NEWS

Certegy Settles Lawsuit

Alpharetta, Ga.-based Certegy Inc. has settled a lawsuit that claimed the company improperly assessed a service charge on unpaid checks during the period August 1992 through December 31, 1996, which allegedly violated provisions of the Federal Fair Debt Collection Practices Act and California's Unfair Business Practices Act.

Certegy said it would take a $4 million charge to cover the settlement costs and that the charge would reduce its Q3 earnings by about 3 cents per share to 32 cents per share, with a reduced net income of $21.9 million. In October 2002, Certegy reported third-quarter 2002 diluted earnings per share of $0.35 on revenue of $254.5 million with a net income of $24.4 million.

Economy Grew in Third Quarter

Gross Domestic Product expanded at an annual rate of 3.1% in third quarter 2002, up from the 1.3% growth rate in the second quarter, according to advanced estimates released by the U.S. Department of Commerce's Bureau of Economic Analysis. Third-quarter growth has been attributed to consumer spending, largely led by automobile purchases.

Gross Domestic Product, a key indicator of economic health in the U.S., is a measure of the monetary value of all goods and services produced, including consumption, government purchases, investments and exports minus imports.

The numbers provided by the Department of Commerce were below Wall Street's expectations of 3.5 to 4% growth in Q3, and many economists predict a slowing in Q4.

The October unemployment rate rose to 5.7 percent, up slightly from September's 5.6 percent, perhaps an indicator the economy is losing some of its momentum. Q3 "preliminary" estimates, based on more comprehensive data, will be released at the end of November.

Visa Rewards for Debit Purchases

Beginning in the spring of 2003, all Visa debit cardholders will be enrolled in a rewards program; however, not everyone will be rewarded, according to an article in the Wall Street Journal. Only those cardholders who sign for their debit card purchases, as if using a credit card, will earn points toward reward items such as movie tickets. Cardholders who choose to punch in a PIN to validate their purchase will get nothing.

More and more consumers make debit card purchases but must sign for them instead of using a PIN when paying because many merchants still do not have PIN-based POS terminals in their stores. The signature-based transaction must travel over Visa International or MasterCard International networks, and these two companies benefit because they are paid a fee for each transaction.

First Data Reports Strong Q3 Earnings

First Data Corp. reported 13% revenue growth in Q3. Revenue grew to $1.989 billion, and earnings per share grew 18% to $0.45. Payment Services, the company's largest business segment, comprised largely of Western Union, accounts for more than 40% of First Data revenue. In this segment, revenue for the quarter increased 19% to $821 million. Western Union added approximately 5,000 new agent locations Q3 and more than 15,000 locations this year. The Merchant Services segment, comprised primarily of First Data Merchant Services and TeleCheck, accounts for approximately 35% of First Data revenue. Revenue for this segment grew 21% for Q3 to $703 million.

Study: Web Use Greatest on Monday

Businesses looking to promote new products or communicate important information may want to do so on Mondays. According to a worldwide study by OneStat.com, an Amsterdam-based Web researcher and software provider, Monday is the most popular day of the week to surf the Web. The study found 15.43% of worldwide Internet traffic occurs on Monday. Thursday is the second most popular day at 15.16%. Tuesday follows at 14.71%, Wednesday at 14.57% and Friday at 14.43%.

The study also shows less Internet usage occurring on the weekends: Saturday and Sunday traffic was much lower at 13.19% and 12.52%, respectively. Research is based on an average of Web usage for the last two months - a sample of 2 million visitors divided into 20,000 visitors of 100 countries each day.

Concord on NYSE, Reports Q3 Revenue

Concord EFS, Inc. has transferred its stock listing to the New York Stock Exchange (NYSE), the world's largest equities market with nearly 2,800 listed companies and a $12.3 trillion total global market capitalization. Concord's stock will trade under the ticker symbol "CE."

Ninety percent of U.S. stocks eligible for an NYSE listing have listed on this market, and although the systems are very different, economic literature has shown that NYSE stocks tend to trade with less volatility when compared with the NASDAQ, according to Investopedia.com.

Concord reported strong revenue growth of 30% in the third quarter 2002, as compared to 2001. Concord added approximately 22,200 new merchant locations to its payment-processing service, including 1,182 quick service restaurant locations, during the third quarter. The company also announced a $150 million stock-repurchase plan in addition to the $250 million approved in August 2002, allowing Concord to buy back shares of its outstanding stock either on the open market or through privately negotiated transactions.

ANNOUNCEMENTS

First Data Expands to China

First Data Corp. extended its reach to China with the formation of First Data (China) Co., Ltd., a Shanghai-based wholly owned subsidiary. First Data will provide a full range of services to card issuing and merchant acquiring companies in China through an administrative office and data center. The subsidiary is scheduled to be in operation in the first quarter of 2003.

WesPay Honors Payment Execs

The Western Payments Alliance (WesPay) recently honored Danne Buchanan, David Gire and Kathleen Milner, three of its executives, for outstanding contributions to the payment industry.

Buchanan was awarded for his work in managing the successful digital image check truncation pilot involving six WesPay members in 2002. Gire was awarded for his efforts in growing WesPay's membership and leading the association's marketing strategy following the 2000 merger of WesPay and Bankers Clearing House (BCH). Milner was awarded for outstanding service to the payments industry for her work on the WesPay-BCH merger, as Chair of WesPay's first Symposium, and for her service on the Federal Reserve's Advisory Committee on currency operations nationally.

Gift Cards Gaining Popularity

A study commissioned by ValueLink, the gift and spending card service of First Data Corp., found the electronic gift card market has shown increases in purchases and spending in 2002.

The study reported nearly 37% of consumers purchased or received a gift card in the last 12 months. More cards were purchased this year than last year, an average of 4.6 cards per person compared to 4.1 cards in 2001, with an average value of $50 per card in 2002 compared with $44 in 2001.

Ninety-three percent of those surveyed said they are likely to purchase additional gift cards in the next year, with birthdays and the holiday season remaining the primary occasion for gift card giving (66%). In addition, 61% of consumers said they usually spend more than the initial value of their gift card.

The random telephone survey took place Aug 7-12, 2002, polling 1,278 people age 18 or older. For more information about the survey and its findings, go to http://www.firstdata.com/news.jsp.

Payment Company Changes Name

eBillit, Inc., a payment service provider for the Internet, has changed its name to PaymentOne Corp. The company says the new name better communicates its value proposition and its focus as a provider of next-generation payment strategies.

ACQUISITIONS

DAS to Acquire Texas Processor

Diversified Acquiring Solutions Sales Corp. (DAS), provider of payment-processing services, announced plans to acquire an equity position in Dallas-based The Brennes Jones Group, a national card processor. DAS provides processing services to more than 300 bank branches, processing more than $500 million each year and offering check guarantee, signature capture, gift card, loyalty card programs and Internet processing.

Scotiabank Sells Merchant Business

Paymentech bought Scotiabank's merchant acquirer and smart card point-of-sale business, which includes debit and credit card payment services and smart card programs. Paymentech will provide merchants with services ranging from point-of-sale transactions to payment processing and reporting, including smart card transactions.

PARTNERSHIPS

Certegy Wins Good Guys

Certegy Inc. will provide check warranty services to Good Guys, Inc., a nationwide consumer electronics retailer. Good Guys operates 72 stores in California, Nevada, Oregon and Washington.

Ingenico Partners in Supermarkets

Ingenico announced that its eN-Concert Store, an electronic payment system, has been integrated with MSS Global's RETAIL, a supermarket point-of-sale software. MSS Global's RETAIL is an in-store hosting solution that handles all front-end cash register functions as well as back-office management and headquarter hosting. Ingenico's eN-Concert Store will manage the payment transactions. The companies also integrated RETAIL software with Ingenico's eN-Touch 1000 and eN-Crypt 2100 terminals.

UniCache Using Hypercom's ICEs

UniCache, Inc. is using Hypercom Corp.' s ICE card payment terminals as part of a new money-transfer solution. UniCache will use its Unicard, a stored-value, magnetic stripe debit card, and Hypercom's terminals to target small businesses in the U.S. and Central America. The solution will enable people without bank accounts to pay for goods and services, make ATM withdrawals, transfer money and have access to UniCache's long-distance telephone program. No credit card or checking account is required.

Global Payments Partners for e-Commerce

Global Payments, Inc. has formed a reseller agreement with VeriSign, Inc. designed to simplify payment over the Internet. As part of the agreement, Global Payments is adding VeriSign Payment Services' Payflow Pro and Payflow Link to its line of e-commerce payment solutions, offering online retailers credit card acceptance solutions and Internet gateway products.

Golden Retriever Fetches New Contract

Service Ratings, LLC has selected Golden Retriever Systems, LLC (GRS) to provide loyalty solutions for Service Ratings' newly acquired ValueStar Real-Time Ratings program. The program helps consumers find reliable providers of local services, such as contractors, home maintenance services, auto repair shops, doctors and dentists.

GRS' tools will track and report on transactions made by consumers who are enrolled in the program and are using a ValueStar-enabled credit card so Service Ratings can gather consumer feedback, publish ratings and offer guarantees on local services to consumers nationwide.

Biometrics Catching on at Supermarkets

BioPay, LLC announced that Cardenas Supermarkets and Malone's Cost-Plus Supermarkets are using BioPay's Paycheck Secure system to fight check fraud. Cardenas stores are located throughout Southern California, including San Bernardino, Riverside and eastern Los Angeles counties. Malone's is using BioPay's solution at six of its stores throughout Dallas.

Choice of Payment with Your Latte

Seattle-based Tully's Coffee will install VeriFone's Omni 3750 point-of-sale terminals in all of its stores for credit card and gift card transactions. Tully's operates 102 specialty retail stores in Washington, Oregon, California and Idaho. Stored Value Systems will manage Tully's gift card program, including authorization, card issuance and reporting.

Tully's also announced that it has signed a multiyear credit card processing agreement with National Processing Co. (NPC). NPC will provide authorization and settlement services for all MasterCard and Visa transactions accepted at Tully's store locations.

CrossCheck Makes an Impact

CrossCheck, Inc. announced that Impact Processing will private-label CrossCheck's check guarantee services as part of its merchant payment offerings. The service will provide merchants check payment guarantee by reimbursing them for checks returned from the bank unpaid. Impact Processing provides payment-processing services to thousands of merchants nationwide and has offices in Utah, California, Washington, Texas, Idaho and New York.

APPOINTMENTS

E-Chex Appoints VP of Technology

National E-Commerce Corp., developer of E-Chex, appointed Scott Bulmahn as Vice President of Technology. Bulmahn previously served as Chief Technology Officer for v.License, a digital rights management software company that he co-founded in 1999. He was also a Technology Advisor for BeautyJungle.com.

Bulmahn has served in a variety of senior technology and management roles over the last decade. His background includes extensive experience designing, developing and managing major transaction processing systems for financial institutions, including Citibank and JP Morgan Chase.

SPS Adds Position Amid Record Growth

Secure Payment Systems, Inc. (SPS) has hired Kristin Helbert to serve as Director of Product Development and POS Systems. Helbert previously was Vice President of Peak Card Services and has a background in POS technical support and sales with significant experience in payment processing. SPS says Helbert's position was created as a result of the business' record-breaking growth.

Genpass Hires EFT Veteran

Genpass, Inc., a network ATM driver and processor, has hired William G. Raymond as Executive Vice President. Raymond previously served as Senior Manager of Bank of America's 14,000 ATM network and has 18 years in the EFT and retail banking industries, the last nine at Bank of America.