GENERAL NEWS

First Data Corp. announced that Eula Adams, President of First Data's Card Issuing Services, is leaving the company effective March 1, 2003 to "pursue other opportunities." First Data put a transition team in place to keep operations running smoothly. The team will report to Charlie Fote, First Data's Chairman and CEO, until a successor for Adams is named.

Economic Growth Slowed in Q4 2002

According to advance estimates of the gross domestic product (GDP) from the U.S. Department of Commerce's Bureau of Economic Analysis, the U.S. economy grew at an annual rate of 0.7% in the fourth quarter 2002 - a much slower pace than the previous quarter, when it grew 4%. U.S imports increased, which are a subtraction in the calculation of GDP, while growth in GDP is attributed to government spending, personal-consumption expenditures (PCE), equipment and software and residential fixed investment. Preliminary estimates will be released on February 28, 2003.

NACHA Asked to Delay Rule Change

The Association for Financial Professionals (AFP), an organization supporting treasury and financial professionals, asked NACHA-The Electronic Payments Association to delay its rule change that allows receivers (payees) of corporate checks to convert funds to automated clearinghouse (ACH) debits.

The AFP says NACHA's new rule allowing business-to-business (B2B) checks to be converted into electronic payments increases a business' exposure to fraud and disrupts corporate cash-management policies. AFP wants the rule change to be delayed until March 2004 to allow time for more corporate education.

The AFP believes payers should be the ones who decide whether to authorize conversion to ACH debits, not payees. NACHA's new rule does allow payers to prevent electronic conversion by using an "auxiliary on-us field" in the MICR line of their checks, but an AFP survey revealed "widespread uncertainty" about the effectiveness of using this opt-out feature and a need to build more awareness of it.

Small Business Owners Love Independence

Nearly three-quarters of employed Americans are either interested in owning, currently own or have owned their own business, according to a recent study* by The Hartford Financial Services Group, provider of small-business insurance.

The survey found that financial success was the driver for those thinking of going out on their own (60%), but current business owners said setting their own hours (62%) and being their own boss (53%) are what makes them happiest - only 39% listed financial success as a primary incentive. The study found the following reasons why many shy away from starting their own business:

• Insufficient financial resources (77%)
• The need for a regular paycheck (62%)
• Fear of failure (54%)
• Uncertainty about how to get started (54%)
• Loss of health and disability benefits (47%)

*Study conducted in 2002 by independent online research company Opinionsite.

ANNOUNCEMENTS

New ATM Company

Chicago-based Midwest Bancard Corp. announced a spin-off of its ATM manufacturing and processing division - a new and separate company called Qualtex (www.qualtexcorp.com). Qualtex will launch the WeatherMaster, a new cash dispenser.

Global Payments Certifies APRIVA

Global Payments Inc. certified APRIVA's wireless gateway and point-of-sale product, the APRIVA POS. APRIVA POS is a hardware and software solution that enables merchants to process credit card transactions from any location using major credit card processors.

Tranax Releases 3DES ATM

Tranax Technologies, Inc. released a fully compliant 3DES-encrypted ATM, the Mini-Bank 1500 ATM. According to Visa, effective Jan. 1, 2003 all newly deployed ATMs should support 3DES. For MasterCard, all new-to-market ATMs must be compliant by April 1, 2003, and existing ATMs must be compliant by April 1, 2005.

Tranax says all newly released Mini-Bank 1500 ATMs will be loaded with new versions of AP and EPP (Encrypted PIN Pad) software, which can use 3DES with a 32-digit master key, automatic unique key binding and MACing (message authentication). For Tranax's existing 3DES-capable Mini-Bank 1500s, users can install the new AP and EPP software without upgrading hardware.

POSDATA Opens New Service Facility

POSDATA, Inc. said it has moved from a 12,500-square-foot service facility to a new 50,000-square-foot facility in Louisville, Ky., to provide better service to its customers and prepare for future growth. POSDATA offers multiple services to the retail point-of-sale, financial and OEM (Original Equipment Manufacturer) industries.

CashWorks Raises $5M

CashWorks Inc. announced it has raised more than $5 million in funding; its lead investor is Capital Southwest. CashWorks has implemented its PayPort technology (patent-pending) in about 300 retail locations and expects to have more than 1,000 locations by the end of 2003. PayPort provides low-cost check cashing services at existing ATMs in retail locations such as convenience stores.

Metris To Cut Jobs

Metris Companies Inc., issuer of credit cards through its wholly owned subsidiary, Direct Merchants Credit Card Bank, N.A., announced it will reduce its workforce by 180 employees to try to reach profitability again. More than half of the positions being cut are at Metris' Minnetonka, Minn., headquarters. The reductions include approximately 25% of the company's senior management team.

PARTNERSHIPS

ATMSafe Secures Four New Partners

ATMSafe North America, LLC announced two new marketing partnerships. AXA Assistance and National Accident Insurance Consultants, Inc. (NAIC) agreed to market the ATMSafe program in the United States by offering the program to their clients and distribution sources. Banks HSBC Argentina and BBVA Argentina partnered with ATMSafe Latin America, sa to implement the ATMSafe program.

ATMSafe is a type of insurance that covers the amount of cash lost and any medical expenses resulting from injuries suffered if a customer is robbed at an ATM. The service also adds a new source of revenue for ATM owners or lessors at each transaction. Many of ATMSafe's clients are in Latin American countries, where safety is often a concern when using an ATM.

Western Union Renews with Kroger Western Union Financial Services, Inc., a subsidiary of First Data Corp., and its affiliate, Integrated Payment Systems, renewed an agreement with The Kroger Co. to provide Western Union money transfer and money order services. The deal adds nearly 500 Kroger stores in Texas, California and Indiana to Western Union's network, and approximately 1,000 Kroger-owned locations will now offer Western Union money orders.

More Web Sites Move to Paid Content

Yaga, Inc. announced uclick, LLC, formerly Universal New Media, the digital media division of Andrews McMeel Universal, is using its software to sell subscriptions on the Web sites uPuzzles.com and MyComicspage.com.

ECHO Renews with First National

Electronic Clearing House, Inc. (ECHO) renewed its contract with First National Merchant Solutions, a wholly owned subsidiary of First National Bank of Omaha. ECHO processes and settles checks drawn on non-participating banks as part of First National's Visa POS program, which is branded and marketed under the name CompletePay. The program converts paper checks into electronic transactions, providing merchants with immediate online authorization.

Certegy Wears the Jewels

Certegy Inc. will provide electronic check and ACH warranty services for consumer-not-present check transactions for telephone orders and Internet purchases through its PayNet platform to Ashford.com, an online retailer of fine gifts and jewelry. Odimo, Inc., the parent company of Diamond.com, which has used Certegy's check services since June 2001, recently acquired Ashford.com.

Certegy also announced it is providing check warranty and collection services to all 629 automotive parts and service chain stores of The Pep Boys - Manny, Moe & Jack.

CRI to Market Dell Cash Registers

Computer Resolutions, Inc. (CRI) will market Dell Computer's retail point-of-sale line of electronic cash registers. CRI, a full-service supplier of computer hardware, systems and services, has been an authorized Dell Service provider since 1991. For its cash registers, Dell is bundling one of its desktop PC's with touch screens, bar code scanners, thermal printers and cash drawers.

Starbucks Japan to Use FDC Gift Card Starbucks Coffee Japan, Ltd. is using First Data Corp.'s ValueLink gift and spending card service for the Starbucks card program in Japanese coffeehouses. Similar to the Starbucks gift card program in the U.S., Starbucks Japan's fully integrated system will allow consumers to make purchases and add funds on existing cards at any of the company's 400 locations throughout the country. ValueLink will handle the card transactions, marking the first ValueLink program in Japan.

7-Eleven Vcoms Add Loyalty

Alliance Data Systems Corp. will provide stored value and loyalty marketing services for 7-Eleven, Inc.'s Vcoms. Vcoms are 7-Eleven's proprietary electronic-commerce touch-screen kiosks that offer financial services such as ATM transactions, purchases of money orders or money transfers, and check-cashing. Alliance Data's program allows consumers to store money on a 7-Eleven Vcom card after cashing checks at the kiosks or loading cash onto the card. 7-Eleven plans to install Vcom kiosks in 1,000 of its stores by the end of May.

TGIF Goes for Fifth Third Bank

Carlson Restaurants Worldwide Inc., the parent company of T.G.I. Fridays, has selected Fifth Third Bank Processing Solutions to be its endorsed credit card processor. Fifth Third will provide processing for the company's Visa, MasterCard, American Express and Discover credit card transactions. Carlson Restaurants operates, franchises and licenses 713 restaurants in 56 countries.

B of A Spreads Out in Valero

Bank of America has expanded its partnership with Valero Energy Corp. and is installing its ATM software in more than 1,100 of Valero's ATMs, located in Valero -owned retail stores Diamond Shamrock Corner Stores, Stop N Go, Ultramar, Valero, Beacon and Total. B of A's previous contract with Valero was for only 300 ATMs in the Stop N Go convenience stores.

ACQUISITIONS

Humboldt Finds New Buyer for ISO Business

First National Bank Holding Co. has agreed to buy Eureka-Calif.-based Humboldt Bancorp's proprietary merchant processing operations for $32 million in cash. The deal is expected to close by March 15, 2003, and Humboldt said it should recognize an after-tax gain on the sale of approximately $18 million during Q1 2003. Humboldt Bank will continue to provide card sponsorship processing for two ISOs until their agreements expire. In 2002, Humboldt attempted to sell its merchant processing division to iPayment Holdings, Inc. for $34 million in cash, but the deal did not go through.

E*Trade Acquires 4,000 ATMs

E*TRADE Access, Inc., a wholly owned subsidiary of E*TRADE Bank, recently acquired a portfolio of more than 4,000 ATMs from XtraCash ATM, Inc. E*TRADE's ATM network now includes more than 15,000 machines, making it the second-largest ATM network in the United States. eFunds Corp. says it has the largest network, with 16,844 ATMs. E*TRADE said the acquisition increases the size of its network by approximately 30% and expands the company's reach in California and the western states.

APPOINTMENTS

Siembieda Elected to STM's Board

CrossCheck, Inc. President and CEO J. David Siembieda was elected to the Board of Directors for Fillmore, Calif.-based Solid Terrain Modeling (STM), a manufacturer of full-color 3-D solid terrain models. Siembieda also is a member of the advisory boards of The Green Sheet and AR Analytics of Mill Valley, Calif., and is a member of the Infrared Data Association (IrDA) and the Electronic Check Council for NACHA.

eFunds Announces Appointments

As part of a recent reorganization plan, eFunds hired and promoted several new executives. eFunds hired Kevin Reager as Senior Vice President (SVP), Division Executive, ATM Solutions; and Mike Feliciano as SVP, Division Executive, EFT Solutions. Kathleen Flanagan was promoted to SVP, Division Executive, Outsourcing Solutions. In addition, Tommy Andrews was hired as SVP, Corporate Development; Kim Jones joined as Director of Security; and Sean Murphy is the new Director of Audit.