Virtual Clearing House

Internet Payment Exchange, a new bill payment solutions company based in Clifton, VA, is developing the financial industry’s first Internet-based payment clearinghouse. The IPAYX Virtual Clearinghouse will efficiently transfer payment and remittance advice information among consumer and business customers through the Internet. The clearinghouse will be compatible with bill presentment and traditional “pay-anyone” payment systems.

“Current payment clearing options, such as those offered by CheckFree , are built on an old telecommunications architecture that’s losing money for all parties but the payment processor,” said Douglas E. Braun, president and chief executive officer of Internet Payment Exchange. “IPAYX will virtually eliminate the need for a middleman in payment routing and clearing, significantly decreasing the third-party role. We’re capitalizing on the ubiquity of the Internet to turn bill payment into a money maker.”

Generating Revenue Through Bill Payment

As much as 65 percent of electronic banking costs is attributed to fees charged by third-party companies for payment processing, Braun noted. The IPAYX Virtual Clearinghouse will change the economy of bill payment by making it a profit center for payment originators (such as banks) and significantly cutting costs for billers who use consolidators (including warehouse and lock box operations) to receive payments. The payment originator is paid for the effort of collecting the payment by the consolidator, who in turn is paid by the biller. The biller acquires the payment at a fraction of the traditional payment expense. “Payment clearing currently requires the originator to pay for transactions they remit,” Braun said. “IPAYX turns that model upside down. We also charge per item rather than per consumer, letting originators take advantage of least-cost routing.”

A Direct Payment Route

The IPAYX Virtual Clearinghouse provides a direct route for electronic payments, using the Internet as a universal information channel. It is designed so that any payment warehouse can send electronic payments directly to biller remittance lock boxes anywhere. Within the Virtual Clearinghouse architecture, IPAYX will offer a virtual private network for payment clearing and information exchange. The virtual private network adds encryption and authentication to the Internet, thereby creating a closed set of access points that use regular Internet pathways for private and secure communications. As a result, the individual transactions take the shortest, fastest and most economical route. IPAYX will also provide a directory synchronization service for routing and posting biller information.

“In the Internet world, there’s no need to funnel payments to third parties when a biller is directly addressable,” Braun said. “Payments aren’t touched, sorted, or handled by any intermediaries, so chances of error are minimized and transaction charges are significantly reduced.” Additional IPAYX Services In addition to the Virtual Clearinghouse, IPAYX will provide alternative delivery services for payments that can be partially completed electronically, such as ACH with either e-mail or fax remittance not

“The irony of e-billing today is that around half of electronic payments are converted into paper checks,” Braun said. “IPAYX offers solutions to help maximize the use and acceptance of electronic payments.” IPAYX will also offer check printing to complement the IPAYX electronic delivery network. The company is currently discussing business relationships and alliances with several super-regional banks and financial service providers.

“We’re already getting a strong response from banks and other financial services companies who want to realize the benefits of electronic payments that have remained elusive,” Braun said. “By providing a highly efficient, low-cost payment alternative, IPAYX has a competitive advantage that will set new standards for the bill payments industry.” About Internet Payment Exchange

Internet Payment Exchange (IPAYX) is a new bill payment solutions company formed in January 1999 to develop efficient, low-cost solutions for bill payment clearing among financial institutions. IPAYX’s products and services are designed to help financial institutions stay involved and profitable in the emerging electronic payments industry. The company’s flagship product is a Virtual Clearinghouse that uses the Internet to efficiently transfer payment and remittance advice information among consumer and business customers at a greatly reduced cost. IPAYX was founded by experienced managers in banking and technology circles with considerable frontline knowledge about electronic banking and payment systems. For more information about IPAYX and its founders, contact Douglas Braun by phone at 703-449-8890, e-mail at douglasbraun@usa.net, by fax at 703-449-9692 or visit www.ipayx.com.

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M-Smart Jupiter

Imagine a world where you could securely log onto your computer, purchase an airline ticket via an encrypted Internet connection and download the boarding pass onto a smart card. Next, you can log onto a government Web site, download your passport onto the same card and then use it to board the airplane to an international destination. When you reach your destination, you could then plug that same smart card into your computer and download an application that allows you to collect hotel and rental car loyalty points. And, perhaps most importantly, before embarking on the trip home, you could plug the card into your computer and download your first class upgrade.

This world is now significantly closer, thanks to Motorola’s Worldwide Smartcard Solutions Division’s (WSSD’s) M-Smart Jupiter(tm) Platform, which supports secure and dynamic application download, robust security, advanced speed and processing power, and maximum flexibility in building value-added smart card solutions. In short, the new platform will allow consumers and businesses to customize smart cards, just as personal computers are customized today by downloading software onto the platform. Similar to how defacto standards helped drive the personal computer industry in the 1980s, Motorola’s innovative Jupiter platform is expected to drive smart card applications and adoption into the next millennium.

“When personal computers were introduced, there was no prevailing standard. It was not until the world embraced the Windows(R) development and operating environment that the sales of PCs exploded,” said Francois Dutray, Motorola’s vice president and general manager, WSSD. “In contrast, in the smart card world, we’re deploying open standards platforms from the beginning, meaning that it may take five years to accomplish in the smart card market what it took 15 years to accomplish in the personal computer market.” The standards that make this possible are the Java Card ™ 2.1 and Visa Open Platform ™ 2.0 technology specifications, which enable the development of globally interoperable smart card systems. In addition, the specifications allow smart card issuers to choose from a variety of operating system options and application developers while providing a core security and card management technology.

Java Card 2.1 technology supports the downloading and customization of applets, or applications, on a smart card platform tailored to the cardholder’s requirements. In conjunction with Open Platform 2.0, which supplements the Java Card platform, a user can securely and dynamically download applications onto the card. Combined with Motorola’s 32-bit RISC processor-based M-Smart Jupiter Platform, these standards create a secure, convenient and dynamic downloading environment. “We are excited by Motorola’s Jupiter platform,” said Patrice Peyret, director, Java Card. “This new development will add to the already significant momentum of Java Card technology in the marketplace and will help drive the adoption of multi-application smart cards.”

In addition, Motorola’s M-Smart 32-bit Jupiter platform represents a significant advancement in smart card security in that it combines both a hardware and software firewall. Until now, smart card platforms have employed a software- only firewall to maintain integrity between the applications – such as banking and transit – that are loaded on the card. Motorola’s unique hardware/software firewall combination, which is based on a secure memory management unit, prevents applications and data from being accessed by unauthorized users. If the hardware firewall detects intrusion, the card is automatically deactivated, protecting the data on the card. In addition, it prevents applications from interfering with each other, which allows trouble-free downloading of additional applications and peace of mind for the consumer.

“We applaud Motorola’s implementation of the Open Platform on its M-Smart Jupiter 32-bit platform,” said Phillip Yen, senior vice president, Emerging Technology, Visa International. “This represents the most advanced technological implementation to date, which will bring significant benefits to card issuers. This dramatic innovation demonstrates the flexibility that a common, open platform provides to card manufacturers and application developers. It is one step further toward the creation of a smart card world based on common standards.” “Motorola has made great strides toward the deployment of multi-function dynamic smart card solutions,” said Jean-Gerard Galvez, chairman, president and CEO of ActivCard. “Coupling Motorola’s innovative technology with our logical network security and authentication services for Java Card technology and the Visa Open platform will enable smart card solutions that will power the future of Internet-based business.”

Creating a User-Friendly Development Environment

In addition to representing a quantum leap in capability and speed as compared to existing products on the market, Motorola’s 32-bit platform supports a multi-application environment and offers unique flexibility and functionality at the operating system level. The features of the operating system of the 32-bit card are modular, allowing users to customize applications with significantly less effort than in the past. Motorola can also customize the operating system for its customers – for example, a customer could choose an operating system that does not support contactless operation, thus allowing more space for a wider variety of applications to be loaded onto the card. In addition, Motorola is offering an application development workbench that developers can use to create applets that are compliant with Java Card 2.1 technology and Open Platform 2.0. The workbench, designed to develop applets that can work on any card that supports the Java 2.1 specification, will help create a friendly, robust development environment that will result in shorter application development cycles. For instance, an airline could use the workbench to develop a loyalty application that could be downloaded from the Web onto any smart card that is Java Card 2.1 and Open Platform 2.0 compliant. “Not only does Motorola’s Jupiter 32-bit platform support advanced security, flexibility and functionality, the workbench allows application developers to deliver applications into card holders’ hands quickly and easily,” said Dutray.

“By significantly reducing the application development cycle time, Motorola is helping drive further development and adoption of smart card applications worldwide.” Motorola is a global leader in providing integrated communications solutions and embedded electronic solutions such as software-enhanced wireless telephone, two-way radio, messaging and satellite communications products and systems, as well as networking and Internet-access products, for consumers, network operators, and commercial, government and industrial customers. Sales in 1998 were $29.4 billion. For additional information, contact Motorola WSSD at (847) 576-3041 or visit our website at .

Motorola & M-Smart Jupiter are trademarks of Motorola, Inc. Windows is a registered trademark of Microsoft. Sun, the Sun logo, Java and Java Card are all registered trademarks of Sun Microsystems, Inc. in the United States and in all other countries. Visa Open Platform is a trademark for Visa.

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Plastic Fever

Standard Register’s ‘National Consumer Survey of Plastic Card Usage’, released yesterday, found that 89% of adults use credit cards while 61% use ATM cards, 59% use membership cards, 37% use debit cards, 33% use prepaid cards, 29% use prepaid phone cards, 25% use loyalty cards, and 5% use smart cards. Half of adults reported regularly carrying one to three plastic cards on a regular basis, while 30% say they usually carry four to six. When it comes to debit, 40% of consumers who own debit cards use them more frequently than their ATM card, while 33% use debit cards less often than ATM cards, and 21% use the two types of cards about the same. SR says it conducted 1,202 telephone interviews with consumers throughout the U.S. during the first two weeks of March.

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Fargo Printers & VOP

UbiQ Incorporated announced this week that Fargo Electronics will use its latest software to enable issuance of Visa Open Platform smart cards using Fargo’s line of desktop card printers. The UbiQPersoMaster software will allow Fargo’s large base of customers to issue smart cards based on a platform that is expected to be widely adopted worldwide.

Open Platform is a comprehensive system architecture designed by Visa that enables fast and easy development of globally interoperable smart card applications. It offers card issuers secure, flexible control and management of dynamic, multifunction smart cards. This non-proprietary platform leverages best-of-breed technology, such as JavaCard from Sun Microsystems and SmartCards for Windows from Microsoft. Further information is available at

![][1] “Our UbiQPersoMaster(TM) solution is a comprehensive, migrateable set of personalization tools for Open Platform card issuers,” said David Tushie, president of UbiQ. “It provides an ‘open system’ platform which, when combined with Fargo’s industry-leading card printers, creates a single, manageable, highly cost-effective solution.”

“Our relationship with UbiQ provides great added value for Fargo’s customers,” said Gary Holland, Fargo’s President. “It gives them a seamless way to incorporate smart card personalization into their operations, letting them issue Open Platform cards for both financial and non-financial card applications.”

About UbiQ Inc.

Founded in 1994, UbiQ Inc. ( ) is a rapidly growing, privately held software firm based in Minneapolis, Minn., that has developed proprietary, patented technology for high-volume smart card personalization. UbiQ’s mission is to be the highest value integrator in the smart card issuance process, reducing the time and cost necessary for secure, faultless “mass” card issuance. The company markets its products in 80 countries worldwide to smart card issuers including Visa and MasterCard member institutions. Other customers and partnerships include card service bureaus, smart card manufacturers, and card personalization and printing equipment manufacturers. Target markets for UbiQ’s software include Internet and electronic commerce, financial services, secure networks, travel and entertainment, stored-value cards, pay phone, digital wireless and GSM, national ID cards, and healthcare.

About Fargo Electronics

Headquartered in Eden Prairie, Minn., Fargo Electronics ( ) is a leading developer and manufacturer of dye-sublimation and wax thermal transfer color page printers and ID card printers. Its printers are among the best-selling card printers in the world today. Fargo does business in more than 80 countries worldwide and maintains one of the largest reseller networks in the color printer business today.

A U.S. Patent has been issued and others are pending for UbiQ’s software solutions. UbiQ is a registered trademark of UbiQ Incorporated, and UbiQPersoMaster is a trademark. FARGO is a trademark of Fargo Electronics Inc. Java and JavaCard are trademarks of Sun Microsystems Inc. All other trademarks are the property of their respective owners.

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

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Tidel Deal

TX-based Tidel Technologies, Inc. announced yesterday that one of its largest distributors, Credit Card Center, has reached a deal with Motiva Enterprises to offer ATM equipment and services to more than 14,000 Shell and Texaco branded stations located in the U.S. The Motiva dealer stations are primarily located in 26 Eastern and Gulf Coast states and Washington, D.C. Philadelphia-based Credit Card Center will feature Tidel’s ‘Ignition Series’ ATMs to the Motiva dealer stations.

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Motorola’s 32-bit Smart Card Platform

Imagine a world where you could securely log onto your computer, purchase an airline ticket via an encrypted Internet connection and download the boarding pass onto a smart card. Next, you can log onto a government Web site, download your passport onto the same card and then use it to board the airplane to an international destination. When you reach your destination, you could then plug that same smart card into your computer and download an application that allows you to collect hotel and rental car loyalty points. And, perhaps most importantly, before embarking on the trip home, you could plug the card into your computer and download your first class upgrade.

This world is now significantly closer, thanks to Motorola’s Worldwide Smartcard Solutions Division’s (WSSD’s) M-Smart Jupiter (TM) Platform, which supports secure and dynamic application download, robust security, advanced speed and processing power, and maximum flexibility in building value-added smart card solutions. In short, the new platform will allow consumers and businesses to customize smart cards, just as personal computers are customized today by downloading software onto the platform. Similar to how defacto standards helped drive the personal computer industry in the 1980s, Motorola’s innovative Jupiter platform is expected to drive smart card applications and adoption into the next millennium.

“When personal computers were introduced, there was no prevailing standard. It was not until the world embraced the Windowsr development and operating environment that the sales of PCs exploded,” said Francois Dutray, Motorola’s vice president and general manager, WSSD. “In contrast, in the smart card world, we’re deploying open standards platforms from the beginning, meaning that it may take five years to accomplish in the smart card market what it took 15 years to accomplish in the personal computer market.”

The standards that make this possible are the Java Card (TM) 2.1 and Visa Open Platform (TM) 2.0 technology specifications, which enable the development of globally interoperable smart card systems. In addition, the specifications allow smart card issuers to choose from a variety of operating system options and application developers while providing a core security and card management technology. Java Card 2.1 technology supports the downloading and customization of applets, or applications, on a smart card platform tailored to the cardholder’s requirements. In conjunction with Open Platform 2.0, which supplements the Java Card platform, a user can securely and dynamically download applications onto the card. Combined with Motorola’s 32-bit RISC processor-based M-Smart Jupiter Platform, these standards create a secure, convenient and dynamic downloading environment.

“We are excited by Motorola’s Jupiter platform,” said Patrice Peyret, director, Java Card. “This new development will add to the already significant momentum of Java Card technology in the marketplace and will help drive the adoption of multi-application smart cards.”

In addition, Motorola’s M-Smart 32-bit Jupiter platform represents a significant advancement in smart card security in that it combines both a hardware and software firewall. Until now, smart card platforms have employed a software- only firewall to maintain integrity between the applications – such as banking and transit – that are loaded on the card.

Motorola’s unique hardware/software firewall combination, which is based on a secure memory management unit, prevents applications and data from being accessed by unauthorized users. If the hardware firewall detects intrusion, the card is automatically deactivated, protecting the data on the card. In addition, it prevents applications from interfering with each other, which allows trouble-free downloading of additional applications and peace of mind for the consumer.

“We applaud Motorola’s implementation of the Open Platform on its M-Smart Jupiter 32-bit platform,” said Phillip Yen, senior vice president, Emerging Technology, Visa International. “This represents the most advanced technological implementation to date, which will bring significant benefits to card issuers. This dramatic innovation demonstrates the flexibility that a common, open platform provides to card manufacturers and application developers. It is one step further toward the creation of a smart card world based on common standards.” “Motorola has made great strides toward the deployment of multi-function dynamic smart card solutions,” said Jean-Gerard Galvez, chairman, president and CEO of ActivCard. “Coupling Motorola’s innovative technology with our logical network security and authentication services for Java Card technology and the Visa Open platform will enable smart card solutions that will power the future of Internet-based business.”

Creating a User-Friendly Development Environment

In addition to representing a quantum leap in capability and speed as compared to existing products on the market, Motorola’s 32-bit platform supports a multi-application environment and offers unique flexibility and functionality at the operating system level. The features of the operating system of the 32-bit card are modular, allowing users to customize applications with significantly less effort than in the past. Motorola can also customize the operating system for its customers – for example, a customer could choose an operating system that does not support contactless operation, thus allowing more space for a wider variety of applications to be loaded onto the card.

In addition, Motorola is offering an application development workbench that developers can use to create applets that are compliant with Java Card 2.1 technology and Open Platform 2.0. The workbench, designed to develop applets that can work on any card that supports the Java 2.1 specification, will help create a friendly, robust development environment that will result in shorter application development cycles. For instance, an airline could use the workbench to develop a loyalty application that could be downloaded from the Web onto any smart card that is Java Card 2.1 and Open Platform 2.0 compliant. “Not only does Motorola’s Jupiter 32-bit platform support advanced security, flexibility and functionality, the workbench allows application developers to deliver applications into card holders’ hands quickly and easily,” said Dutray. “By significantly reducing the application development cycle time, Motorola is helping drive further development and adoption of smart card applications worldwide.”

Motorola is a global leader in providing integrated communications solutions and embedded electronic solutions such as software-enhanced wireless telephone, two-way radio, messaging and satellite communications products and systems, as well as networking and Internet-access products, for consumers, network operators, and commercial, government and industrial customers. Sales in 1998 were $29.4 billion. For additional information, contact Motorola WSSD at (847) 576-3041 or visit our website at .

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NextCard Goes Public

San Francisco-based NextCard, Inc. announced this morning that its initial public offering of 6,000,000 shares, of newly issued common stock, has been priced at $20 per share. The shares will begin trading this morning on the Nasdaq under the ticker symbol “NXCD”. NextCard has granted its underwriters an option to purchase up to 900,000 additional shares pursuant to their over-allotment option. NextCard was launched in Dec. 1997 with the introduction of “The First True Internet VISA”. Since then more than 1.7 million consumers have applied online for the ‘NextCard Internet VISA’. The company says being unconstrained by legacy technologies has been a key to its success. The firm, formerly known as Internet Access Financial Corporation, raised $38 million in its third round of private financing during November and $14 million in its second round of funding last June.

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Wave Joins SCF

The Smart Card Forum, a multi-industry organization working to accelerate the widespread acceptance and application of smart card technology, announced Thursday that Wave Systems Corporation has joined as the Forum’s newest Principal Member. Wave Systems is a leading provider of e-commerce, content distribution and security services, that together with smart card applications, provide a new and emerging model for the digital economy.

“This is a very exciting time for smart card applications, thanks to companies like Wave and the solutions they provide. Their solutions will facilitate the large-scale adoption of smart cards we are certain to see in the future,” said SCF President and CEO Donna Farmer. “The benefits offered by the Forum are unmatched in the industry, with the vast amount of information that is available to Wave Systems and our other members from our research findings and workgroup meetings, as well as the Smart Card Forum Educational Institute. With the technology expertise that Wave brings to our members, and the membership privileges given to them, we look forward to a mutually complementary relationship.”

Additionally, Ms. Farmer noted that Lark Allen, executive vice president of strategy and business development for Wave Systems, will be speaking at the Forum’s “Enabling Privacy in a Virtual World” symposium on privacy being held on Thursday, May 20 in Washington, DC.

As a Principal Member, Wave is entitled to privileged access to the Smart Card Forum Consumer Research, other Forum sponsored research and documents, along with attendance at the Technical Working Group sessions, Smart Card Forum Educational Institute programs, and the Annual Meeting.

“Wave’s distributed, trusted client approach to e-commerce will have a significant effect on many industries, and we regard our membership in The Smart Card Forum as an important way for us to reach complementary markets and gain industry support for this new e-commerce solution. Wave’s EMBASSY trusted client architecture provides a secure open systems processing platform which any smart card applications developer can use to deploy applications services,” said Steven Sprague, president of Wave. “Our partnerships with leading security, smart card and content providers are key to the market success of our solution, and we look forward to working closely with the Forum.”

The Smart Card Privacy Symposium

The Smart Card Forum Privacy Symposium will be held at the Monarch Hotel, 2401 M St., NW, Washington, DC, and is open to members and non-members alike. The event will address privacy issues from a multi-disciplined perspective and is intended to objectively examine key issues regarding privacy and security on the Internet. The use of smart cards as a technology that may be applied to enable privacy is central to the theme. Members are entitled to special discounted attendance. The fee for non-members is $395. Attendees may register online at or by calling (202) 530-5306. Registration and continental breakfast will start at 7:30 a.m. on the day of the event and the program will begin at 8:00 a.m. and end with a reception for attendees from 6:00 p.m. to 8:00 p.m.

About Wave Systems Corp.

Founded in 1988, the mission of Wave Systems Corporation is to create content distribution and secure services based on a new distributed trust model for e-commerce. Wave’s core EMBASSY technology is based on an open, standards-based hardware and software device that enables secure transaction processing and distributed information metering in users’ PCs. Embedded in PC hardware and peripherals, set-top boxes and other devices, EMBASSY is the foundation for client-based security applications and a new distribution and purchasing model for content and services. This low-cost, secure “system within a system” will enable the personal computer to assume an important new role in the evolving digital economy. By moving secure transactions to the desktop, Wave provides intrinsic value to the electronic commerce process, benefiting PC users, application developers, and hardware manufacturers. For more information, please visit Wave’s corporate web site at

About The Smart Card Forum The Smart Card Forum is a non-profit, multi-industry organization of nearly 200 members working to accelerate the widespread acceptance of multiple application smart card technology by bringing together, in an open forum, leading users and technologists from both the public and private sectors. The Smart Card Forum is the leading organization for education and awareness of topical issues associated with the use and adoption of smart card systems. The Smart Card Forum also operates the Smart Card Forum Educational Institute, the industry-leading course dedicated to providing smart card education that has set the standard in the industry. The curriculum is based on leading edge educational models and methodologies utilizing experienced instructors who are experts in the smart card industry. For more information about The Smart Card Forum, log on to the organization’s Web site at .

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FUSA Acquisition

First USA revealed Thursday it has purchased Carolina First’s credit card receivables totaling $112 million and representing approximately 130,000 VISA credit card accounts. The bank also signed an agent bank partnership with First USA. Carolina First will continue to originate business credit cards in its market areas and retained its business credit card receivables, which total approximately $2.5 million. The credit cards sold include approximately $58 million in Carolina First’s off-balance-sheet credit card trust. In connection with the sale, the credit card trust will terminate effective May 17. The bank is also closing the credit card operations of Resource Processing Group, Inc., its credit card servicing company.

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Paymentech Deals Gets DOJ Blessing

First Data Corporation announced Thursday it has received clearance from the Department of Justice under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 for its proposed acquisition of the outstanding public shares of Paymentech, Inc..

The transaction is subject to approval by Paymentech, Inc.’s shareholders and other conditions. First Data expects the transaction to close early in the third calendar quarter.

Atlanta-based First Data Corporation is a leader in electronic payment systems. First Data and its principal operating units process the information that allows millions of consumers to pay for goods and services by credit, debit or stored card at the point of sale or over the Internet, by check or wire money. For more information about First Data, please visit the Company on the Internet at [www.firstdatacorp.com][1].

Paymentech, Inc., founded in 1985, provides full-service electronic payment solutions for merchants, third-party transaction processing, and total commercial card payment programs. Paymentech is a leading acquirer of bankcard transactions in the United States and a leading commercial card issuer.

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

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Border Cards

Drexler Technology Corp. Thursday received a $7.5 million, one-year contract award for production of ‘LaserCard’ optical memory cards for use in U.S. government programs. The U.S. Department of State will use $5 million of the cards for its ‘Laser Visa’ border-crossing card program in Mexico. The U.S. Immigration and Naturalization Service will use the remaining $2.5 million of the cards in the United States as ‘Permanent Resident Cards’ or “Green Cards.” Drexler says yesterday’s order created a 12-month backlog of 3.5 million optical memory cards.

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Western Union Settles

First Data Corporation announced Thursday that its subsidiaries, Western Union Financial Services, Inc. and Orlandi Valuta, have received preliminary approval for a proposed settlement of all claims in a nationwide class action lawsuit pertaining to the companies’ U.S.-to-Mexico money transfer businesses.

The United States District Court for the Northern District of Illinois preliminarily approved on a nationwide basis the agreement reached with counsel for the plaintiff class in the lawsuit. The court also issued an injunction prohibiting further prosecution of any similar lawsuits, including those currently pending in Texas and California.

“We are very pleased to have reached this settlement with the plaintiffs and avoid the costs and distraction of further litigation for all parties involved,” said Doug McNary, president, Western Union North America. “Western Union has a long history of not only helping our customers send their hard-earned money to Mexico but also of helping them in their local communities, as demonstrated by the settlement’s $2 million charitable fund for Mexican and Mexican American causes. We believe the terms of the settlement ensure that Western Union remains the best way to send money to Mexico.”

“We congratulate Western Union for deciding to settle this case in a way that will deliver benefits to customers sending money to Mexico now, rather than engaging in protracted litigation,” said Arturo Vargas, executive director of the National Organization of Latino Elected and Appointed Officials (NALEO). “We are pleased that Western Union has recognized that it has a responsibility not only to its customers but to the broader Latino community in the U.S. By creating a $2 million charitable fund, Western Union will be helping our community to address its many unmet needs,” he added.

“We’re pleased to be part of the charitable fund advisory committee which will help guide the distribution of critical funds to the Latino community, a community which has long been a strong customer base for Western Union,” said Antonia Hernandez, president and general counsel of the Mexican American Legal Defense and Education Fund (MALDEF). “We believe that this fund, which is part of the broader settlement of the litigation, shows a commitment by the parties to address future needs of the Latino community,” she added.

According to the terms of the settlement, each of the companies will issue discount coupons for future transactions to Mexico to its customers who transferred money from the U.S. to Mexico after January 1, 1987. In addition, Western Union will issue discount coupons for use in future Western Union money transfers to Mexico to MoneyGram customers who transferred money from January 1, 1987 to December 10, 1996. MoneyGram was owned by First Data Corporation prior to December 11, 1996.

In addition, Western Union and Orlandi Valuta will create a $2 million charitable fund that will be used to support Mexican and Mexican-American causes. The companies also will modify their disclosure regarding currency exchange on their consumer money transfer forms or receipts and in their price-related Mexico money transfer advertising.

Western Union and Orlandi Valuta expect to provide notice to customers of the settlement and additional details regarding the settlement within the next several months. The companies also expect that the court will give final approval to the settlement in the fall of 1999 and that coupons will be issued in 2000.

First Data will take a second quarter charge of approximately $18 million after-tax to reflect legal fees, the charitable fund and other administrative costs in connection with the settlement. The company currently does not anticipate that the settlement agreement will change its previously announced estimated ranges for projected earnings in 1999, excluding the effect of the $18 million after-tax charge described above and the previously announced $37 million after-tax recovery in connection with the sale of Innovis. Additionally, the company does not expect the settlement will affect its long-term objective to achieve internally-driven growth in revenues, net income, and earnings per share of 13 — 16% per year, compounded.

Western Union and Orlandi Valuta are subsidiaries of First Data Corporation. First Data is a global leader in electronic payment systems. First Data and its principal operating units process the information that allows millions of consumers to pay for goods and services by credit, debit or stored value card at the point of sale or over the Internet, by check or wire money. For more information about First Data, please visit the Company on the Internet at [www.firstdatacorp.com][1].

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

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