NEWS

It's So Peachy!

Beginning October 9, 2003, Federal Reserve Offices will begin issuing to U.S. banks and businesses the redesigned Series-2004 $20 note, a peach-colored bill with enhanced security features and subtle background colors, as part of an ongoing effort to stay ahead of counterfeiting. New designs for the $50 and $100 bills will be released over the next few years. Training and informational materials, including information about the bill's new security feature, are available to download or order through www.moneyfactory.com/newmoney.

Economy Grew More Than Expected in Q2

Preliminary estimates of real gross domestic product (GDP) indicate that the U.S. economy increased at an annual rate of 3.1% in the second quarter of 2003, up from the U.S. Department of Commerce's Bureau of Economic Analysis' previously released advance estimates, which showed growth at only 2.4%. Preliminary estimates are based on more complete source data than were available for advance estimates issued in August. The increase in Q2 GDP is attributed to personal consumption expenditures (PCE), federal defense spending, nonresidential fixed investment and residential fixed investment. In the first quarter, GDP increased 1.4%.

Privacy Initiative Passed, Might be Blocked

Following last-minute concessions by opponents, California Gov. Gray Davis signed SB1, the state's long-pending financial privacy initiative, into law on August 27, 2003, but efforts at the federal level to eliminate many of its key provisions began immediately.

The state legislation, the first of its kind in the country, is meant to crack down on identity theft by restricting the sharing of consumer information among financial institutions and their affiliates. At issue on the federal level is the debate over renewing the Fair Credit Reporting Act, set to expire on January 1, 2004, and whether there should be national standards set for sharing this information or if states should be allowed to set their own stricter provisions. (See GS issues 03:07:01 and 03:05:02 for more details.)

First Data Cuts 260 Jobs

In an effort to keep costs down and improve operating margins, Denver-based First Data Corp. laid off 260 employees, including 190 in Omaha, Neb., and 100 contract workers. The jobs lost all were in First Data's card-issuing division and included several different levels of employees - programmers, project managers and vice presidents.

FDC, Concord Comply with DOJ Info Request

First Data Corp. and Concord EFS, Inc. said they both have complied with the Department of Justice's request for additional information in regard to First Data's April 2003 proposal to acquire Concord for approximately $7 billion. The combined company would have control over 70% of the PIN-based debit market. The companies said they have certified their compliance with the DOJ and that it has the right to challenge their certification. Both companies still expect the deal to close in the fourth quarter of 2003.

ANNOUNCEMENTS

ETA Retires Interconnect

The Electronic Transactions Association (ETA) announced that it is retiring "Interconnect," a printed information resource for ETA members on association and industry news. The last issue of the publication was the July/August issue. The ETA now will provide this content through several different media sources: its Web site, Transaction Trends magazine and e-mail updates.

Vital Adds Lipman Products to its Offering

Vital Processing Services Class-A approved Lipman USA, Inc.'s retail and direct marketing point-of-sale application to include restaurants for credit, debit, EBT and commercial card processing for the NURIT 2085, NURIT 3000 and NURIT 3010 terminals. Vital also Class-A approved the NURIT 8000 wireless terminal to process through Vital's network.

PARTNERSHIPS

ACH Direct and EXS Partner

Electronic Exchange Systems (EXS) and ACH Direct, Inc. have established an ISO credit card relationship that will allow ACH Direct's agents to market and sell from one source for both credit card and ACH processing services and also enable EXS to provide its sales agents with merchant processing services. ACH Direct provides and processes ACH transactions (EFTs).

Convert Currency at the Point-of-Sale

CardSystems Solutions Inc. and Mtrex have partnered to provide dynamic currency conversion to ISOs, acquirers and merchants in the U.S. The two companies are integrating their technologies (CardSystems' processing systems and Mtrex's currency management systems) to offer currency conversion originating at the point-of-sale and continuing throughout authorizations, clearing and settlement to chargeback processing.

Both the cardholder and the merchant can make transactions in their currency of choice, knowing immediately how much their purchase will cost and not having to wait for their monthly credit card statement to find out.

CardinalCommerce Wins Two

CardinalCommerce Corp. has won two new customers. Both Provident Bank and First Horizon Merchant Services will offer CardinalCommerce's payment authentication software, Cardinal Centinel, to their online merchant customers. CardinalCommerce designed the software specifically for acquiring banks, merchant service providers and their merchants - it reduces the number of fraudulent transactions and guarantees payment to online merchants while protecting account information.

Chartway Chooses Certegy

Chartway Federal Credit Union selected Certegy Inc. to provide credit, debit and ATM card processing, Internet banking and electronic bill payment services and customer support for at least five years. Chartway has more than $800 million in assets, 130,000 members and branches throughout the U.S.

DAS Partners with Montana Bank

Diversified Acquiring Solutions Sales Corp. Inc., (DAS) and Missoula, Montana-based Community Bank entered into a merchant referral program whereby Community Bank-Missoula will refer new merchant business to DAS (and receive referral income and residual income on all processed volume), and DAS will handle application functions, credit underwriting and will provide the sale, setup and servicing of the processing relationships.

CyberSource Offers Check Acceptance

CyberSource Corp. has teamed with First Data Corp.'s TeleCheck division to offer its merchants the ability to accept checks over the Internet using TeleCheck's Internet Check Acceptance (ICA) service. CyberSource is a provider of electronic payment and risk management solutions.

Moneris Renews with Illinois State Office

Moneris Solutions renewed its payment processing agreement with the Illinois Office of the Secretary of State. This state office has been using Moneris Solutions' hardware, software and service/support to accept credit and debit cards and electronic checks over the phone and the Internet.

The office accepts Visa, MasterCard, American Express, Diners and Discover/Novus for business services such as driver's license renewals and new license plate orders. Moneris Solutions' original partnership with the Illinois Secretary's Office in 1992 enabled it to accept credit card payments for the first time.

Kinko's to Use Mosaic's EFT Software

Kinko's, Inc. will use Mosaic Software's Postilion EFT software for the authorization of credit and signature debit card transactions initiated in Kinko's stores. In addition, Kinko's will use Mosaic's Postilion at the corporate level as a payment gateway for routing transactions directly to networks and card issuers, which eliminates the need to route transactions from each store to the EFT network via dial-up. Kinko's also will use the software for stand-in authorizations at both Kinko's stores and corporate levels.

Another Clearing House Joins NCE

The Connecticut Clearing House joined the National Check Exchange's (NCE) check clearing and settlement organization, adding 16 banks and 428 million checks. With this addition, the NCE said it now clears and settles 4.1 million checks valued at $8.1 billion on average per day. The Connecticut Clearing House will benefit from the relationship with NCE with access to electronic check presentment and an image exchange network.

Mikasa, Starbucks Choose NPC

National Processing Co. (NPC) signed a multiyear agreement to provide authorization and settlement services for all Visa and MasterCard transactions at Mikasa, Inc.'s U.S. retail stores. NPC also will process Canadian MasterCard and Visa credit card transactions for Starbucks Corp. NPC already provides authorization and settlement services for all U.S.-based MasterCard, Visa and Diners Club transactions for Starbucks' retail, catalog and online sales.

ACQUISITION

Global Axcess to Acquire 900 ATMs

Ponte Vedra Beach, Fla.-based Global Axcess Corp. signed a letter of intent to acquire approximately 900 ATM/merchant contracts from a privately held company based in the Southeast. Global Axcess expects the transaction to close by January 15, 2004.

No further details of the deal were disclosed. Through its wholly owned subsidiary, Nationwide Money Services, Inc. (NMS), Global Axcess provides ATM management solutions such as cash, project and account management services. NMS owns and operates more than 1,600 ATMs across 39 states.

APPOINTMENTS

AMDS Strengthens Management Team

ISO American Merchant Data Services Inc. announced members of its management team: Bert Adcock is President and Co-Chairman of the Board; Don Latourette serves as Chief Executive Officer (CEO), Chief Financial Officer (CFO) and Co-Chairman of the Board; Jim Darby is Chief Operating Officer (COO) and Director; and Angie Browder is Executive Vice President. Combined, AMDS executives have more than 37 years of credit card and check processing experience.

Adcock worked at Concord EFS, Inc. for six years and was Director of Customer Service. Latourette owns and manages 21 rental real estate properties valued at more than $4.5 million. He also has owned and operated a concrete and building materials company for 30 years. Darby worked at Concord for 15 years and was the Director of Operations. Browder was the top Inside Sales Representative at Concord.

Datawire Promotes Two

Datawire Communication Networks Inc. announced appointments to its executive management team as part of an aggressive business growth plan. Patrick Cummiskey was promoted to CEO from the position of Senior Vice President of Sales and Marketing; he also will serve on Datawire's Board of Directors. Cummiskey joined the company in October 2002.

Cummiskey previously served as Senior VP of Sales in the Transaction Services Division at Alliance Data Systems; VP of Business Development at Shared Network Services, Inc.; and Executive VP, Strategic Development and Senior VP of Sales and Marketing at BUYPASS Corp. (now part of Concord EFS).

Datawire's Senior Vice President of Operations, Michael Geihsler, was promoted to President and COO. Geihsler has more than 29 years' experience in product and system development, operations, client services and business development in the transaction processing industry. Before joining Datawire in December 2002, he served as Vice President, Client Services for Alliance Data Systems. He also was VP, Electronic Commerce Systems Division at Shared Network Services and Executive VP, Product Development and Senior VP, Operations at BUYPASS.

Zucchini, Taken and Ferrero on EWI Board

EWI Holdings, Inc. appointed Michael Zucchini, Phil Taken and Louis Ferrero to its Board of Directors.

Zucchini is Chairman of the Board of Inovant and a Director of Visa USA and Visa International. He previously served as Vice Chairman of Fleet Boston Financial until his retirement from that position in 1999.

Taken is General Counsel for Tolleson Wealth Management and a consultant to various companies in transaction processing and financial services. He previously served as Chief Administrative Officer and General Counsel of Paymentech and as Senior Vice President and General Counsel of First USA.

Ferrero is the former Chairman and CEO of Anacomp and the former Chairman of Conseco Global Investments. He currently is the managing partner of Tuscany Ventures.

Williams to Serve as Global eTelecom COO

Global eTelecom, Inc. President James Ronald Williams also will serve as Chief Operations Officer (COO). Williams joined Global eTelecom as President in April 2002 and was elected to serve on the Board of Directors in March 2003. He is the founder and former President of EZCheck, a payment guarantee company, and has 20 years of experience in the payment processing industry. Williams succeeds Edward Villarreal as COO.

Global Payments Appoints Two to Board

Alan M. Silberstein and Raymond L. Killian Jr. will serve on Global Payments Inc.'s Board of Directors.

Silberstein is President and COO of Debt Resolve. He previously served as President and CEO of Western Union; Chairman and CEO of Travelers' Claim Services unit; and head of retail banking for Midlantic Bank. He also managed the credit card business and retail operations and technology for Chemical Bank.

Killian is Chairman of Investment Technology Group, Inc. (ITG), Chairman of the Board of Voice Automation, Chairman Emeritus of the Cotting School in Lexington, Mass., and is a partner in High Street Equity Advisors. He previously served as President and CEO of ITG until he retired in December 2002.

He also was Executive Vice President for the Jefferies Group from 1985 to 1995 and Vice President of Institutional Sales for Goldman Sachs from 1982 until 1985. He is a past governor of the Boston Stock Exchange and also served on the board of the National Organization of Investment Professionals.

MIST Appoints New President/CEO

MIST Inc. hired David Nyland to serve as President and CEO. Nyland has more than 15 years of experience in the technology industry. He held senior management positions at Architel and Syndesis. He also worked with Accenture, a global management consulting and technology services company. Nyland replaces Charles E. Lee, who stepped down from the positions in March 2003.

BOTTOM LINES

• U.S consumer spending increased 0.8% in July, the Commerce Department reported.

• U.S. consumer debt increased 4.1%, or $6 billion, in July 2003, largely attributed to automobile loans and other big-ticket purchases.

• Wal-Mart Stores, Inc. sold more furniture in 2002 ($1.24 billion) than any other retailer, the Wall Street Journal reported.

• Starbucks Coffee Co. plans to open retail locations in two of Charter One Financial, Inc.'s banking centers in Albany and Rochester, N.Y. Banking hours for these branch locations will be 6 a.m. to 10 p.m.

• Albertsons, Inc. agreed to add an Office Depot "outlet" with more than 700 products in stock in 18 of its supermarkets located in Chicago, Los Angeles and Phoenix, CIES-The Food Business Forum reported. Albertsons has similar partnerships with Toys "R" Us, Krispy Kreme and Starbucks.