NEWS

Hand Held Products, Inc. (HHP) and Symbol Technologies, Inc. are in the heat of battle over patents. Symbol Technologies announced it is suing HHP in the United States District Court for the District of Delaware for infringing on 12 of Symbol's patents, which are related to imager-based bar code readers, integrated terminals (batch and wireless) and engines.

Since HHP had earlier accused Symbol of patent infringement, alleging breach of contract regarding Symbol's use of HHP Technology at the U.S. Postal Service (HHP filed a suit in U.S. District Court Western District of North Carolina on July 20, 2001), a condition of Symbol's lawsuit is that HHP declare that 36 of HHP's patents are not infringed by any Symbol bar code scanning system or are otherwise invalid or un-enforceable.

Major Retailers Sued in Patent Dispute

Coral Gables, Fla.-based Default Proof Credit Card System, Inc. filed a lawsuit against Home Depot Inc., Starbucks Corp., Wal-Mart Stores Inc. and Sam's Club, claiming the companies violated its patent on prepaid debit cards, according to a story in the Miami Daily Business Review. In its lawsuit, Default Proof said it should be paid a licensing fee for each transaction. The company filed suit Jan. 15, 2003 in the U.S. District Court for the Southern District of Florida. Default Proof applied for the patent in 1997 and was granted it in June 2002 (patent 6,405,182), which covers a "system for dispensing prepaid debit cards through computerized point-of-sale terminals."

More Banks to Block Online Gambling

New York State Attorney General Eliot Spitzer enjoyed another victory in his continued fight against illegal online gambling. Ten more banks signed an agreement with Spitzer to block cardholders from using their credit cards for online gaming transactions. The banks also agreed to pay a combined total of $335,000 in settlement costs to the state of New York. The banks are:

• Cayuga Bank (now First Niagara Bank)
• Chemung Canal Trust Company
• First Consumers National Bank
• First Premier Bank
• Merrick Bank
• Peoples Bank
• Trustco Bank
• USAA Federal Savings Bank
• US Bank NA
• Wells Fargo Financial Bank

Spitzer began his anti-online gambling campaign in June 2002, when Citibank was the first to agree to block these types of transactions. Many other credit card issuers have implemented blocking mechanisms, including American Express, Providian, Bank of America, Fleet, Direct Merchants Bank, MBNA and Chase Manhattan.

2002 e-Commerce Sales up from 2001

The U.S. Department of Commerce reported in its U.S. Census Bureau quarterly report on e-commerce statistics that Q4 2002 retail e-commerce sales totaled $14.3 billion, an increase of 29.3% from the previous quarter. Online retail sales, which accounted for 1.6% of total retail sales in Q4 2002, were $869.6 billion, up from $827.5 billion in Q3 2002. The Department of Commerce estimated total e-commerce sales for 2002 at $45.6 billion, an increase of 26.9% from 2001. Total retail sales in 2002 increased 3.1% from 2001.

Convenience Stores Increase in Number

According to the NACS/TDLinx Official Industry Store Count published by NACS, the total number of convenience stores in the U.S. was 132,424 at the end of 2002. In 2001, the official store count was 124,516 stores. Nearly 59% of all stores are owned and operated as a one-store business or franchise. Texas has the most convenience stores (12,688 stores), followed by California (9,149), Florida (8,984), New York (5,969) and North Carolina (5,674).

ANNOUNCEMENTS

NACHA Council Focused on EBT

Recognizing that EBT cards have been widely adopted in the U.S., NACHA-The Electronic Payments Association's EBT Council (established in 1995) has changed its name to the "Electronic Benefits and Services Council" to better reflect its new mission: "to assure that EBT standards and operating rules remain relevant and that they accommodate a variety of governmental payments and services using existing and emerging technologies."

TNS Marks 5,000 ATMs

TNS Smart Network Inc. announced it reached a milestone on February 20, 2003: The company now processes for 5,000 ATMs in Canada. TNS said this is a 100% increase in ATMs within 12 months. TNS is a Canadian private service bureau for third-party ATMs.

Since many users of MagTek, Inc.'s Mini-MICR check reader prefer to connect it to a PC, MagTek now offers its product with a USB (universal serial bus) interface. The Mini-MICR check reader is compatible with USB 2.0 and 1.1. The RS232 and keyboard wedge models are still available.

PARTNERSHIPS

Starbucks Plans New Credit Card

Starbucks Corp. announced plans to offer its own credit card that also allows cardholders to prepay for their lattes, mochas, baked goods and other treats by loading money onto the card. The company has joined forces with financial industry leaders Bank One Corp. and Visa U.S.A. to make it happen. Starbucks said it plans to launch the card in late fall 2003 and will use a "significant portion" of profits from the card to support social and environmental causes.

Certegy and NPC Form Alliance

Certegy Inc. and National Processing Co. have partnered in check processing. Certegy will offer full-service check processing to NPC's merchants, and NPC will support Certegy check products, including check warranty and verification, electronic check authorization, ACH services and consumer-not-present solutions.

Certegy also announced it will provide electronic check conversion and imaging services to Price Chopper Supermarkets chains in the Northeast. The initial implementation began in 2002, and Certegy said the rollout to all Price Chopper locations would be completed by May 2003.

Hypercom in Northeast Supermarkets

Hannaford Bros. Co. selected Hypercom Corp.'s ICE 5500M credit card payment terminal for at least 100 of its multilane supermarkets, including stores under the Shop'n Save and Hannaford names, throughout Maine, New York, New Hampshire, Vermont and Massachusetts. Hypercom expects to deploy more than 2,000 terminals.

Global Payments Expands with California Bank

Global Payments Inc. expanded its merchant services program with Union Bank of California to include terminal deployment, terminal replacement and repair, and training and documentation services for merchants using Global Payments' processing services.

DAS Partners with Union Bank Co.

Diversified Acquiring Solutions Sales Corporation Inc., (DAS) and Columbus Grove, Ohio-based The Union Bank Company entered into a merchant referral program whereby The Union Bank Company will refer new merchant business to DAS (and receive referral income and residual income on all processed volume), and DAS will handle the sale, set-up and servicing of the processing relationships.

ACQUISITIONS

Coinstar Acquires Prizm

Coinstar Inc. acquired Prizm Technology, Inc., Coinstar's partner in a 75-store, prepaid wireless supermarket pilot. Financial terms of the deal have not been disclosed. Coinstar owns and operates coin-counting machines in supermarkets throughout the U.S., Canada and the UK. Prizm developed and deploys TOP-UP services and terminals, which allow consumers to purchase services such as prepaid wireless minutes, bill payment, automated check cashing and wire transfers at un-attended TOP-UP kiosks. Terminals are placed in high-traffic retailer areas such as shopping malls, convenience stores and universities.

Cardtronics Moves into Malls

Cardtronics expanded its ATM portfolio beyond retail petroleum and convenience stores by acquiring CenterCourt Cash, Inc.'s 22 ATMs and transaction processing contracts that are for locations in 10 shopping malls across the U.S. Of the 22 new locations, 19 ATMs are located in California, and the other three are in Seattle and Baltimore.

FDC Processing More Payments in Europe

First Data Corp. signed an agreement to acquire TeleCash Kommunikations-Service GmbH from T-Systems International GmbH, a division of Deutsche Telekom AG. TeleCash is an electronic payment network operator of 166,000 point-of-sale terminals that arms merchants with the ability to accept debit and credit card payments.

Innovus Merges with Momentum

New Orleans-based Innovus, Inc. (formerly Automated Technology Machines, Inc.) and Houston-based Momentum Cash Systems have merged and will do business under the name of Innovus, Inc. A New Orleans real estate developer, Joseph Canizaro, now owns the company.

APPOINTMENTS

Discover Hires Abagnale as Advisor

"Catch Me If You Can" author Frank Abagnale, whose life story also was recently made into a movie starring Leonardo DiCaprio, will serve as an advisor/consultant on fraud prevention for Discover Financial Services, a business unit of Morgan Stanley. Discover Card has scheduled Abagnale, featured in the February 24, 2003 issue of The Green Sheet ("Notice to Fraudsters: 'Cash Me If You Can,' " 03:02:02) to appear at several retail and merchant association conferences where he will discuss his life experiences, provide fraud prevention workshops and seminars, and sign copies of his books.

EZCheck Recruits New President

Randy Rutledge joined EZCheck as President and Chief Executive Officer; he also will serve on the company's Board of Directors. Rutledge has more than 22 years' experience in financial services. Most recently, he was Senior Vice President and Chief Marketing Officer of TeleCheck Services, Inc., a subsidiary of First Data Corp., where he worked 17 years. Rutledge also was on the TeleCheck Executive Committee and the First Data Operating Committee.

FDMS to Expand in Supermarket Services

First Data Merchant Services hired Joseph Venezia as Vice President of Market Development for the supermarket industry. Venezia previously served as Marketing Director with the Scott's Co. and also worked about eight years with the Proctor and Gamble Co. in brand management and marketing.

Vodafone on Mobile Payment Board

The Mobile Payment Forum selected Alessandra Dell'Otti as Steering Group Chair. Dell'Otti is Head of M-Commerce, Product Development for Vodafone Group, PLC. The Forum is a global alliance of organizations from the mobile and financial industries, dedicated to advancing mobile (m) commerce. The Forum's 12-seat board includes NEC Corp., Nokia Corp. and T-Mobile International and representatives from American Express Co., JCB Co., Ltd., MasterCard International, NTT DoCoMo, Oracle, Telecom Italia Mobile, Visa International and Vodafone.

CrossCheck Appoints SVP

Chris Schumacher has been appointed Senior Vice President at CrossCheck, Inc. Schumacher previously worked at Transworld Systems, Inc. (TSI) in several different positions; his most recent was Director of Operations at TSI's corporate headquarters. He also oversaw TSI's collection operations in Honolulu and Los Angeles.

TransFirst Promotes Joni Floyd

TransFirst recently named Joni Floyd President of Shared Services Division. Floyd is a 22-year veteran of bank data services and e-commerce industries and has been a member of Affiliated Computer Services, Inc. management team from 1990 through 2000, where she served in several executive positions, including Executive Vice President of the Electronic Commerce Division. Floyd had served as TransFirst's Vice President of Strategic Development since 2001.

Symbol Hires Fortune 500 Veteran

Symbol Technologies, Inc. hired Mark T. Greenquist as Senior Vice President and Chief Financial Officer. Greenquist has served in numerous positions at General Motors Corp., including at GM's New York treasurer's office handling corporate finance, capital markets, foreign exchange and commodity hedging, and investor relations. He has experience with GM's European operations as Treasurer of Saab Automobile and CFO and Managing Director of GM Poland. Greenquist also worked as Vice President and Corporate Treasurer of Delta Air Lines and most recently oversaw executive management and financial operations at Agere Systems.

CheckFree Names Vice Chair Payment-industry veteran Mark A. Johnson has accepted the position of Vice Chairman for CheckFree Corp.'s Board of Directors. Johnson has worked in several executive positions at CheckFree for more than 18 years and has served on the company's Board since 1982. He left the company in 2000 to form e-RM Ventures, a private investing consultancy. His background also includes stints at The Federal Reserve Bank and Bank One.