ISO 8583 Adopted for SET/SSL Transactions

Applied Communications, Inc., GlobeSet, Inc., Hypercom Corporation and Tandem Computers, a Compaq Company, announce plans to take a leadership role in making Electronic Commerce (EC) products interoperable. The four will use established ISO 8583 messaging formats to enable existing transaction authorization systems at financial institutions, processors, and switch networks around the world to authorize electronic commerce transactions secured by Secure Electronic Transaction (SET) or Secure Sockets Layer (SSL) protocols. The ISO 8583 messaging format is not an alternative to SET or SSL. It will be used in conjunction with these protocols to enable card authorization systems to route and authorize purchase transactions initiated on the Internet.

To date, implementation of EC programs like Internet shopping have required custom interfaces to existing card authorization systems. The goal of this effort is to use standards to link EC technologies and existing card payments systems; extend the interoperability of programs like SET; and promote the growth of EC by making it cost effective and timely to implement.

ISO 8583 is an open standard widely used to transmit financial transactions between merchants, institutions, switch networks and processors. The plan to implement ISO 8583 to pass transactions between EC technologies and existing payments systems is a natural extension of the standard.

“Our customers are increasingly interested in finding ways to integrate EC into their existing BASE24 authorization platforms,” says Dan Heimann, director of Strategic Marketing at ACI. “Implementation of an ISO 8583 interface will allow our BASE24-pos customers to process transactions generated by merchant servers and SET technology just as they would a traditional point-of-sale transaction. Because it is an open standard, use of ISO 8583 is not exclusive to ACI, GlobeSet, Hypercom or Tandem. We have come together to prove its use as a tool to link existing systems and emerging EC technologies.”

As a leading developer of SET solutions, GlobeSet offers one of the most advanced suites of SET 1.0 products available, including the cardholder wallet, the merchant point-of-sale application, the financial processor gateway and the certification authority (CA). “The use of ISO 8583 messaging formats will greatly enhance the already high level of interoperability between GlobeSet products and other technology, including existing card payment systems like BASE24-pos,” said Dennis Jolly, vice president, sales and operations at GlobeSet.

“Hypercom continues to support the ISO 8583 standard as a message format that will allow our customers to migrate to new technology, such as Electronic Commerce, without replacing or changing existing systems. Our partnerships with GlobeSet and ACI provide SET interoperability and a seamless migration path for our customers using BASE24,” said Ted Cole, vice president, Pinnacle Software Products Group at Hypercom.

“The ISO 8583 standard reinforces Tandem’s iTP (Internet transaction processing) strategy by offering our customers the interoperability necessary for electronic transactions between buyers, merchants and banks,” said Patrick Smyth, vice president of Worldwide Marketing at Tandem. “Tandem provides improved electronic payment delivery to customers for their existing private networks, and now also provides a consistent path with ISO 8583 to support transactions over the public network.”

About Tandem

Founded in 1974, Tandem, a Compaq company, designs and delivers technology solutions that companies rely on to compete in a business world that runs 24 hours a day. Headquartered in Cupertino, Calif., Tandem has offices, strategic partners, and service providers in more than 50 countries. Tandem press materials are also available on NEWSdesk International on the World Wide Web at

About Hypercom

Hypercom Corporation is a leading supplier of point of sale (POS) hardware, software and network payment automation products. For more than a decade, Hypercom has been providing solutions for delivering and processing financial transactions which enable end users to easily add evolving payment applications and expand their POS networks. Headquartered in Phoenix, AZ, Hypercom markets its products in more than 50 countries via 65 global distributors.

About GlobeSet

GlobeSet has been at the center of SET development since its introduction. The company is part of the SET design team, has served as a charter member of the SET Business Review Panel and has passed SET compatibility testing sponsored by VISA and MasterCard (May, 1997). Founded in 1994, GlobeSet, Inc. is a privately held corporation headquartered in Austin, Texas. Strategic equity investors include Bankers Trust, Tandem Computers (a Compaq Company), and Verity, Inc. Additional information about GlobeSet can be found at .

About ACI

Applied Communications, Inc. is a subsidiary of Transaction Systems Architects, Inc. (Nasdaq: TSAI). Transaction Systems’ software facilitates electronic payments and electronic commerce by providing consumers and companies access to their money. The company’s products are used to process transactions involving credit cards, debit cards, smart cards, remote banking services, checks, wire transfers and automated clearing and settlement. Its solutions are used on more than 2,500 product systems in 68 countries on six continents. Visit TSA and ACI on the World Wide Web at .

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Brazil Goes to Credit Scoring

Fair, Isaac and Brazil’s largest credit reporting agency, Serasa, signed an agreement yesterday to develop Brazil’s first credit scoring system. Under terms of the agreement, Fair, Isaac will develop the models to generate individual credit scores. Serasa Centralizacao de Servicos dos Bancos maintains credit files on 80 million individuals and has 300,000 institutional customers.

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Smart Card Forum’s New Prez

William Barr, Executive Director of Information Networking at Bellcore in Morristown, New Jersey, has been elected President of the Smart Card Forum to lead a cross-industry effort promoting the widespread acceptance of multiple application smart card technology. A leading authority on distributed computing and information networking, Mr. Barr is responsible for developing and executing Bellcore’s business and market plans for its electronic commerce and internet businesses.

Mary Pat McMahon, Senior Vice President, Strategic Planning and Product Management, Cash Station, Inc., will serve as Vice President. Her responsibilities at Cash Station include corporate strategy development as well as the development, implementation, and management of new product lines.

Gerald Hubbard, Vice President, Marketing, Bull Worldwide Information Systems, was re-elected Treasurer. Rebekah Schloss, Manager, Software Product Management, Diebold/Interbold, was elected to the office of Assistant Treasurer.

Michael Smith, General Manager, Schlumberger DANYL, was re-elected Secretary. Frederick Honold, Director of Global Practices, AT&T Solutions was elected to the office of Assistant Secretary. All of these officers are members of the Forum’s Executive Committee.

In addition, Thomas L. Gregg, President and CEO of 3-G International, Inc. was elected Auditing Member Representative. The newly-elected Government Representative is Eduardo Esquivel, Systems Analyst at the Department of Information Resources for the State of Texas.

New to the Board of Directors are:

Miguel Abramowicz, Director of Smart Card Global Technology Support, Citibank

Julie Krueger, Marketing Manager, SPYRUS

Gilles Lisimaque, Senior Vice President and Chief Technology Officer, Gemplus

Cynthia Bengier, Director, Strategy and Product Management, Mondex USA

Additionally, Frederick Honold and Michael Smith were re-elected to the Board of Directors. The 1997/98 Board of Directors also includes the following members:

Catherine A. Allen, CEO, BITS (Banking Industry Technology Secretariat)

David Boyles, Senior Vice President, American Express

Bev Matson, Director, Global Partners, VeriFone

Jean McKenna, Senior Vice President, Visa International

Martha Rea, Executive Vice President, PSI

Dick Shaffner, Senior Vice President, NationsBank Card Services

Cliff Wilke, VP, Business Development, Mobil Oil Credit Corporation

Jody Zimmerman, Marketing Manager, Siemens

Diane Darrow, CAE, Smart Card Forum Executive Director

Diane Darrow was named Executive Director of the Smart Card Forum in April, 1997. In this position, she is responsible for directing all of the Forum’s operations and strategic implementations including, the Educational Institute, Work Groups, member communications, symposia and meetings, and membership service and recruitment. A 20-year veteran of association management, Ms. Darrow received her Certified Association Executive (CAE) distinction in 1993 for demonstrating a high level of competence and fitness for association management.

Association Management Group Handles Headquarter Operations

Additionally, the Association Management Group Inc. (AMG) was retained to manage the Forum’s day-to-day operations. Founded in 1982, AMG is one of the leading association management firms in the industry. It offers clients a full range of services including finance and accounting, meeting and event scheduling, government affairs, and design and production.

The Smart Card Forum

The Smart Card Forum is a non-profit, multi-industry membership organization promoting the widespread acceptance of multiple-application smart card technology. Its primary mission is to accelerate the widespread acceptance of multiple application smart card technology by bringing together, in an open forum, leading users and technologists from both the public and private sectors. Together, they work toward these common goals:

lead the industry forward by establishing a vision for interoperability;

establish an environment that facilitates market trials;

provide objective and timely smart card information to members and interested concerns;

develop cross-industry positions on issues relevant to technology, business, and legal and public policy, and

remain the focal point for the discussion of leading edge issues critical to the growth of the industry.

The Forum was established in September 1993 and currently has more than 200 corporate and government members.

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France’s New Smart Health Cards

ORGA, one of the world’s leading manufacturers of smart card systems, is taking part in the Sesam Vitale project being organized by the French Ministry of Health. By the start of next year, the company will, through an agreement with Bull, have begun supplying some 8 million microprocessor-based smart cards to insured persons involved in the project. The smart cards will be personalized in France by one of the partners of ORGA and Bull.

The first phase of the Sesam Vitale project due to start in 1998 will see selected families provided with “smart” health insurance cards which aim both to speed up and simplify data flows, including the capture of services data, billing, and reimbursement within the French health system. A read/write device in conjunction with the patient’s card will enable services rendered to be entered immediately each time a patient visits the doctor, then forwarded electronically to the respective health authority and insurer in the form of a set of encrypted data records. These organizations can then reimburse patients their share of the costs directly.

This procedure should render hand-written bills and prescriptions, along with time-consuming administrative transactions obsolete, while reducing processing times and cutting costs. The issuing of Sesam Vitale cards to all insured persons is already planned for the second phase of the project due to begin in 1999. Equipped with increased storage capabilities, these cards will be able to record a patient’s medical history and thus help enhance the quality of the service provided.

France will become one of the first countries in the world to introduce smart cards for its health insurance system across the board. The French concept will see the first fully automatic system based on microcontroller cards implemented for practical everyday use. According to Dr. Heiner Gronewald, head of ORGA’s Health Insurance business, “ORGA has always played a pioneering role in smart card development; Sesam Vitale will give the smart card a major boost in the health insurance field, and we are pleased that our participation in the project led by Bull again underlines our status as a technological leader in this sector.”

ORGA USA is the North American subsidiary of ORGA Kartensysteme GmbH Germany, one of the world’s leading developers and suppliers of microprocessor-based smart card technology, with more then 550 employees worldwide. ORGA offers turnkey solutions for health care, banking, telecommunications and other emerging markets. The company’s capabilities include quality card manufacturing, full system integration and project management.

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Debit Card’s 10% Share

Off-line debit card transaction volume will exceed $100 billion this year according to mid-year ‘VISA Check Card’ and MasterMoney’ data. As of June 30 there were 67.6 million debit cardholders in the U.S. generating more than one billion transactions since the first year, representing slightly less than $50 billion in year-to-date card volume. While the number of cardholders is growing about 42% annually, debit card volume is nearly doubling this year. Truly this is a market segment that is no longer in infancy. Total U.S. card volume, including debit and credit cards, will exceed $1 trillion this year. Credit card volume is growing about 14.5% annually according to CardData’s mid-year computations.

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Y2K Problem is Tip of Iceberg

The president of a Silicon Valley software firm which helps major corporations ready their computer systems for the year 2000 (Y2K), commented on reports from the White House Office of Management and Budget (OMB) that it will cost $3.8 billion to prepare government computer systems for 2000. He believes their cost will be “double that.”

Doug Engfer, president of The Windward Group, a software design, development, quality assurance, and documentation consultancy here said: “Problems with Y2K go far beyond computers thinking ’00’ means 1900 instead of the year 2000. Companies and the government need to get their arms around a problem that seems to grow without stopping.

“If shareholders of America’s major corporations knew the state of the Y2K assessment in those companies, they’d be appalled,” said Engfer. “At least the government is trying to understand the scope of what they face. This is not the last such surprise we will get from the OMB, and the final budget will likely be at least double current estimates.

“We can count on similar ‘bombs’ from industries we have trusted in the private sector, including banks, credit card companies and others,” Engfer said. “Even if they begin work immediately, most organizations will not be able to complete their projects in time.”

The Windward Group provides software design and development, documentation, and quality assurance services to a diverse client base. Their success in a broad spectrum of technologies springs from their ability to create long-term partnerships, dedication to quality, and experienced associates with strong technical expertise. Key clients include: FedEx Ship (shipping software for the SOHO market), PIM software and handheld-to-desktop architecture for Palm Computing Division of 3COM Corp., and GUIA (Genesis Utility Information Applications) for Itron Inc.

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Arkansas Banks Go Online

During the next year, all banks within the First United Bancshares Inc. system will have online real-time banking capabilities available through the Internet. With this service, bank customers anywhere in the world will be able to access their accounts and bank services through the Internet.

With the online banking product, bank customers will be able to make inquiries on their loan and deposit accounts, get online account statements, transfer funds, make loan payments, order checks, request stop payments, apply for loans, and open new accounts. Customers will also be able to download account information into home accounting software such as Quicken. The system will also be capable of supporting electronic bill payments and check image displays when these services are fully implemented. An extensive online help section will be provided for users.

“We are very pleased to introduce this service at our banks,” said James V. Kelley, chairman, president and chief executive officer of First United. “Many of our customers have asked for the online banking product and we anticipate that acceptance will grow rapidly. Online banking makes it easier and more convenient for our banks’ customers to access their accounts from their homes, offices or any site with Internet access.”

“Online banking is part of a broader array of services that banks must offer in order to meet the needs of a diverse population and First United is leading the way in providing our customers with this outstanding product,” Kelley continued. “Our customers will continue to be able to handle their transactions at the bank if they prefer, but the segment of our customers who prefer to use the online method will be able to do so.”

Fredonia State Bank, which is headquartered in Nacogdoches, Texas, introduced the product in August. Internet banking will be available at all First United Bancshares locations within the next year.

First United is a multi-bank holding company with nine affiliate banks and a non-bank subsidiary, First United Trust Company, N.A., serving 30 communities in Arkansas and Texas. The member banks are: First National Bank of El Dorado, Ark.; First National Bank of Magnolia, Ark.; Merchants & Planters Bank, N.A. of Camden, Ark.; City National Bank of Fort Smith, Ark.; Commercial Bank at Alma, Ark.; First United Bank, Stuttgart, Ark.; The Bank of North Arkansas, Melbourne, Ark.; FirstBank, Texarkana, Texas; and Fredonia State Bank, Nacogdoches, Texas.

In addition, First United has signed a definitive agreement to obtain City Bank & Trust, a $64 million bank in Shreveport, La. Also, First United has signed a definitive agreement to purchase Citizens National Bancshares Inc., a $263 million bank holding company headquartered in Hope, Ark. Citizens National Bancshares owns Citizens National Bank of Hope, Ark. and Texarkana, Ark., as well as Peoples Bank and Loan Company in Lewisville, Ark.

First United’s stock is listed on the NASDAQ National Market System under the symbol “UNTD.”

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Turkey’s SET Pilot

VeriFone, a leading global provider of secure payment solutions, has announced a major project with Garanti Bank in Turkey to provide a total Internet payment solution for its Secure Electronic Transaction (SET) pilot program. Garanti Bank ranks second in the world in terms of profit on capital and fourth in terms of returns on assets and will adopt VeriFone’s complete end-to-end suite of SET pilot products. This will enable it to offer a complete Internet payment solution for its merchant partners.

The three-fold solution will be based on VeriFone’s vPOS, vGATE and vWALLET software, conforming to the SET protocol and running on HP servers, to enable electronic commerce and create new retail banking opportunities via the Internet as an alternate delivery channel.

The SET protocol, originally proposed by Visa and MasterCard, is being developed with contributions from VeriFone and other companies as the standard for Internet bankcard transactions. VeriFone is committed to rolling out SET pilot and production solutions that are fully compliant with the latest MasterCard/Visa SET protocol standards.

“Internet commerce is an emerging market in Turkey and is showing promising growth,” commented Husnu Erel, General Manager, Garanti Ticaret. “Garanti Bank was the first bank in Turkey to extend on-line/real time service to its entire branch network and will also be the first bank in Turkey to use the VeriFone Internet commerce solution. VeriFone’s proven expertise and experience in the PoS and payment systems arena, together with Hewlett-Packard, means that we are in a position to offer merchants the best possible solution to compete in the market.”

“This Garanti Bank project extends the global momentum behind the adoption of the VeriFone and HP SET solutions,” commented Jan-Erik Rottinghuis, vice president of VeriFone, Europe, Middle-East and Africa regions. “Turkey is one of the fastest growing countries for payment cards in Europe and VeriFone is introducing multiple new solutions to meet the requirements of the Turkish banks and their merchants.”

“Together, HP and VeriFone have been able to offer Garanti Bank a turn-key solution encompassing hardware, electronic commerce software, banking and payment systems and consulting services. This should enable Garanti Bank to establish a leading position in SET-enabled electronic commerce just as it has with its Internet Banking offering,” commented Jean-Richard Bloch, electronic commerce program manager, financial services Europe, HP.

VeriFone brings its leading Internet payment software and solutions and a combination of International and local payment expertise, whilst HP provides world-class enterprise computing and services, including consulting and systems integration expertise.

VeriFone’s SET Products will offer a complete end-to-end software solution for Internet payment, and consist of VeriFone’s vPOS, vGATE and vWALLET software. Versions of these products are already being used to provide live Internet payment services to Internet merchants in Europe, North America and Asia.

With paid-in capital of TL 40 trillion, Garanti Bank () ranks among the largest 1,000 banks in the world according to The Banker and was named “Best Bank” in Turkey for the last three years by Euromoney. It prides itself on providing its customers with quality service and a diverse range of products. Garanti has applied the principles of market segmentation, customer focus and relationship management, transforming branches into dedicated marketing units offering integrated financial services to corporate, commercial and retail customers.

HP is a global provider of computing, Internet and intranet solutions, services, communications products and measurement solutions, all of which are recognized for excellence in quality and support. HP has 120,500 employees and had revenue of $38.4 billion in its 1996 fiscal year. Information about HP and its products can be found on the World Wide Web at .

Istanbul-based Iletisim Teknoloji Danismanlik Ticaret A.S, ITD () distributes VeriFone’s payment solutions throughout Turkey. The company was established in 1991 and is a market leading solutions provider in the voice systems and electronic payments technology markets.

VeriFone, Inc. (), a wholly owned subsidiary of Hewlett-Packard Company, is the leading global provider of secure electronic payment solutions for financial institutions, merchants and consumers. VeriFone has shipped more than six million electronic payment systems, which are used in over 100 countries.

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Experian Certified

After an embarrassing start in selling consumer credit reports over the Internet last month Experian announced yesterday it will adopt the National Computer Security Association’s ‘Secure Web Vendor’ program. Experian is also requiring all its Internet partners to achieve NCSA certification. The NCSA program requires Web sites to meet certain security criteria and to pass remote and on-site inspections. Experian suspended its on-line consumer report service Aug 15.

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Partnerships & Smart Cards

The Smart Card Forum opened its fifth annual meeting yesterday in Washington, DC with more than 400 global members in attendance. This year’s meeting is focusing on the importance of alliances in both the technical and business areas of smart card development. The Forum says partnerships generate better outcomes in terms of response times, product and service performance, quality levels, and costs, resulting in a competitive advantage.

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