NPC Wins SW Contract

Southwest Airlines has signed a five-year contract with National Processing Co., keeping the company as its processor for MasterCard and Visa credit card transactions, the two companies announced today.

“National Processing is the best in its field when it comes to credit card processing for the airline industry. Just like our own customers, Southwest demands the best when it comes to service and value, so it was only natural that we would continue our relationship for the mutual benefit of both companies,” said Southwest chief financial officer Gary Kelly.

The contract renewal secures National Processing’s place as the nation’s premier provider of processing services for the travel industry. National Processing processes credit card transactions for six of the nation’s 10 largest airlines, including Southwest. It also provides processing and settlement services for every airline ticket sold through the nation’s 48,000 travel agencies.

Southwest chose National Processing to handle its credit card transactions after putting its contract out for competitive bids from the nation’s major processing providers this summer.

“The travel industry has and will continue to be a mainstay of our business. We’re quite pleased that a high-growth industry leader such as Southwest has chosen to continue its relationship,” said National Processing executive vice president Tom Wimsett. “While we’ve been working hard to diversify our customer base with the addition of many smaller customers as of late, we are still committed to the larger customers that have historically provided the bulk of our business. Southwest’s decision to stay with us demonstrates our commitment to this important segment of the market,” Wimsett added.

National Processing handled more than 14 million credit card transactions for Southwest in 1996. Because of the airline’s continued growth, National Processing is currently on track to handle more than 15 million transactions for the airline this year, the two companies reported.

Profile of National Processing Company

National Processing is the operating subsidiary of National Processing, Inc. (NYSE: NAP) and is a leading provider of transaction processing services and customized processing solutions. Deploying technology and applications software, the Company provides products and value-added services which include processing of card and check transactions for merchants, outsourcing of administrative and financial functions, and ticket processing and settlement for providers of travel-related services. National City Corporation (NYSE: NCC), a $52 billion financial services company based in Cleveland, Ohio is the majority owner of National Processing, Inc.

Profile of Southwest Airlines

Southwest Airlines, the fifth largest domestic carrier in terms of Customers boarded, currently serves 51 cities in 25 states. Based in Dallas, Southwest currently operates more than 2,200 flights a day with a fleet of 252 Boeing 737s with an average age of 8.0 years — one of the youngest pure jet fleets in the domestic airline industry.


First Data Acquires Funds Associates

First Data Investor Services Group, Inc., the mutual fund and distribution services business unit of First Data Corporation (NYSE: FDC), announced today that it has acquired Funds Associates Ltd. (FAL), a major provider of technical solutions for the financial services industry. Terms of the transaction were not disclosed.

FAL, based in Berwyn, Pa., is a privately held specialist data management company whose clients include Wells Fargo, BancOne and Edward Jones. Among its services, FAL has developed SuRPAS, one of the industry’s leading data processing and mutual fund shareholder capabilities systems. SuRPAS will enable First Data Investor Services Group to provide clients with the tools to access a variety of asset allocation and wrap product programs as well as entry into the mutual fund supermarket arena.

“The acquisition of FAL further expands our strategic commitment of ‘Redefining Distribution’ by enabling First Data Investor Services Group to provide the most innovative and complete mutual funds data services available in the industry,” said Jack Kutner, president of First Data Investor Services Group. “This capability is a key component of our strategy to provide clients with the technological tools, service platform and professional expertise to identify, sell and service customers across multiple distribution channels. We expect FAL to be an important part of our growth as we approach the new millennium.”

FAL will operate as a separate business unit of First Data Investor Services Group in the provision of sophisticated data processing solutions.

Commenting on the acquisition, Dick Lucas, president of FAL said, “Our proven capabilities and First Data Investor Services Group’s clear commitment to the bank, broker and fund marketplace form a natural alliance. This combination will enable us to reach our shared vision for the future.” With a servicing portfolio of more than $500 billion, First Data Investor Services Group is one of the nation’s leading providers of mutual fund services to banks, investment advisory firms and mutual fund complexes. With approximately 2,700 employees, the company currently services more than 16 million shareholder accounts and operates 24 hours a day, seven days a week. In addition to its headquarters in Westborough, Massachusetts, First Data Investor Services Group maintains operations in Georgia, Maryland, North Carolina, Rhode Island and Virginia.

Hackensack, N.J.-based First Data Corporation is a global leader in payment systems, electronic commerce and information management products and services. First Data and its principal operating units process the information that allows millions of consumers to pay for goods and services by credit, debit or smart card at the point of sale or over the Internet; by check or wire money.

For more information about First Data, please visit us on the Internet at .


VISA’s Fall Promotion

Visa U.S.A. and 23 upscale retail stores nationwide today invited Visa cardholders to a “Tribute to Style” and the chance to win $25,000 of the world’s most chic clothing, jewelry and accessories.

By using a Visa card at any participating store from October 1 through the end of November, consumers will be given a unique fold-out “invitation to style” with the chance to win one of thousands of prizes. The “Tribute to Style” promotion is an extension of the Rodeo Drive charity event, co-sponsored by Visa, of the same name which took place on September 21.

The grand prize winner will receive a $25,000 Rodeo Drive shopping spree, two tickets to one of Hollywood’s hottest awards shows, personal wardrobe consultation by ‘stylist to the stars’ Patty Fox and a copy of her book, Star Style. Twenty-five first prize winners will enjoy a $5,000 shopping spree on Rodeo Drive, consultation with Patty Fox and a copy of her book. There will be 2,500 second prize winners who will receive Star Style. Everyone will win style advice through a fun and informative fashion tip in the fold-out invitation.

The “Tribute to Style” promotion marks a continuation in Visa’s efforts to promote upscale retailers. Visa recently completed two Visa Gold promotions: the “Shop, Dine and Stay” retail and destination promotion, involving more than 500 prestigious retailers, fine restaurants and luxury hotels across the country, and sponsorship of Bon Appetit’s Wine and Spirits Focus in Chicago.

“The ‘Tribute to Style’ promotion is really a tribute to Visa’s retail partners and cardholders,” said Tom Edwards, senior vice president, market development and acceptance, Visa U.S.A. “Retail promotions like ‘Tribute to Style’ help our retail partners increase traffic in their stores nationwide and at the same time reward our customers. In addition, retailers experience the benefits of accepting the world’s largest payment method — such as guaranteed payment, incremental sales increases with card usage, and higher average ticket purchases.”

Stores on Rodeo Drive and participating stores throughout the country will have the “invitations to style” for distribution to consumers who make purchases with their Visa cards. Merchants include Bang & Olufsen of America, Christian Dior, Cole Haan, David Orgell, Davidoff of Geneva, Denmark Jewelry, Ermenegildo Zegna, Escada, Escada Sport, Fendi, Fred Hayman Beverly Hills, Fred Joailler, Gianfranco Ferre, Giorgio Beverly Hills, Guess?, Hammacher Schlemmer, Harry Winston, J.P. Tods, Lalique, Lladro, Louis Vuitton, Nicole Miller, and Sulka.

“Partnering with Visa U.S.A. for the ‘Tribute to Style’ promotion is a wonderful opportunity for us,” said Ron Michaels, General Manager, Luis Vuitton, Rodeo Drive. “The level of awareness that Visa generates through support of their promotional partnerships has a substantial impact in creating interest and excitement among our current and potential customers.”

“We are very excited about the special Tribute to Style promotion, and the tremendous support Visa U.S.A. has shown to our 25th anniversary celebration in co-underwriting the ‘Tribute to Style’ event,” said Fred Hayman, owner of Fred Hayman Beverly Hills. “Visa is one of the strong cards on Rodeo Drive, and we are happy to have a close association with them in the many promotions that have benefited The Entertainment Industry Foundation/Permanent Charities, Rodeo Drive, our retailers and, of course, Visa.”

The promotion will be publicized through point-of-purchase communication and national print advertising. Details will be outlined in advertisements in a special 22-page section on a “Tribute to Style” in the October issues of Vogue, Vanity Fair and GQ. Advertising also will run in the same publications in the regular editorial section, including promotion details and contact information for consumers who do not live near participating retailers and would like to request a fold-out invitation.

Visa is the preferred payment brand and the largest consumer payment system worldwide. It plays a pivotal role in advancing new payment products and technologies to benefit its 21,000 member financial institutions, their cardholders, and the global economy. Visa is the only consumer payment system to facilitate $1 trillion worth of purchases of goods and services in a fiscal year. Visa’s nearly 600 million cards are accepted at more than 14 million worldwide locations, including 370,000 ATMs in the Visa/PLUS Global ATM Network. Visa’s Internet address is .


Corporate Card Leadership

The nation’s largest issuer of bank corporate cards, First Bank System, introduced a new version of its corporate card expense management system Thursday. ‘FirstView 3.0’ is a Windows-based system that enables card program administrators to mine purchasing cad and corporate card transaction data and provides enhanced capability to distribute data and cardholder statements via e-mail. First Bank’s Corporate Payment Systems will begin using the name U.S. Bank in the first quarter 1998.


Blue AmEx Credit Card for Brazil

American Express Brazil today announced the launch of a new blue-colored revolving credit card, the American Express Credit. In addition to the quality service traditionally associated with American Express products, the card will offer a competitive monthly interest rate that may be further reduced through timely repayment and frequent card usage. Depending on the level of usage, cardmembers will be able to reduce or eliminate the annual card fee.

“We at American Express are dedicated to bringing a broad range of fine products to the marketplace in order to better serve our customers,” said Hélio Lima, president of American Express Brazil. “With the new blue card, American Express offers Brazilians a fresh and exciting new means of payment. American Express Credit has a look and personality all its own — dynamic, fresh and contemporary. With flexible card fees and interest rates, it will appeal to a younger, more active market segment.”

Noting that today’s announcement is the third revolving credit card product American Express has launched in Latin America this year, Roberto Cavalcanti, president of American Express’ Latin American and Caribbean region, added, “This further speeds our strong momentum in Latin America. This product launch follows closely on the heels of two similar and highly successful credit card launches in Argentina and Mexico. Additionally, this year we have announced card partnerships with BCN, Sony and Banco Excel Economico in Brazil; Banco Bital in Mexico; Banco Popular in Puerto Rico; and Credomatic Bank in Costa Rica, Nicaragua, El Salvador, Honduras and Guatemala.”

Benefits and services offered with the new American Express Credit include:

Up to 100 percent discount on the annual fee through continuous card usage;

Up to 20 percent discount on interest rates, with monthly spending over R$200 and timely repayment;

Automatic billing to a cardmember’s bank account, for ease of settlement;

Access to participation in the Membership Rewards program;

Access to more than 135,000 ATMs worldwide; Access to 1,700 travel service locations in 130 countries;

Emergency assistance and card replacement when traveling;

Global Assist for medical and legal assistance when traveling;

Automatic Accident Insurance when a cardmember purchases airline tickets with American Express Credit.

American Express is a diversified worldwide travel, financial and network services company founded in 1850. It is a world leader in charge and credit cards, Travelers Cheques, travel, financial planning, investment products, insurance and international banking.



Losses in card bonds dropped 20 basis points in August to 6.60% from 6.80% in July according to Standard & Poor’s ‘Credit Card Quality Indexes’. S&P says this mirrors last August when charge-offs dropped 40 basis points. Delinquencies have held steady all summer which suggests the outlook for the fourth quarter is positive. S&P says the August decline was largely attributable to charge-off declines by Discover, First USA and Advanta. Among major issuers, only Citibank and Capital One reported charge-off upticks for August.

Distribution Date 9/15/95 9/15/96 9/15/97
Performance Month Aug 95 Aug 96 Aug 97
Outstandings $140.8b $208.8b $226.8b
Yield 17.9% 17.7% 18.8%
Charge-Offs 4.0% 5.2% 6.6%
Weighted Base Rate 8.5% 8.1% 7.8%
Excess Spread 5.5% 4.4% 4.5%
Delinquencies 4.3% 4.7% 5.2%
Payment Rate 14.2% 13.8% 14.2%
Source: Standard & Poor’s CreditWire


Japan’s Record Bankruptcy Rate

Standard & Poor’s expects Japan’s consumer finance industry will face a much tougher operating environment in the years ahead, even though its current performance is strong. Concerns are mounting about a possible deterioration in asset quality, as loan portfolios have grown rapidly amid a depressed economy.

Further, intensifying competition and a potential increase in Japanese interest rates are expected to put pressure on lending margins. As this scenario evolves, the gap in creditworthiness between small, midsize, and large players is expected to widen.

Japan’s consumer lending market has already started to show warning signs. Personal bankruptcies reached an all-time high of 56,494 in 1996 and continue to grow at 20%-30% year on year in 1997. Reflecting this trend, consumer finance companies are expected to see an increase in credit costs in the near term. Further on, lending rates are expected to be forced downward as competition from existing players and new entrants intensifies. Margins are likely to come under further pressure should Japan’s low interest-rate environment — the primary contributor to expanding margins in the last few years — eventually come to an end. Finally, the anticipated lifting in fiscal 1998 of the Acceptance of Contributions, Money Deposits and Interest Law, which prohibits consumer-finance companies from accessing debt capital markets to fund direct loans, is likely to accelerate a divergence in credit quality among market players.

Industry performance is currently solid, as evidenced by the strong portfolio growth and financial performances of major players. The six leading industry participants recorded 16% portfolio growth on average in fiscal 1996 (ended March 31, 1997). This has been achieved in large part through newly introduced unmanned credit-authorization machines, which have improved customer access, as well as the finance companies’ easier access to loans. Other factors have been an increase in consumer demand for credit amid the prolonged economic slump and the aggressive growth strategies adopted by midsize players, particularly their strategies to expand distribution networks. Profitability ratios among the top six are impressive, with return-on-asset rates above 3% and return-on-equity rates between 15% and 20% on average, which is extremely high for Japanese financial institutions. The strong financial performances reflect improvements in already high net interest margins amid the low interest rate environment. Credit costs, while increasing, continue to be favorable.

Standard & Poor’s evaluation of the industry shows that some consumer finance companies are able to maintain satisfactory levels of credit quality despite the industry’s risky nature. Our evaluation takes into account a number of factors, including the quality of underwriting and collection skills, the degree to which loan portfolios are diversified among consumers, and a company’s ability to maintain a favorable financial profile (including profitability and capitalization). Overall negative factors are:

— A relatively risky customer base of low to middle-income individuals;

— Limited funding flexibility, reflecting the absence of ‘main bank’ relations common among Japan’s major corporates;

— Restricted access to capital markets; and

— Consumer finance companies’ limited track records as borrowers.

Small and midsize players are seen as especially vulnerable, as they are typically the most exposed to the asset quality problems associated with rapid expansion. Further, these smaller players often lack the funding flexibility or management skills to cope with intensified competition. Midsize players are pursuing aggressive expansion strategies to improve their market position and thus ensure their competitiveness against larger players. They will enjoy better odds of survival only if asset risks are addressed and managed pr.ply. Large players, who have superior name recognition and thus access to customers with stronger credit, will also be challenged by the industry’s dynamics. In an industry of shrinking margins, consumer finance companies that fail to pr.ply address asset quality problems and manage their funding and operating costs will be unable to survive, Standard & Poor’s said.


DataMerchant Beta Test

Cognos(R) today announced the release of DataMerchant(TM) to beta testing. DataMerchant is the first product specifically designed to securely package, distribute and merchandise the contents of a relational database over the Internet, extranet or intranet.

DataMerchant was developed to address the growing requirement companies have to exploit the Internet to their business advantage. Corporations are already using business intelligence applications to leverage internal data assets to more effectively run their business. With the rise of the Internet and the release of DataMerchant, corporations will now be able to access business intelligence data from anywhere around the globe, anytime they want it.

Whether companies actually sell their data assets or provide them to business partners to enhance their existing business relationships, DataMerchant delivers the tools required to build and maintain a successful online data distribution and merchandising application. DataMerchant allows organizations to maximize their flexibility while minimizing the setup and management costs of data distribution.

“Corporations are acknowledging the Internet as a two-way transaction medium that offers increased customer service, global reach, low-cost distribution, round-the-clock service and new marketing opportunities,” said Alan Rottenberg, Cognos’ senior vice president of Marketing and Business Strategy. “DataMerchant provides companies with the means to leverage the Internet and World Wide Web to maximize the value in their data assets. By taking advantage of DataMerchant’s e-commerce functionality, data can be packaged, marketed, sold, and distributed globally.”

DataMerchant gives organizations the ability to package data into specific “data services,” each with unique access and pricing profiles. DataMerchant supports two models of accessing data — wholesale and retail. Wholesale data is accessed via the Internet using an ODBC-compliant application such as Cognos’ Impromptu(R). Retail data is accessed via a Web browser and can be offered by subscription, per-row retrieved or both. At all times, the data source is protected by the DataMerchant server against online intrusion.

Other key features and benefits of DataMerchant include:

— data vendors can choose from several off-line and on-line billing options, and integrate their Storefronts with third-party e-commerce software and in-house accounting systems;

— wizards make the task of defining data products and building Storefront interfaces easy and straightforward;

— data consumers can “help themselves” using DataMerchant Web Storefronts, which means 24-hour service for customers and lower overhead costs for vendors;

— data consumers interact with DataMerchant ‘Shopping Assistants’ – web- based query wizards that enable users to simply and intuitively retrieve only the data they need; and

— encryption protects payment information and data during transfer.

DataMerchant is in beta test at large data producers and publishers, which represent the initial market for the product. General availability and pricing will be announced in late 1997. Subsequent versions of DataMerchant will be targeted for internal data distribution over corporate Intranets and Extranets at existing Cognos customer sites and other Global 2000 organizations.


Cognos is the leading strategic supplier of enterprise business intelligence tools, allowing users to easily extract critical information through data access, reporting, analysis and forecasting. Cognos products consistently deliver the highest productivity gains to the user, the most manageable solution to the administrator, and the fastest return on investment (ROI) to the enterprise.

Cognos also develops, markets and supports software tools for enterprise application development.

Founded in 1969, Cognos is a publicly held company with offices around the world. U.S. operations for the company are headquartered in Burlington, Massachusetts. For more information, visit Cognos’ World Wide Web site at .


Commercial Card Pitch

First USA Paymentech, Inc. formally introduced a full service commercial card program for financial institutions seeking a commercial card processing partner. The announcement was made during a presentation by Paymentech at the American Bankers Association Conference in Long Beach, California.

Mary Dees, group executive for Paymentech’s commercial card unit, introduced the program during a conference presentation on corporate payment systems and the sophisticated technology and account management demands of such programs.

“When it comes to corporate, purchasing and fleet card solutions, it is no longer just about cards. Clients look for payment process re-engineering and improved expense management,” said Dees. “Companies want to tailor programs that address such issues as spending parameters, robust data reporting, integration of payment information into accounting systems, extensive program and implementation consultation, benchmarking, ongoing analysis, and more.”

Given these complexities, the most cost effective entry to the corporate payment arena for financial institutions is to partner with a processor capable of offering all components,” said Dees. “This is the solution we are taking the banks that have significant goals for their commercial card business.”

Paymentech will market its existing Visa and MasterCard commercial products to financial institution partners. In addition, Paymentech will make available major payment programs such as the PHH/Paymentech MasterCard corporate fleet card, the British Airways co-branded Visa corporate card. Paymentech will also offer a small business card version of the British Airways product that will be available only through agent bank relationships.

“As a third-party processor, we are perceived as a non-threating partner for banks who are serious about playing in the corporate payments market,” said James W. Baumgartner, president of Paymentech’s ability, via its merchant acquiring operation, to help corporate clients sign up and activate purchasing card accepting vendors. Through its Network Services unit, Paymentech has one of the largest terminal bases with purchasing card acceptance capability.

Banks and independent sales organizations (ISOs) utilize Paymentech Network Services for authorization and electronic draft capture transaction processing for merchant point-of-sales locations. Paymentech is also initialized closed loop systems for corporate clients that include commercial card issuing and merchant acquiring.

Paymentech currently delivers basic commercial card services to 70 smaller financial institutions. “We want to offer a range of solutions from a standard programs for small banks to highly customized offerings for larger banks,” said Baumgartner.

First USA Paymentech, Inc., founded in 1985, provides full-service electronic payment solutions, processing approximately 392 million total transactions in the June 1997 quarter. As the third largest processor of bankcard transactions in the United States, Paymentech processed approximately $41.3 billion in bankcard sales volume during fiscal 1997. Paymentech also issues commercial card products to businesses and other entities, and provides commercial card payment and information processing.


Business Card Use Up

Small and mid-sized business owners remain optimistic about future growth, but their optimism is “more subdued” than in 1996, according to the sixth annual Survey of Small and Mid-Sized Businesses conducted by Arthur Andersen’s Enterprise Group and National Small Business United (NSBU). Small and mid-sized business owners anticipate another good year ahead with increases in profits, revenues, employee compensation and new hires — however, projected increases in all four areas are down from what was expected in 1996.

The survey covered topics such as business growth, employment, financing strategies, hiring challenges and technology — including the Internet and World Wide Web.


Despite a more moderate outlook on growth, small and mid-sized businesses are continuing to invest to improve their operations. A large majority of owners surveyed, 89.2 percent, reported that they made significant changes in their businesses.

More than half of owners, 56.5 percent, said they made technology enhancements. These enhancements included computer system upgrades by 52 percent of owners and changes to better utilize the Internet by 19.4 percent of owners. Other changes included improving productivity (38.5 percent), developing new products and services (35.9 percent) and increasing employee training (24.3 percent).

To a large degree, small and mid-sized business owners believe that factors outside their control have the greatest influence on their companies. This is supported by the fact that 40.9 percent of owners cited the economy as the biggest determinant of their success and survival.


A lack of qualified workers continues to pose problems for small and mid- sized businesses, but some have found solutions by better managing and motivating their current employees. More than one-quarter of small and mid- sized business owners surveyed, 27.2 percent, said that a “lack of qualified workers” is one of the top three challenges their companies face.

Among mid-sized companies — those with 100 to 499 employees — the need for qualified workers is even greater. Owners at more than one-third of the mid-sized companies surveyed, 37.8 percent, said a “lack of qualified workers” is the top challenge for their businesses. In addition, the need for qualified workers is higher for companies that are expanding.

Progressive companies offer more incentives and greater flexibility to help them attract and retain qualified workers. Their solutions include providing profit sharing, allowing employees to work at home, offering stock ownership plans and implementing other methods to increase motivation, such as giving rewards and recognition based on performance.


Alternative forms of financing, such as credit cards, are gaining in popularity while use of traditional sources of capital, such as commercial bank loans and private loans, is declining. Reliance on commercial bank loans has decreased 24 percent in five years, declining steadily from 49.4 percent in 1993 to 37.8 percent in 1997. In addition, reliance on private loans has decreased by 32 percent, from 23.2 percent in 1993 to 15.8 percent in 1997.

Increasingly, small and mid-sized business owners are turning to alternative methods of financing. Credit card financing has nearly doubled during the past five years, from 17.3 percent in 1993 to 33.5 percent in 1997. Other popular methods of alternative financing cited by owners included vendor credit (19.8 percent), leasing (15.8 percent) and personal or home equity loans (15.5 percent).


Taxes are now the top government-related issue among survey respondents. In fact, 86.7 percent of owners, compared to 75.3 percent in 1996, said tax- related concerns are the most important government-related issues affecting their businesses.

In addition, 94.7 percent of small and mid-sized business owners surveyed said that the Social Security system needs to be reformed. Almost one-third of owners, 29.1 percent, cited rising Social Security costs as one of the most important issues facing their businesses.

This year’s survey was completed prior to passage of the 1997 tax bill. At the time the survey was conducted the top two tax-related concerns cited by owners were tax simplification, by 41.1 percent of owners, and payroll tax reform, by 34.4 percent of owners. Neither issue was addressed in the new tax legislation. On the other hand, capital gains tax incentives, requested by 31.4 percent of owners, and estate tax reform, requested by 17.2 percent of owners, were major components of the new tax package.


Comparing profit and sales performance levels of small and mid-sized companies during the past 12 months clearly shows that some technology investments can result in better returns than others. Computer users experienced a 3.5 percent increase in profits while companies that use remote modem connections to their networks experienced a 5.1 percent increase. In contrast, companies that do not have computers experienced a 0.8 percent decline in profits during the last 12 months.

Likewise, the average company that uses computers saw a 5.6 percent increase in revenue while companies that use remote modem connections experienced a 7.4 percent increase. Companies that do not use computers experienced only a 0.4 percent increase in revenue during the last 12 months.

In other technology developments, the Internet and World Wide Web are growing in popularity. The number of small and mid-sized businesses taking advantage of the Internet has grown significantly _ 43.1 percent of owners surveyed said their companies use the Internet _ up from 25.8 percent in 1996.


Game Financial Acquired

Viad Corp and Game Financial Corporation today announced that Viad Corp’s Travelers Express subsidiary has signed a merger agreement with Game Financial. Travelers Express is a leading provider of payment services for retailers and financial institutions. Game Financial is a leading provider of payment services for the gaming industry.

The transaction is structured as a merger, with Viad Corp issuing common stock in exchange for 100 percent of the outstanding shares of Game Financial. It is valued at $10.75 per share of Game Financial stock for a total of approximately $51 million. The transaction, which is planned to close by the end of 1997, is expected to be slightly accretive to Viad Corp’s earnings in 1998.

Following the merger, Game Financial will become a subsidiary of Travelers Express. Gary A. Dachis, Game Financial founder, president and chief executive officer, along with his management team, will continue to operate the business from its current offices in Minneapolis.

“This is a fine opportunity for both companies,” said Philip W. Milne, president and chief executive officer of Travelers Express. “The merger will fuel Game Financial’s continued growth and open a new distribution channel for Travelers Express’ growing line of payment services. Travelers Express is focused on introducing new payment services to our customers, and we are excited about expanding Game Financial’s product lines into our extensive distribution channel. Bringing together the technology leaders in our respective industries will promote continued innovation in the marketplace.”

“The merger is a great marriage of two leading payment service companies,” said Game Financial’s Gary Dachis. “It opens up many cross-marketing possibilities between us and it will allow Game Financial to capitalize on the extensive service network, automated call center capacity and operational expertise of Travelers Express. We are enthusiastic about the opportunity this merger presents for our shareholders, employees and clients.”

The Game Financial merger demonstrates the aggressive growth strategy that Travelers Express has pursued for several years. Travelers Express has been focusing on adding market share to existing product lines, but with the Game Financial merger it is entering a new market sector in the payment services field.

The merger has been approved by the boards of directors of both Game Financial and Viad Corp, but remains subject to all normal conditions to closing, including receipt of all necessary regulatory consents, Game Financial shareholder approval and confirmation that the transaction will qualify for pooling of interests accounting treatment.

Game Financial, which was founded in 1990, provides cash access services including credit card advances, check cashing services and ATM services in about 90 casinos across the nation. Since going public in 1994, the company’s revenues have increased to $19 million in 1996, and $14.4 million for the first six months of 1997, an increase of 84 percent over the same period as last year.

Travelers Express started as a money order business in 1940 and is now the largest money order processor in the nation and the second largest U.S. processor of electronic bill payment services. Other payment services include official check and share draft processing for financial institutions. In 1996, Travelers Express processed more than 750 million transactions valued at over $100 billion.

Viad Corp has owned Travelers Express since 1965. The Phoenix-based corporation is a $2.5 billion services company with businesses in airline catering, convention services, travel and leisure, as well as payment services.