Credit ID Crackdown

The Federal Trade Commission, U.S. Department of Justice, U.S. Postal Inspection Service and eight state and local law enforcers announced Monday that they have filed another 16 law enforcement actions against defendants who falsely claim to help consumers obtain new credit histories through new identification numbers. The FTC says these credit repair con games are spreading like wildfire on the Internet and in unsolicited junk e-mail. Seven complaints filed by the FTC, along with another filed by the Department of Justice at the FTC’s request, allege violations of the ‘Credit Repair Organizations Act’ and the ‘FTC Act’. The other eight cases were announced by state and local law enforcers, including the Maryland, New Jersey, Oklahoma and Texas Attorneys General; the Orange and Santa Clara County, California District Attorneys; the San Diego City Attorney; and the U.S. Postal Inspection Service.

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Online Cash

Las Vegas-based eConnect and First Entertainment.com said yesterday they have formed a joint venture to develop same-as-cash Internet transactions by on line debit ATM card and smart cards. The concept involves home devices that will bypass the Internet with sensitive card data and will connect with the Internet merchants for immediate acknowledgment of receipt of the same-as-cash payments. The service, to be called ‘InterTransGate.com’, will interface between the bank host processor and participants. ET&T, a strategic partner of eConnect, will be driving the transaction into the bank system for card authorization. After bank card authorization is complete, ET&T will then connect with InterTransGate.com, who will then connect with the participating Internet merchants. The acknowledgment from the Internet merchants will then pass back to InterTransGate.com, who will then pass the information back to ET&T. The completed receipt of bank card authorization and merchant acknowledgment will then be passed back to the waiting eConnect device which will then print a receipt for the consumer.

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iCat E-Commerce

iCat, a division of Intel Corporation, Monday announced the iCat E-commerce Provider Program, which helps companies build branded online stores without having to develop, design, administer or host their own solutions. Through this program participating companies can offer E-commerce capabilities to their own customer bases of small- to mid-sized businesses. iCat’s E-commerce Provider Program also offers the benefits of the Visa Purchasing Card to provide merchants with an automated payment process.

The program is aimed at financial institutions, telecommunication companies, ISPs and business-focused Internet sites that already serve as Internet “portals” for their small- to mid-sized business customers, and would like to also offer their customers the value and convenience of an integrated E-commerce capability.

“The iCat E-Commerce Provider program allows companies to immediately establish presences as providers of E-commerce solutions for their own business customers without having to shoulder the substantial cost of development,” said Doug Schulze, general manager of the iCat division of Intel. “This lets Provider companies participate in the booming Internet economy while providing more value to their customers and promoting their brand name — all through a simple program that streamlines the entire process.”

Intel’s iCat division provides the hardware, software, communications and services required to host and serve the Internet stores established through the iCat E-Commerce Provider Program. This allows a provider to focus on marketing the service to its customer base.

The Visa Purchasing Card provide merchants with a solution to automate the payment process while helping to reduce transaction expenses and improve cash flow.

“Our involvement in the iCat E-commerce Provider Program will expand Visa Purchasing Card acceptance to small- to medium-sized businesses,” said Ryan Ross, vice president, New & Emerging Markets, Visa U.S.A. “The Visa Purchasing Card will offer customers of merchants accepting the card the added value of enhanced transaction information when making online purchases.”

Merchants who build online stores through a participating iCat Provider will have the option to access the same marketing services and support a merchant would receive by building a store directly through the existing iCat Commerce Online service. These include assistance in establishing a merchant account and online real-time payment processing, as well as securing space in the iCat Mall. Merchants also have the ability to register their stores with Internet search engines, creating their own unique addresses and monitoring their site position on leading search engines. iCat’s services also enable merchants to advertise through banner ads, and send direct e-mails to their customers and prospect lists as well.

The iCat E-commerce Provider Program is the first new service offering from iCat since it became a division of Intel in February.

About iCat

iCat, based in Seattle, was founded in 1993 and provides small- and mid-sized businesses worldwide with the information, technology, marketing services and personalized support they need to sell products online and be successful in E-commerce. In addition to the iCat E-commerce Provider Program, iCat offers an Affiliate Program that allows revenue sharing with Web sites that refer customers to iCat. In February 1999, iCat became a division of Intel. For more information, or to build an online store, visit the iCat Web Site at www.icat.com.

Intel, the world’s largest chip maker, is also a leading manufacturer of computer, networking and communications products. Additional information about Intel is available at [www.intel.com/pressroom][1].

[1]: http://www.intel.com/pressroom

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TRM 1Q/99

TRM Corporation, reported its financial results for the first quarter of 1999. The Company adopted a calendar year fiscal year beginning January 1, 1999.

Net income improved for the quarter to $881,000 producing $.12 per diluted share before preferred stock dividend and $.07 after preferred stock dividend. Last year the Company reported a loss of $3,173,000 or $.45 per share during the corresponding quarter.

Revenue for the quarter was $16,948,000. Revenue per installed CopyCenter worldwide improved 9% providing a strong indication that the improvement initiatives put into place during 1998 have produced the anticipated and desired results. The Company removed 5,000 marginally producing CopyCenters during 1998 as it installed over 8,000 new NextGen(TM) photocopiers into TRM retailer locations.

As a result of efforts concentrated on aligning costs with revenue, expenses for the quarter were reduced by $412,000 or 7%.

“Our team is very pleased by the progress that has been made in strengthening our core Photocopy Division,” said President and C.E.O. Fred Stockton. “We have returned to the position of being a growing company that has the ability to control expenses. The platform is now in a position to support solid and sustainable growth into the future.”

During the quarter, the Company launched its new ATM Division by deploying the first of seven hundred ATM machines scheduled to be placed into the fastest growing convenience store chain in the Southeast United States by the end of 1999. In March, installations began in South Carolina, North Carolina and Florida.

Headquartered in Portland, Oregon, TRM Corporation is recognized as the world’s leading provider of convenient self-service photocopying. The Company owns and maintains over 31,000 TRM CopyCenters located in independent and multi-site retailer locations in 75 metropolitan service areas in the United States, Canada, England, Wales, Scotland and France. TRM recently entered into the convenient off-premise ATM business.

To better match its business cycle with annual reporting, the Company shifted from a July 1st to June 30th fiscal year to a calendar year fiscal year effective January 1, 1999.

FOR 1Q/99 EARNINGS REPORT FOR TRM VISIT CARDDATA ([www.carddata.com][1])

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

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Drexler Up 125% for Year

Drexler Technology Corporation reported Monday that its net income and earnings per share more than doubled for the 1999 fiscal year ended March 31, 1999, on a 43% growth in revenues.

Net income rose more than 125% for the year ended March 31, 1999, to $4,127,000, or 41 cents per share diluted, from $1,831,000, or 19 cents per share, for the fiscal year ended March 31, 1998. Fiscal 1999 revenues rose 43%, to $15,850,000 from $11,081,000 for the previous fiscal year.

For the fiscal fourth quarter ended March 31, 1999, net income rose to $1,156,000, or 12 cents per share diluted, compared with $853,000, or 9 cents per share, for last year’s fourth quarter. Revenues for the fiscal 1999 fourth quarter were $4,287,000 compared with $3,461,000 for the fourth quarter of last year.

The company’s cash and cash equivalents totaled approximately $8,066,000 at March 31, 1999, compared with approximately $4,830,000 at March 31, 1998. The company has no debt.

Also at March 31, 1999, the company had 9,794,180 shares of common stock outstanding compared with 9,640,747 shares of common stock outstanding at March 31, 1998.

On April 5, 1999, the company announced a $5 million production order for more than one million LaserCard(R) optical memory cards and 250 card reader/writers for a commercial application, with deliveries from April 1999 through March 2000.

Drexler’s patented LaserCard(R) optical memory card is a recordable, credit-card size, digital-data-storage device that offers multiple data-security safeguards and resistance to counterfeiting. LaserCard(R) commercial and government applications include immigration cards, cargo manifests, access cards, healthcare records, high security/interactive ID cards, automotive records, portable records with audit trails, and consumer transaction systems.

Based in Mountain View, Drexler Technology Corporation manufactures LaserCard(R) optical memory cards. Drexler’s wholly owned subsidiary, LaserCard Systems Corporation, markets optical memory card products and develops system software for PC-based optical card systems.

FOR MORE INFO ON DREXLER’S LATEST EARNINGS REPORT VISIT CARDDATA ([www.carddata.com][1])

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

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Schlumberger 1Q/99

The turnover of the Smart Cards & Terminals business unit of Schlumberger increased by 14% during the first quarter of 1999, compared with the same period the previous year. Major factors behind this rise are successes with SIM cards for mobile phones, Qianflex? (the bank card for China), and e-purse schemes in Europe. The Stelio intelligent pay-and-display parking terminal also plays a role, thanks to a substantial increase in deliveries. The Test & Transactions division of Schlumberger, which manages Smart Cards & Terminals and Automated Test Equipment (ATE), saw its turnover increase by 12% compared with the fourth quarter of 1998.

Following sustained strong growth, sales of SIM cards have significantly boosted the turnover of Smart Cards & Terminals. The latest figures benefit from the first deliveries of the very latest SIM cards, Cyberflex? Simera?, which are programmable using the Java? language, and growth in e-purse applications – particularly in the Netherlands. In Asia, sales of smart cards have progressed well following the introduction of Qianflex cards in China, and sales of phone cards.

In the increasingly important area of network security, Schlumberger was awarded a pioneering contract to use its Cryptoflex? smart cards to ensure the integrity and security of a European customer’s e-mail traffic. This system also allows authentication of orders and payments. Schlumberger continued to build on the success of its Cyberflex Mobile Solutions through the implementation of mobile banking services in Hong Kong and Germany.

The ATE business unit saw a 49% reduction in turnover compared with the same period last year, following the general caution over capital equipment expenditure by the semiconductor industry. The recent upturn in this sector has resulted in a 26% increase in orders compared with the last quarter of 1998.

Considering the activities of Schlumberger as a whole, first quarter turnover was $2.31 billion – a fall of 24% compared with the same period last year. If a first quarter severance charge for the oilfield services division is excluded, net income and diluted earnings per share were $179 million and $0.32, 53% and 52% lower, respectively, than the same period last year.

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Cap One Call Center

Capital One announced plans Monday to open a customer relations call center in Boise, ID.The issuer acquired assets of an existing call center run by American Direct Credit. Cap One immediately hired the center’s approximately 110 employees with plans to hire 400 additional employees by year-end 2000 at the Boise site. The company is currently building its first west coast facility just south of Seattle in Federal Way, WA.

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AmEx Sets Standard

American Express announced Monday the licensing of its smart card multiple application framework to more than a dozen industry players, including some of its direct competitors in the T&E industry. The licensees include: MasterCard, Discover Card, Europay, IBM, Microsoft, Orga Card Systems, Proton World, Sun Microsystems and others. AmEx said yesterday that VISA has also expressed its intent to license the multiple application framework. AmEx has used the multiple application framework in its smart card pilots with American Airlines, Continental Airlines, Hilton Hotels and IBM. In each of these pilots, corporate business travelers used smart cards to check-in to hotels and airlines as well as participate in advanced loyalty and rewards programs. The smart card framework contains a detailed description of the data, files and structure of the multiple functions and applications contained on a smart card. The framework currently supports: personal profile, corporate/government agency profile, airline, hotel, car rental, charge, credit and physical access. The multiple application framework builds on the global specifications put in place by EMV and incorporates relevant smart card standards, such as ISO and IATA. American Express also announced Monday the formation of the ‘Interoperability Consortium’, an independent and open body that will govern the multiple application framework standard.

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CheckFree GlitchFree

CheckFree confirmed Monday that it has identified and corrected the root cause of the system error that led some users of its e-billing/payment service to experience intermittent problems accessing and using the system. The error affected consumers who both attempted to access electronic billing and payment services through Intuit’s ‘Quicken’ or Microsoft’s ‘Money’ software, and who bank at financial institutions that process transactions on the firm’s newest processing system, ‘Genesis’. CheckFree traced the problem to application code in its middleware, which affected entry to the ‘Genesis’ system. The company says such problems are extremely difficult to detect in simulated stress testing and are not unusual as growth occurs. CheckFree acknowledge the problem could have affected up to about 20% of its 2.8 million subscribers. The glitch first made its appearance last Monday and was resolved by Friday. The e-bill company says it is preparing a thorough internal review of the system interruption and restoration events.

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Waiting Game

Tulsa, OK-based Commercial Financial Services was expected to name a buyer last week which was critical to the status of its forward-flow contracts. However as of yesterday no buyer has materialized. The list of the most promising bidders has reportedly dwindled to three: Worldwide Capital Inc., Household and GE Capital. Atlanta-based Worldwide Capital is owned by industry veteran Frank Hanna. Hanna also has connections with CompuCredit Corp. in Atlanta through his sons. CompuCredit is a sub-prime card issuer offering the ‘Aspire VISA’ card. The firm raised $54.8 million in an IPO two weeks ago.

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Qwest – CITGO Deal

Denver-based Qwest Communications announced Monday it has been selected as the preferred provider of prepaid phone card services for CITGO Petroleum. Qwest will now provide prepaid products and services to more than 15,000 of CITGO’s locations. Qwest says its three prepaid cards offering ‘S.A.F.E.R.’ functionality will be marketed through the deal. The three cards include: ‘Best Value’ cards; ‘TeleMinutos’ cards for calls to Mexico and Latin America; and ‘America’s Best’ for calls to Asia. ‘S.A.F.E.R.’ is a service mark and stands for “Secure Activation For Every Retailer”.

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NextCard eWallet

San Francisco-based NextCard and eWallet announced this morning a universal, one-click electronic wallet for cardholders. The ‘NextCard eWallet’ enables cardholders to purchase, with a single click of a mouse at hundreds of major online merchants. When cardholders download the ‘NextCard eWallet’ onto their desktop, their NextCard account, billing and shipping information will be loaded into the wallet. When cardholders shop online, they simply drag the ‘NextCard VISA’ icon over to the purchase form for completion. Instantly, all of their credit card and shipping information is automatically entered so the customer can complete the purchase without re-typing personal information. The ‘eWallet’ is password protected, resides on the cardholder’s personal computer and uses encryption technology to protect personal data. NextCard, launched in December 1997, is currently in the process of going public.

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