NEWS

PayPal Settles with Feds for $10 Million

eBay Inc.'s online payment service PayPal Inc. will pay $10 million to settle charges from the federal government that it transferred funds knowingly to illegal offshore and online gambling companies between mid-2000 and November 2002. As part of the settlement, PayPal also agreed to maintain a corporate compliance program for at least two years. The settlement amount represents revenue PayPal received from processing the unlawful transactions. When eBay acquired PayPal in October 2002, it stopped PayPal from further facilitating payments to online casinos.

Future Growth for Debit Cards

A 2003 survey on the bankcard industry by the American Bankers Association found that banks plan to grow their debit card business over the next five years with "next generation" debit cards such as stored-value, payroll and debit business. Here are some of the report's findings:

• Debit cards as check replacement ranked first for growth opportunities for all large, medium and small issuing banks
• 21% of the debit-issuing banks plan to offer stored value cards in 2003
• 10% of large issuing banks plan to issue payroll cards in 2003 In addition, credit card issuers are investing significantly in technologies to prevent fraud and protect against identity theft.

Now That's a Lot of Checks!

On July 25, the U.S. Treasury's Financial Management Service began issuing 26.3 million Child Tax Credit Advance Payments, which were authorized by the Jobs and Growth Tax Reconciliation Act of 2003, and signed into law by President Bush on May 28, 2003. Most of the checks will be distributed in three mailings: July 25, August 1 and August 8. Following August 8, check disbursement will continue until the end of calendar year 2003 with a weekly volume of 10,000 to 100,000 checks.

Visa Offers Bargain Smart Card

As part of its Visa Smart Breakthrough Card program, Visa International now offers a new smart card-the GP (Global Platform)-Entry card-for $1.98. Visa says its smart card costs have decreased up to 40% since the start of the program in 2000. The Association's member banks have issued more than 60 million global Visa smart cards; of this 60 million, 22 million cards are issued under Visa's Smart Card program. Visa smart card prices are based on the cost of white plastic and include Visa's Smart Debit/Credit (VSDC) application in ROM.

ANNOUNCEMENTS

Bob Carr Receives Lifetime Achievement from MWAA

The Midwest Acquirers Association (MWAA) awarded Bob Carr, Chairman and CEO of Heartland Payment Systems, Inc., the 2003 Midwest Life Achievement Award for his contributions to the merchant bankcard acquiring industry and to Independent Sales Organizations on July 31, 2003.

In addition to serving as CEO of Heartland, Carr also helped form the Bankcard Services Association, which is now known as the Electronic Transactions Association. Carr served as the Association's Vice President for three years and as Chairman for the Committee on Ethics. Carr also has served as Vice President and Director of Data Processing for the Bank of Illinois and as a mathematics and computer sciences instructor and Director of Data Processing for Parkland College where he was elected faculty President.

Visa/MC Approve Pay-as-You-Use Processor

Visa and MasterCard have authorized Westlake Village, Calif.-based CellCharge of California, Inc., to offer its merchant customers "pay-as-you-use" credit card processing. To use the service, merchants dial a toll-free number. Using the phone's keypad, merchants enter their "PIN", the customer's credit card information and the sale amount. CellCharge says there are no transaction, monthly minimum, or annual renewal fees and no contracts or credit card equipment is required.

Transactions are captured and funds are electronically deposited into the merchant's checking account within 24 to 48 hours. Transactions take about 30 seconds to complete. Targeted merchants include sub-contractors, handymen, electricians, plumbers, carpet and pool cleaners and taxi drivers.

MSI Launches New Web Site

Merchant Services, Inc. (MSI NJ), acquired the rights to use the URL www.merchantservices.com and has launched a new Web site designed to generate leads on merchant accounts for MSI's sales organization. This new MSI Web site provides merchants with information about merchant accounts, credit card acceptance, credit card processing services and Internet online merchant services.

FDMS Certifies NETePay

First Data Merchant Services has certified Datacap Systems, Inc.'s NETePay on the FDMS North Platform. NETePay is an IP payment server for Windows that uses the Internet to obtain high-speed authorizations for debit and credit cards through FDMS processing hosts.

$1Billion in a Month Through Visa

Heartland Payment Systems, Inc. announced that June 2003 was the first month in company history that it processed $1 billion in card volume through a single credit card association for the first time. Of Heartland's total of $1.6 billion processed in June, $1 billion was processed through VISA U.S.A.

Microsoft Certifies TPI Server

TPI Software LLC's Payment Server has been certified for Microsoft Windows Server 2003. The Microsoft certification indicates that the software has met technical standards for reliability and security on the Windows Server 2003 platform. TPI develops payment-processing software for retail and online merchants.

Visa Awards Lynk

Visa U.S.A awarded Lynk Systems, Inc. the 2003 Visa Service Quality Performance Award for having the "Lowest Duplicate Transaction Rate." The award program recognizes Visa members and processors that sustain "operating excellence over the calendar year in key areas that directly affect customers."

mbi Hits 300,000 Benefit Debit Cards

mbi, a provider of employee benefit debit cards, said more than 300,000 employees are using mbi's Flex Convenience card. In July 2002, mbi surpassed the 116,000 mark of benefit cards issued. The number of employer groups offering the card to has increased from 1,500 last year to more than 4,300 today. mbi introduced the first health care debit card in 1998. The cards allow employees to pay for health care expenses rather than submitting manual claims and waiting for reimbursement.

PARTNERSHIPS

Web Site Sells Gold with Yaga

GoldMoney, a G.M. Network Ltd. company, is using Yaga, Inc.'s electronic check technology so merchants and consumers can purchase gold online. Previously, GoldMoney's Web site only allowed the acceptance of payments for gold via bank wire transfers or paper checks. In addition, Tribune Company subsidiary Tribune Media Services (TMS) is using Yaga Inc.'s Digital Content Commerce solution to for its new consumer e-mail newsletter program. TMS will offer the newsletter subscriptions through newspapers and other online publications for $19.95 a year.

CrossCheck Wins Virgin Atlantic

Virgin Atlantic Cargo is using CrossCheck, Inc.'s check guarantee services at its locations in Miami, New York, Norwalk, Conn., and San Francisco. Virgin Atlantic Cargo selected CrossCheck's Standard Guarantee and Stop Payment programs to avert bad checks, and its Premium Approval and COD coverage to accept even more checks. The company also will be able to accept incremental payments for services with CrossCheck's Multiple Check program.

Apropos Paymentech

Paymentech, L.P. will process payments and gift cards for Apropos Retail Management Systems' major apparel retailers such as bebe, White House/Black Market, Boot Town and St. John Knits.

Visa and SafeCHECK Combine Check Services

Visa USA and SafeCHECK, LLC are combining their electronic check services (Visa POS Check Service and SafeCHECK) to form a bank-owned, integrated electronic check conversion and processing solution. Visa will be in charge of the new service that converts paper checks to electronic checks and Visa's network, VisaNet, will power it.

Financial institutions enrolled in Visa POS Check Service include: Bank of America, BB&T, First National Bank of Omaha, First Citizens, Provident Bank, State Employees Credit Union (North Carolina), SouthTrust Bank and U.S. Bank.

SafeCHECK's participants include: ABN AMRO Services Company, Inc., Banc of America E-Commerce Holdings, Inc., BB&T, Fleet National Bank, JP Morgan Chase Bank, U.S. Bank, Union Bank of California, Union Planters, Wachovia and Wells Fargo.

FraudScrub.com Integrates with Visa and MC

FraudScrub.com selected iBIZ Software's CommerSafe MPI (merchant plug-in) to integrate with MasterCard Secure Code and Verified by Visa and provide these solutions to its online merchant customers.

Fifth Third Wins MAPCO

Fifth Third Bank will provide electronic payment processing of Visa, MasterCard, American Express and Discover credit and debit card transactions and EBT, Fleet card and gift card processing for MAPCO Express. MAPCO has 243 convenience stores in Tenn., Ark., Ala., Kent., Miss., La. and Va.

ACQUISITIONS

FDC Acquires Frank Solutions

First Data Corp.-backed eONE Global, LP's operating company govONE Solutions, LP acquired Frank Solutions Inc. in June 2002. Frank Solutions develops voice response and voice recognition e-commerce software for government, court, utility, insurance and higher education industries. Frank Solutions will operate as a unit of GovConnect, a subsidiary of govONE Solutions, which specializes in processing taxes and other payments for government agencies.

APPOINTMENTS

EDR Adds Telesales Director

Electronic Data Resources, Inc. appointed Rick Anthony to Director of TeleSales Operations. Anthony has nearly 13 years of experience in the bankcard industry, with expertise in risk management, credit underwriting, customer service, account management and implementation and settlement and facility management.

He previously served as Vice President of Operations at Global Payments Inc. and has held executive and management positions at Paymentech, L.P., NOVA Information Systems and NaBANCO.

Bank One Appoints New CEO

Bank One Corp. promoted William Campbell to CEO of its $74 billion credit card business. Campbell succeeds Philip Heasley, who left Bank One to pursue other opportunities. Campbell has extensive experience in consumer and financial services.

For the last three years, he advised Bank One's Planning Group. Prior to joining Bank One, he managed Citigroup's Global Consumer Business. He also worked 28 years at Philip Morris, including five years as CEO of Philip Morris USA.

E-Chex Hires New CFO

E-Chex developer National E Commerce Corp. hired Charles C. Cunningham to serve as Chief Financial Officer. Cunningham has more than 20 years' experience in corporate finance for both public and private companies.

Prior to E-Chex, he most recently was CFO for e resources inc., a publicly traded company, until it merged with Central Wireless in June 2002. Cunningham also was a Senior Associate for Buis & Co. and CFO for NatureScapes, a privately held site management firm.

EXS Appoints VP Operations

Electronic Exchange Systems hired Allan Smith as Vice President of Operations. Smith has more than 13 years of management experience, with seven years in commercial credit management. Prior to joining EXS, he served at Fidelity Investments, firstsource.com and Ingram Micro Inc. Smith has a master's in business with an emphasis in finance and a master's in economics.

Trapp Elected to Global Payments Board

Global Payments Inc.'s Governance and Nominating Committee elected Michael W. Trapp to Global Payments' Board of Directors. Trapp is a retired managing partner of Ernst & Young. He also was a member of the firm's Partner Advisory Council. Trapp also serves on the board of directors for Ann Taylor Company and The North Highland Company.

BOTTOM LINES

• 7-Eleven, Inc. opened its 25,000th store on July 9, 2003 and celebrated its 76th anniversary that same month. Approximately five 7-Eleven stores open each day around the world.
• Food and general-merchandise retailers planning to expand internationally have the most opportunity in Russia and Eastern European countries, according to A.T. Kearney's 2003 Global Retail Development Index. The index ranks retail-investment attractiveness among 30 emerging markets. Many retailers seek growth overseas because of increased competition and limited expansion opportunities in the U.S.
• Starbucks Coffee Company opened its 1000th Asia Pacific store in July. Starbucks has more than 6,500 stores worldwide, with more than 1,600 Starbucks stores outside the U.S.
• Albertson's, BJ's Wholesale Club, Safeway, Wal-Mart and Sam's Club are some of the retailers offering to cash (at no charge) tax-rebate checks from the U.S. government. The first batch of twenty-five million checks totaling $14 billion was mailed July 25, 2003.