SmartDisk Corporation, a company focused on providing simple, innovative solutions that advance and enhance the use of miniature storage media and smart cards, announced yesterday that it has shipped its 250,000th product.  This shipment of Smarty, the smart card reader/writer, to Visa International, is a milestone both for SmartDisk, a nine-month old privately held company and for Fischer International Systems Corporation, its primary distribution arm.

On this significant occasion, SmartDisk is honoring Visa International with its first annual “Excellence in Technology” award for furthering the development and use of smart cards in the financial industry. The award will be presented today at CARTES 98.

Smarty plays an important role in Visa International’s Visa Platinum initiative, a smart card program in Visa’s Latin America and Caribbean region that enables cardholders to gain access to their account information over the Internet.  Smarty, a 3.5 inch floppy disk sized adapter, acts as the bridge between a smart card and a PC.

“We congratulate SmartDisk on its success and are very pleased to be recognized by SmartDisk for our contributions to emerging payment technologies,” said Philip Yen, Senior Vice President, Visa International. “SmartDisk is an important partner in our efforts to advance smart card acceptance and we were very pleased to be able to use the Smarty technology to facilitate the world’s first use of a payment card over the Internet. We look forward to continuing this relationship with them.”

“As a nine-month old company, we are delighted with the strong sales of our products: Smarty, the smart card reader/writer and FlashPath, the flash memory reader/writer,” said Michael S. Battaglia, President and CEO, SmartDisk Corporation. “This is the perfect occasion for SmartDisk to applaud Visa International, one of our most valued customers, for its innovative use of Smarty as a link between the Visa Platinum card and the PC.  We look forward to an ongoing and productive partnership with Visa International.”

About Smarty

The Smarty smart card reader/writer acts as a bridge between a smart card and a PC. Smarty has the same dimensions as a 3.5 inch floppy disk and includes a slot into which a smart card can be inserted. To use it, one simply inserts a smart card into the slot and slips Smarty into a PC’s floppy drive. Increasing use of smart cards in Asia, Europe and the U.S. is fueling a need for a versatile, economical card reader. Smarty fulfills this need, supporting electronic commerce, banking, health care, and government applications, and the high-level security that such transactions require including access control, network authentication and data certification.

About Visa

Visa, “the world’s best way to pay,” is the preferred payment brand and the largest consumer payment system worldwide with more volume than all other 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 eight million Visa Cash cards. Visa is pioneering SET Secure Electronic Transaction programs to enable and advance Internet commerce.  There are more than 620 million cards, which generate over US $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 .

About SmartDisk Corporation

SmartDisk Corporation is a joint venture of Fischer International Systems Corporation (FISC) and Toshiba Corporation formed to develop, manufacture, market and distribute patented devices that provide simple, innovative solutions to advance and enhance the use of miniature storage media and smart cards. SmartDisk is the creator of patented-technology that allows for the viewing of images taken with digital cameras on personal computers via the floppy disk drive slot and for the reading and use of smart cards in the same fashion. Ownership of the company is split, 60% by FISC and 40% by Toshiba and others. SmartDisk is based in Naples, Florida, with international operations based in Tokyo, Japan. For more information, visit .



National Credit Management Group of Fort Lee and Edgewater, NJ, and its two principals agreed to settle Federal Trade Commission charges brought against them as part of “Operation Eraser,” a federal-state crackdown on fraudulent credit repair firms. The FTC charged the defendants with violating the FTC Act and the Credit Repair Organizations Act by making deceptive claims about their ability to improve consumers’ credit records and get them credit cards and by charging advance fees for these services. The FTC also charged the defendants with violating the Telemarketing Sales Rule by making unauthorized bank account debits, obtaining advance fees for “guaranteed” credit cards, and failing to disclose the true costs of their services. The proposed settlement would permanently ban the two principals from most credit-related business in the future, would ban them from check debiting, and would require that they pay $350,000 in redress. A court-appointed receiver shut down National Credit Management Group’s business in April. NCMG was a large company, doing business as 1-800-YES-CREDIT.


Fraud Seminars

Dallas-based Sterling Commerce is holding a series of seminars regarding check fraud prevention and vault and ATM cash control during Nov and Dec. One major presentation will explain how kites operate, how to identify large dollar kites, how to prevent kite schemes or shut one down if it occurs, a financial institution’s liabilities and the insurability of the kite risk. Another presentation will reveal the key steps to successful cash control; explain how to make cash profitable; and illustrate how to increase income by lowering cash levels, while still guaranteeing customer service. For more information: 800-222-6219.


ATM/SC Postage Metering

Pitney Bowes Inc. was awarded a patent this week for a postage metering capability integrated in an ATM. When used with a smart card, postage value is accounted for without reference to an internal vault of the apparatus or to a postal facility, by using a vault of the smart card. The smart card may be used to dispense postage by accessing a customer’s postage account at a remote center to set into the internal vault a value to be dispensed, with communication secured in accordance with information provided by the smart card. Using such information, the customer’s postage account may also be accessed to recharge the vault of the smart card, rather than the internal vault. Additionally, postage may be dispensed in accordance with value inputted directly by a customer, using cash, credit-, debit-, or money-cards. The internal vault of the postage meter is used when accounting for postage dispensed in accordance with such directly inputted value.



Bull announced its comprehensive, integrated “SmartPurse”, electronic purse solutions this week in Paris.

The SmartPurse solutions include all the components needed to implement an electronic purse system. The first solution presented by Bull uses the Proton technology and includes:

— Microprocessor cards, equipped with the Proton electronic purse (e-purse) application developed by Bull — Personal readers marketed by Xiring, a Bull subsidiary — Solfeo, Amadeo, and Alto payment terminals — Reloading terminals for e-purse cards, developed by Banksys — NT servers, equipped with the electronic purse application developed by PWI (Proton World International), a Banksys subsidiary — Customer services including installation, deployment and support.

“SmartPurse is based on the wide-ranging, established know-how of Bull, an international Information Technology group, recognized for its capacity for technological innovation and expertise in integration. The Smart Purse solution harnesses this know-how to that of Bull Smart Cards & Terminals, world leader in the field of electronic purses,” said David Levy, CEO of Bull Smart Cards & Terminals. “With all this know-how, Bull is in a position to set up a Smart Purs site within six months of taking an order.”

Multiple benefits

SmartPurse is aimed at large organizations such as banks, retail chains, transport companies, and universities, wishing to take advantage of electronic purse facilities.

By replacing the use of cash and cheques, SmartPurse facilitates small amount payments, improves customer relations, encourages loyalty, and consequently leverages increased sales.

Security is guaranteed at all stages, from card presentation to crediting the account. Costs linked to handling cash and theft are reduced.

The electronic purse also cuts out some of the disadvantages linked to the use of debit-credit cards for small amounts: the high cost of real-time communication, excessive transaction times, tax paid on each transaction.

Large organizations can use the e-purse system for a very broad range of activities, where payment is typically made with coins or small value notes:

— Local stores including newsagents, bakeries, grocers, fast foods — Dispensers: drinks, confectionery — Ticket machines: car parks, public transport, time stamps, cinemas — Indoor or outdoor public telephones — Mobile activities: taxis, home delivery services.

An electronic purse for $ 24 per person

Example of SmartPurse configuration for 20,000 people including:

— The Proton NT license — The license for the Tuxedo transactional monitor — The Windows NT server — The security access modules — One electronic purse card per person — 200 electronic payment terminals — The integration, support and deployment services. Total cost: $ 473,000.

SmartPurse is distributed in the 85 countries where Bull has operations.

The world-wide e-purse market

E-purse technology started in 1994 with the development by Bull of a reloadable multi-issuer, multi-provider, multi-service electronic purse card: the CC 60, a new application of the CP8 technology.

Electronic purse systems, aimed at replacing hard currency, must have very sophisticated built-in security mechanisms. The Bull card, based on Bull’s experience in the field of microprocessor card security, meets these demands. It includes strongly secured payment transaction and loading functions, and the latest encryption algorithms.

The whole system developed around this card is traceable and auditable: all transactions are recorded, thereby making it possible to detect any attempted fraud. The Proton system has been developed by Banksys, the Belgian national operator in payment systems, specialized in transaction systems.

About Bull Smart Cards & Terminals

Bull Smart Cards & Terminals is the industry leader in the field of secured financial transactions. Bull designs, develops and markets global smart card solutions for financial, loyalty, transport, telecommunications, healthcare and other applications. Products include contact-contactless cards plus a full range of general purpose and EFT/POS terminals, automated teller machines, as well as associated software and services.

Bull Smart Cards & Terminals is the acknowledged industry leader in research, development and security related to smart cards & related terminals. The company is also the worldwide leader in electronic purse cards. Since inventing the microprocessor smart card in 1976, Bull has obtained more than 1200 patents in the field, and has received certification for smart card security that is the highest level ever achieved by a smart card.

In 1997, Bull Smart Cards & Terminals earned revenues of 1416 million of FF ($280 million). By relying on Bull international network, the division achieves 80% of the revenue abroad with a strong position in Europe (80%).

About Bull

Bull is an international I.T. group based in Europe with 21,000 people and operations in nearly 100 countries. In 1997, Bull earned revenues of $4.2 billion including over 65% outside of France, its country of origin.

Bull offers a wide range of systems, infrastructure software and I.T. services, through focused innovation, alliances with the best partners and its own integration expertise.

In its industry, Bull is recognized for innovative products including Escala family of open servers, smart cards and software such as OpenMaster for secure management of systems and networks. In I.T. services, Bull is ranked in Europe as the third largest systems integrator and fifth in maintenance and support services. Information on Bull is available at:     More information on these activities can be found on the World Wide Web at:


First USA & MSN

The nation’s #1 online credit card issuer and software giant Microsoft entered into the largest Internet advertising agreement ever signed. Yesterday, Microsoft announced that [First USA][1] will purchase $90 million of advertising on MSN. The agreement gives First USA exclusive rights to advertise its credit cards across most of the MSN network of Internet products and services for five years. FUSA will have exclusivity among popular MSN sites such as MSN ‘Hotmail’, the MSN ‘CarPoint’ online automotive service and MSN ‘Gaming Zone’. First USA will not have exclusivity on the MSN ‘Expedia’ travel service, the MSN ‘Sidewalk’ online guide, MSN ‘MoneyCentral’ or MSN ‘Small Business’ properties on the MSN network. MSN says its reach has increased from 30.1% to 34.1% of all online users, based on recent research.




Product Technologies Inc. , an ICL company, Wednesday announced the availability of version 5 of SmartCity. SmartCity is a turnkey smart card based e-purse (electronic purse) application that also provides a multi-application development platform and tools to systems integrators.

SmartCity 5 incorporates support for additional Gemplus smart card types, a new higher performance and lower cost security and authentication processor, seamless Sybase or Oracle database support, and new and enhanced wizards for improved SmartCity Back Office operator throughput.

Gemplus smart cards now supported by SmartCity include GemSAFE, a card for securing computer access, email and Internet access; the low cost MPCOS-3DES 1KB card for use in applications requiring a single purse and a limited number of applications; and the low cost GPM271 card, a disposable card used in the SmartCity gift certificate application. SmartCity also supports Gemplus’ PCOS, GPM416 and MPCOS-EMV (Europay, MasterCard, Visa) compatible smart cards. All card types can be supported within a single SmartCity system.

“SmartCity 5 is a testament to our continuing commitment to provide leading edge end-to-end smart card solutions to a variety of markets,” said Bill Mangino, ICL vice president of international sales and marketing. “The release of SmartCity 5 with support for GemSAFE cards offers the security features demanded by the corporate market, but it also provides multi-application, e-purse, and database management features.”

Additional Features

SmartCity 5 incorporates new features along with the proven features of earlier SmartCity versions, including:

o New – Support for Microsoft NT Scheduler for automated scheduling of routine processes without operator intervention;

o New – Integrated merchant point-of-sale (POS) device management;

o New – SmartCity Secure Access Module (SAM) Server for authorizing revalue transactions in an online environment or via dialup modem;

o New – Token Manager for secure key management;

o Underlying software objects that can be easily integrated into third party solutions;

o Enhanced – Card Setup to configure card structures and access conditions for purses, loyalty, and multi-applications;

o Enhanced – Card Priming Module for card personalization;

o Device Personalization Wizard to download encryption keys to system devices and SAM cards;

o Enhanced Customer and Merchant Explorer applications for customer support personnel;

o Faster transaction processing; and

o Report utility for producing standard and customized reports.

SmartCity 5 runs on Microsoft Windows NT clients interfacing with relational databases running on Windows NT or a UNIX server.

Pricing And Availability

SmartCity 5 is available for immediate shipment; price varies according to size of installation. It is already in operation at three customer sites in the U.S. and Europe. SmartCity 5 will be demonstrated at Cartes ’98 in Paris, France, October 27 through October 29, 1998.

About PTi

PTi is a leading U.S.-based multi-application smart card solution provider owned by ICL. PTi specializes in software for card management systems and the provision of end-to-end smart card solutions, including ICL’s SmartCity. PTi is headquartered in Middletown, CT, with a branch office in Moscow, Russia. Further information on the company can be found at: .

About ICL

ICL is a leading supplier of IT systems and services, headquartered in London, UK. Operating in over 70 countries and employing over 19,000 people, the Group’s revenues for 1997 were approximately US$4 billion. The company implements IT systems for major projects and provides innovative services to a range of industries covering amongst others, retail, finance, travel, telecoms and utilities together with education, local and central government sectors. ICL services include outsourcing, helpdesks, network services, inter/intranets, electronic commerce solutions, interactive kiosks, smart card systems, digital cities and web sites. ICL plans to relist on the London Stock Exchange in 2000.


Interactive Loyalty

Mondex International announced Wednesday the launch of ‘Interactive Loyalty’ which utilizes smart card technology. Mondex says the new software will enable considerable customer-specific information to be stored on smart cards and that cardholders will be able to redeem rewards immediately. Licenses to use ‘Interactive Loyalty’ programs will start at $40,000. Mondex says the ‘Interactive Loyalty’ offers several benefits including: a six week development cycle; no need for a complicated database; multi-application cards; incentivising payment options; co-branding possibilities; reduced fraud; and dynamic segmentation. In addition to providing the smart card software, Mondex International has created a ‘Business Partner Network’ to provide a complete solution for smart card based loyalty programs.


Diebold Canada Executive

Diebold, Incorporated has named Neil James managing director, Diebold of Canada, Ltd. Based in Toronto, James will be responsible for all sales, service and support activity for the company’s operation.

“Neil’s understanding of today’s vertical markets, as well as his knowledge of the level of specialization needed in those markets, is key to our continuing growth in Canada,” said David Bucci, group vice president of North American Sales and Service.  “His leadership will help us greatly expand our global presence.”

James joined Diebold in 1980 and has held several field sales positions in the United States.  His most recent position was general manager of Diebold’s Asia/Pacific organization in Singapore.  James has a bachelor’s degree from Baldwin-Wallace College, Berea, Ohio, and a master’s degree in education from Kent State University, Kent, Ohio.

Diebold, Incorporated (pronounced DEE-bold), headquartered in Canton, Ohio, USA, is a global leader in providing card-based transaction systems, security and service solutions to the financial, education, healthcare, utility and retail industries.  Founded in 1859, the company develops, manufactures, sells and services automated teller machines, campus and card systems, electronic and physical security equipment, automated medication and supplies dispensing systems, integrated systems solutions, software and banking supplies.  For more information about Diebold, Incorporated, visit the company’s Web site at .


MovieFone Voice Recognition

Callers to MovieFone, the nation’s largest movie guide and ticketing service, will soon be able to get movie listings and tickets faster and easier than ever by simply speaking into the phone. MovieFone, Inc. announced it will use speech recognition technology from Lucent Technologies to enhance its popular interactive service, known by familiar local phone numbers such as 777-FILM.

MovieFone is one of the largest interactive phone applications in the world, providing more than 100 million callers a year with a complete directory of movies, theaters, and showtimes, and the ability to buy tickets. Since MovieFone’s inception in 1989, callers have made selections using the buttons on their touch-tone key pad. The enhanced service, set to launch in New York in early 1999, enables moviegoers to select a movie by saying the title into the phone. Similarly, callers can enter other information like their zip code or credit card number by speaking into the phone. Callers who do not wish to speak their selections still have the option of entering them using their touch-tone keypad. The New York launch will be followed by a rollout to more of the 35 major cities MovieFone serves.

Letting moviegoers use their own voice to speak to MovieFone is a twist, since the well-known voice callers hear when they call MovieFone (e.g. “Hello and welcome to MovieFone…”) is a frequently imitated part of pop culture. The voice of Mr. MovieFone has been parodied on television shows from Saturday Night Live to The Simpsons to Late Night with David Letterman. In fact, in one of the most memorable episodes of Seinfeld, when Kramer’s phone number is changed to one that is just one digit away from 777-FILM, he is forced to spend the whole episode imitating Mr. MovieFone and providing unsuspecting callers with movie information.

According to Tom Jarecki, Sr. VP Operations for MovieFone, “Seinfeld’s Kramer said it best. When he couldn’t understand the selections callers were making with the buttons on their telephones, he asked, ‘Why don’t you just tell me the name of the movie you selected?’ Using Lucent’s speech recognition technology, MovieFone callers will soon be able to do just that.”

He continued, “MovieFone has always used innovative technology to make moviegoing more convenient for consumers. Lucent’s Speech Solutions will enable us to reinforce that principle by presenting a more fun and entertaining service for moviegoers while saving them time. Lucent’s long history in speech recognition gives us great confidence in the accuracy and reliability of the new system.” Designed by Bell Labs, the solution includes Lucent’s high-density speech recognition board and software to support advanced speech applications.

“Our goal is to make speech services ubiquitous by making them useful to the vast majority of consumers,” said Daniel Furman, president of Lucent Speech Solutions. “Working with MovieFone is an important step toward that goal.”

Lucent’s Speech Solution handles wide variations of voice pitches and accents, and its high capacity supports large vocabularies, easily recognizing specific movie titles. With the capability of recognizing spoken numerals, as well as different credit card types (Visa, MasterCard, and others), the speech technology also will be able to quickly process credit card transactions used to purchase theater tickets. The heart of the new technology is Lucent’s high-density speech recognition board, which provides an economical solution by supporting a large number of simultaneous conversations in a small space.

Today’s announcement with MovieFone adds to Lucent’s large base of customers using network-based speech systems, processing millions of speech transactions each week. In addition to scalable speech engines that include both hardware and software components for Automatic Speech Recognition (ASR) and Text-to-Speech (TTS), Lucent Speech Solutions include a full complement of speech applications. These applications, such as voice dialing, automated attendant, personal assistant, e-mail reading, and information access, all use 0natural language user interfaces.

MovieFone, Inc. is the leading media company focusing on the moviegoing audience. The Company’s primary products, the MovieFone interactive telephone service (e.g. 777-FILM) and [][1] on the web, comprise the largest movie listing guide and ticketing service in the country, providing millions of moviegoers each week with a complete, free directory of movies, showtimes, theater locations and the ability to purchase tickets in advance. The Company, which is celebrating its 10th anniversary this year, has received over 300 million calls and logged over 35 million online users. The Company’s services cover more than 14,500 movie screens in 33 cities around the nation, which account for over 60% of the nation’s movie attendance. MovieFone, Inc. is a public company with offices in New York and Los Angeles.

Lucent Technologies, headquartered in Murray Hill, New Jersey, designs, builds and delivers a wide range of public and private networks, communications systems and software, data networking systems, business telephone systems and microelectronics components. Bell Laboratories is the research and development arm for the company. For more information on Lucent Technologies, visit and [][2] for Lucent Speech Solutions.



Halloween – $5 Billion Industry

While a frequently quoted figure estimates Halloween sales at $2.5 billion, recent information indicates that figure may be way too low.  By the time sales from all markets are totaled, the actual figure should easily exceed $5 billion, according to The Halloween Association (THA).

THA breaks down Halloween sales into three categories: candy, costumes and all other items.  Candy, the largest single category, accounts for approximately $1.76 billion in sales.  Recently, this figure was adjusted upward from $950 million by the National Confectioners Association.  The lower estimate, based on scanned merchandise, was changed after industry officials recognized that much of the candy sold through seasonal stores, kiosks, convenience stores and smaller venues is not scanned.  Historically, Halloween has accounted for the highest candy sales throughout the year, according to the manufacturing group.

The second major category of sales, costumes, is estimated between $1 and $1.5 billion and growing.  With more adults celebrating the holiday than ever before, costume sales and rentals to them are fueling the growth of this category.  According to the 2nd annual Halloween Survey conducted by the National Retail Federation, 82% of children plan to dress up to attend parties or to go trick-or-treating.  Seventy-three percent of adults (up from 65% last year) also plan to participate in some kind of Halloween activity.  In fact, adult activities have multiplied to the point where 45% of all respondents to a recent American Express survey said they will celebrate Halloween on a level equal to or greater than last New Year’s Eve.

The third category, which accounts for at least $2.5 billion, includes all other Halloween sales — pumpkins, decorations, crafts, greeting cards, tie-in advertising programs, entertaining (in-home parties for adults or children), outside entertainment (seasonal videos, movies, bars and restaurant sales for special holiday promotions, etc.), and more.  According to THA Executive Vice President, Carol Shaner, “This number can only be estimated, based in part on the American Express survey which indicated that consumers will spend approximately 26% of Halloween dollars on candy and 23% on costumes, leaving more than half of Halloween dollars spent in the ‘other’ category.”

According to THA, this category is less well documented than the candy and costume figures, but definitely is growing.  Halloween decor, for example, was almost unknown ten years ago, but now includes light strings, wind socks and flags, pumpkin carving kits and accessories, pumpkin-colored leaf bags, and much more.  Any consumer who watches TV, reads the newspaper or visits a grocery store, discount store, drug store or mall can readily see the increase in the number of Halloween products and the amount of Halloween tie-in advertising.

Shaner thinks this estimated figure probably doesn’t include income generated by haunted attractions, which are proliferating, nor the money spent by such venues for props, lighting and special effects.  It also may not include purchases not readily identifiable as Halloween sales such as leotards, fabric or other costume-making supplies.

All types of sales are growing according to both the American Express and National Retail Federation surveys:  85% of those questioned reported that they will spend at least the same amount or more on Halloween-related purchases this year over last.  Among adults who plan to celebrate the holiday, 59% will spend up to 25% more, while 29% will spend up to 50% more.

The Halloween Association is collecting and disseminating financial and demographic information regarding the celebration of Halloween.  THA may be contacted at 3525 Ellicott Mills Drive, Suite N, Ellicott City, MD 21043-4547, phone 410-418-4800 and fax 410-418-4805.  The E-mail address is [][1]. Information is posted, as it is developed, on the Association’s web site at [][2].



AmEx Consumer Card Head

American Express Company Tuesday announced that Alfred F. Kelly, Jr., 40, has been named President of the Consumer Card Services Group, effective November 1.

In his new role, Mr. Kelly will head American Express’ consumer card business in the United States.  He will also be responsible for the company’s Customer Servicing and Risk Management support for the U.S. card business.

In addition, Mr. Kelly will become a member of the American Express Planning & Policy Committee, and will report to Kenneth I. Chenault, President and Chief Operating Officer.  Mr. Kelly succeeds Phillip Riese, who is leaving American Express to become Chief Executive Officer of OptiMark Technologies, Inc.

Mr. Kelly was formerly Executive Vice President and General Manager of U.S. consumer card marketing.  He joined American Express in 1987, and has held a number of key leadership positions within the consumer card organization.  In those roles he has successfully led efforts to launch new products, expand rewards programs, reduce customer attrition, build credit card receivables and increase market share.

In announcing Mr. Kelly’s promotion, Mr. Chenault said, “Al’s broad knowledge of our card business, along with his exceptional leadership abilities, make him superbly qualified to take on his new responsibilities.”

Prior to joining American Express, Mr. Kelly was Manager of Information Systems at the White House, where he led data processing functions for eight of the 11 agencies that comprise the Executive Office of the President.  He also held a series of positions in information systems and strategic and financial planning at PepsiCo.

Mr. Kelly is a chairman of the Wall Street Charity Golf Classic, which is one of the most successful fund-raisers benefiting the Cystic Fibrosis Foundation.  He also serves on the Board of Trustees for Iona College.

Mr. Kelly received his B.A. and M.B.A. degrees from Iona College in New Rochelle, New York, where he was an adjunct assistant professor from 1980- 1985.  He lives with his wife and four children in New Rochelle.