Magic Line Deal

Magic Line has signed a five-year participation and gateway services agreement with Dearborn Federal Credit Union, Michigan’s largest credit union. They also signed an Internet banking agreement through Magic Line’s partnership with Online Resources to provide the Credit Union with a fully-branded Web site where it can offer its members account access for balance inquiries, transfers and electronic bill payment. DFCU holds more than $1.1 billion in assets and has over 170,000 members nationwide, and more than 100,000 of them are ATM and debit cardholders.

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Primeflex Cards

Schlumberger introduced yesterday ‘Primeflex Entry’, a unique card specifically designed to provide easy and cost effective entry to smart loyalty. The card delivers all the recognized benefits of smart card technology — security, ease of use, and low life cycle costs. It will enable retailers to implement simple loyalty programs rapidly and economically, while providing a foundation for more complex and sophisticated programs in the future. One card will store up to two million points, plus additional information about the card holder for use in building targeted marketing programs.

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Precis Deal

OK-based Precis Smart Card Systems and VeriFone announced yesterday that Precis is the first applications developer partner signed to create smart card applications for VeriFone’s ‘VeriSmart’ software system. ‘VeriSmart’ software is a flexible client/server technology that enables financial institutions, telecommunications companies, cable/satellite providers and other service providers to centrally manage multiple smart card applications, smart card reader devices and host interfaces.

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’99 Online Buying Explodes

ZDNet projects this morning that the number of people who buy holiday gifts on the Web using credit cards will more than triple this year. The ZDNet ‘InternetTrak’ survey of U.S. adults over 18, shows that 24 million credit card users are likely to buy holiday gifts online in 1999, more than three times the 7.8 million people who purchased online during the 1998 holiday buying season. The survey revealed that during the 1998 holiday shopping season, online shoppers spent an average of $526 on gifts, for a total online expenditure of $4.1 billion dollars. Extending this average per capita spending to the 24 million people who plan to spend online in 1999, the ZDNet forecasts that a minimum of $13.7 billion will be spent online during the 1999 holiday shopping season. The most popular gift products purchased online using credit cards in 1998 were: books (43%); entertainment CD’s (28%); clothing (25%); computer hardware (22%); and computer software (17%).

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Crandall Joins AmEx

American Express Company (NYSE: AXP) today announced that Robert L. Crandall, former chairman and chief executive officer of AMR Corporation and American Airlines, has been elected to the Board of Directors of American Express.

Crandall was with American Airlines for 25 years until his retirement last year. He was named president of American Airlines in 1980 and in 1985 was given the additional titles of chairman and chief executive officer of American and its parent company AMR Corporation.

During his tenure, Crandall led the upgrade of American’s SABRE computer reservations system that grew to become a leading provider of airline computer services worldwide; oversaw introduction of the Super Saver fare, the first deep discount fare of its kind in the industry; led development of the industry’s first yield management system, a revenue-maximizing sales approach that today is used throughout the industry; and launched the industry’s first frequent flyer program, AAdvantage. Under his leadership, the airline added more than 60 international destinations to what had been a predominantly U.S. domestic route system and increased revenues from $4 billion in 1980 to $19 billion last year.

“With his many years of experience in the airline industry, his broad knowledge of the travel business and understanding of international markets and his creativity and intelligence, Bob will be an excellent addition to our Board,” said Harvey Golub, chairman and chief executive officer of American Express.

Crandall currently serves on the Board of Directors of the Halliburton Company, MediaOne Group and Celestica. He is also a director of the National Park Foundation. His position on the American Express Company Board will be effective March 1.

A native of Westerly, R.I., Crandall holds a bachelor’s degree from the University of Rhode Island and a master’s degree in business administration from the University of Pennsylvania’s Wharton School.

American Express ( ), founded in 1850, is a global, travel, financial and network services provider.

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Gemplus Software

Gemplus will unveil this morning a major initiative to accelerate the integration of smart card solutions into information systems. The first step will be the creation of a new division, Gemplus Software, to deliver software products to its VARs, developers, partners and customers. Gemplus says by creating a new software division the company is responding to the shifting balance of power in the market, from card manufacturers to solution providers. The goals of Gemplus Software are to support open systems and standard APIs by developing and marketing software products that can be integrated as a component of an overall smart card solution. Gemplus says it will initially focus on software products for mobile communication applications and information technology applications.

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Still Going

The teaser rate marketing strategy remains alive and well as CitiGroup continues to market its 3.9% APR, 12-month balance transfer rate on its ‘Platinum Select VISA’. According to CardWatch, Citi has launched a direct mail campaign this week offering the 3.9% rate through March 1, 2000. The no-annual-fee ‘Platinum Select’ card charges a prime +7.9% rate for purchases and a 19.9% fixed rate for cash advances. The punitive APR is prime +12.9% and the late fee/over-limit fee is $25. CardWatch also reports this week that late fee and over-limit fees continue to rise. MBNA is currently notifying cardholders that its late fee and over-limit fee is increasing from $25 to $29. Bank One is also notifying First Chicago cardholders this week that late fee and over-limit fees are going up. For latest marketing/pricing intelligence visit CardWatch ([www.cardwatch.com][1]).

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

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vPOS & vGate & SET

VeriFone, Inc., the global leader in electronic payment and a wholly owned subsidiary of Hewlett-Packard, yesterday announced that its vPOS (virtual point-of-sale) and vGate Internet payment software have been approved as SET compliant by the SET Secure Electronic Transaction L.L.C. agency responsible for SET compliance testing.

Together with VeriFone’s SET compliant vWallet(TM), VeriFone’s suite of Internet applications now offer end-to-end SET compliant payment transactions, providing consumers, merchants and financial institutions with the highest levels of security offered for Internet payment today. In addition to its full end-to-end SET implementation, VeriFone’s merchant payment product, vPOS, also accepts SSL cardholder transactions to ensure the broadest range of payment capabilities for its customers.

“VeriFone receiving the end-to-end SET mark means that our merchants can now offer a highly secure means of conducting payment over the Internet,” said Adrian Horsfield, senior manager, Electronic Commerce, Merchant Services and Point of Sale for the Royal Bank of Canada. “We are proud to be on the leading edge of technology, providing our merchants with solutions that let them jump to the forefront of the Internet commerce revolution.”

“VeriFone’s SSL- and end-to-end SET-based Internet software provides a practical solution for Internet shoppers today and gives new Internet shoppers the confidence to make payments online,” said Shannon Byrne, President of Paradata Systems, Inc., Royal Bank’s first SET enabled Internet Payment Hosting Service. “SET provides an additional level of security that makes on-line payment more like being inside a real store.”

“In the rapidly evolving world of payment, VeriFone is committed to providing electronic payment solutions that meet the present and future demands of our customers worldwide. The SET protocol is an important aspect of Internet payment, with businesses in many countries adopting it as their security standard,” said Tom Kilcoyne, vice president and general manager of the E-Commerce Software Division at VeriFone. “The explosive growth of Internet commerce predicted over the next few years will bring forth a higher demand to protect the integrity of transactions from start to finish for consumers, financial institutions and merchants alike.”

SET is a standardized Internet protocol that provides assurances as to the identities of merchants, banks and cardholders participating in the transaction, while providing the data encryption to enhance confidentiality and payment integrity. The SET protocol was developed by MasterCard and Visa in cooperation with industry leaders such as VeriFone in order to provide all parties to an Internet transaction with security and authentication assurances comparable to an in-store transaction.

Merchants process payment on-line through VeriFone’s SSL- and SET-based vPOS (virtual point-of-sale) software and by interacting with vGate software residing at a financial institution to complete the transaction. Consumers can use the SET-based vWallet or SSL Web Browsers to protect the information between the consumer and the merchant’s Web site.

About Royal Bank of Canada

Royal Bank of Canada (RY) is Canada’s premier global financial services group and a leading provider of personal and commercial banking, corporate and investment banking, and wealth management services. As one of North America’s largest financial institutions, Royal Bank of Canada and its key subsidiaries Royal Trust, RBC Dominion Securities, RBC Insurance, and Royal Bank Action Direct have 60,000 employees who serve 10 million clients through more than 1,500 branches and offices in over 30 countries.

About Paradata

Paradata Systems Inc. () has produced a suite of e-commerce and security systems that forms the basis for solutions in the e-commerce and software anti-piracy marketplaces. Paradata uses the new Secure Electronic Transaction (SET) protocol as a financial back-end to these solutions, and has become the first company in North America to provide hosted e-commerce payment services to multiple Internet Merchants based on the new protocol. With its critical understanding of cryptography and protocols, Paradata is poised for rapid growth in those marketplaces where secure transfer of data is required. It seems destined to play a major role in the projected $400 billion e-commerce marketplace over the next few years.

About VeriFone

VeriFone, Inc. ([http//:www.verifone.com][1]), a wholly owned subsidiary of Hewlett-Packard Company, is the leading global provider of secure electronic payment solutions for financial institutions, merchants and consumers. VeriFone has shipped more than six million electronic payment systems, which are used in over 100 countries.

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

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Cash Deposit ATM

NCR has introduced an ATM that can instantaneously scan bunched cash deposits in multiple currencies and denominations. The new ‘Personal Cash Deposit ATM’ addresses consumer frustrations about traditional envelope deposits and alleviates the added costs incurred by banks to pay for dual verification. The ‘Personal Cash Deposit ATM’ can process bunches of up to 30 notes and can recognize up to 50 mixed denominations or multiple currencies. The ATM also detects 100% of all forgeries by using multi-sensor note recognition. The ‘Personal Cash Deposit ATM’ has been running at a Singapore bank since January. Current plans call for additional units to be in Shanghai and Hong Kong next month with other trials planned for Spain and Argentina. NCR says, so far, not a single bill jammed during numerous tests using up to 12,840 bills.

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AmEx Golf

American Express has joined Andersen Consulting and NEC in sponsoring the World Golf Championships. AmEx will offer special on-site cardholder services such as the ‘Tiger Woods Clinic’. AmEx cardholders who purchase daily or weekly World Golf Championships event tickets with their card for this week’s event will receive admission to a golf clinic hosted by Tiger Woods the day following the tournament. AmEx will also provide a complimentary ‘PGA Tour’ radio, complimentary use of a periscope as well as a free ballmarker. The first of three tournaments, the Andersen Consulting Match Play Championship, will be get underway tomorrow at La Costa Resort and Spa, in Carlsbad, CA. The American Express Championship will be played Nov. 4-7 at the Valderrama Golf Club in Andalucia, Spain.

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