BAMS Revenue Up 27%

BA Merchant Services, Inc. reported first quarter net income of $8.7 million, compared to net income of $7.7 million for the first quarter of 1997.

Earnings per share of $.18 for the first quarter of 1998 increased 13 percent over pro forma earnings per share of $.16 per share for the comparable quarter in 1997. The operating results for the first quarter of 1997 include the historical results of operations for the Thailand, Philippines and Taiwan merchant processing businesses acquired from BankAmerica Corporation in the second and third quarters of 1997.

Net revenue of $41.8 million on sales volume processed of $9.1 billion for the first three months of 1998 increased 16 percent and 27 percent, respectively, over net revenue of $36.0 million on sales volume processed of $7.2 billion for the same period in 1997.

“We have generated strong growth in sales volume and transactions processed over the past year principally by expanding our direct sales efforts,” said Sharif Bayyari, president and chief executive officer of BAMS. “We look forward to continuing this strategy in cooperation with the new BankAmerica Corporation.”

The company’s net income from domestic operations in the first quarter of 1998 increased 18 percent over the comparable quarter in 1997. Domestically, net revenue in the first quarter of 1998 increased 21 percent over the comparable period in 1997 on an increase in sales volume processed of 28 percent. First quarter 1998 net income from the company’s Asian operations decreased 66 percent from first quarter 1997, reflecting both increased competition and the area’s economic turmoil.

Total operating expense for the first quarter of 1998 increased $4.8 million or 19 percent over the first quarter of 1997. The increase was primarily attributable to: (1) a 21 percent increase in data processing and communications expense principally due to increased third party data processing services related to growth in transaction volume; (2) a 17 percent increase in salaries and employee benefits mostly due to sales staff growth and; (3) a 56 percent increase in depreciation expense due to the acquisition of merchant processing terminals required for the company’s expanded merchant base and the impact of the HostLINK transaction processing system installed during the second quarter of 1997.

BAMS provides an array of payment processing and related information products and services to merchants who accept credit, charge, and debit cards as payment for goods and services. BAMS is the exclusive provider of merchant processing services for Bank of America. According to industry sources, BAMS is the fourth largest processor of merchant credit transactions and one of the largest processors of debit card transactions in the United States.

                      BA MERCHANT SERVICES, INC.
                         FINANCIAL HIGHLIGHTS

                                Table 1
           Quarterly Summary of Results and Statistical Data

                                                Three Months Ended
                                                     March 31,               
                                                 1998       1997(1)
   ($ in 000’s, except per share data)
1. Net revenue                                 $ 41,834    $ 35,969
2. Income from operations                      $ 12,724    $ 11,609
3. Net income                                  $  8,699    $  7,705
4. Operating margin(2)                             30.4%       32.3%
5. Diluted earnings per share(3)               $    .18         N/A
6. Pro forma diluted earnings per share(1,3)        N/A    $    .16

7. Total transactions processed
      (amounts in 000’s)                        154,987     107,016

8. Total sales volume processed
      ($ in millions)                          $  9,116    $  7,205

N/A  Not applicable

1    Results for the quarter ended March 31, 1997 include the
     historical results of operations for the Thailand, Philippines
     and Taiwan merchant processing businesses acquired from
     BankAmerica Corporation. The acquisition of these entities has
     been accounted for as a reorganization of entities under common

2    Pre-tax income from operations as a percent of net revenue.

                                               Three Months Ended
                                                     March 31,
3    (amounts in 000’s)                          1998   1997 Pro forma
     Weighted average number of common
      shares outstanding                         48,660    46,636
     Weighted average number of common shares
      and common stock equivalents outstanding   48,802    48,700

    Basic earnings per share amounts are the same as reported diluted
     earnings per share amounts.

                      BA MERCHANT SERVICES, INC.

                                Table 2
                        Statement of Operations

                              Three Months Ended
                                   March 31,     Increase/(Decrease)
                                1998       1997     Amount    Percent
   ($ in 000’s)
1. Net revenue                 $41,834   $35,969   $ 5,865        16%

   Operating expense:
2. Data processing and
    communications               9,249     7,668     1,581        21%
3. Salaries and
    employee benefits            9,451     8,059     1,392        17%
4. General and administrative    5,667     5,492       175         3%
5. Depreciation                  3,549     2,281     1,268        56%
6. Occupancy                       750       747         3         0%
7. Amortization of intangibles     444       113       331       293%

8.   Total operating expense    29,110    24,360     4,750        19%

9. Income from operations       12,724    11,609     1,115        10%

10. Net interest income          2,020     1,524       496        33%

11.  Income before income
      taxes                     14,744    13,133     1,611        12%

12.Provision for income taxes    6,045     5,428       617        11%

13.  Net income                $ 8,699   $ 7,705   $   994        13%

                      BA MERCHANT SERVICES, INC.

                                Table 3
                             Balance Sheet

                                             March 31,    December 31,
      ($ in 000’s)                              1998          1997
    Current assets:                 
1.    Cash and cash equivalents             $ 68,874        $ 29,426
2.    Short-term investments                  53,785          64,018
3.    Drafts in transit                      107,604         110,445
4.    Accounts receivable                     58,061          63,461
5.    Other current assets                     7,754          11,533
6.      Total current assets                 296,078         278,883
7.  Property and equipment, net               28,250          27,762
8.  Other assets                              19,556          25,422

9.      Total assets                        $343,884        $332,067


    Current liabilities:
10.   Accounts payable                         $ 277            $ 32
11.   Merchants payable                        8,757           8,058
12.   Accrued liabilities                      6,969           6,050
13.   Accrued credit card association and
       interchange fees                        8,823           9,192
14.   Income taxes payable                     7,434           3,459
15.   Other current liabilities               10,786          13,207
16.     Total current liabilities             43,046          39,998
17. Other liabilities                            858             816
18.     Total liabilities                     43,904          40,814

    Stockholders’ equity:
19. Common stock                                 486             486
20. Additional paid-in capital               252,576         252,479
21. Retained earnings                         46,979          38,280
22. Accumulated foreign
     currency translation adjustments           (61)               8
23.     Total stockholders’ equity           299,980         291,253
24.     Total liabilities &
          stockholders’ equity              $343,884        $332,067



The Association of Packagers and Carriers has selected NOVA Information Systems as its recommended provider of credit card and debit card processing for APAC members throughout the U.S.. NOVA will process and settle POS transactions for participating APAC member associates. Current credit card transaction volume for APAC members is in excess of $250 million per year. APAC members will also receive such services as SCAN check verification, free check collection, on-line debit card acceptance, ‘Auto-Close’ automatic daily batch settlement, and customization options for each establishment and terminal location.


Outsourced Certificate Authority

CyberGuard Corporation, a leading provider of network security and electronic commerce solutions, today at Networld + Interop announced the availability of TradeAuthority Version 3.0. This next-generation certificate authority outsource service enables organizations to become their own certificate authority for their employees and business partners in less than 48 hours.

“We needed to implement an in-house Certification Authority (CA) or Public Key Infrastructure (PKI) system and use digital certificates for a customer in Finland to migrate a lottery application to the web and use digital certificates,” noted Paul Anderson, director of MIS at SCA Promotions Inc., a Dallas-based event promotion company. “CyberGuard’s TradeAuthority solution enabled our customers to issue their own certificates over the web, which saved them thousands of dollars in communications costs and eliminated the need for relocating their back-end database from the U.S. to Finland.”

CyberGuard’s TradeAuthority service enables companies to manage their business processes on the web by utilizing a Local Registration Agent (LRA) for the task of managing electronic identities. With TradeAuthority, organizations register, approve, issue, deliver, administer and manage their own Entrust digital certificates online, and approve registrations and key status changes based on corporate policies and procedures.

TradeAuthority 3.0 supports a distributed liability model for digital certificates via this LRA. With this solution, organizations can remotely manage keys with a web interface and an LRA digital certificate. TradeAuthority supports all major web browsers and provides a graphical interface through which an LRA can administer their users’ certificates. The LRA can easily determine the current status of both existing and pending user certificates,  determine the user’s organization, and make necessary changes to the certificate status.

“Distributed liability is the critical factor in making a CA business- ready. Accepting the liability for one’s own employee is reasonable, but expecting that from any third party doesn’t’ work in the business world,” noted Tom Patterson, CyberGuard vice president of electronic commerce.

The new release of TradeAuthority allows the LRA to download information about their users from the CA database for use in other applications. It also lets users register and pay for certificates on-line by credit card. Additionally, certificate authority availability is improved with a new internal monitoring system that instantly notifies CyberGuard support staff of any equipment, network, or CA application  issues.

TradeAuthority is compatible with CyberGuard’s award-winning TradeVPI product suite, allowing use of digital certificates in web-based applications. TradeAuthority, in conjunction with TradeVPI, provides an immediate solution for organizations looking to securely migrate their legacy systems to the web.


TradeAuthority is immediately available and is priced at less than $9 per user, per month.      For additional product information, visit CyberGuard’s web site at [ or ][1]

About CyberGuard

CyberGuard Corporation is a leading provider of network security and electronic commerce solutions to Fortune 1000 companies and governments worldwide. CyberGuard’s award-winning, industrial-strength firewall and certificate authority products and services protect the integrity of data and applications from hackers and digital thieves. The US National Computer Security Center, the National Computer Security Association and the European Information Technology Security Evaluation Criteria have certified CyberGuard products.  The company has US headquarters in Ft. Lauderdale, Florida and branch offices worldwide. More information on CyberGuard Corporation can be found at .



MCI’s New E-Bill Service

MCI Systemhouse and NETdelivery Corp jointly announced Tuesday a strategic partnering agreement to provide secure Internet-based electronic billing and payment solutions to banks and other financial institutions and businesses. The solution leverages MCI Systemhouse’s systems integration and customer care capabilities, and NETdelivery’s Electronic Delivery Management software applications to enable financial institutions, banks and consumers to organize, manage and pay bills via the Internet. MCI estimates the total value of paper-based transactions last year to be $3 trillion, with the size of an average check from consumers and businesses pegged at approximately $170.


MobileMinutes Card

People in Pittsburgh can now get cellular service with no monthly bills, no monthly access fee, no credit checks, and no security deposit.  Bell Atlantic Mobile has introduced MobileMinutes, a pre-paid cellular calling card.

MobileMinutes cards are available for $25 or $50, and can be used for both local and long distance cellular calling.  Cards can be purchased individually and used with a customer’s existing equipment or may be bought in conjunction with a new or refurbished phone.

MobileMinutes customers will never receive monthly cellular bills and are not bound by long-term contracts.  It is a pay-as-you-go system, designed for people, seeking control over their cellular expenses.

“A MobileMinutes card is like a bank debit card that allows you to pay up- front and then reduce the balance as you use the service,” said Jerry Fountain, regional vice president for Bell Atlantic Mobile in Pittsburgh.

“We expect MobileMinutes to be popular for gift giving, for those who haven’t yet established credit, and for those who simply want the comfort and predictability of paying as they go,” Fountain said.  “This service is ideal for parents who want to give their college-bound children the security and convenience of a cellular phone, yet want to control the cost.”

At the beginning of each call, the customer is informed of the balance remaining on their account for that particular call.  They will receive a reminder tone when four minutes are left on the account, and each minute thereafter.  To buy additional MobileMinutes, customers can go into any Bell Atlantic Mobile Communications Store.  Customers can also call an 800 number and use their credit card to process payment on-line and update their MobileMinutes balance immediately.

There is a one-time activation fee of $15.  Each card is good for 60 days. When customers leave the Bell Atlantic Mobile Pittsburgh region, depending on the area visited, they may be able to place calls using their MobileMinutes card or a major credit card.


Romanian Card System

IFS International, Inc. The Romanian Bank for Development, headquartered in Bucharest, Romania and one of the largest banks in the country, has licensed the TPII product to manage its ATMs, POS devices, provide Voice Authorization and to produce international and domestic payment cards.

The systems integrator is Digital Equipment (Romania).  TPII will run on Digital Alpha Server 4100 “Tru Cluster” hardware and will provide a system to drive a network of devices accepting various types of payment cards, including Visa and Mastercard, that will grow to approximately 100 ATMs and 1000 POS terminals.  The value of the contract to IFS International exceeds $400,000.

Adrian Apolzan, the Chief of the Cards Department at RBD, stated “Our ambition is to be the largest payment card services provider in Romanian banking.  For this reason, we selected the system of Digital Equipment and IFS’ TPII product as this will provide a scaleable, reliable and fully functional solution, in line with the high status of the Romanian Bank for Development.”

Mihai Pascadi, Sales Manager, Banking and Finance, Digital Equipment, Romania commented “This project is consistent with our mission in Romania: to provide Romanian customers with state of the art fully integrated solutions to help them compete and win in their business.  Digital Romania has developed over the years a special relationship with IFS International not only due to their excellent products, but also to their proven capacity to deliver their promises.  This is the second major TPII project in Romania and we are happy to already see the signs that the project will be at least as successful as previously.”

Simon J. Theobald, Senior Vice President, IFS International added “IFS International is proud to be associated with another major Romanian bank and our worldwide partner Digital Equipment.  We look forward to assisting the Romanian Bank for Development in their ambition to become the largest payment card services provider in Romania.”

IFS International products are used to provide ATM, POS, smart card, debit card management, bank teller, bank platform, home banking and call center solutions to the financial industry.

IFS is headquartered in Troy, NY, with offices in the United Kingdom, Germany, Australia and Singapore.  For additional information in the U.S., call 518-283-7900, fax 518-283-7336, E-mail [][1], web page [][2]  For information about Europe, the Middle East or Africa, call +44-1895-823626 or E-mail [IFS-UK@IFSINTL.COM.][3]  For information about Asia call +65-97-393-474.

[3]: mailto:IFS-UK@IFSINTL.COM


New Oregon ATM Firm

TRM Copy Centers Corp. confirmed plans to form an ATM Division using a $20 million equity investment by ReadyCash Investment Partners, LP. TRM says its ATM Division will enable the company to bring ATM services to its 25,000 customer relationships in North America, as well as increase utilization of the distribution and service organization the firm has in the US and Canada. TRM is the world’s leading provider of self-service photocopying and owns over 33,000 TRM Centers located in independent retailer and multi-site national and regional retailer locations in 75 metropolitan service areas in the U.S., U.K. Canada,  Belgium and France.


Acme VISA Card

Acme Markets and U.S. Bancorp rolled-out the ‘Acme American Rewards VISA Card’ yesterday. The new Visa will allow customers to earn free food at Acme supermarkets, free airline tickets from American Airlines, free ski lift tickets at Camelback Ski Resort in Tannersville, Pa., and other travel benefits. The rewards program will award cardholders with two points for every dollar spent at Acme, and one point for every dollar spent on the card at other retailers. Cardholders begin  earning rewards once 1,500 points have been acquired.  At that level, customers can earn $100 off select vacation packages with Apple Vacations, American Vacations or Delta Vacations  Some of the other rewards customers can earn include certificates for $25 worth of free food at Acme for 2,500 points, or free American Airlines airline tickets at 25,000 points. The VISA program  will also be integrated Acme’s SuperCard loyalty program.  Acme Markets has 175 retail stores in NJ, DE, PA and MD.


Citibank’s Task Order

Citibank confirmed Monday the award of a ‘Task Order from the U.S. General Services Administration’ to provide purchase and travel charge capabilities on one integrated card platform. The two year agreement is part of a master contract award announced by the GSA in February 1998. In addition, as part of this Task Order, the GSA may also order pilot programs from Citibank, including those using smart card technology. The contract also follows on the heels of the U.S. Department of Veterans Affairs’ recent decision to award Citibank a Task Order to provide Fleet, Travel and Purchase card services.  Citibank estimates that yesterday’s Task Order will require servicing in excess of $100 million in transactions.


Delta Boosts SkyMiles

Delta Air Lines is offering a double miles promotion to members of its SkyMiles program for all paid travel on Delta in First Class and Business Class worldwide on domestic and international flights between June 15 and September 1, 1998.

Not only will SkyMiles members receive the double miles when flying on Delta, but they also will receive the standard 50 percent class of service bonus for paid First Class and 25 percent class of service bonus for paid Business Class.  In addition, the class of service bonus miles earned for travel between June 15 and September 1, 1998, on Delta, Austrian Airlines, Sabena or Swissair will apply toward 1999 Medallion qualification.

As always, Medallion level members will continue to earn their standard 25 percent or 100 percent Medallion level bonus.

Double miles for paid travel in First Class or Business Class consists of the actual mileage flown, or the Delta 500 mile minimum per qualifying flight, whichever is greater, plus a bonus equal to that same amount.

Delta carried more passengers worldwide last year than any other airline. Delta, Delta Express, the Delta Shuttle, the Delta Connection carriers and Delta’s Worldwide Partners operate 5,016 flights each day to 330 cities in 53 countries.  Delta SkyMiles members earn mileage by flying Delta, the Delta Connection carriers, Delta Express, the Delta Shuttle and Delta’s airline partners.  The Delta SkyMiles program offers many other mileage building opportunities including participating hotels, car rental companies, cruise lines, more than 2,000 restaurants, investments with Charles Schwab & Co., Inc., mortgages with North American Mortgage Company, the SkyMiles Optima Credit Card from American Express and MCI’s services.



For just one round trip between New York and Rio de Janeiro, a Gold or     Platinum Medallion member traveling as a paid First Class passenger would     earn a total of 33,523 miles-enough miles for one Coach Class ticket for     travel within or between the continental U.S. and Canada which requires     25,000 miles or for one Coach Class ticket for travel between the     continental U.S./Canada and Bermuda, the Caribbean, Hawaii or Mexico in     Delta’s SkyMiles program which requires 30,000 miles, and still have miles     left over.


    New York – Rio de Janeiro round-trip mileage (from timetable) 9,578 miles
    +Double mileage bonus                                         9,578 miles
    +100% of base for Gold/Plat. Medallion bonus                  9,578 miles
    + 50% bonus for First Class                                   4,789 miles
    TOTAL:                                                       33,523 miles

SALT LAKE CITY – ROME BY GENERAL SKYMILES MEMBER IN BUSINESS CLASS:     For just one round trip between Salt Lake City and Rome, a general     SkyMiles member traveling as a paid Business Class passenger would earn a     total of 25,938 miles, — enough for one Coach Class ticket within or     between the continental U.S. and Canada which requires 25, 000 miles in     Delta’s SkyMiles program.


    Salt Lake City – Rome round-trip mileage (from timetable)    11,528 miles
    +Double mileage bonus                                        11,528 miles
    + 25% bonus for Business Class                                2,882 miles
    TOTAL:                                                       25,938 miles


For just one round trip between New York and San Francisco, a Gold or     Platinum Medallion member traveling as a paid First Class passenger would     earn a total of 18,116 miles.  So, with just two round-trips, a Gold or     Platinum SkyMiles member traveling in First Class could earn a total of     36,232 miles– enough for one Coach Class ticket within or between the     continental U.S. and Canada which requires 25,000 miles or for one Coach     Class ticket for travel between the continental U.S./Canada and Bermuda,     the Caribbean, Hawaii or Mexico which requires 30,000 miles in Delta’s     SkyMiles program.


    New York – San Francisco  round-trip mileage (from timetable) 5,176 miles
    +Double mileage bonus                                         5,176 miles
    +100% of base for Gold/Platinum Medallion bonus               5,176 miles
    + 50% bonus for First Class                                   2,588 miles
    TOTAL:                                                       18,116 miles


Sri Lanka Debit Cards

Hypercom announced Monday a $650,000 contract to provide Sampath Bank with Hypercom POS terminals, PIN pads and networking accessing controllers. This will be the first debit card system in Sri Lanka. Under yesterday’s contract, Hypercom will supply T7 Series POS terminals, primarily the T7E and T77, S7 and S7GCB PinPads and Networking Access Controllers.   Sampath Bank is one of Sri Lanka’s top three commercial banks and the most technologically advanced with 325,000 customers.