of the National Telecommunications Standardization Committee of Mexico. He is a founding partner and member of the board of directors of the Mexican Association of Multimedia, Info-routes and Information Content (AMMICI), an entity dedicated to the promotion of business-oriented Internet content in Latin America.

Mr. Apan Wong currently manages the Company’s help desk and call center operations in Mexico He was responsible for engineering, furnishing and installing the ATM/IP network mentioned above. Prior to joining Telscape, Mr. Apan Wong served as Regional Telecommunications Manager for Hewlett Packard where he was responsible for the installation and operation of HP’s telecommunications network in the Latin American Region.

Telscape International, Inc. is a fully integrated U.S. based communications company that supplies international voice, video, data and Internet services, via switched and dedicated networks, principally to and from Latin America.

The Company owns and operates a satellite teleport facility in Mountain View, CA, which delivers an array of communications services to customers throughout North, Central and South America. In addition, the Company provides a full range of systems integration and value-added telecommunications services in Mexico to major public and private sector customers. Telereunion, a Telscape subsidiary, is one of a select number of companies that has been granted a facilities-based long distance concession by the Mexican government.


IDT Acquires Patent

IDT Corporation Thursday announced that it has negotiated exclusive patent rights for a versatile pre-paid calling card in Europe. Under the agreement, IDT will act as the central clearinghouse for collecting royalties from distributors of pre-paid calling cards covered by the national patents corresponding to European application No. 0572991. Under the patent, IDT has obtained the exclusive rights to license the use of pre-paid Personal Identification Numbers (PINs) for pre-paid phone cards in Austria, Belgium, Switzerland, Germany, Denmark, Spain, France, United Kingdom, Greece, Ireland, Italy, Liechtenstein, Luxembourg, Monaco, Netherlands, Portugal, and Sweden. The patent also covers the exclusive rights to recharge pre-paid phone cards as well as transfer balances between calling card users.