NEWS

ccording to The Conference Board's Consumer Research Center, the slowdown in job growth has curbed consumers' confidence. Consumers who assessed business conditions as "good" declined to 23.2% from 25.2%. Consumers have also reduced expectations for the next six months. Those anticipating conditions to worsen increased to 8.8% from 7.1%. The employment outlook for the next six months was also less favorable. The number of consumers expecting fewer jobs increased to 15.4% from 13%; however, consumers expecting their incomes to improve in the months ahead rose to 19.3% from 18%. The Conference Board predicts that until the job market and pace of hiring picks up, cautious attitudes will prevail.

LML Defendants Change Counsel

LML Patent Corp. agreed to, and the U.S. District Court of Delaware approved, a second extension of time for Electronic Clearing House Inc. (ECHO), Xpresschex and NOVA Information Systems, Inc. to respond to LML Patent Corp.'s patent infringement complaint. A second extension of Sept. 17, 2004 was requested because each defendant recently changed lead counsel.

MasterCard Reports Online Debit Growth

MasterCard International's online debit activity, which includes Maestro and Cirrus, continued to show growth for the three-month period ending June 30, 2004. The Maestro brand appears on more than 545 million cards worldwide, a 10.2% increase over the same quarter in 2003. Europe continues to be the largest cardholder base for Maestro with 253.1 million cards, a 10.2% increase over the same period in 2003. MasterCard's purchase transactions for the second quarter of 2004 totaled 1.4 billion. In the United States, Maestro-processed purchase and transaction volumes surpassed all-time second quarter highs, with transactions growing 92% during the first six months of 2004. MasterCard reports that new acquirer and merchant-direct connections to the MasterCard Debit Switch, as well as Maestro issuer decisions to designate the MDS as their preferred routing channel for online debit transactions, fueled the increases.

Visa Breaks Olympic Sales Record

Visa International sales at the 2004 Olympic games in Athens broke all records set at previous Olympic games. During the month of August 2004 Visa transactions through ALPHA Bank in Greece increased 55% compared to August 2003. Visa reports sales volumes of approximately $12 million worth of card purchases at Olympic venues in 17 days. The average transaction value of $103.50 was an increase of 44% compared to the Sydney 2000 Games. Additionally, more than 50,000 withdrawals were made at the 17 Olympic ATMs, totaling $5.4 million, a 41% increase from the Sydney Games.

ANNOUNCEMENTS

ATM Alliance Corp. Expands Services

ATM Alliance Corp. has set up sales teams in Las Vegas and Los Angeles to secure locations for cash-dispensing and cashless ATMs. ATM Alliance Corp. provides in-store financial transaction equipment, products and services. The company currently has several hundred cash-dispensing ATMs in each city and expects to install 250 scrip ATMs each month in each city. The companies place ATMs in locations that typically get heavy foot traffic, including casinos, convenience stores, fast food businesses and nightclubs. The sales team will also focus on places that aren't equipped to accept credit cards.

CardSystems Certifies Ingenico Elite 712

CardSystems Solutions certified the Ingenico Elite 712 terminal for credit and debit card acceptance. Additionally, POS outsource provider Terminals Direct will resell Ingenico's Elite 710 terminal. The i3010 PIN pad is also available through Terminals Direct.

The Elite 710 and 712 are part of the Elite family of terminals that leverage the UNICAPT multi-application architecture. Recently, Ingenico recently shipped its 500,000th UNICAPT-based terminal. The company also just finished its strongest half-year ever. Sales were 27.3% higher than the first half of 2003 and 5.4% higher than in the second half of 2003.

Cynergy Opens Manhattan Office

Cynergy Data opened a new office in Manhattan. The new office houses Cynergy's Executive, Marketing and ISO Support departments. Other staff, including the Customer Service, Technical Support, Application Processing and Deployment departments, will remain in Cynergy's original office in Queens. Cynergy's Manhattan office, located near Penn Station, Times Square and Grand Central Station, will allow for more convenience in arranging meetings between Cynergy staff and ISOs, vendors and executive partners. All phone numbers and e-mail addresses will remain the same.

JUSTCHEX Debuts Mobile Phone Check Verification

JUSTCHEX, LLC, provider of online processing of returned checks for payment, now provides wireless access to funds verification services delivered through the text messaging functions on most mobile phones. The service, Chexmessaging, is available to clients of JUSTCHEX, as well as the clients of any other check recovery or collections company. Clients need only register a mobile phone on the company's Web site. There is no software required.

Clients enter the routing and account number of a personal, business or payroll check on the keypad of their phone and the service inquires in real-time about the status. The system queries combined databases of up to 200 million check writer accounts and displays the results on the phone screen. The replies include "Yes" for an open, funded account; "No" for a closed account, repeat offender or a negative balance account. Details of all responses are also added to the client's reporting list on the Web site. Valued-added functionality includes velocity control to limit how many checks a client will accept in a client-defined period of time. The company plans to add a check guarantee service utilizing Chexmessaging in the fourth quarter of 2004.

MagTek's MICRImage Certified

Secure Payment Systems (SPS) successfully completed testing and certification of MagTek's MICRImage product. The MICRImage reader is designed to read and process all electronic check applications. MICRImage also supports an optional 3-track Magnetic Stripe Reader that reads ISO standard cards and AAMVA driver's license formats. MICRImage has a storage capacity of up to 100 black and white images. The certification will enable the MICRImage device to interface with current POS terminal applications downloaded on Lipman and Hypercom Corp. products supported by SPS.

National EFT, a division of Alliance Payment Technologies, Inc., also certified MICRImage. The MICRImage device will be configured to interface with a PC and will be deployed by National EFT nationwide. This offering will be integrated with National EFT's WebGateway for ARC and RCK transactions.

Randel Honored as Entrepreneur of Year

Neil Randel, President and CEO of First American Payment Systems, was named a winner in the Business Services category for the Ernst & Young Entrepreneur of The Year Awards in the Southwest Area. The awards honor entrepreneurs through regional, national and global award programs in over 100 cities and 35 countries. Randel will be eligible for consideration for the Entrepreneur of The Year national program. Winners will be announced on Nov. 20, 2004.

TransAKT Corp. Sets Sales Record

TransAKT Corp. sold 3,400 Voice Over Internet Protocol (VoIP) units in August, marking the company's single most successful sales month to date. The units were sold into Canada, Holland, Taiwan, Israel and Portugal. These sales included handsets as well as VoIP servers.

PARTNERSHIPS

ACH Direct Awarded Toll Roads Contract

ACH Direct, Inc. signed a contract with the Transportation Corridor Agencies, which operate Orange County California's 67-mile public toll road system, to provide toll transaction processing services to its organizations. ACH will be responsible for processing all checks received by toll roads customers.

CheckFree and Wells Fargo Extend Agreement

CheckFree Corp. signed a five-year contract extension with Wells Fargo & Co. to continue as a provider of electronic billing and payment processing services. CheckFree has been processing electronic bill payments for Wells Fargo since 1996. In 2003, the company began delivering CheckFree e-Bills from hundreds of billing organizations to Wells Fargo's online customers.

Columbia Bank Chooses TrustCommerce

Columbia Bank selected IP-based payments solutions provider TrustCommerce as its third-party payment processor for Internet-based transactions. Terms of the deal were not disclosed. A wholly owned subsidiary of Columbia Banking System, Inc., Columbia Bank operates 34 branches in Washington.

First Data Announces New Partners

First Data Corp. signed a product development agreement with JCB, the largest card issuer and acquirer in Japan. Under the terms of this agreement, First Data will enhance its VisionPLUS card processing system to support JCB issuance and acquiring. In addition, First Data will support JCB in its efforts to enable First Data's worldwide client base to issue and acquire JCB cards. VisionPLUS software offers new account processing, merchant administration, cardholder billing, collections and co-branding capabilities.

First Data also extended its processing agreement with Nationwide Building Society. Nationwide Building Society is the UK's fifth largest mortgage lender and ninth largest retail banking, saving and lending organization. First Data will process Nationwide's Visa credit cards, as well as provide a full contact center for cardholders. The organization has 700 branches, 200 branch agencies and approximately 2,000 ATMs. Also in First Data news, Washington Mutual, Inc. agreed to extend its STAR Network relationship with First Data. Terms of the agreement were not disclosed.

Omaha Lincoln Clearinghouse Association Chooses NCHA

The National Clearing House (NCHA) recently implemented settlement services for the Omaha Lincoln Clearinghouse Association, the 18th clearinghouse to choose NCHA for settlement and related services. Omaha Lincoln Clearinghouse is the third clearinghouse to be converted to NCHA this year, and the 11th conversion in the last 16 months. The addition of nine Omaha Lincoln Clearinghouse members brings the total number of financial institution processing sites using the NCHA National Settlement System to 429. Many of these sites belong in multiple settlement arrangements, for a total of 517 exchange participants.

Smart Financial Credit Union Installs Postilion

Smart Financial Credit Union has installed Mosaic Software's Postilion software to provide in-house ATM driving as well as transaction switching and routing for its network of ATMs. Serving the Houston area since 1934, Smart Financial provides service to more than 82,000 members.

KeyBank and JPMorgan Chase Use SVPCO Image Exchange

SVPCO, the electronic check processing business of The Clearing House Payments Co., recently launched the company's Image Exchange Network, following a two-month test period with KeyBank and JPMorgan Chase & Co.

SVPCO's Image Exchange Network enables financial institutions to clear and settle check images directly or through other parties. The network allows institutions to create digitized images of paper checks. The initial exchange between KeyBank and JPMorgan Chase was managed at a controlled volume level to fully test the operations at each bank. The banks expect to continue to exchange a steadily growing number of electronic check data and image cash letters, increasing volumes throughout 2005. The SVPCO network enables financial institutions to exchange their files peer-to-peer through a secure network, while activity and summary information is exchanged centrally through SVPCO for management reporting and settlement services. The SVPCO network supports the exchange of electronic data and image for forward presentment, return items and IRD printing.

TCF National Bank Joins NACHA

TCF National Bank has joined NACHA - The Electronic Payments Association as its 20th financial institution member. NACHA now has 39 direct members consisting of 19 payments associations and 20 financial institutions. The other financial institution members are ABN AMRO, American Express Co., Centurion Bank, Bank of America, Bank One, BB&T Corp., Capital One, Citibank, Commerce Bank, Discover Bank, FleetBoston Financial, Fort Knox National Bank, JP Morgan Chase, KeyBank, Mellon, National City, PNC Bank, U.S. Bank, Wachovia and Wells Fargo.

ACQUISITIONS

Fidelity National Financial to Acquire InterCept

Fidelity National Financial, Inc. will acquire InterCept, Inc. for $18.90 per share. InterCept provides technology products and services to the financial industry, including item processing, check imaging, EFT and debit card processing. The company serves more than 2,000 clients and operates more than 30 check imaging processing centers nationwide.

Magex Acquires Open Payment Technologies

Magex Holdings acquired Open Payment Technologies, Inc. (OPT). Headquartered in London with offices in San Francisco and Phoenix, Magex provides electronic payments services to the financial services, telecommunications and retail industries. OPT provides stored-value products and electronic payment processing to vertical markets, including the retail and hospitality industries.

Magex will distribute OPT's stored-value card processing, loyalty programs and transaction authorization services to merchants, value-added resellers and financial services institutions globally. Magex will maintain OPT as a wholly owned division and retain the Opticard brand name. Dave Ingwersen, President of OPT, will become President of Magex's Card Services Division.

PRE Solutions Acquires GTS Prepaid

Prepaid processing provider PRE Solutions, Inc. completed an asset purchase of GTS Prepaid. The acquisition of accounts from GTS Prepaid brings PRE Solutions approximately 4,000 additional customer locations. Following the acquisition, PRE Solutions will deliver prepaid products and services to more than 50,000 retail outlets in the convenience store, check cashing, grocery, drug store and discount retail industries throughout the United States and Puerto Rico.

APPOINTMENTS

VeriFone Appoints Barry to Vice President

VeriFone, Inc. named Kevin Barry Vice President of Global Supply Chain Management. Barry will be responsible for demand planning, supply base management, contract manufacturing and fulfillment centers. Most recently, he was with Solectron, where he held senior supply management positions in the Technology Solutions Business, Asia Materials Services unit, and the Global Materials Services unit. Prior to Solectron, Barry worked at General Electric.

DeSimone Named E4X SVP

Multi-currency services provider E4X, Inc. appointed Michael DeSimone to the position of Senior Vice President, Sales and Marketing. DeSimone has more than 17 years of experience in the area of foreign exchange services and international payments. As E4X's new SVP of Sales and Marketing, DeSimone will lead the company's sales and marketing strategy. Previously DeSimone held sales, product development and technology positions with Travelex, Citibank and Thomas Cook Financial Services. In his various roles, DeSimone has worked closely with many organizations, including Visa, JP Morgan Chase, Bank of New York and the Royal Bank of Scotland. DeSimone's experience also includes overseeing the development and launch of several Internet-based trading, FX and payments systems for personal and commercial segments. He is a member of NACHA's Global Payments Forum.

Bottomline Promotes Eberle and Donovan

Bottomline Technologies promoted Rob Eberle to President and Kevin Donovan to Chief Financial Officer. Eberle joined Bottomline in 1998 and has been the company's Chief Operating Officer since 2001. He will continue to serve as COO, retaining his sales and customer execution responsibilities.

He will also assume a greater responsibility for executing the company's growth plans. Donovan, Bottomline's Treasurer and Vice President of Finance, joined the company in 1999. He has also served the organization as Corporate Controller.

Hargens Appointed to Q Comm Board

Harry Hargens was appointed to the Board of Directors for Q Comm International, Inc. Hargens was instrumental in the development of the business of automating credit card processing at the POS. He has been active in the payments and transaction processing industry since 1981, having held senior management positions at Omron, VeriFone, TransNet, HONOR, and National Data.

Presently, Hargens serves as a CEO, President, and Director of InstaPay Systems Inc., the holding company of Kryptosima LLC, which he founded in 2000.

Lang Named Director of Sales for CheckAGAIN

Electronic check re-presentment provider CheckAGAIN promoted Robert Lang to Director of Sales. Lang will work in CheckAGAIN's regional office in Florida and will oversee the company's sales teams in Florida and Virginia. Lang has 20 years of experience. Before joining CheckAGAIN in 2002, he served as President of Audit Systems and National Account Manager for AccuCheck.

NOVA Promotes McAlhaney

David McAlhaney was appointed to the position of General Manager, Member Service Provider channel for NOVA Information Systems, Inc. McAlhaney will be responsible for all business development and sales strategies for the MSP channel.

He joined the company in 1999 and most recently served as Midwest Regional Vice President of NOVA's MSP channel. He will report directly to Mike Higgins, NOVA's Senior Vice President, Sales and Relationship Management.

McAlhaney has over 20 years' experience in the payments industry. Prior to joining NOVA, he was a partner at American National Bankcard. He also spent eight years at First Data Resources (FDR). Prior to FDR, McAlhaney spent four years employed at First National Bank of Omaha where he was responsible for managing the distribution channels for direct sales, MSP sales and agent banks sales.

Bottom Lines

• U.S. retail e-commerce sales in Q2 2004 totaled $15.7 billion, an increase of 23.1% from the same period last year, the Census Bureau reported.
• 7-Eleven, Inc.'s August 2004 sales totaled $1,093 million, an increase of 7.2% over the same month in 2003.
• The National Association of Convenience Stores (NACS) recently released its "2004 Convenience Store Industry Fact Book" on CD-ROM. The report includes data such as store counts by state and region and industry sales and profits.