CheckFree & Countrywide

CheckFree and Countrywide Home Loans, Inc. , the nation’s largest independent mortgage lender, this week announced an agreement that will provide nearly 2 million Countrywide customers access to online electronic billing and payment through a central Web site of their choice.

Since 1998, Countrywide has offered its customers automated debit via the Countrywide Electronic Payment Service — powered by CheckFree’s robust payment infrastructure.  With this new agreement, Countrywide customers will also be able to receive their monthly mortgage statement electronically on their personal computers and pay it with a click of the mouse.

Countrywide’s Web site () currently allows borrowers to access their personal account information online. In early February, Countrywide customers will also have the ability to electronically pay their mortgage via the Countrywide Web site.  In the next few months, consumers will be able to send their Countrywide payment electronically by visiting the CheckFree E-Bill(sm) Web site () or the many other financial service providers’ Web sites that offer electronic bill presentment and payment.

“Countrywide prides itself on the technological prowess that has made us one of the top mortgage servicing companies today,” said Tom Boone, managing director of Countrywide.  “We continue to adopt the latest innovations, like CheckFree E-Bill, to offer our customers as many options as possible — not only for paying their mortgage, but for managing their overall finances.”

As part of its ongoing commitment to customer service, Countrywide will work to install the self-care component of CheckFree’s third-generation E-Bill product, announced at the recent Retail Delivery Systems trade show in Las Vegas.

According to Matt Lewis, senior vice president of Electronic Commerce Product Management and Marketing for CheckFree, “Bill presentment turns the traditional monthly bill into another powerful tool that can be used to communicate with customers.  Billers are able to brand their electronic bills according to their needs and use them to learn as much as they can about their customers via an interactive environment.”

With the signing of Countrywide, CheckFree now has contracts with more than 40 of the nation’s top 100 billers, including Ameren, American Electric Power, AT&T, BellSouth, Boston Edison, Chase Credit Card & Chase Mortgage, Columbia Gas of Ohio, Consumers’ Energy, CUNA Mutual Group, First USA, Florida Power & Light, GPU Energy, HomeSide Lending, International Billing Services, Northeast Utilities (Connecticut Light & Power and Western Massachusetts Electrical Company), Northern Illinois Gas (Nicor), Public Service Company of New Mexico, PGE, Small Business Administration, Southern California Edison, Southern Co., Total System Services Inc. (TSYS), and Washington Water Power.

In addition to billers, CheckFree works with financial service providers such as First Union and Intuit’s Quicken to offer integrated bill presentment and payment.  Future Web site launches for CheckFree E-Bill include Bank One, Chase Manhattan Bank and PNC Bank.

About Countrywide

Founded in 1969, Countrywide Credit Industries, Inc. originates, purchases, sells and services loans for single-family homes through its primary subsidiary, Countrywide Home Loans, Inc. The company is headquartered in Calabasas, Calif., and has nearly 11,000 employees with more than 500 offices across the nation.

About CheckFree

Founded in 1981, CheckFree (), the operating subsidiary of CheckFree Holdings Corp., is the leading provider of electronic commerce services, software and related products for more than 2.5 million consumers, 1,000 businesses and 850 financial institutions. CheckFree designs, develops and markets services that enable its customers to make electronic payments and collections, automate paper-based recurring financial transactions and conduct secure transactions on the Internet.


Card Race

MBNA America said Wednesday it has begun its seventh year issuing the official ‘NASCAR’ credit card. As the official credit card issuer of NASCAR since 1993, MBNA currently has more than 1.5 million NASCAR-related cardholders among more than 300 affinity groups. MBNA also signed a multi-year agreement to become a principal sponsor of Joe Gibbs Racing. MBNA sponsors two NASCAR race weekends each year in Delaware: the spring MBNA Platinum 200 and 400 and the MBNA Gold 200 and 400 in the fall.


MBNA – Ottawa

MBNA Canada Bank announced yesterday that the University of Ottawa has entered into an affinity agreement with MBNA to offer a credit card to its students and alumni. The MBNA ‘University of Ottawa’ card program, which is available as a Preferred and Gold MasterCard, will be offered to the university’s supporters, including 23,000 students and 106,000 alumni. MBNA currently has more than 30 University of Ottawa alumni employed and MBNA Canada has established an ‘Alumni Mentoring/Referral Program’. MBNA Canada Bank, formed in 1997, employs about 300 people in Ottawa and Montreal and has more than 100 Canadian affinity programs.


No Blackouts

Diners Club announced Tuesday it will add yet another component to its ‘Club Rewards’ program. ‘Tailored Travel’ will offer cardholders access to airline flights typically unavailable due to black-out dates and capacity controls, thus alleviating the restrictions experienced with frequent flyer tickets. ‘Tailored Travel’ is a one-stop travel service providing complete vacation itineraries from hotel stays to entertainment activities using ‘Club Rewards’ points in exchange for the current market price. One of the unique features of ‘Tailored Travel’ is the access to non-restricted airline tickets including business, first-class and late notice tickets as well as hotels and rental cars. Next week, Diners Club’s newly beefed-up ‘Club Rewards’, will become the first loyalty program and only charge card to offer point redemption to more than 24 airlines, including every major U.S. carrier, and 11 of the foremost hotel chains. Program details will be available via CardTrak ([][1]).



Multi-Stripe Cards

Silicon Valley optical memory card manufacturer Drexler Technology, announced Tuesday it has received a ‘Notice of Allowance’ for a patent involving enhanced security E-commerce transactions. The patent involves using an optical memory stripe as an anti-counterfeit validation method for smart cards. According to patent documents: “such counterfeiting can be inhibited by bonding an optical memory stripe to the smart card, with pre-recorded or post-recorded validation data on the cards. This optical validation data would be read with a photodetector array and could be transmitted to the recipient during funds transfer and/or used locally to control dispensing of cash”. Drexler says the dual stripe card can be used in both healthcare and banking applications.


Diebold Names Global Support VP

Diebold, Incorporated announced Charles J. Bechtel has been appointed vice president of Global Support Services.  He will report directly to Gerald F. Morris, executive vice president and chief financial officer.  Prior to this, Bechtel served as vice president of Information Systems.  In his new position, he will be leading a newly formed organization called Global Support Services.     The new organization includes:

* Information Technology (IT) including corporate IT planning, application development, IT operations and personal computer resources.

* Service/Systems Operations and Support including the Customer Response Center, event/status monitoring, systems and software support, systems solutions lab all located in Green, Ohio.  Also included is service parts and repair logistics located in Mogadore and Seville, Ohio.

* Development and Education including sales, systems, technical and leadership development training as well as Campus Systems customer training.

* Sales Support including Marketing Services, Sales Communication, Architectural and Engineering Services, the Global Solutions Center and the Marketing and Sales Support group.

“The Global Support Services organization enables Diebold to continue its strategic efforts toward worldwide growth by aligning existing North American- focused functions under a single global organization,” said Morris.  “This organization better enables Diebold to support its global presence as well as create new revenue-generating opportunities.”

Bechtel joined Diebold in 1988 and has held several executive positions within the North American Sales and Service Division.

Diebold, Incorporated is the global leader in providing integrated delivery systems and services.  Founded in 1859, the company employs more than 6,000 associates in some 120 locations worldwide with headquarters in Canton, Ohio, USA.  Diebold reported revenues of US$1.2 billion in 1998 and is publicly traded on the New York Stock Exchange under the symbol ‘DBD.’  For more information, visit the company’s Web site at [][1].



CyberCash Doubles Revenues

CyberCash, Inc., the world leader in e-commerce payment technologies and services, today announced business and operating results for the fourth quarter and year ended December 31, 1998.  CyberCash reported revenues of approximately $4.4 million for the three months ended December 31, 1998, up 120% from $2.0 million in the fourth quarter of 1997.  The company reported a ($0.46) per share loss during the 1998 fourth quarter.  For the year, CyberCash had revenues of $12.6 million versus $4.5 million in 1997, while losses amounted to ($2.15) per share.

“In October, we indicated that the fourth quarter could be affected by a seasonal decrease in the number of merchants signing up for CyberCash products and services, as most merchants could be expected to focus their efforts on the busy holiday season, and our judgment was accurate” said Bill Melton, CyberCash chairman and chief executive officer.  “With most merchants focusing their efforts on the high volume of transactions during the busy holiday season, merchant acquisition and expansion naturally slowed.  Looking forward, the record number of Internet purchases reported in November and December further increases our confidence that electronic commerce is no longer a dream.  As our revenues during the year have continued to grow steadily, CyberCash has and will continue to play a pivotal role in enabling the speed and convenience of online commerce,” said Melton.

CyberCash is currently the only company providing merchants with a full suite of secure, convenient payment technologies, enabling them to send payments from a retail store cash register or over the Internet to a payment processor.  CyberCash provides the vital link between the merchant and the credit card processing network, allowing merchants to receive credit card authorization and payment settlement from their acquiring banks.  CyberCash offers merchants a cost-effective business solution for merchant payment processing in the traditional retail store, as well as a path to migrate to the Internet.

CyberCash’s ability to offer a complete payment solution across the traditional retail market and the Internet resulted from the company’s acquisition of ICVerify, Inc. in April 1998.  As a result, CyberCash increased its own revenue stream by one-time perpetual license fees and annual maintenance charges from the sale of ICVERIFY products.  The company also expanded the ICVERIFY product line in July through the release of ICVERIFY for Windows 2.2.  In addition, CyberCash announced a development and marketing agreement with IBM for the distribution of NetVERIFY.  ICVERIFY product sales accounted for approximately 50% of CyberCash’s revenue in 1998.

CyberCash undertook a large-scale campaign in 1998 to increase the number of Internet merchants using its payment services and to bring the company’s advanced technology to the attention of a wider audience.  Currently adding merchants at the rate of 700 per month, CyberCash ended 1998 with more than 9,400 online merchants, a 275% increase over 1997.  Driving forces behind this growth included the introduction of CashRegister 3, which makes payment processing more convenient for merchants, and the expanded distribution if its software by embedding the software in electronic commerce packages, such as Microsoft’s Complete Commerce.  The increase in merchant base, coupled with a new fee structure, which charges merchants a setup and monthly service fee, grew service revenues by more than 200% from the previous year and accounted for approximately 25% of CyberCash’s total 1998 revenue.

Of the 75% of revenue generated from CyberCash’s payment processing business, approximately half of this revenue was generated from setup fees for the CyberCash service and the one-time perpetual license fees generated from the sale of ICVERIFY products.  With a significant portion of its revenue resulting from an increasing merchant base in both the physical and Internet worlds, CyberCash experienced a “seasonal” effect during the fourth quarter. This resulted from merchants concentrating on retail sales and refraining from changing payment systems.  In addition, the fourth quarter reflected the increasing use by merchants of internal technology budgets to address Year 2000 issues rather than investing in new payment technologies.  Despite this pressure, the monthly recurring revenue stream generated from monthly service and maintenance fees offset this seasonal effect.  These recurring revenue streams accounted for approximately 20% of the company’s revenues in 1998 and are increasing the company’s deferred revenue base, which grew to approximately $1.0 million by the end of December 1998.

Melton said that CyberCash expects to continue to grow its payment processing business during 1999 by increasing its merchant base through expanded sales and marketing efforts.  CyberCash sells its products and services through partners, integrators, software distributors, web hosters, Internet service providers, storefront providers, acquiring banks and payment processors.

“Most industry analysts agree that both the volume of consumer Internet commerce and the number of on-line merchants tripled in 1998, and we look forward to that trend continuing,” said Jim Condon, president and chief operating officer.  “It’s not surprising then that more and more brick and mortar businesses are looking to the Internet as another valuable point of sale, and potentially the most profitable.  CyberCash is opening this channel to these companies and is poised to take advantage of the anticipated continued dramatic growth in e-commerce.”

Condon added that during 1998, CyberCash placed additional emphasis on its PayNow Secure Electronic Check Service.  He sees significant long-term revenue potential in this market because of the numerous benefits businesses can realize through electronic bill presentment and payment.  CyberCash entered into alliances with Netscape, Oracle, Digital Cities, NCR, Edison Electric Institute, Pitney Bowes and Novazen in order to increase its foothold in this developing marketplace.  These relationships and CyberCash’s relationship with International Billing Services, entered into in 1997, helped increase revenues from PayNow by almost 300% over the prior year and accounted for approximately 5% of CyberCash’s revenue in 1998.

CyberCash delivered on its promise to develop business solutions for merchants in 1998 through the release of its InstaBuy Service.  The InstaBuy Service provides merchants with a way to convert a higher percentage of web site visitors to buyers and to retain those customers for repeat purchases while consumers gain convenience and security.  InstaBuy also allows banks to enhance their relationships with customers on the Internet.  InstaBuy accounted for almost 10% of CyberCash’s revenue in 1998.

In September, CyberCash and First USA entered into a marketing agreement for First USA to sponsor the InstaBuy Service.  Under this agreement, First USA anticipates entering into agreements with some of the largest Internet merchants to issue InstaBuy Agile Wallets(TM) and to accept InstaBuy transactions. CyberCash will continue to target other financial institutions worldwide to market the InstaBuy Service and to provide additional licensing fees.  CyberCash expects its marketing expenses to increase in 1999 in order to advertise and promote InstaBuy.

CyberCash’s commitment to expanding its infrastructure and upgrading its architecture was a priority in 1998.  As a result, CyberCash reduced development of customized software and one-time projects for third parties. As the Internet market matures, merchants are transitioning from home-grown solutions to packaged software solutions.  With the company’s increased focus on the scalability of its technology in preparation for the impending growth of e-commerce, customization revenue decreased from approximately 90% of total revenue in 1997 to approximately 10% of revenues in 1998.

Once again during the fourth quarter, CyberCash fulfilled its commitment to maintain a constant level of cash operating expenses while continuing to grow revenues.  During the last three quarters of 1998, CyberCash held cash operating expenses to less than $11.5 million a quarter and, prior to the acquisition of ICVerify in April 1998, held cash operating expenses to $7.5 million a quarter.

Earlier this month, CyberCash received a capital infusion of $10 million from a private placement which provides the company with the funds needed to achieve its strategic objectives in 1999, according to Condon.  This funding increases CyberCash’s cash on hand to more than $21.0 million with a firm commitment for an additional $5.0 million in financing to be received in the spring of 1999.  “During 1998, the company made tremendous strides in reducing its cash burn rate for operating expenses.  The burn rate for operating expenses during the fourth quarter was $3.7 million compared to $5.3 million during the third quarter,” Condon said.

CyberCash anticipates that during 1999, sales and marketing expenses will increase as the company concentrates on expanding its merchant base and deploying the InstaBuy Service.  In addition, CyberCash expects research and development expenses to increase as the company continues to develop new products and services and enhances its existing technology.

Also during the year, CyberCash took steps to upgrade the strength of its management team by recruiting several key officers and staff and elevating Condon to president and Melton to chairman of the CyberCash board of directors.

While achieving most of its goals for 1998, the company did not fully meet internal expectations.  The principal reasons include the continued slow rampup of electronic commerce during much of the year, the need to expand CyberCash’s infrastructure and technology architecture, a slowdown in sales during the ICVerify acquisition and integration, and the shortcoming of several key technologies to meet merchant and consumer needs.  “As a result of the lessons learned in 1998, the development of secure technologies which are easy to use and an outstanding 1998 holiday season for electronic commerce, 1999 is shaping up as the year electronic commerce truly comes of age,” said Melton.  “With CyberCash’s intensified focus on the company’s core payment processing capabilities and its emerging InstaBuy Service, CyberCash is well positioned to ride the crest of the e-commerce wave.”

About CyberCash, Inc.

CyberCash is the world leader in secure, convenient payment technologies and services, enabling e-commerce across the entire market spectrum from electronic retailing environments to the Internet.  CyberCash provides a complete line of software products and services allowing merchants, billers, financial institutions and consumers to conduct secure transactions using the broadest array of popular payment forms.  Credit, debit, purchase cards, cash, checks, smart cards and alternative payment types (e.g., “frequent buyer” or loyalty programs) are all supported by CyberCash payment solutions.  Leading brands of CyberCash include ICVERIFY(R), PCVERIFY(TM), CashRegister, NetVERIFY(TM), CyberCoin(R) and PayNow(TM).

For more info on 4Q/98 financials for CyberCash please visit CardData ([][1]).



BodyGuard Card

Daly City, CA-based Edward Price Company unveiled its new healthcare savings card, the ‘BodyGuard Card’ yesterday. The program offers discounts of 17% to 25% on healthcare services. The card gives consumers access to preferred provider organizations for most ancillary healthcare services including prescription drugs, vision care, dental, chiropractic, podiatry, acupuncture, hearing aids and alternative medicine. ‘BodyGuard’s’ network uses seven separate specialty PPOs with more than 78,000 pharmacies and providers nationwide. ‘BodyGuard’ PPO partners include: American Dental Network, PCS, Acupuncture Plus, and Family Chiropractic America.


Cendant Sues Accountant

Cendant Corporation announced Tuesday it has filed a lawsuit against Ernst & Young LLP for damages arising from the class actions brought against the Company for accounting irregularities previously disclosed in April 1998.

According to the complaint filed today in United States District Court for the district of New Jersey in Newark, Cendant seeks damages it sustained as a result of the irregularities, as well as contribution from Ernst & Young for any damages assessed in the class action lawsuits against Cendant, because the financial statements, alleged to be the basis of the accounting irregularities, were audited and certified by Ernst & Young.

For all the relevant times Ernst & Young was the accounting firm for CUC International — the company that merged with HFS Incorporated in December 1997 to form Cendant Corporation-and issued financial statements for the years 1995 through 1997.  In the second and third quarters of 1998, Cendant disclosed that it had discovered accounting irregularities in CUC financial statements for the years 1995 through 1997, including fictitious pre-tax income in excess of $500 million.

The complaint alleges, among other things that:

— Ernst & Young did not detect these false statements in any of the three years because, in part, it did not perform the audits in accordance with professional standards required and discharged its duties with gross negligence.

— Ernst & Young knew in 1997 that heavy reliance would be placed on all its financial reports of CUC because of the merger discussions CUC was having with HFS that resulted in the formation of Cendant.

— Ernst & Young’s audits of CUC’s financial statements violated numerous Generally Accepted Auditing Standards as established principally by the Auditing Standards Board of the AICPA (American Institute of Certified Public Accountants).  The complaint contains many examples of these violations.

Statements about future results made in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements are based on current expectations and the current economic environment.  The Company cautions that these statements are not guarantees of future performance.  They involve a number of risks and uncertainties that are difficult to predict.  Actual results could differ materially from those expressed or implied in the forward-looking statements.  Important assumptions and other important factors that could cause actual results to differ materially from those in the forward-looking statements are specified in the Company’s Prospectus Supplement dated November 24, 1998.

Cendant Corporation is one of the world’s foremost providers of consumer and business services.  The Company operates in three principal segments: Travel Services, Real Estate Services and Alliance Marketing.  In Travel Services, Cendant is the leading franchisor of hotels and rental car agencies worldwide; the largest provider of vacation exchange services; a leading fleet management company; the UK’s largest private car park operator; and a leading motorist assistance group in the UK.  In Real Estate Services, Cendant is the world’s largest franchisor of residential real estate brokerage offices, a major provider of mortgage services to consumers and a global leader in corporate employee relocation.  In Alliance Marketing, Cendant provides access to insurance, travel, shopping, auto, and other services, primarily through direct marketing to customers of its affinity partners.  Headquartered in New York, NY, the Company has more than 35,000 employees and operates in over 100 countries.

Details – VISA announced that it has been selected by Visa U.S.A. to be one of the payment systems’ providers offering special services to Visa’s small- and medium-sized businesses in its Instant Visa Rewards for Business program., the largest single source domain name registration service on the Internet, will give Visa’s small- and medium-sized business customers the opportunity to register an Internet domain name at , build an e-commerce enabled Web site at and then host that Web site at . joins a group of service providers including Sprint (NYSE: FON), The Wall Street Journal (NYSE: DJ) and Franklin Covey in offering discounts on special services to small businesses. currently offers customers the ability to register domain names with a wide array of top-level domains (TLD) extensions. works with Network Solutions (Nasdaq: NSOL) to deliver .com, .net, and .org TLDs. The company’s partners include GeoCities (Nasdaq: GCTY), (Nasdaq: TGLO), the Infoseek Corporation (Nasdaq: SEEK), Thomson and Thomson and

“We are very pleased to have been chosen by the Instant Visa Rewards for Business program,” said Sascha Mornell, director of marketing and online services for “Our company is focused on offering small- and medium-sized businesses the opportunity to get their e-business on the Internet quickly and affordably through domain name registration services to e-commerce storefronts. We are excited to work with Visa to offer integrated Internet solutions to their business customers.”

The Visa promotion targets Visa Business cardholders and will run from February 1999 through July 1999.

“The Instant Visa Rewards for Business program offers high-value discounts on services and information resources specifically designed to meet the needs of Visa’s small- and medium-sized business customers,” said Jewel Wilk, director, marketing services. “We’re pleased to add to our list of providers offering these special services”.

About is a division of Forman Interactive Corp. (FIC), a leading developer of Internet-based solutions and electronic commerce development tools for small- and medium-sized businesses. was also ranked in the top 100 Web Sites by PC Magazine in December 1998. Forman Interactive Corp. was founded in 1994 and is based in New York, NY. Forman Interactive’s hosting division, SiteAmerica, was ranked by Network Computing as a top five e-commerce solution for small businesses in the December 1998 issue. SiteAmerica is the exclusive Web hosting provider for Ziff-Davis, Inc. University (NYSE:ZD).

About Visa

As the World’s Best Way to Pay, Visa is the leading payment brand and the largest consumer payment system worldwide with more volume than all other major payment cards combined. Visa plays a pivotal role in advancing new payment products and technologies to benefit its 21,000 member financial institutions and their cardholders. Visa has more than 70 smart card programs in 33 countries and on the Internet, with 23 million Visa chip cards, including over 8 million Visa Cash cards. Visa is pioneering SET Secure Electronic Transaction* programs to enable and advance Internet commerce. There are more than 620 million Visa-branded cards, which generate over $1.2 trillion in annual volume. Visa is accepted at more than 15 million worldwide locations, including at over 450,000 ATMs in the Visa Global ATM Network. Visa’s Internet address is [][1].



Consumer Protection Week

Next week will mark the first annual “National Consumer Protection Week” organized by the FTC, U.S. Postal Inspection Service, National Association of Attorneys General, National Association of Consumer Agency Administrators, National Consumers League, and the AARP. Activities across the country will focus on five different types of credit fraud: credit repair scammers; indentity theft; file segregation; advance-fee loans; and home equity scams. Next week’s theme: “Credit Fraud — Know The Rules, Use The Tools.”


MBNA Honors NFL Teacher

MBNA America Bank, N.A., is pleased to congratulate the 1998 NFL Teacher of the Year, Michele Eggleton, a computer teacher at St. Augustine High School in San Diego, California, and an adjunct faculty member at the University of San Diego.

The award, presented by MBNA, will be presented during a pregame ceremony at the AFC-NFC Pro Bowl in Honolulu, Hawaii, this February.

Ms. Eggleton, who was nominated by her former student, defensive tackle Darrell Russell of the Oakland Raiders, will receive a $5,000 grant from the NFL.  A $10,000 NFL award will be presented to St. Augustine High School, where Ms. Eggleton is the head of the Computer Department and helped design the school’s computer laboratory.  She had taught mathematics for 10 years at the high school.  Eggleton also was selected as the “Distinguished Teacher of Mathematics” in San Diego last year.  Prior to the position at St. Augustine, Ms. Eggleton taught in junior high school and developed an algebra program for several schools.

The NFL Teacher of the Year program, sponsored by MBNA, was created in 1990 by NFL Commissioner Paul Tagliabue and the NFL clubs to honor school teachers who had positive influence on NFL players.  MBNA is pleased to sponsor this annual award as part of the company’s longstanding commitment to support education initiatives through scholarships and grants.

The NFL Teacher of the Year program is also part of MBNA’s relationship with the NFL, which has endorsed MBNA as the official credit card issuer of the NFL and for its 31 member teams.  More than 1.2 million loyal fans have chosen to carry a National Football League credit card from MBNA.

MBNA’s sports marketing sector includes endorsements from more than 600 sports organizations, including Major League Baseball, the National Hockey League, National Association of Stock Car Auto Racing (NASCAR), many of the National Basketball Association teams, the PGA of America and the American Quarter Horse Association.  MBNA has endorsements in every major sport, including football, baseball, basketball, tennis, hockey, soccer, golf, horse racing, and automobile racing.

MBNA Corporation (NYSE: KRB), a bank holding company and parent of MBNA America Bank, N.A., a national bank, has $59.6 billion in managed loans. MBNA, the largest independent credit card lender in the world, also provides retail deposit, consumer loan, and insurance products.