NEWS

Walgreens Co. will continue accepting American Express Co.'s (AmEx) cards. Previously the company announced it would stop accepting them. A new, long-term agreement allows customers to use AmEx cards at all Walgreens drugstores, along with Walgreens.com, Walgreens Mail Service, Walgreens Home Care and Walgreens Specialty Pharmacy.

Lynk Changes Name to RBS Lynk

Following Lynk Systems Inc.'s acquisition by The Royal Bank of Scotland Group, the company changed its name to RBS Lynk Inc. As part of the RBS Group's U.S. holdings, RBS Lynk will report up through the Citizens Financial Group as part of a newly created division called Retail Direct, USA, focused entirely on the payment processing industry. Lynk will begin the brand transition immediately, with completion anticipated by May 31, 2005.

SunTrust Updates Status of SEC Inquiry

SunTrust Banks Inc. received notice in October 2004 that the staff of the Securities and Exchange Commission (SEC) opened an informal inquiry into matters concerning SunTrust's restatement of its financial statements for Q1 and Q2 of fiscal 2004.

In connection with that inquiry, the SEC issued a formal order of investigation and the SEC staff issued subpoenas seeking documents related to SunTrust's allowance for loan losses and related matters. SunTrust intends to continue to cooperate with the SEC.

TowerGroup: Trend Toward Outsourcing Private Label Cards to Continue

According to a report from TowerGroup, consumer credit shifts are driving in-house issuers of private label credit cards to either outsource their card businesses or sell them outright. The report, titled, "Private Label Credit Cards in the U.S.: A Market in Decline?" finds that competition from general purpose credit cards, an increase in the volume of bad loans and margin pressures contribute to the shift.

TowerGroup expects robust activity in the co-brand and reward programs. The group also predicts that payroll and gift cards will continue to compete with private label cards for transaction share at the POS. To purchase a copy of the report, send an e-mail to service-info@towergroup.com .

ANNOUNCEMENTS

CDE Adds Encryption to Client Services

CDE Services Inc.'s PIN-entry Device (PED) encryption service is in compliance with ANSI X9 (TG-3) standards. The Accredited Standards Committee X9 Inc. created and approved the TG-3 Compliance Guidelines. This organization includes more than 50 major processors, banks and networks. Its founders created it to standardize the process for reviewing security procedures throughout the industry. Certegy Establishes Corporate Headquarters

Certegy Inc. established its corporate headquarters in St. Petersburg, Fla., the principal home of the company's domestic card and check operations. Certegy's global software and development group, corporate accounting, treasury, tax, human resources support and other administrative functions will remain at the Alpharetta, Ga. location, the site of the company's corporate headquarters since 2001. EPN Launches FTP

The Electronic Payments Network (EPN), the automated clearing house (ACH) payments business of The Clearing House Payments Co., offers File Transfer Protocol (FTP) over the Internet to enable financial institutions to connect to EPN's network. EPN is the only ACH operator to offer FTP to financial institutions. Commerce Bancorp Inc., which operates 305 retail banking locations serving metropolitan New York and Philadelphia, is the first commercial user of EPN's FTP option.

Fifth Third Bank Processing Certifies WeatherMaster ATM

Fifth Third Bank Processing certified Qualtex Corp.'s WeatherMaster weather-resistant ATM, for processing on its network. Qualtex's WeatherMaster ATM gives bank equipment dealers and independent ATM deployers access to a lower cost through-the-wall ATM for small financial institutions and retail establishments.

InstaPay Systems Gets Patent

The U.S. Patent and Trademark Office issued patent No. 6,834,271 to InstaPay Inc.'s wholly owned subsidiary, Kryptosima. The patent takes a broad approach to describing methods for implementing secure payment transactions on the Internet. It addresses the processes that the company's payENKRYPT service uses to enable ATM card transactions for Web merchants.

Merchant 911 Recommends CardinalCommerce

Merchant 911, an organization dedicated to helping merchants combat fraud, chargebacks and related expenses, selected CardinalCommerce Corp. as a recommended provider of fraud-related chargeback reduction measures. Merchant 911 endorses CardinalCommerce's Cardinal Centinel software for merchants who wish to reduce their exposure to fraud and chargebacks by participating in the Verified by Visa and MasterCard SecureCode programs.

Firms Join Retail Broadband Alliance Created by New Edge Networks

More than a dozen new companies have joined the Retail Broadband Alliance, a forum that makes it easier for retail merchants to migrate to broadband networks. New members include card payment processors, POS solutions providers and ISOs. New Edge Networks formed the Alliance in November 2004 to bring together companies that represent turnkey products used in the retail sales supply chain for data networks.

The Alliance develops marketing and educational programs to help increase awareness of solutions that enable broadband networking use. Membership in the Retail Broadband Alliance is open to companies whose products and services target the retail industry. Member companies must have a minimum of two years of operating history and proven expertise in retail markets. More information is available online at www.newedgenetworks.com/solutions/rba/ .

In other news, the broadband networks New Edge Networks builds for business customers are compliant with the credit card data security requirements of AmEx, Discover and MasterCard. The company awaits validation of compliance from Visa U.S.A. New Edge Networks will undergo regular system audits to maintain its compliance certification.

Paymentech Certifies SLIM CD

SLIM CD POS software has been certified on the Paymentech LP platform. The software supports both card-swipe and keyed transactions. SLIM CD's NetConnect connectivity generally processes transactions to Paymentech in two to five seconds without requiring the merchants to have a leased line or dedicated Internet connection.

TPI Achieves Security Compliance

TPI Software LLC's software is in compliance with Visa U.S.A.'s Cardholder Information Security Program (CISP) and MasterCard's Site Data Protection (SDP) program. TPI developed its SmartPayments software in accordance with Visa's CISP "Payment Application Best Practices" (PABP), a newly formalized compliance program for software applications defining a set of guidelines for developing secure payment applications.

Tranax ATM EPPs Certified by Visa

Tranax Technologies Inc. will make Visa-certified encrypting PIN pads standard on all of Tranax's Mini-Bank 1500, Mini-Bank 2150, Mini-Bank 2250 and Mini-Bank 2100T ATMs. Tranax made this decision despite the fact that Visa has postponed its PED- certification deadline.

TSYS Finalizes BofA Agreement; Extends MBNA Agreement

TSYS added five years to its current agreement with Bank of America (BofA) to provide exclusive processing services through 2014. The expanded relationship covers all consumer- and commercial-credit Visa and MasterCard accounts issued by BofA, as well as the recently acquired portfolio of FleetBoston Financial Corp. In other TSYS news, MBNA Corp. extended its existing seven-year relationship with TSYS for commercial-card processing services by an additional three years. MBNA has been a TSYS client since 1995.

USA ePay Bundles Security Scans for Online Merchants

USA ePay has become the first payment processor to bundle Visa and MasterCard compliance security scanning at no additional cost to merchants. This new service bundle is designed to allow all USA ePay merchants to easily meet the requirements of Visa and MasterCard's new PCI security standard.

WRG Moves to New Headquarters

Western Reserve Group Inc. (WRG) moved into its newly constructed corporate headquarters. The 25,000 square-foot facility allows WRG to manufacture 350 ATMs simultaneously, as well as keep an on-demand inventory of 775 units. The structure is located on 2.5 acres, allowing WRG to expand the facility by another 30,000 square feet in the future. An information technology (IT) room allows WRG's IT staff to monitor all systems from a secure, central location.

PARTNERSHIPS

CrossCheck Inc. Named Heartland Provider

CrossCheck Inc. will provide check authorization services, including electronic check conversion, to Heartland Payment Systems Inc. as part of Heartland's suite of payment services.

Heartland's check conversion service offers check conversion at the point of sale and delivers funds directly to the merchant's account. This program's unique features include the guarantee and conversion of business checks.

Wal-Mart, GE Consumer Finance and Discover to Issue Credit Card

Wal-Mart, GE Consumer Finance and Discover Financial Services will launch a new credit card on the Discover network. GE Consumer Finance will issue the new card, called Wal-Mart Discover, and will make it available to customers by March 2005.

First National Merchant Solutions Extends ECHO Contract

First National Merchant Solutions renewed Electronic Clearing House Inc.'s processing contract under the Visa POS Check program through December 2005. First National first contracted with ECHO to process Visa POS Check activity in December of 2002.

Ingenico and Vuemedia Create Customer Channel

Ingenico formed a partnership with VueMedia to develop a joint product that will enable retailers to reach consumers in real-time with messaging at the POS or anywhere in the retail store. VueMedia's Personalized Real-time Interactive Store Middleware (PRISM) will leverage Ingenico's i6770 terminal to deliver a single easily integrated point-of-payment and in-store technology platform that will allow retailers to communicate directly in real time with consumers.

In other Ingenico news, the company formed a marketing partnership with IBM, in which Ingenico will supply terminals and transaction acceptance technology for IBM's Retail Store Solutions organization within the United States. The agreement includes all Ingenico multi-lane products sold to major U.S. retailers.

Returned Check, ARC and ACH Transactions Processed On-demand

JUSTCHEX LLC added access and functionality for collection agency and bank partners to use the transmodus.net Web site as its own client-processing platform. The site functionality enables collection agencies and banks to manage client accounts and configure their own business models. transmodus.net provides an on-demand solutions platform that delivers verification, electronic recovery and secondary collections.

Keycorp and Thales Sign Global MOU

Keycorp Limited and Thales e-Transactions signed a Memorandum of Understanding to develop, manufacture and sell secure payment systems. Keycorp will distribute and install Thales Artema payment terminals for specific opportunities. Although the focus of the relationship is payment terminals, the two companies will also explore other areas of common interest.

Lipman Get $2.5 Million Order From UBC

Lipman Electronic Engineering Ltd. received a $2.5 million order for its NURIT 8320 desktop POS terminal from United Bank Card Inc. (UBC). UBC currently handles the merchant accounts for more than 20,000 locations and processes in excess of $2 billion annually.

Moneris Solutions, InfoTouch and Merchant Partner Join Forces

Moneris Solutions, InfoTouch Corp., and Merchant Partners have teamed to integrate payment processing with touch screen technology. The offering consists of a Moneris merchant account, InfoTouch's Store Manager touch screen POS software and Merchant Partner's Virtual Point of Sale.

NOVA and Givex Partner

NOVA Information Systems Inc. and Givex Corp., a gift card and loyalty transaction processor, formed an alliance that will allow the companies to market enhanced electronic payment, gift, loyalty and check products to merchants in North America.

RBS Lynk Joins With New Edge Networks; Adds Members to OneLynk Alliance

New Edge Networks entered into an agreement with RBS Lynk to provide national broadband DSL access for multi-location networks. New Edge Networks will provide direct high-speed connections to all Lynk processing centers for redundant access by its merchant customers. In other company news, RBS Lynk signed Kobus Business Systems and Systems Technology Group as the newest members of OneLynk Alliance, RBS Lynk's value-added reseller program.

TransAKT Taiwan and Wireless Tech Asia Pacific Jointly Market VoIP

TransAKT Taiwan Limited reached an agreement with Wireless Tech Asia Pacific PTE for the sales and distribution of TransAKT Taiwan's Voice over Internet protocol (VoIP) services and hardware in the Asia Pacific region. TransAKT will be the exclusive supplier of the VoIP network that Wireless Tech will offer. TransAKT Taiwan will also supply Wireless Tech with all of its VoIP hardware.

Pay By Touch and Certegy Partner

Pay By Touch entered into a marketing alliance with Certegy. The alliance will allow Pay By Touch users to cash government and payroll checks at Pay By Touch merchant locations using its finger scan technology along with Certegy's Paycheck Accept Verification and Check Guarantee services.

ACQUISITIONS

Discover Financial Services and Pulse EFT Association Merge

Discover Financial Services and PULSE EFT Association completed their merger following approval of PULSE's financial institution members. The merger joins PULSE and its 4,100 member banks, credit unions and savings institutions with Discover Network and its four million merchant and cash access locations. PULSE will become a business unit of Discover and will retain its brand, pricing and operating platform as well as its management team, staff and Houston headquarters.

eFunds to Acquire ClearCommerce

eFunds Corp. signed an agreement to acquire ClearCommerce Corp. eFunds will pay the purchase price of approximately $19.4 million in cash at closing, which is expected to occur in Q1 2005. The acquisition will add a "card not present" fraud prevention solution to eFunds' retail and financial service offerings. It will also expand the company's footprint in the retail sector with more than 140 new customers in seven countries.

TSYS to Acquire Vital Processing

TSYS signed an agreement to purchase the 50% equity stake that Visa U.S.A. holds in Vital Processing Services. Following the closing of the transaction, Vital will become a wholly owned subsidiary of TSYS. Beverly Wells will remain President of Vital. TSYS expects the transaction to close in Q1 2005.

APPOINTMENTS

First Data Names Mobile Solutions Director

First Data Corp. appointed Nandita Bakhshi to Managing Director of Mobile Solutions, a new business unit focused on mobile payments and related services. Bakhshi joins First Data from FleetBoston where she served as an Executive Vice President of Consumer Deposits and Payments. She previously held executive level positions at Home Savings of America and Bank One Corp.

DuoCash Names New CEO

Internet payment solutions company DuoCash Inc. named Albert F. Case Jr. as Chief Executive Officer. Case joined the company as a consultant and acting Chief Operating Officer in June of 2004. Case, a 30-year veteran of the information technology industry, previously served as Division President and Senior Vice President of Gartner Inc., and President and Managing Director of Stamford Research.

CardSystems Hires Sales VP and Director

Integrated electronic payment processor CardSystems Solutions Inc. appointed William Caylor to Vice President of Sales and Robert Cochran to Director of Sales. Caylor brings to CardSystems more than 15 years of experience in the payment processing industry. Prior to joining CardSystems, he served in sales management positions for NOVA Information Systems and Moneris. He also spent more than nine years in sales and general management positions with First Data and other payments companies. Cochran brings more than 17 years of experience in the merchant bankcard services industry. He's been responsible for building and managing sales channels, which include a direct sales force, regional sales offices and national agent/ISO channels.

Wells Fargo Exec Voted NACHA Chairman

The members of NACHA - The Electronic Payments Association elected Steve Ellis, Executive Vice President of Wells Fargo & Co.'s Wholesale Banking Group, to the position of Chairman of NACHA's Board of Directors. Ellis and the new NACHA Board officially began two-year terms on Jan. 1, 2005. Ellis is a 17-year veteran of Wells Fargo.

ViVOtech Names New CEO

ViVOtech appointed Michael Mullagh to CEO and a member of the Board of Directors. Mullagh served as President and CEO of Telephia and Whisper Communications, and as President and COO of two large Canadian wireless carriers. Mullagh replaces ViVOtech co-founder Jorge Fernandes, who becomes Chairman of the Board.

Ingenico Hires Rousseau and Le Marre

Sylvain Rousseau joined Ingenico as Group Vice President of Operations. Rousseau started his career at Hewlett Packard, before moving on to Thomson in June 2000, where he was International Supply Chain Director at the Tubes Division. Patrice Le Marre is now in charge of Supply Chain Management, reporting to Rousseau. Le Marre was previously head of planning at Alcatel. His top priority will be further growth in profit margins through cost control and enhanced customer service.

BOTTOM LINES

• The average consumer will spend $97.27 this Valentine's Day, down slightly from $99.24 in 2004, a study from the National Retail Federation (NRF) predicts. NRF expects 2005 total Valentine's Day spending to reach $13.19 billion.
• U.S. gays, lesbians and bisexuals are expected to spend $610 billion in 2005, a $30 billion increase over last year, according to a study by Packaged Facts and Witeck-Combs Communications.
• Consumers bought $70 billion worth of merchandise in 2003 using self-check out systems, according to the "Atlanta Journal-Constitution."