Alliance Data Expands Fleet Card

Alliance Data Systems has acquired Financial Automation Limited (FAL), an Auckland, New Zealand-based software company.

Alliance Data is one of the nation’s largest providers of network, payment system and database services to some of the most prestigious petroleum and retail clients in the marketplace. The FAL acquisition enhances Alliance Data’s full-service petroleum processing capabilities.

Mike Beltz, Alliance Data Systems’ Petroleum and Network Services president commented, “This acquisition expands Alliance Data’s current offerings to the petroleum industry with an extensive fleet services program and enhances our position as a premier full-service provider to that industry. We are excited about the future and will continue to leverage our experience and resources to meet our clients’ needs.”

Colin Carran, FAL’s principal owner and managing director said, “We are pleased to have reached this agreement with Alliance Data Systems. Our International Fleet Card System meets or exceeds the requirements of the marketplace and will offer a competitive advantage to Alliance Data’s superb client base.”

Currently employing more than 5,500 associates at 12 locations nationwide, Alliance Data Systems offers private label processing, network services, database marketing services, merchant banking, and credit card marketing to clients in the petroleum, retail and direct-to-home satellite programming industries. Alliance Data Systems’ 12 facilities are located in Colorado, Kansas, New Jersey, Ohio and Texas.

FAL was founded in 1987, providing advanced software solutions to the retail, banking and petroleum markets. The company, which has grown to 30 employees, will continue its New Zealand operations while establishing a Dallas-based industry specialist support group for Alliance Data Systems’ customers.

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Pegasystems Adjusts Earnings

Pegasystems Inc. today reported the release of its financial results for the third quarter of 1997 which ended on September 30, 1997, and also restated results for its second quarter, which ended on June 30, 1997, based on an unanticipated issue raised by its auditors which shifted some income to future quarters.

The second quarter’s restatement and the third quarter’s earnings were impacted by the accounting for a specific set of contracts signed with First Data Resources (FDR) in the second quarter. Prior to signing, Pegasystems discussed prospective accounting structure and treatment of those contracts with the company’s auditors, and concluded its negotiations following their advice. In late October, Pegasystems management was surprised by a revised assessment by its auditors. Faced with this reversal, further accounting advice was engaged to assist in the analysis of those contracts, and the company has begun a selection process for a successor accounting firm.

FDR became a Pegasystems customer and relicensor in the second quarter of 1997, and Pegasystems believes the relationship is progressing excellently with substantial successes to date. Pegasystems’ overall market and financial expectations from the FDR relationship have not changed. The revised accounting treatment shifts $5 million recognized in the second quarter of 1997 out into future quarters. Based on this accounting treatment, the Company expects approximately $750,000 of incremental revenue per quarter for the 21 quarters starting in the fourth quarter of 1997.

Alan Trefler, Pegasystems’ President said, “We continue to be very pleased with the success of our products in the marketplace, both in our traditional financial service applications and in the additional vertical markets that we have targeted. I am pleased to announce that Pegasystems now has 11 global offices, with our recent opening of offices in Atlanta and Charlotte. We have also implemented a new program to recruit and train Certified Solutions Providers from other respected organizations to further leverage our staff and products. We believe that the prospects for our business are very strong, and our expectations for the future are unaffected by the revenue timing issue we experienced in Q2 and Q3.”

The Company’s loss for the third quarter was $2.2 million (or 8 cents per share), a decrease of 203.3% over the $2.2 million (or 8 cents per share) earned during the same period in 1996. Revenues for the third quarter were $7.0 million, a 26.7% decrease as compared to $9.6 million for the third quarter of 1996.

The Company’s loss for the nine months ended on September 30, 1997 was $1.3 million (or 5 cents per share), a decrease of 137.6% over the $3.6 million (or 14 cents per share) earned during the same period in 1996. Revenues for the nine month period were $23.5 million, a 12.0% increase as compared to $21.0 million for the comparable period in 1996.

The figures set forth above for periods after December 31, 1996 are unaudited.

About Pegasystems Inc.

Pegasystems develops customer service management software to automate customer interactions across transaction-intensive enterprises. Many of the world’s largest banks, mutual funds, and credit card organizations use the Company’s solutions to integrate, automate, standardize, and manage a broad array of mission-critical customer service activities.

Pegasystems’ headquarters is located in Cambridge, Massachusetts, with regional offices in North America, Europe and Australia. Pegasystems’ telephone number is 617-374-9600, and additional information about Pegasystems can be obtained through the World Wide Web at .

Forward-Looking Statements

Except for the historical information contained in this announcement, the matters discussed in this announcement are “forward-looking statements” (as that term is used in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties detailed from time-to-time in the Company’s filings with the Securities and Exchange Commission (the SEC). In particular, Pegasystems draws the reader’s attention to the “Risk Factors” stated in the Company’s Registration Statement on Form S-1 dated January 22, 1997 and its accompanying Prospectus, the Company’s Annual Report on Form 10-K dated March 31, 1997, as well as to the Company’s periodic and current reports as they are filed with the SEC.

PEGASYSTEMS INC.
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
(Unaudited)

Three Months Ended Nine Months Ended
September 30, September 30,
Revenue 1996 1997 1996 1997
Software license $6,502 $3,273 $12,896 $13,734
Services 3,064 3,737 8,060 9,742
Total revenue 9,566 7,010 20,956 23,476

Cost of revenue
Cost of software license 118 86 354 106
Cost of services 2,017 2,786 5,006 7,151
Total cost of revenue 2,135 2,872 5,360 7,257
Gross Profit 7,431 4,138 15,596 16,219

Operating expenses
Research and
development 2,361 3,992 5,883 9,418
Selling and marketing 1,614 4,480 3,870 11,070
General and
administrative 541 675 1,329 1,833
Total operating
expenses 4,516 9,147 11,082 22,321
Income from operations 2,915 (5,009) 4,514 (6,102)

License interest income 381 476 1,127 1,271
Other interest income 273 922 296 2,669
Interest expense (16) — (85) —
Income before provision
for income taxes 3,553 (3,611) 5,852 (2,162)
Provision for
income taxes 1,386 (1,372) 2,285 (822)
Net income $2,167 $(2,239) $3,567 $(1,340)

Net income per common
and common equivalent
share $0.08 $(0.08) $0.14 $(0.05)
Weighted average number
of common and common
equivalent shares
outstanding 26,991 29,756 25,952 29,528

PEGASYSTEMS INC.
Condensed Consolidated Balance Sheets
(in thousands, except share-related amounts)
(Unaudited)

December 31, September 30,

Cash and cash equivalents $24,201 $54,555
Trade and installment
accounts receivable, net of
allowance for doubtful
accounts of $939 at
December 31, 1996
and $545 at
September 30, 1997 14,582 20,431
Prepaid expenses and
other assets 1,235 4,616
Total current assets 40,018 79,602

Long-term license
installments, net 23,802 27,141
Equipment and improvements,
net 3,035 4,679
Purchased software, net — 9,601
Total assets $66,855 $121,023

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and
accrued expenses $ 2,697 $2,566
Deferred revenue 53 1,291
Deferred income taxes 2,904 814
Total current liabilities 5,654 4,671

Deferred income taxes 8,816 10,085

Stockholders’ Equity:
Preferred stock, $.01 par value,
1,000,000 shares authorized;
no shares issued
and outstanding — —
Common stock, $.01 par value,
45,000,000 shares authorized;
26,392,200 shares and 28,541,000
shares issued and outstanding at
December 31, 1996 and
September 30, 1997,
respectively 264 287
Additional paid-in capital 30,206 82,782
Deferred compensation (73) (59)
Stock warrant — 2,897
Retained earnings 22,022 20,682
Cumulative foreign currency
translation adjustment (34) (322)
Total stockholders’ equity 52,385 106,267
Total liabilities and
stockholders’ equity $66,855 $121,023

PEGASYSTEMS INC.
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
(Unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
1997 1997
1996 (RESTATED) 1996 (RESTATED)
Revenue
Software license $3,874 $3,983 $6,394 $10,462
Services 2,575 3,250 4,996 6,004
Total revenue 6,449 7,233 11,390 16,466

Cost of revenue
Cost of software license 118 10 236 20
Cost of services 1,584 2,346 2,989 4,365
Total cost of revenue 1,702 2,356 3,225 4,385
Gross Profit 4,747 4,877 8,165 12,081

Operating expenses
Research and development1,918 3,015 3,522 5,426
Selling and marketing 1,282 4,081 2,256 6,590
General and
administrative 399 595 788 1,158
Total operating
expenses 3,599 7,691 6,566 13,174
Income from operations 1,148 (2,814) 1,599 (1,093)

License interest income 378 421 746 796
Other interest income 11 998 23 1,747
Interest expense (30) — (69) —
Income before provision
for income taxes 1,507 (1,395) 2,299 1,450
Provision for income taxes 588 (530) 899 551
Net income $919 $ (865) $ 1,400 $ 899

Net income per common and
common equivalent share $0.04 $(0.03) $0.06 $0.03

Weighted average number
of common and common
equivalent shares
outstanding 25,359 29,674 25,432 29,413

PEGASYSTEMS INC.
Restated Condensed Consolidated Balance Sheets
(in thousands, except share-related amounts)
(Unaudited)

December 31, June 30,
1996 1997

Assets
Current assets:
Cash and cash equivalents $24,201 $72,511
Trade and installment
accounts receivable, net of
allowance for doubtful accounts
of $939 at December 31, 1996
and $671 at June 30, 1997 14,582 17,744
Prepaid expenses and
other assets 1,235 1,620
Total current assets 40,018 91,875

Long-term license
installments, net 23,802 27,604
Equipment and improvements, net 3,035 3,832
Total assets $66,855 $123,311

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and
accrued expenses $ 2,697 $3,250
Deferred revenue 53 2,176
Deferred income taxes 2,904 1,865
Total current liabilities 5,654 7,291

Deferred income taxes 8,816 10,406

Stockholders’ Equity:
Preferred stock, $.01 par value,
1,000,000 shares authorized;
no shares issued
and outstanding — —
Common stock, $.01 par value,
45,000,000 shares authorized;
26,392,200 shares and 28,487,600
shares issued and outstanding at
December 31, 1996 and
June 30, 1997, respectively 264 287
Additional paid-in capital 30,206 82,584
Deferred compensation (73) (63)
Retained earnings 22,022 22.921
Cumulative foreign currency
translation adjustment (34) (115)
Total stockholders’ equity 52,385 108,714
Total liabilities and
stockholders’ equity $66,855 $123,311

SOURCE Pegasystems Inc.

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SMARTALK’s UK Push

SMARTALK(SM) TeleServices, Inc. and its wholly owned subsidiary, SMARTALK TeleServices Ltd., announced today the signing of a definitive agreement with Manchester, UK based NORWEB Communications (a United Utilities member company) to act as SMARTALK’s UK service partner to provide all network and switching facilities for SMARTALK’s UK traffic. Through the agreement NORWEB shall provide the necessary telecommunications network service which will enable SMARTALK to cost-effectively launch its prepaid calling card products and services to retail distribution channels in the UK and Europe. Through the arrangement SMARTALK shall also provide NORWEB the enhanced call processing systems necessary to launch prepaid calling card products and interactive services to corporate customers using SMARTALK’s technical expertise.

“This agreement gives us tremendous advantages as we begin selling SMARTALK prepaid calling cards in the UK market,” stated SMARTALK Chairman and CEO, Robert H. Lorsch. “It combines our companies’ respective core competencies — NORWEB’s established network and transport facilities and SMARTALK’s expertise in prepaid services, including technology, call-flow, manufacturing, marketing and distribution of prepaid telecommunications products through retail distribution channels. The advantages to both companies include lower costs and superior technology.”

Under terms of the agreement NORWEB Communications will also offer calling card products using SMARTALK features and call-flow under the brand name NORWEB Global Talk to its affiliate UU Group companies and to existing and future business customers including `customer loyalty’ and `consumer incentive’ programs.

“We are particularly pleased to be partnering with NORWEB. This agreement gives us switching facilities in the UK, ensuring our ability to become a competitive participant in the UK market without reducing the company’s overall gross margins,” continued Mr. Lorsch. “In addition to our recently-announced relationship with WH Smith, this agreement provides access to additional potential distribution channels in the UK through NORWEB’s prestigious customer base which includes Airtours, Manchester Airport, First Choice Holidays, University of Manchester and Center Manchester Healthcard NHS Trust.”

Both SMARTALK’s retail product, and NORWEB’s Global Talk product will include state-of-the art features including messaging facilities, and will operate from most anywhere in the world. SMARTALK, through its wholly owned UK subsidiary, SMARTALK (U.K) Ltd., will provide application and program development, and the calling card switching facility expertise. Mark Ballett, Managing Director of NORWEB Communications, said, “This agreement with SMARTALK, the leading player in the North American prepaid phone card industry, provides a perfect match of skills. We are delighted to partner with such an aggressive industry leader. What enthuses us most is SMARTALK’s ability to seek and gain major retail distribution, as evidenced by their recent long-term agreement with WH Smith. As a partner, this signals a very strong message as to SMARTALK’s commitment to the UK and European marketplace.”

SMARTALK currently maintains distribution agreements with mass merchandisers, consumer electronics retailers, supermarkets and home office superstores in North America including Office Depot, Future Shop, CompUSA, Pep Boys, Venture Stores, The Good Guys, Staples, Service Merchandise, Osco Drug, Sav-On Drug, OfficeMax, Dominick’s Finer Foods, Eckerd Drug, Food4Less, Ralphs Supermarkets, Bradlees, Marshall Field’s, Best Buy, Fingerhut and Builders Square, as well as university book stores and convenience stores. SMARTALK also offers specialized value-added promotional phone card programs to corporate clients including Gillette, Hewlett-Packard, Wells Fargo Bank, Nabisco, Pfizer and Prudential Securities. The Company maintains strategic marketing partnerships with Choice Hotels and HFS, the two largest hotel franchisers in the world, along with Simon DeBartolo Group, the largest publicly-traded real estate company and operator of shopping malls in North America.

Based in Los Angeles, with additional offices in Boston, Orlando, San Francisco and Toronto, SMARTALK is a member of the Telecommunications Resellers Association, International Telecard Association and the Consumer Electronics Manufacturer’s Association.

NORWEB Communications, part of United Utilities plc, is a public telecommunications network operator and currently offers a range of high quality voice and data telecommunications services to the business sector. NORWEB has an extensive trunk network in the north west of England based on fiber optic, microwave and traditional technologies.

Note: Certain statements made herein that are not historical are forward-looking within the meaning of the Private Securities Litigation Reform act of 1995. Such statements include, but are not limited to, the ability of the Company to complete the transactions with WH Smith and NORWEB Communications, which are both subject to certain conditions, potential access to additional distribution channels, the cost-effective launch of prepaid calling card services in the UK, lower costs, maintaining of gross margins, and the potential to become competitive participants in the UK market. Investors are cautioned that all forward-looking statements involve risks and uncertainties including, without limitation, risks related to receptivity of retailers’ customers to the Company’s products and services; market acceptance and consumer demand for the Company’s products and services, completion of the specified agreements and pricing dependence on third-party vendors. Investors who seek more information about the Company’s business and relevant risk factors may wish to review the Company’s SEC reports, including, but not limited to, its Annual Report on Form 10-K for 1996, and quarterly reports on Form 10-Q.

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shopfast.com

It’s THAT time again. Whether they’ve been naughty or nice, Billy still wants a “Radio-Controlled R2 D2,” Chrissy won’t face her school friends without “Dentist Barbie” in tow, your sister is restless for the Simon & Garfunkel CD boxed set, and your husband is dropping hints about a new sand wedge.

The holiday crunch is on. You can battle your way through traffic jams, people jams and bad weather, or you can do it the easy way — use ShopFast ( ) — a convenient, new online shopping solution, where the gifts you need are a click away.

The ideal solution for holiday hassles and gift-buying procrastinators, ShopFast is the new interactive retail “hub,” where online customers can quickly and easily browse through an upscale collection of brand-name catalog “boutiques” from the comfort of their own computers. The ShopFast environment consists of a carefully chosen family of upscale “storefronts,” to appeal to a broad range of consumers, with additional brand-name marketers enhancing the site daily.

Currently, ShopFast’s roster of sites includes: Simon & Schuster Interactive; Collectors’ Choice Music; Competitive Edge Golf; TeleFlora; Critics’ Choice Video; Toy Factory; Repechage Cosmetics & Skin Care; de Granvelle Chocolate; Style On Line; Kosher Grocer; and Discount Travel, among others.

“ShopFast was created to save people time, money, and a whole lot of headaches,” says company president and co-creator Ronny Yakov, an 18-year veteran of the communications and graphic arts industry. “Jumping from retail site to retail site on the Web can be as frustrating as elbowing your way through crowds at the mall. With one click, ShopFast delivers high-quality online catalogs directly to a user’s fingertips. Our superior sites, combined with our high-speed connection, has made this holiday shopping season a pleasure, not a chore.”

Customer Convenience & Security

Customers visiting ShopFast can rapidly access storefronts of interest, where they can examine different products, access special offers, and add their purchases to an “online shopping basket” which automatically takes them through a secure check-out process. The exclusive, proprietary ShopFast Cashier(TM) offers four payment options to suit the personal preferences and comfort levels of each customer. Customers can order online using their credit card; they can sign online electronic “checks” (both of these options are fully protected by ShopFast’s cutting-edge encryption software); they can access an 800 number for each site, where they can place their order over the phone; or they can request a customer service representative from the selected sites to call them back to make the transaction.

Industry Growth/Consumer Research

The arrival of ShopFast comes at a time when the online retail industry stands poised for explosive growth. “Online shopping is going to be bigger than anyone expects, no matter what kind of projections they’re making,” stated Andrew Kantor, editor-in-chief, Internet Shopper. “It’s going to blow people away in the next five years. It’s going to change the face of commerce, business, and even international politics — in ways we can only guess. If you think the fight between Amazon.com and Barnes & Noble is big, just wait.”

Projections by Forrester Research estimate online retail sales reaching $1.14 billion in ’97, $2.3 billion for ’98, and a skyrocketing $6.6 billion by the year 2000. User figures are exploding, with most analysts estimating that there are presently between 35 and 50 million users online worldwide; by year 2000 that figure is expected to skyrocket to between 163 million and 1 billion users online.

According to Internet Shopper Magazine, of an estimated 45 million Internet users in the United States, between 35 and 40 percent of them have made an online purchase, or between 15.75 million and 18 million people. Worldwide estimates predict that by the end of 1997, about $1 billion worth of consumer transactions will have taken place (approximately $300 million during the holiday season alone). By the year 2000, between $40 billion and $60 billion worth of consumer transactions will take place on the Internet.

A recent survey of online and Internet households by NFO Interactive found 55% of respondents made purchases via the Internet in ’96, with 89% of online holiday shoppers indicating that they were pleased with their interactive shopping experience, and 58% planning to do more in 1997.

About ShopFast

Headquartered in New York, ShopFast ( ) is a division of leading communications services company, ColorBank Digital Sources, Inc. ShopFast is a commercial Internet development partner that creates and operates customized direct marketing Web sites for manufacturers, distributors and retailers. It currently consists of 12 online retail sites, with a projected total of 18 high-quality sites by end of year. ShopFast uses its expertise in electronic commerce setup, transaction processing, and online marketing to help clients effectively sell their products and services on the Web.

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FirstClass PhoneCards

About 60% of purchasers of the ‘FirstClass PhoneCard’ say they purchase the card as a gift. The prepaid phonecard is issued by American Express and distributed via the U.S. Postal Service. This year, and for the first time, the phone cards will become available through many USPS stamp vending machines. The rechargeable and replaceable phone cards are also being offered in a special ‘Kwanzaa’ and ‘Hanukkah’ designs this year.

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ScrippsLink Launched

La Jolla headquartered Scripps Bank announced the introduction of their new 24-Hour on-line home banking service with bill pay, ScrippsLink(TM). ScrippsLink(TM) can be accessed through your personal computer, ScreenPhone, telephone, and the World Wide Web.

ScrippsLink(TM) allows customers to transfer funds between ATM linked accounts, reconcile balances, review account activity, generate interim statements, review product information, link to accounts at other U.S. institutions, communicate with Scripps Bank via e-mail, and download account information into personal financial management software, such as Quicken(R) or Microsoft(R) Money. Additionally, there is the option to utilize Bill Pay Service with ScrippsLink(TM). Scripps Bank is offering its on-line Bill Pay free for the first 90 days of service. For more information, please come in to one of our seven offices or visit our Web site at [www.scrippsbank.com][1].

Scripps Bank is an independent commercial bank that offers a “Private Banking” atmosphere and tradition of quality service for individuals and businesses in the La Jolla, San Diego, North and East County areas. Headquartered in La Jolla, Scripps Bank has regional offices in El Cajon, Escondido, Kearny Mesa, Encinitas and Point Loma, a downtown San Diego office, and offers Trust, Corporate Banking, Small Business Administration, International, and Residential Lending services. Scripps Bank was recently named the “#l Small Business Friendly Bank in California” by the Office of Advocacy. For the fifth consecutive year and the eighth time, Scripps Bank has been recognized as a Premier Performing Bank by the Findley Reports.

[1]: http://www.scrippsbank.com

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China Prefers AmEx

Meanwhile American Express held a signing ceremony in Washington, DC yesterday with the China National Tourism Administration designating the American Express Card as the “Official Card of Tourism for China” from 1998 until the year 2000. AmEx first received the designation in 1994 and subsequently established a joint Tourism Training Center with China Tourism College training 600 tourism industry managers. AmEx currently has four proprietary offices and 30 representative offices throughout the country. Bank of China says AmEx cards account for 45% of all foreign card spending in China, representing 15% of China’s total tourism-related foreign exchange earnings.

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Changing Top 10

The recent sale of the BONY portfolio to Chase and the sale of Advanta to Fleet will add 1.0% to the aggregate marketshare of the “Top 10” issuers by year end. If the AT&T portfolio is sold before year’s end it could alter the lineup further, possibly adding another 2% share if sold to another “Top 10” issuer. Based on historical fourth quarter activity and current growth rates, MBNA will be within $3 billion of unseating Citibank as the nation’s largest issuer by year’s end.

Top 10 Scoreboard (ranked by receivables in $billions)
Third Quarter 1997 Fourth Quarter 1997
1. Citibank 46.5 1. Citibank 48.4
2. MBNA 41.6 2. MBNA 45.5
3. Banc One 38.9 3. Banc One 41.4
4. Discover 34.9 4. Discover 37.1
5. Chase 27.4 5. Chase 32.4
6. Frst Chic 17.3 6. Frst Chic 17.9
7. Household 16.0 7. Household 17.5
8. AT&T 14.2 8. AT&T 14.7
9. Cap One 12.9 9. Fleet 13.5
10. Advanta 10.5 10. Cap One 13.2
Total: 260.2 281.6
Marketshare: 62% 63%
Source: Bankcard Barometer/Bankcard Update/CardData

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AmEx to License Smart Card File Structure

American Express Corporate Services announced today that it will license its smart card multiple function file structure to other companies worldwide. By making it broadly available, American Express is encouraging widespread adoption of the file structure to achieve global interoperability among smart cards, particularly in the travel and entertainment industry.

Several large companies already have expressed interest in licensing the file structure. American Express also plans to cooperatively adapt the file structure for various smart card platforms and to enhance and upgrade it on an ongoing basis.

“With our American Express Smart Corporate Card, we have shown the value of convenience and control that multiple application smart cards provide business travelers and corporations,” said Ed Gilligan, President, American Express Corporate Services. “As more companies offer smart cards in the travel and entertainment arena, it is critical that the industry work toward standards to achieve interoperability.”

“The opening of our smart card development work to others in the industry demonstrates our unwavering commitment to interoperability, the single most important challenge facing the smart card industry today,” added David Boyles, Senior Vice President, Electronic Commerce at American Express. “Only through interoperability will we achieve a level playing field where competition spurs innovation and better products for our customers.”

American Express is a leader in developing smart card solutions, testing a variety of smart card applications that will speed travelers past check-in points at airports, hotels and car rental agencies, enhance loyalty and reward programs, and streamline the entire travel expense management process. The company introduced the first multiple function smart card test in the hospitality industry with Hilton Hotels Corporation and IBM in May of this year, and is conducting two of the largest smart card tests in the airline industry with Continental Airlines and American Airlines. American Express also is working with the government in a multiple application smart card test.

The American Express smart card file structure currently includes personal and corporate/government agency profile information, airline, hotel, car rental, charge, credit and physical access functionality. It incorporates existing open industry standards, such as the International Air Transport Association (IATA) standard for airline smart cards.

American Express Corporate Services, which includes the American Express Corporate Card, Business Travel Services and Corporate Purchasing Card, assists companies in managing and controlling their business travel expenses. It is a unit of American Express Travel Related Services Company, Inc., a wholly owned subsidiary of the American Express Company — a diversified worldwide travel, financial and network services company founded in 1850. American Express () is a leader in charge and credit cards, stored value products, travel, financial planning, investment products, insurance and international banking.

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Australia Prefers VISA

VISA International announced from London yesterday it has become the preferred payment card for Sydney, New South Wales and Australia. The Sydney agreement also covers the ‘2000 Olympic Games’. Specifically VISA signed marketing partnership agreements with the Sydney Convention & Visitors Bureau, Tourism New South Wales and the Australian Tourist Commission. As part of the agreements VISA will offer customized Australia Travel packages exclusively to cardholders, and discount rates for travel, hotel, dining and purchases via VISA’s ‘International Destination Program’.

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ICVERIFY & Merchant Builder

ICVERIFY Inc. today announced that its electronic transaction processing software now integrates with The Internet Factory’s electronic commerce software, Merchant Builder 2.2. Also today, The Internet Factory announced Merchant Builder 2.2, the new version of its online store creation package.

Together Merchant Builder and ICVERIFY enable merchants to build online stores that process credit card transactions and deposit funds to merchant accounts at over 99% of all U.S. banks. Using ICVERIFY, merchants can process Visa, MasterCard, American Express, Discover Card, Diners Club, Carte Blanche, JCB and private-label credit cards. Merchant Builder and ICVERIFY will be of particular interest to VARs and ISPs because the products offer the ability to manage multiple stores located on a single server. With appropriate licensing, multiple merchants can process transactions with a single copy of ICVERIFY and each merchant can have drafts captured to their own bank account.

“The integration of ICVERIFY’s credit card processing solution continues our commitment to allow our customers to choose from among the best third-party tools,” said John Murray, vice president of marketing at The Internet Factory. “Our integration of ICVERIFY’s software also provides an easy way for their current customers to expand their businesses to include an online store.”

“We’re pleased that The Internet Factory has decided to build an integration to ICVERIFY for this latest release of Merchant Builder,” said Karen Tate, Director of Internet Markets for ICVERIFY Inc. “As this product continues to gain momentum in the marketplace, The Internet Factory’s customers will be able to add transaction processing functionality to their Web storefronts easily and affordably. Because ICVERIFY software has processor certifications covering more than 99% of US banks, merchants can choose from the best available discount rates for e-commerce. ICVERIFY software is offered as a one-time software license so merchants will never pay an additional per-transaction fee for using ICVERIFY.”

Key Merchant Builder Features:

1. Fully Customizable. Full Site Magic eXpansion (SMX) source code so that store functionality can be changed for industry and customer needs.

2. Remote Store Management via the Web. All store functions can be managed from within a Web browser using online forms. Last minute store updates and product changes also can be created remotely over the Web.

3. Fully Integrated Payment Solution. Merchants with existing credit card processing accounts can accept and verify credit card payments using ICVERIFY or Cybercash.

4. Enhanced Customer Management. Merchant Builder automatically retains customer addresses, phone numbers and email information as orders are processed. This data can be printed as reports or exported to other programs.

5. Enhanced Product Types. Merchants can configure multiple “SKU sets” for products that have many variable attributes such as size, color and material.

6. Enhanced Order Notification. Order notification can be made using email and automatic fax notification (requires third party product).

7. Enhanced Reporting. Sales, sales tax liability, and customer order activity can be aggregated into a variety of reports. Information can be printed or exported to any word-processor, spreadsheet, or database mailing list.

Merchant Builder 2.2 is shipping with a single store price of $1,495.

About ICVERIFY Inc.

ICVERIFY Inc., a privately held, venture capital-funded corporation with U.S. headquarters in Oakland, Calif., and European headquarters in Munich, Germany, is the leading software solution for authorizing credit, purchase, debit/ATM card and check guarantee transactions and is used by more than 250,000 physical and virtual points of sale.

ICVERIFY supports more than 100 major card processing networks and has certifications covering the retail, restaurant, hotel, mail/telephone order, auto rental, travel and gasoline industries. The software processes Visa, MasterCard, American Express, Discover Card, Diners Club, Carte Blanche, JCB and private-label credit cards, with automatic draft capture to the merchant’s bank account. ICVERIFY’s functionality includes the ability to support multiple merchant environments. Its reporting and query features enable the merchant to track and to edit transactions efficiently and effectively. ICVERIFY can be reached through the Internet at or by calling 800-666-5777.

About The Internet Factory

The Internet Factory, founded in 1995, is a software solutions developer focused on creating Internet applications for building electronic stores and selling wares on the Internet. The company has developed Merchant Builder 2.2, an easy-to-use electronic commerce solution for ISPs, developers and non-technical merchants, and Commerce Builder 3.0, a sophisticated Web server suite with HTTP, proxy, and chat servers.

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ProMark Extends Major Issuer Contract

ProMark One and one of the nation’s largest and most reputable credit card issuers recently cemented their 1½-year relationship by signing a long-term telemarketing services agreement.

The agreement constitutes a 3-year, multi-million dollar commitment, whereby ProMark One will become one of a select group of contracted vendors providing telemarketing services in support of the client’s marketing of credit card products. These telemarketing services include outbound telemarketing in support of the acquisition of new credit card customers. The agreement contains certain hourly guarantees, which are contingent upon meeting pre-established performance and quality standards.

ProMark One, a wholly-owned subsidiary of International Data Response Corporation (IDRC), is a leading provider of outsourced teleservices, specializing in customized telesales solutions for the financial services and banking industries, among others. One of the nation’s largest and fastest growing teleservices providers, ProMark One has nearly 3,800 employees and 2,400 workstations in 15 locations. Through the IDRC network of companies, ProMark One has access to over 1,600 additional workstations in 17 locations throughout the US and Canada.

ProMark One will continue to open new centers and dedicate resources as needed to support the agreement and the growth of the project. Currently, the client’s programs are being conducted in five ProMark One call centers, located in Arizona, Pennsylvania, and Nevada.

ProMark One and its client entered into this strategic alliance to support the increased demand for the client’s credit cards that has resulted from an industry-wide acceptance of telemarketing as an efficient marketing channel for credit card-related products and services. All involved parties should benefit substantially, as the agreement means additional capital and resources for the continued growth and expansion of both companies’ marketing efforts.

Jeff Stiefler, Chairman and CEO of IDRC (ProMark One’s parent company) said, “This agreement cements our partnership with this client, and represents a source of stability and growth for both ProMark One and IDRC.”

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