VISA SpendTrak Update

At the midway point of the holiday shopping season retail credit card charge volume is holding to a 12.4% increase over last year, and total card volume, since the Thanksgiving weekend, is up 13%. VISA says its U.S. holiday retail purchase volume hit $15.6 billion and total U.S. volume hit $19.4 billion as of December 11. VISA also says retail transactions thus far, total 236 million versus 205 million last year.

VISA U.S. RETAIL MAP
Pacific $3.0 (+13.7%) Southeast $3.3 (+13.4%)
Northeast $3.3 (+11.7%) Mountain $1.0 (+13.6%)
Southwest $1.3 (+11.7%) Grt Plains $1.0 (+11.7%)
Grt Lakes $2.7 (+10.7%)

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Open MULTOS Platform

Open platforms represent the key to the successful adoption of smartcards around the world, today claimed Hugh Kingdon, Vice President, Marketing of MAOSCO, the cardsortium created the drive the adoption of MULTOS as an industry standard multi-application smartcard platform.

Speaking at the CardTech SecurTech ’97 conference in San Jose, Hugh Kingdon said, “The development and ultimate success of the smartcard depends on the provision of an open, global, highly secure, multi-application platform. It is this that will enable and drive the mass adoption of the smartcard in the same way that products such as DOS and Windows drove the development of the computer industry.

“Only with an open, multi-application platform, will consumers embrace smart cards into their private and work lives, because open platforms will enable a wide range of products and services, providing new levels of functionality, convenience and security.

“My role, and role of the MAOSCO consortium therefore, is to deliver MULTOS as an open, secure standard and to vigorously defend this openness.

“Any card issuer can issue MULTOS cards and it is the card issuer alone who determines which applications and products reside on their MULTOS cards. MULTOS may be freely used to support products or services which are competitive to those of consortium members MasterCard and Mondex.

“There are no restrictions on who may produce MULTOS cards or on the silicon platform that must be used. Card fabricators and silicon providers do not even need to take a license.

“It is quite wrong to assume that MULTOS activity is restricted to MAOSCO consortium members. The MULTOS market is truly open. The role of the consortium is to control the MULTOS specification and to ensure the openness of the platform, on behalf of, and to the benefit of, the whole industry.”

MULTOS provides the card issuer with the flexibility to target an individual consumer by bringing together a unique combination of products and services on a single card – within a framework of security and control.

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WolfMart Online

Tired of long lines? Too much to do, too little time? Capitolnet Marketing Group, along with Action Graphics and First Union National Bank, have made it possible for Wolfpack fans to order merchandise directly on-line. As of December 4, 1997, WolfMart, North Carolina State University’s online catalog, is now completely interactive. Sam Matheny, General Manager of Capitolnet Marketing Group, said, “We are very excited about this opportunity and off to an excellent start with over $1,000 in orders in the first three days of business.”

“What an innovative, fun way to shop. Open Market software has enabled NCSU fans across the nation easy access to their favorite Wolfpack gear,” said Julie McCarthy, Marketing Assistant for Capitolnet Marketing Group. The ability to order 24 hrs a day, 7 days a week makes WolfMart a convenient way to shop. WolfMart is now fully functional with transactions being processed by First Union National Bank. Credit card security is ensured as transactions are handled using Open Market’s Transact and SecureLink software.

With the holidays just around the corner, a golf shirt, sweat shirt, duffel bag or embroidered hat can be a great gift idea for any Wolfpack fan. A wide selection of logos and colors allow shoppers to personalize many of the gift items available.

That’s not all fans can find here. Capitolnet Marketing Group was one of the first to provide college football ticket sales online. This service has now been extended to include Wolfpack women’s basketball and gymnastics tickets. Please visit for more information. You may contact us at wecare@gopack.com.

About Capitolnet Marketing Group

![][1] Capitolnet Marketing Group (CMG), a division of Raleigh-based Capitol Broadcasting Company Inc., specializes in Internet-based marketing including advertising, commerce and multi-media production services. CMG (http://www.capitolnet.com) provides businesses with innovative marketing solutions by developing and managing websites and Internet applications that provide informative and entertaining content.

About First Union

![][2] First Union offers access to a full array of products and services through its Internet home page (). Customers may purchase merchandise online as well as check balances in their checking, savings, money market, CAP, credit card, IRA, loan and time deposit accounts. First Union’s Cyberbanking customers also can pay bills and transfer funds between eligible First Union accounts, re-order checks and issue stop payment requests.

Charlotte-based First Union Corporation (NYSE: FTU) provides financial products and services to more than 12 million customers nationwide. First Union is the nation’s sixth-largest bank holding company with $143 billion in assets as of June 30, 1997.

[1]: /graphic/capitolnet/capitolnet.gif
[2]: /graphic/firstunion/firstunion.gif

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ETA Annual Expo

Electronic Transactions Association will be Jazzin’ It Up in New Orleans for the group’s 1998 Annual Meeting & Exposition. Because of the success of our earlier tradeshows, we have doubled the size of our 1998 expostion to over 80 exhibit booths. Over 500+ attendees are expected to participate in what has become THE acquirers meeting in the electronic transactions industry. Cutting edge acquiring industry seminars will be presented by dynamic speakers and will include: Opportunities into the Next Millenium — Invited speaker Carl F. Pascarella, President of VISA, U.S.A. ReInventing Your Enterprise Invited speaker Allen Neuharth, Chairman & President of USA Today Strategic Positioning for the Future — Invited speaker Albert irato, President of Hypercom, Inc. There’s More Out There… Marketing Opportunities — invited speaker Fred Gumbel, President of Vital Processing Service Value-Added Selling to Merchants Setting Up A Merchant on the Internet Sponsorship and Exhibit opportunities are available, for information call ETA (800) 695-5509. Meeting registration materials will be available mid December.

The Electric Transactions Association is a national not-for-profit trade association representing organizations offering electronic transaction processing products and services. Our membership represents leading companies providing services between merchants and settlement banks; financial institutions; and businesses providing equipment or services to the industry. ETA was organized to influence policy within the industry by providing leadership through education, advocacy and the exchange of information.

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Global Acquires ECS

Global Games Corp./Global Communications, Inc. , announced Thursday that it has acquired 100% of Electronic Card Services, Inc., Miami, Florida.

ECS is in the business of providing electronic cash cards accepted by major retailers. As more and more organizations accept payment through electronic means, electronic card services provide a method by which cash can be exchanged for electronic cash which can then be redeemed at retailers, phone companies and online. ECS is doing business in the U.S. and Canada, primarily with prepaid phone cards marketed via machine dispensing.

Through its affiliation with Global Communications, the cash card applications of ECS will be broadened to allow consumers to use the card for chat line, prepaid cellular usage, and Internet access via 800 phone numbers for travelers seeking to avoid high cost alternatives. More applications will be available…virtually equaling a debit card. Global will also provide numerous new high volume sites for the cards to be dispensed, as well as Internet marketing support.

According to Telecard World Magazine, electronic cash card sales in 1997 will approximate $2.2 million for prepaid phone card usage alone, with growth to $4.3 billion by the year 2001.

ECS booked $450,000 in revenue in its last quarter. Revenue for 1998 is forecast to be at $14 million with pre-tax profit of approximately $7 million.

Global’s acquisition price for ECS was $1.6 million, made up of 4 million shares of Global stock (restricted) and $800,000 in cash.

Global Communications provides commercial Internet services, third party credit card processing, and Internet entertainment with bingo and lotto games.

A letter of intent was recently signed to acquire all of the stock of Integrated Consumer Entertainment, Ltd., an Illinois-based provider of dating chat line and other services in several major U.S. markets. Completion of this acquisition is expected later this month.

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Economic Concerns

With corporate layoffs surging and consumer debt soaring there is concern on Wall Street this morning that credit card-backed securities will be affected next year. Fitch IBCA’s December issue of “Credit Card Movers and Shakers” says the pace of corporate cutbacks during the past two months as well as the pickup in consumer credit in October is “worrisome”. Total layoffs announced thus far this year exceeds 450,000 jobs, the second highest year in U.S. history. During October consumer credit increased 10.5%, the fastest rise in more than a year. Fitch says the current, historically high chargeoffs and consumer bankruptcies are the result of the abundance of available credit generated between 1993 and 1995, a period when many Americans were out of work or working at lower paying jobs due to prior cutbacks.

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Linking Up

VISA and MasterCard separately announced new alliances with online services yesterday to promote electronic commerce. MasterCard entered into a partnership with Boston-based Consumer World to launch a new online service called ‘Price Check’. The ‘Price Check’ service enables consumers to comparison shop among multiple online discount merchants by entering a product name into CW’s automated search engine. Consumer World is a Web site consisting of more than 1,700 consumer-related links. RAM Research’s Web sites are designated by Consumer World as the “hottest” and “best bet” site for credit card information. Meanwhile VISA signed agreements with online news broadcaster PointCast to promote e-commerce. Under terms of the agreement VISA will be designated as PointCast’s preferred and default payment method and cardholders will receive special benefits.

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Vital Snags BB&T

Vital Processing Services (Vital), a leading, full-service merchant services provider, announced the signing of a multi-year merchant processing agreement with Winston-Salem, N.C.-based BB&T Corporation.

Under terms of the agreement, BB&T will use Vital’s Authorization/Data Capture and Clearing and Settlement Services. BB&T will be converting its entire portfolio of 27,000 merchants to Vital’s back-end merchant processing system.

“Vital is pleased to offer an important bank such as BB&T complete merchant processing solutions,” said Fred Gumbel, CEO and president of Vital. “This valuable business partnership means that BB&T can now enjoy fully- integrated processing solutions, world class customer service and tremendous cost savings.”

“We selected the Vital platform over various processing platforms because Vital offers higher quality service, and its system functionality is superior to what we have today,” said Scott Qualls, senior vice president and manager of BB&T’s Revolving Credit Department.

BB&T (NYSE: BBK), a multi-bank holding company with $27.2 billion in assets, operates 485 banking offices in 256 cities in North Carolina, South Carolina and Virginia. BB&T is a full-service commercial and retail bank that also offers additional financial services, such as insurance, investments, leasing and trust. More information on BB&T is available at the bank’s Web site, .

Vital Processing Services (Vital) is a leading full-service merchant processing company. Its clients include financial institutions that provide credit card processing to their merchant customers. Headquartered in Tempe, Ariz., Vital offers financial institutions operational services that enhance business solutions without competing for their merchant business. Its services include merchant POS products, electronic authorization and data capture; clearing, settlement and exception processing; merchant accounting, billing, and reporting; operational fulfillment services (including the outsourcing of chargeback and retrieval processing); risk management; and customer service. Vital is a merchant processing joint venture of Visa(R) U.S.A. and Total System Services, Inc.(R) (NYSE: TSS) (TSYS(R)) ( ). Vital’s Internet address is .

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Another One Exits

The shakeout in the bank credit card industry continues as First Maryland Bancorp agreed yesterday to sell off its entire portfolio to BankAmerica Corporation. First Maryland Bancorp’s portfolio includes the card business of subsidiaries First Omni Bank (DE) and Dauphin Deposit (PA). At the end of the third quarter First Omni had $576 million in receivables while Dauphin Deposit held $47 million, according to CardData. Terms of the sale were not disclosed other than to confirm the $623 million portfolio was sold “at a premium”. One year ago First Omni broke through the $1 billion mark in receivables riding on the success of its Bell Atlantic cobranded program. During the third quarter the issuer sold off the Bell Atlantic portion to Chase Manhattan. Yesterday’s announcement will boost BankAmerica’s card portfolio to $10.7 billion in receivables.

First Maryland Snapshot (before selloffs)
RECEIVABLES ACTIVES CARDS
First Omni $1,003,378,000 516,428 1,545,626
Dauphin Dpst $ 46,719,559 39,559 71,914
Source: Bankcard Update/CardData (2Q-97 data)

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Read Me A Story Sponsors

Capital One Joins VISA-RIF Program

Capital One Bank sponsored a local performance of “Read Me a Story” for more than 500 children at Capital One’s Dallas/Fort Worth facility on Thursday. Mayor Kenneth Barr of Fort Worth joined the cast of Visa’s Reading is FUNdamental (RIF) literacy roadshow to promote the benefits of reading with the children of Capital One’s more than 500 associates, as well as the students of his alma mater, D. McRae Elementary School.

“The ability to read well is the cornerstone of an informed citizenry and a productive work force, but critical for the continued success of our city. The City is a strong supporter of the Fort Worth Independent School District and its goal that all students will become proficient readers by the end of the second grade. To help achieve this goal, we are fortunate to have the commitment of Capital One and Visa to help our young people get excited about reading,” said Mayor Kenneth Barr of Fort Worth.

“The Visa ‘Read Me a Story’ program is an excellent opportunity for us all — parents, teachers, local businesses and the more than 6,000 associates of Capital One — to promote the benefits and excitement that go hand in hand with education and reading a book,” said Mitch Beres, Capital One’s D/FW Site Manager. “All of us at Capital One are thrilled to share this opportunity with our Fort Worth Adopt-A-School partner, D. McRae Elementary School. Capital One associates are committed to making a difference in the community as volunteers and mentors with adopt-a-school and other community projects.”

An emphasis on reading improvement in Texas and in such cities as Fort Worth is already making a significant impact. Fort Worth’s public schools are in the second year of an Elementary Reading Initiative that has seen reading improvements ranging from 1 – 12 percent in six grades on the Texas Assessment of Academic Skills (TAAS).

“The ‘Read Me a Story’ program reinforces the benefits of reading to — and with — children from their earliest years,” said Mike McGinley, Director of Risk Operations for Capital One’s D/FW location. “We are pleased to support the efforts of local teachers and administrators to improve reading by supporting programs like ‘Read Me a Story,’ which encourages children and parents to enjoy reading together.”

Reading is FUNdamental is the nation’s oldest and largest nonprofit children’s literacy organization, serving over 3.8 million children each year through 17,000 RIF sites throughout 50 states, and involving the help of 219,000 volunteers. Last year, RIF put more than 10 million books in children’s hands. Reading is FUNdamental has provided more than 173 million books since its founding in 1966 and celebrated its 30th birthday last year. For more information on “Read Me a Story,” call toll free (888) 703-READ (703- 7323) or visit the “Read Me a Story” Web site at [222.visa.com/readme/][1].

Headquartered in Falls Church, Virginia, Capital One Financial Corporation is a financial services company whose principal subsidiaries, Capital One Bank, and Capital One, F.S.B., offer consumer lending products. Capital One’s subsidiaries collectively had 10.7 million customers and $13.5 billion in managed loans outstanding as of September 30, 1997, and are among the largest providers of MasterCard and Visa credit cards in the world.

National City Sponsores VISA-RIF Program

National City Corporation and Visa U.S.A. have teamed up to help address what has been labeled as a national reading crisis in America.

Recent studies reveal:

* Over 40 percent of the nation’s fourth graders can’t read at the basic level for their grade.

* 60 percent of high school seniors can’t read at the level they should.

* Only half of young children routinely are read to by their parents.

* There is a direct correlation between parental involvement and reading comprehension.

On Friday, December 12, 1997 approximately 530 youngsters from Prospect and Christ the King elementary schools will assemble in the Shaw High School auditorium located at 15320 Euclid Ave. to hear stories read aloud by some of America’s favorite storybook characters and receive a book donated by National City. The outreach effort is part of a nationwide fundraising and reading awareness campaign called “Read Me A Story” being undertaken by Visa U.S.A. Inc. to benefit Reading is Fundamental (RIF), America’s oldest and largest children’s nonprofit literacy organization.

This is the second year National City and Visa have hosted the event in Cleveland. The tour will visit approximately 24 cities during the holidays to spread the joys of reading to children across America. National City also sponsored shows in Pittsburgh, Pennsylvania, Louisville, Kentucky, Columbus, Ohio and Indianapolis, Indiana in this year’s tour.

Visa has guaranteed a $1 million minimum contribution to RIF related to Visa card sale transactions from November 1 through December 31, 1997. Proceeds will be distributed in 1998 to 3,000 participating local RIF programs around the country to help children read.

“This is a very important event,” states Mimi Shenk, assistant vice president and director of community sponsorships at National City. “These youngsters are America’s future. National City applauds this program.”

Children will be treated to a 30-minute original music performance filled with dancing, singing and a special story reading by the entire “Read Me A Story” storybook cast including: Angelina Ballerina, Babar, Clifford the Big Red Dog, Curious George, Peter Pan and many other favorite storybook characters.

National City Corporation Profile

National City (NYSE: NCC) is a $53 billion diversified financial services company headquartered in Cleveland, Ohio. National City operates banks and other financial services subsidiaries principally in Ohio, Indiana, Kentucky, and Pennsylvania. On December 1, 1997, National City announced a definitive agreement to merge with First of America Bank Corporation, a $22 billion bank holding company headquartered in Kalamazoo, Michigan. That transaction is expected to close in the second quarter 1998, subject to regulatory and stockholder approval. National City can be found on the Internet at .

Rite Aid tro Sponsor VISA-RIF Program

Rite Aid is teaming up with Visa to support Reading Is Fundamental (RIF), the largest children’s literacy organization in the nation.

Visa’s “Read Me a Story” program will visit the Great Lakes Mall in Mentor on Friday, Dec. 12 at 4pm. Five popular children’s characters such as Peter Pan, Little Red Riding Hood, Mother Goose, and Clifford the Big Red Dog will take the stage in the common area of the mall about 500 feet from Rite Aid.

After the fifteen-minute performance the characters will meet and greet children at the front of the mall and pass out bookmarks and balloons.

In addition, each time someone uses their Visa card for a purchase at any Rite Aid store in December a portion of the sale goes to RIF.

Visa has guaranteed a $1 million minimum contribution to Reading Is Fundamental, related to Visa card sales transactions from Nov. 1 through Dec. 31, 1997. Void where prohibited or restricted.

Rite Aid is involved with numerous charities such as Children’s Miracle Network and the company’s own Mother’s Day Mammograms(R) program.

Mother’s Day Mammograms(R) is designed to raise awareness of the importance of early detection of breast cancer. The program offers free mammograms to thousands of uninsured and underinsured women through a unique network of public and private sector partnerships.

Rite Aid is a major sponsor of the Children’s Miracle Network and this year raised $1.3 million for local Children’s hospitals in 26 states.

Rite Aid pharmacists also participate in community outreach programs by teaching elementary students about poison prevention, holding flu and childhood immunization clinics, educating high school students about responsible use of medication, and informing senior citizens about drug interactions.

General information about Rite Aid, including corporate background and press releases, is available free of charge through the company’s website at .

[1]: http://222.visa.com/readme/

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U.S. Wireless Raises Cash

U.S. Wireless Data, Inc. announced yesterday it has concluded a private placement pursuant to Regulation D of the Securities Act of 1933 by which the Company raised gross proceeds of approximately $3,000,000.

The instrument gives the holder the right to convert principal into shares of USWDA’s common stock in the future at 80% of market price, but not lower than $4 per share for the first 270 days and no higher than $6 per share. The investment instrument carries an 8% coupon, which drops to a 4% coupon once the underlying shares of common stock are registered with the Securities and Exchange Commission.

The coupon is payable in shares of the Company’s common stock. The investment also provides the Company with redemption privileges. The proceeds will primarily be used as working capital to fund the national launch of the Company’s proprietary wireless transactions processing solutions and to repay existing obligations.

The Company plans to file a report on Form 8-K with the Securities and Exchange Commission setting forth further details with respect to the financing.

USWDA also announced it plans to file an application with NASDAQ within the next 21 days for inclusion of its shares to be re-listed and traded on the NASDAQ Small Cap stock market. Re-listing would give the common stock greater visibility and prominence in the financial community. Moreover, trading data of the Company’s common stock would be widely distributed by wire services for dissemination by newspapers and other media.

Evon Kelly, CEO of USWDA stated, “This financing completes the first and most important phase of our turnaround and squarely positions the company to attack the marketplace with its wireless transactions processing solutions. It also shows renewed investor confidence in U.S. Wireless Data and its business strategy. Further, we are excited about the possibility of a future re-listing of our common shares on the NASDAQ Small Cap Market.”

USWDA’s proprietary enabling technology, TRANZ(TM) Enabler, converts a merchant’s existing dial-up TRANZ VeriFone credit-card terminal into a high-speed wireless terminal. It provides merchants with a faster and more cost efficient way to transact business.

The wireless transaction takes 3 to 5 seconds verses 11 to 20 seconds with a dial-up service. Going wireless means the merchant no longer needs a dedicated or shared telephone line to carry transaction traffic, thereby eliminating delays, busy signals and the cost to install or pay for monthly telephone service.

U.S. Wireless Data announced in August, 1997, a joint marketing and operating agreement with GTE Wireless, the wireless business unit of GTE Corp., to distribute USWDA’s TRANZ Enabler wireless credit card processing system using GTE’s cellular CDPD network.

U.S. Wireless Data, Inc. has developed, tested and is now delivering compelling new proprietary products, programs and standards to the transaction processing and credit card industry which utilize Cellular Digital Packet Data (“CDPD”) wireless networks.

USWDA delivers the fastest and most cost-effective transaction processing solution to retail merchants in the United States today — wired or wireless. USWDA will generate recurring revenue from every transaction processed by merchants who utilize the Company’s CDPD wireless technology.

The Company’s strategy will be to deploy its technology through marketing and partnership agreements with major cellular phone companies, regional and community banks, select ISO’s and its own sales force.

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