n our continuing commitment to bring you the latest and most complete report of industry news, we have expanded the feature formerly known as "FYISOs," renamed it "Industry Update" and moved it toward the front of the magazine (it's on Page 8 of this issue). You also can get fresh industry news every business day in "News from the Wire" on www.greensheet.com.

NEWS

The Securities and Exchange Commission is investigating Symbol Technologies, Inc.'s past accounting practices. The company and several of its former employees have received Wells notices from the SEC stating that the company and individuals may be charged with violations of various federal securities laws and regulations. Symbol's stock fell nearly 19% in after-hours trading after the announcements were made.

In addition, Robert W. Korkuc, Vice President and Chief Accounting Officer (CAO) of Symbol Technologies, resigned effective March 11, 2003. Symbol is searching for a replacement, and Mark T. Greenquist, Senior Vice President and CFO, is serving as interim CAO.

Skimming Ring Busted in New York

A credit card skimming operation was broken up in Queens, N.Y., when detectives found a laptop computer containing 4,300 stolen credit card numbers and blank credit cards that could have been stolen from American Express and MasterCard, the New York Times reported. The credit card numbers were stolen from consumers who had used their cards at pharmacies, shoe stores and convenience stores in New York, New Jersey and Connecticut. Officials estimated that up to $13 million in goods could have been fraudulently purchased with the stolen information.

Credit card skimmers are small battery-powered wedges containing a memory chip that can hold 50 to 100 account numbers and information. Stolen numbers are downloaded onto a computer that is connected to a card encoder, which records data such as account numbers, account-holder's name, card expiration date and a PIN on a blank card's magnetic stripe.

Feds Accuse PayPal of Patriot Act Violation Federal prosecutors claim eBay's subsidiary, online payment service PayPal, violated the U.S. Patriot Act between October 2001 and July 2002 by processing funds related to illegal Internet gambling.

The U.S Patriot act, which Congress hurriedly passed a month after the Sept. 11, 2001 terrorist attacks, prohibits the transmission of funds associated with any criminal activity. When eBay acquired PayPal in October 2002, it stopped PayPal from facilitating payments to online casinos; however, about 6% of PayPal's 2002 revenue was obtained from online gambling.

The U.S. attorney for the Eastern District of Missouri told eBay that not only might PayPal have to pay money it received from online payments to casinos plus interest, but it also faces potential civil and criminal penalties. The U.S. attorney's office offered eBay a settlement, and at the time of publication eBay had not issued a response.

Microsoft Says Beware of Windows Flaw

Microsoft Corp. issued a "critical" warning about a weakness in nearly every version of its Windows software, from Windows 98 to the latest version of XP, that could allow hackers to infiltrate the computer when users are surfing the Web or checking e-mail. A hacker or group of hackers employed this flaw to attack at least two U.S. Army Web servers on March 11, 2003, according to TruSecure Corp., a security services company that discovered the attack.

Microsoft urged Windows users to download a free software patch from its Web site, www.microsoft.com/ security. The company also said customers using the newest versions of e-mail applications Outlook Express 6 and Outlook 2002 were not at risk when using e-mail.

First Data Ranked 43rd by Business Week

The 2003 The Business Week 50-The Best Performers features "the survivors of a brutal business climate - resilient companies that boast durable profits created by innovation." First Data Corp. was ranked 43rd out of 50 companies. Three banks also made the list: Wells Fargo & Co. at 23rd, U.S. Bancorp at 26th and Wachovia Corp. at 35th.

ANNOUNCEMENTS

UNICAPT EMV 4.0 Approved

Ingenico obtained generic EMV 4.0 (EMV 2000) approval for its entire UNICAPT 32-bit architecture-based product line of point-of-sale devices for handling EMV standard smart card transactions.

Landmark Merchant Seeks Exec

Landmark Merchant Solutions is looking to fill the following position: Executive needed to manage multi-office ISO phone sales operation. Previous hiring, training and phone sales floor management skills required. Top salary, monthly bonuses and stock options are available. Best opportunity available anywhere in phone sales management. Senior management team has 100 years of industry experience. Currently there are 50 phone sales employees - looking to grow to 100. Locations are in Schaumburg and Oak Brook, Ill. You can e-mail your resume to salesexecutive@landmarkmerchant.com or fax it to 847-221-0401. Web site: www.LandmarkMerchant.com. No phone calls, please.

Ezic Certified with Global Payments

Global Payments, Inc. certified Ezic, Inc.'s Digital Payment Solution. In addition to Global Payments, Ezic is also certified to process with Vital Processing Services, First Data Merchant Services, NOVA Information Systems and CardSystems.

Contactless Payments White Paper Available

The Smart Card Alliance, a not-for-profit association working to accelerate the acceptance of smart card technology, has a new white paper available: "Contactless Payment and the Retail Point-of-Sale: Applications, Technologies and Transaction Models." The white paper provides an overview of adopted and emerging contactless payment technologies and how smart cards are used with them.

The report is available to both members of the Smart Card Alliance and non-members at no charge at www.smartcardalliance.org.

Fiserv EFT and CNS Combined

Fiserv, Inc. is combining Fiserv EFT and Consumer Network Services (CNS) into a single organization that will be called Fiserv EFT/CNS (Fiserv bought CNS from EDS in December 2002). Fiserv EFT/CNS will continue to operate as two main offices - in Portland, Ore., and Morris Plains, N.J. Grant Christenson, formerly President of Fiserv EFT, is CEO of the new business unit, and Tony Catalfano, formerly Director of CNS, is President and Chief Operating Officer.

EWI Receives Patent for PinXpress

EWI Prepaid was awarded a patent for its PinXpress transaction platform, the NACS Daily reported. The patent covers the real-time delivery of PINs to retailers' point-of-sale systems, kiosks or ATM networks.

PARTNERSHIPS

Wimsett, GTCR Partner in New Venture

GTCR Golder Rauner, LLC, Thomas A. Wimsett and other executives have joined forces to form Iron Triangle Payment Systems, LLC, which will be headquartered in Louisville, Ky. Wimsett is the former President and Chief Executive Officer of National Processing, Inc., where he worked for 19 years. Iron Triangle is already looking for growth and acquisition opportunities in transaction processing and payment services. GTCR plans to invest up to $200 million in the company. It also has invested in Genpass, Risk Management Alternatives, Skylight Financial, Transaction Network Services, TransFirst, TSI Telecommunications Services and VeriFone, Inc.

VeriFone and Prepaid in Latin America

VeriFone, Inc. is integrating EWI Prepaid's patented PinXpress technology into its point-of-sale terminals. The solution will allow retailers to manage their prepaid program from their POS system and will allow consumers to purchase prepaid services, such as wireless, long distance, Internet, coupons, ticketing, gasoline and utilities at retail locations without using any plastic cards. EWI and VeriFone have plans to jointly market and distribute their integrated solution to retailers in Latin America, Argentina, Brazil, Chile and Mexico and the Caribbean.

Latin America is a hot market for prepaid services. VeriFone says up to 95% of wireless phone customers use prepaid services in Mexico, and it estimates that it has 75% market share in the retail placement of POS terminals in Latin America.

Hypercom Lands 2 Terminal Contracts

Hypercom Corp. will supply PayRight Merchant Services, LLC with 10,000 of its card payment terminals outfitted with HyperSafe operating system security over the next 12 months. Hypercom estimates that the partnership is a multimillion-dollar deal. In addition, MSI, the New Jersey Headquarters awarded Hypercom a 12-month, multimillion-dollar contract for 10,000 terminals.

Lynk Wins Retail and Grocery Customers

Westlake ACE Hardware selected Lynk Systems, Inc. to provide electronic payment services. Lynk will interface with SDI, Westlake's POS software provider, to provide credit, debit and electronic gift card processing. Westlake is the largest ACE Dealer in the U.S. with more than 75 stores throughout eight Midwestern states.

In addition, four regional grocery store chains - K.V. Mart Company (Top Valu Markets and Valu Plus Food Warehouse), Superior Super Warehouse, Rouses Supermarket and Nugget Markets - elected to use Lynk Systems' Integra POS system to process credit, debit and EBT transactions. Integra integrates into existing POS systems and creates a gateway between stores' point-of-sale systems and Lynk's host.

DataWave Gives 7-Eleven POSA

7-Eleven Canada, Inc. has selected DataWave Systems, Inc. to provide point-of-sale activation (POSA) technology for all 497 of its stores. DataWave's technology will be used to sell prepaid cellular time from Canada's national telecommunications companies and to activate long distance calling cards at the point-of-sale.

DataWave has been supplying long distance phone cards to 7-Eleven's customers since 1995, and the company says its technology has been implemented in more than 1,000 terminals.

New CrossCheck Partners

CrossCheck, Inc. will provide check guarantee services to 24 franchised Round Table Pizza locations in California using its technology for Disputed Stop Payment and Premium Approval.

The company also announced that Credit Card Consultants is marketing CrossCheck's check guarantee services as part of its private-label merchant offering. Credit Card Consultants' check guarantee service will offer merchants reimbursement on checks that are returned from the bank unpaid.

DAS Looks to First Star

Diversified Acquiring Solutions (DAS) and Bethlehem, Pa.-based First Star Savings Bank and its seven branches have formed a merchant bankcard partnership. First Star Savings Bank will identify opportunities for merchant processing, assist merchants with their applications and set pricing. In return, DAS will manage credit underwriting and processing relationships.

BPS and NPC Renew Contract

ISO Business Payment Systems (BPS) extended its processing agreement with National Processing Co., LLC (the partnership began in June 2000). BPS, which has more than 110 sales offices located across the U.S., will continue to market NPC merchant processing services to its customers.

Certegy Checks Checks at Dick's

Certegy, Inc. is providing Dick's Sporting Goods, Inc. with check warranty services at Dick's entire chain of 141 stores in 25 states. Certegy's solution offers check approval, risk management, customer support and flexible reporting.

Global eTelecom Wins Two

Global eTelecom will provide electronic check conversion services to customers of Bridgeview Payment Solutions and Merchant Services, Inc. of New York using its processing technology, which turns paper checks into electronic transactions.

PULSE Moves Switch Ops In House

PULSE EFT Association has partnered with eFunds Corp. to bring its switch processing in house. PULSE chose to use eFunds' CONNEX processing and settlement software and professional services for its EFT network switch operation. PULSE will move its Houston switch platform and disaster recovery site from J.P. Morgan Chase & Co. to two PULSE processing sites. PULSE expects the change to be completed by November 2003.

APPOINTMENTS

Concord EFS Board Adds Director

Concord EFS, Inc.'s Board of Directors elected George F. Raymond to the board. Concord's board now has 12 directors, including eight outside directors. Raymond is president of Buckland Corp., an IT consulting company. His background includes serving as CEO of Automatic Business Centers, Inc., a payroll-processing company he founded in 1972 and sold to Automatic Data Processing Corp. in 1989.

Hypercom Expanding ISO Sales Team

Hypercom Corp. announced plans to expand its staff that supports ISOs, agents and other merchant level salespersons. Hypercom is creating "an elite team of highly experienced sales executives and payment technology, service and support" to help this channel build business and generate new revenue.

So far the team consists of 10 people. Hypercom has hired Roger Dietz as Vice President of ISO Sales, Eastern Region to serve on the ISO support team. Dietz previously served as a sales executive at VeriFone, Inc., where he managed a region of 19 states.

MasterCard Elects Board Chairman

MasterCard International announced that Baldomero Falcones Jaquotot was elected Chairman of its Board of Directors, succeeding Lance L. Weaver. Falcones is Chairman of Santander Central Hispano Seguros y Reaseguros, S.A.

He has served as Vice Chairman of MasterCard's board since March 2001 and has been a board member since 1997. Weaver, Executive Vice Chairman of MBNA's board, served as MasterCard's Chairman since March 2001. He will continue to be a member of MasterCard's board.

Provident Bancorp Appoints CFO

Provident Bancorp, Inc., parent company of Provident Bank, hired Paul Maisch as Senior Vice President and CFO. Maisch has 18 years of experience as a CFO, most recently at Premier National Bancorp in the Hudson Valley. Maisch began his career at Ernst & Whinney (predecessor of Ernst & Young) in 1974.

Global eTelecom Promotes Brundage

Global eTelecom promoted Christopher W. Brundage to Senior Vice President. The company hired Brundage in 2001 as Director of Sales, and he most recently served as Vice President of Sales and Marketing.

Genpass Builds Card Services Team

John M. Gallagher has joined Genpass, Inc. as Senior Vice President of Card Services. Genpass is owned and operated by GTCR Golder Rauner, LLC. Gallagher, who has 30 years of experience in the EFT industry, previously served as Director of Product Marketing at VeriFone, Inc.

Gallagher also has worked with Genpass CEO Bipin C. Shah at two other companies, Gensar and CoreSates Financial Corp.

BOTTOM LINES

• Gateway, Inc. announced it is cutting 17% of its workforce (1,900 jobs) and closing 76 of 268 retail stores. This is the company's third restructuring in three years, and its stock value has decreased 97% since 1999.

• The U.S. Consumer Confidence Index fell again in March 2003 to its lowest level in a decade - 62.5, down from 64.8 in February.

• Red Robin Gourmet Burgers, Inc. added Dallas-based Mandes Restaurant Group, LLC as a new franchise partner. Mandes will build eight Red Robin restaurants in the Dallas Metroplex by 2008.

• Spiegel Group, Inc., a 138-year-old company that owns apparel chain Eddie Bauer, filed for Chapter 11 bankruptcy protection. The company also closed its bankcard business, affecting 740,000 accounts. MasterCard and Visa credit cards issued through Spiegel's First Consumers National Bank no longer can be used.

• McDonald's Corp. reported that its February 2003 U.S. same-store sales fell 4.4%. Worldwide same-store sales fell for the 12th consecutive month, to 4.7%.

• Albertson's, Inc.'s 2002 fiscal fourth quarter net income dropped 29%. The company points to slow sales and increased competition.

• The Consumer Price Index, a statistic often used to measure inflation, increased 0.6% in February 2003, up from January's increase of 0.3%; it is also the largest rise in two years. Consumer prices rose largely in energy products and food.

• The Commerce Department reported that February 2003 retail sales dropped 1.6% from the previous month, the largest amount since November 2001.