Easyflex & FastOS

Following its successful launch in Europe and South America, Schlumberger Smart Cards & Terminals is introducing the Easyflex smart card with FastOS operating system in North America. Serving as an electronic passport for access/identification and transportation applications, the innovative Easyflex card combines conventional contact-based transactions requiring a card reader with contactless operation — all in a single smart card chip. The flexible, dual-interface technology allows an issuer to customize the card to meet multiple needs. For instance, corporations can use the Easyflex card as an employee ID card to provide secure, fast access to buildings and computer networks, as well as for stored value transactions at on-site cafeterias and vending machines. The card is also ideal for transportation, since operators can issue the card as a ticket, and also link it with other card systems for additional applications, such as retail, banking and e-purse transactions.

“Transportation operators worldwide are beginning to understand the advantages of smart ticketing technology,” stated Jonas Andersson, business segment director, Schlumberger Smart Cards & Terminals. “The flexible architecture of the Easyflex card and its FastOS operating system allow issuers to immediately take advantage of a more efficient means of ticketing, while providing development options for other types of future transactions.”

Innovative Easyflex Projects Underway in Europe and South America

Brazil — EasyFlex Combines Identification, Transport and Financial Transactions

With 1.5 million citizens, Curitiba, Brazil is beginning a city-wide program that will put Easyflex smart cards into the hands of its entire urban population. During phase one, 30,000 municipal employees will be given a smart card which functions as a local government ID and access card, a payment card for retailers and a passport to preferential services with a participating bank.

These applications will be followed by electronic ticketing for local bus services, which will operate in contactless ‘walk by’ mode. Starting in 1998, the program will be extended to families of municipal employees, and then to the city’s entire population, making Curitiba the world’s first city-wide showcase for the convenience and flexibility of smart cards.

According to government officials, this smart card program reduces costs and speeds the development of Curitiba’s commercial infrastructure, helping to make major improvements in the quality of life in this major commercial center in Southern Brazil.

Finland — Easyflex Links Nationwide Bus Network

Easyflex is providing Finland’s diverse bus network with a single card solution that can be used for nationwide travel on ticketing systems ranging from high-speed contactless terminals used by mass transit operators in major cities, to contact card terminals used on most rural and inter-urban routes. The program provides a common card and clearing service for a network of more than 400 bus operators. A successful user of contact-based smart cards for nearly five years, the Matkahuolto system is switching to Easyflex to accommodate operators who want to use higher-speed contactless cards and terminals.

Easyflex cards can contain just a ticket and the associated administration data, or an electronic purse, which can be used anywhere on the network for buying tickets or for reloading the stored value. One of the key features of the Easyflex card is a high level of security for reloading the electronic purse. Matkahuolto plans to extend the e-purse capability to additional transactions in its transport network, such as refreshments and newspapers.

FastOS — the Flexible Operating System for Wireless and Contact-based Transactions

Easyflex features the powerful new operating system from Schlumberger, FastOS, which enables the wireless and contact-based transactions to run side by side. Easyflex and FastOS build on Schlumberger expertise in both the contactless radio-frequency proximity card market, and in the mainstream contact smart card sector.

The Easyflex contact interface draws on the Schlumberger world-leading Multiflex(TM) technology, which has formed the basis of numerous payment card applications for world-leading banks and credit card companies. The contactless radio frequency (RF) interface is compatible with the Mifare protocol, a technology which currently accounts for around 90 percent of the world’s contactless electronic transport ticketing applications. The FastOS operating system is compatible with the complete range of emerging industry standards for transport cards — including ISO14443A contactless operation), prENV1545 (data structures), and IATA’s specification for airline travel — and with key standards in the mainstream card environment, such as ISO7816, the EMV payment specification, and prENV1546 for e-purses.

About Schlumberger

Schlumberger Smart Cards & Terminals offers a flexible portfolio of smart card-based solutions for businesses and communities of all kinds. The company provides cards, terminals, development tools and support in open configurations for operators, developers, integrators and distributors worldwide. Under The Smart Village(R) brand, the Schlumberger offer includes the milestone Cyberflex(TM) card, the industry’s first Java(TM)-based smart card. The Smart Cards & Terminals group operates 45 facilities in 34 countries across the globe. Additional information is available on the World Wide Web at [http://www.slb.com/et/][1]. Schlumberger Smart Cards & Terminals is a business unit of Schlumberger Limited, a $10.65 billion global technology service company providing oilfield services, natural resource management, transactions based technology and associated systems, and semiconductor test equipment.

[1]: http://www.slb.com/et

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Industry Pulse

March may turn out to be a turning point for the card industry as delinquency and chargeoffs stabilized while yields continue to climb. The bankruptcy component of chargeoffs declined for the second consecutive month. Meanwhile annual fees, late fees and over-limit fees are still spiraling upward as average card interest rates turn south for the fourth straight month. The good news comes from the April issue of Card Management Information Services’ ‘Bankcard Barometer’.

                             INDUSTRY  STATS
      Standard APR:     18.76%           Delinquency:      5.41%
      Standard Fee:     $18.25            Chargeoffs:       5.54%
      Gold APR:          17.83%           Bankruptcy:      40.2%
      Gold Fee:         $35.34            Attrition:        8.24%
      Late Fee:         $19.38            Fraud Losses:     0.18%
      Overlimit Fee:    $18.59            Yields:          13.46%
        Source: Bankcard Barometer, April 98 issue

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Showing Off Card Stuff

The ‘CardTech/SecurTech ’98’ expo gets underway this morning in Washington, D.C. as hundreds of vendors gather to show-off their high tech card stuff. Giesecke & Devrient America said Friday they will demo the first multi-currency ‘VISA Cash’ smart card on the Internet. The card utilizes G&D’s ‘STARCOS SVO’ operating system. G&D also announced it will demonstrate its new ‘C@ppuccino’ Java smart card and development toolkit. The new toolkit can be used in smart cards for a wide variety of applications including secure payment, telecommunications, multimedia and transportation.

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NBS Names Eng VP

Fred Mueller, president of NBS card Technology Corporation, a subsidiary of NBS Technologies Inc., is pleased to announce the appointment of William Sherman III as Vice President of Engineering. In this position, Sherman will oversee NBS’s mechanical, electrical and software development efforts. He will also advise the company on the development and use of technology for new products.

Prior to joining NBS, Sherman was employed for 21 years by Brandt Inc., where he held several key positions: most recently, he served as Vice President of Systems Software Development. In that position, he was responsible for operations in the company’s retail cash management and financial vault automation systems division, where he oversaw the creation of software application products and system integration for coin and currency processing systems.

While at Brandt, he developed and implemented the world’s first and most sought after high-speed Counterfeit Detection System for U.S. currency and the World’s first embedded processor high-speed currency counter, coin sorter controller and cash settlement system.

Sherman holds a BS in Electrical Engineering and an MS in Engineering Management from Drexel University.

NBS Technologies, Inc. is a multinational company that designs, manufactures and markets an integrated line of plastic card, card issuance, identifications and point-of-sale products, services and software. Customers, who cover a wide range of market segments and applications, include financial institutions, retailers, government agencies and healthcare organizations. NBS Technologies Inc. is a Toronto-based public company that sells to customers in over 85 countries through facilities located in Canada, the United States and the United Kingdom.

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New CCS President

Card Capture Services, Inc.(CCS), a leading independent provider of ATMs nationally, announces the promotion of David Grano to company president. The reorganization occurred mid-March when former president and co-founder Jeff Jetton announced his desire to focus more on broad company initiatives and less on day to day operations.

As president, David Grano will lead corporate initiatives and strategic planning. He will also retain his seat on the company’s board of directors. A former high ranking Nextel Communications executive, Grano joined CCS in November of 1996 as vice president of marketing and distribution. As such he created and oversaw implementation of an expanded marketing and distribution strategy to drive national distribution for the company’s ATM products and services. As a result, company sales grew from $16 million in 1997 to $27.5 million in 1998.

“Since joining CCS, Dave has made an enormous contribution to the company,” commented Jetton. “I am confident that this transition will strengthen CCS, and position the company well for future growth.”

Jeff Jetton will continue as CEO and chairman of the board. As such, he will manage the president to company initiatives, lead merger and acquisition activity, identify new products and increase shareholder value. He will also continue to lead board initiatives as chairman. Jetton and co-founder Steve Wright’s contributions to Oregon’s entrepreneurial growth were recognized last year by the Oregon Entrepreneur Forum with the Oregon Service Entrepreneur award, one of the state’s highest business honors.

Card Capture Services, Inc.(CSS) was incorporated in 1993, in Portland, Oregon. CCS offers turnkey ATM programs providing transaction processing, machine maintenance, customer service, accounting and reporting to a growing base of merchant owned and operated Automated Teller Machines(ATMs) nationwide. By tapping non-traditional and unsaturated markets, CCS is leading the wave of independent ATM deployments nationally. The company currently has 50 employees and a nationwide network of 30 independently contracted dealers.

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VISA & Golden Bear

VISA teed-off last night with a new national TV commercial featuring golf legend Jack Nicklaus. The 30-second spot called ‘Higher Learning’ promotes the Nicklaus/Flick Golf Schools with the message that the school does not take American Express. The promotion is part of VISA’s ongoing marketing partnership with Golden Bear Golf. VISA also sponsors a national tour of golf clinics produced by Nicklaus/Flick.

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CTST Opens

The rapid advance of chip-based card technology (smart cards) and biometrics has spawned ambitious plans by corporations and government to link individuals more intimately to the “wired” world. At the juncture between what technology can do and how people will use it are a myriad of legal, regulatory and policy issues. The same technologies which make it easier and safer to function in cyberspace, potentially pose threats to: How consumer rights are protected How industries are structured How commerce is conducted How government oversees fairness for its citizens and competition among companies CardTech/SecurTech (CTST) ’98, which will attract nearly 10,000 attendees from more than 70 nations, will provide an intensive forum on these and other issues during the week of April 27-30, 1998. Located at the Washington Convention Center in Washington, DC, CTST will play host to many of the world’s leading authorities on electronic commerce, business law, privacy, and government regulation. These experts will discuss pressing issues currently weaving their way through the legislative and regulatory processes, as well as through the courts of law and public opinion. Some of the topics to be explored include: The liability and insurance issues associated with certificate authorities that will attest to the authenticity of people in their financial, legal and personal dealings over the net. The effect on law enforcement and taxing authorities as they cope with new environments in their efforts to suppress money laundering, fight organized crime and collect taxes. The ability of privacy regulation and compliance to keep pace with the ever increasing complexities of modern information networks. “One of the fascinating aspects of debates that arise when discussing personal technologies such as smart cards, cryptography, and biometrics is that the same tools that can protect people’s privacy and assets, can also be seen as intruding on their personal lives,” said Ben Miller, CTST founder and conference chair. “Discussion between the people building the systems and the people charged with safeguarding the public trust is the only way to ensure a future that is both beneficial and acceptable to everyone.”

With the rapid adoption of card and security technology in both domestic and international markets, concerns have been justifiably raised regarding user privacy and authentication. Recent cases of “identity” theft highlight the risks of using old fashioned paper documents, passwords and written signatures. Not only are these methods ill-suited to emerging electronic systems, they are easily foiled by criminals. The creation of sophisticated systems for replacing written signatures with digital ones is one of the most pressing requirements for electronic commerce and information sharing. Banks, governments, and information providers recognize that an all new infrastructure must be built to facilitate life in a “wired” world. While the technological challenges are daunting, the larger hurdles lie in structuring the systems to accommodate legal requirements and protect citizens.

In addition, cultural changes are occurring as use of the Internet penetrates deeper into the population. Since its early days, the Internet has been a place where many people assume a level of anonymity, at least in some of their electronic dealings. A higher level of security and trust can be provided by smart cards, digital signatures and biometrics, yet users may still feel uneasy about their identity being known. Recent studies have shown that, for the majority of people, security of electronic transactions is a prerequisite to their becoming regular “net” users.

Legal, Regulatory and Policy Issues Impact in Private Sector First To date, government bodies have primarily monitored the development of technologies and how industries are planning to use them. Private sector entities have regularly been warned by elected officials and regulatory bodies to be sensitive to consumer rights and attitudes. In response, a number of existing and newly formed industry groups have been setting guidelines for how the new technologies will be applied. Among these are the Smart Card Forum, Smart Card Industry Association, and the Banking Industry Technology Secretariat (BITS) of the Banker’s Roundtable. Representative of these organizations will participate in discussions at CTST ’98 as will luminaries from both the public and private sector including: Robert Pitofsky, Chairman of the Federal Trade Commission, will discuss government views on privacy and antitrust regulation in cyberspace. Thomas J. Smedinghoff, Chairman of the Electronic Commerce Division of the American Bar Association and partner of McBride, Baker & Coles in Chicago, will present at length the legal issues surrounding digital certificates and electronic authentication. Andrew Pincus, General Counsel at the U.S. Department of Commerce, will discuss international initiatives to create uniform laws and standards for electronic commerce. Jeff Ritter, Director of Document Authentication Systems and former Director of Ohio State University’s ECLIPS, will explore the legal aspects of electronic document origination and authentication. John Burke, Partner of Foley, Hoag & Eliot, will examine the issues of security and privacy associated with multi-application cards that provide access to the services of banks, travel companies, government agencies and other groups on a single smart card. Bob Litan, Director, Economic Studies Program at the Brookings Institution, will focus on balancing privacy policy with changing consumer perceptions. Stuart Baker, Partner at Steptoe & Johnson, will examine international issues associated with cryptography including domestic and export controls, digital signatures and certificate authorities. Columbia Law School Professor Alan Westin, Publisher of Privacy & American Business, will share guidance on consumer, employee and citizen privacy issues and how corporations should handle their interaction with government and consumer groups. Finally, Thomas Vartanian, Managing Partner of Fried Frank, Harris, Shiver & Jacobson’s DC office, and Chair of the American Bar Association’s Committee on Cyberspace Law, organized the legal, policy and regulatory track at CTST and will moderate the day-long program scheduled for Thursday, April 30.

For more information on CTST seminars and conference programs, please contact Liz Wenchel at (301) 654-0551.

About CardTech/SecurTech CardTech/SecurTech (CTST), founded in 1991, is the world’s most prestigious conference and exhibition covering advanced smart card and security technology. Recently purchased by Faulkner & Gray, Inc., publisher of Card Technology and Smart Card Alert, CTST focuses on applications of card and related technology solutions for banking, the Internet, telecommunications, mass transit, security, retail, loyalty, government, and health care. Information about the organization, sponsors, program topics, and exhibition can be found via the Web at .

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Back in the Saddle

After a sluggish 97 Household Bank showed a strong first quarter. New card accounts originated were nearly double the level a year ago due to increased marketing initiative over the past few months. Household also noted yesterday that chargeoffs related to personal bankruptcies declined for the second consecutive quarter. According to Card Management Information Services’ 1Q Portfolio Survey Household added more than 700,000 accounts during the first quarter.

                     HOUSEHOLD  1Q  SNAPSHOT

                    1998-1Q             1997-4Q
     RECV       $17,336,014,000     $17,314,186,000
     Q VOL      $ 8,139,392,000     $ 9,689,549,000
     ACCTS          16,760,000         15,692,000
     ACTIVES         7,846,000           7,411,000         
     CARDS          22,627,000          21,184,000
     Source: Card Management Information Services

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Reloading Cards via Internet

Product Technologies Inc. (PTi) today announced that Internet revaluing of smart cards can now be accomplished using SmartCity 4, its turnkey smart card-based e-purse (electronic purse) application that also provides a multi-application development platform and tools to systems integrators. This enhancement makes it possible for SmartCity smart card holders to load cash to their e-purse(s) via the Internet from such devices as PCs and interactive kiosks.

To add more cash value, the user inserts a smart card into a PC/SC-compliant smart card reader. The user then accesses the participating financial institution’s Web site via a standard Web browser and selects the smart card revalue option. The application prompts the user for a smart card PIN and the amount of money the user wishes to add to the card’s purse. Pertinent account information is then securely read from the card and transmitted with the revalue request to the financial host for routing to the appropriate authorization network. If authorized, the cardholder’s account is debited or charged and the value loaded to the card’s purse. In addition to the revalue function, cardholders may also view purse balances and their last 10 transactions.

The availability of this new technology means that a user no longer needs to travel to a bank to load e-purse funds; the card can be revalued securely without the user ever having to leave home. The demand for this kind of convenience is evidenced by a new study from Killen & Associates which forecasts a smart card revaluing market of $26.5 billion by 2005.

“This advanced Internet-based technology that we have developed for SmartCity is a first, and it responds to a strong market need to provide the consumer with increased convenience, as well as security in electronic purse transactions,” said Bill Mangino, PTi’s president and chairman. “PTi remains committed to delivering these technological advances to our customers in anticipation of market demand.”

The Internet Revalue feature of SmartCity 4 will be demonstrated at CardTech/SecurTech `98 in Booth No. 1230. The show will be held at the Washington Convention Center in Washington D.C. from, April 28-30, 1998.

Pricing And Availability

The Internet Revalue feature of SmartCity 4 will be available in June 1998. Price varies according to customer’s existing SmartCity installation.

About PTi

PTi is a leading supplier to systems integrators of smart card-based e-purse applications that can be used in combination with loyalty and other applications. It is headquartered in Middletown, CT, with a branch office in Moscow, Russia. Further information on the company can be found at: .

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