NEWS

A computer hardware problem at First Data Corp. caused 800,000 Visa and MasterCard-branded credit and debit transactions to be overcharged-some of them double and triple billed-at Wal-Mart stores across the United States.

The processing errors were made on Wednesday, March 31, 2004, and were posted the following day. Staci Busby, a First Data spokesperson, said First Data corrected the error as soon as it was discovered on the company's quality control reports, and that cardholders should have seen incorrect charges reversed in their accounts by Tuesday, April 6.

First Data posted a toll-free number (888-893-0626) on its Web site and in Wal-Mart stores for consumers to call if they have any questions about the charges; the company has also been calling customers to inform them of the error. First Data said it has implemented more quality control measures as a result of the over billing.

ANNOUNCEMENTS

Study on Merchant POS Preferences in Progress

Collective Dynamics, a management consulting and research firm specializing in payments and card-centric products and services, is conducting two research studies in 2004: One study is on merchant loyalty/retention to the merchant service provider; the other is regarding merchant payment choices and merchant loyalty and retention. Collective Dynamics' research on these topics will address such questions as:

• Do merchants have preferences for accepting different card types? (Credit card, PIN debit card, gift card, signature debit card, check, check conversion, check guarantee, etc.)
• What payment types does the merchant currently accept and why? What are the drivers for accepting one payment type over another?
• Are merchants aware of the differences in pricing between PIN debit and signature debit?
• Are they more willing now to consider making a PIN pad available to accept PIN debit?
• What are their major concerns/issues with PIN pads?
• With the recent overturning of the "honor all cards" rule, what proportion of merchants that are taking credit and signature debit cards now will change their policies?
• Is the merchant using or considering alternative payment types such as ACH/Debitman?
• What equipment and terminal type(s) does the merchant use?

For more information, visit their Web site at www.collectivedynamics.com.

GO Software Certified to NetConnect

GO Software Inc., a subsidiary of Return On Investment Corp., announced its certification to Paymentech, LP's NetConnect, a secure, direct Internet connection to its card authorization center. GO Software's latest version of PCCharge processes merchant credit card transactions using the Internet and NetConnect.

Lynk First in Two Certifications

Lynk Systems, Inc. announced it was the first U.S. payment processor to certify WRG Services, Inc.'s Genesis ATM, a cash-dispensing only machine that's simple to operate and affordably priced-nearly half the cost of other ATMs, according to the company. Lynk also was the first to Class A certify VeriFone, Inc.'s Easy ID, a software for automated age verification, on VeriFone's Omni 3750 POS terminal.

New ATM Association Forms

In response to recent legislation in Illinois that bans surcharges on Link ("EBT") card ATM withdrawals, three payments industry executives formed The Midwest ATM Association, a not-for-profit corporation based in Chicago. The goals of the association are to promote ATMs and their usage, raise funds for legislative lobbying and to bring together small ATM deployers. The associations' Board of Directors include:

• President: Brad Zerman, President of Qualtex Corp.
• Vice President: Robert Halperin, President of Metro ATM Management, Inc.
• Secretary/Treasurer: Mike Boyd, Project Coordinator of Rockford Tech Systems

Prospective members of the association may request information via e-mail at brad@qualtexcorp.com or by phone at (312) 280-6700 x 101.

Shift4 Corp. Opens New Data Center

Shift4 Corp. opened a new data center-now its primary center-providing credit, debit and gift card authorization and settlement processing and transaction data storage for more than 5,000 organizations worldwide and can handle at least ten times the transaction load as before. The center offers increased bandwidth, high-speed connections to multiple and diverse Internet providers, dedicated authorization processing systems, increased database storage, a full capacity generator, better UPS systems and increased AC capabilities.

SST Awarded $6 Million in Financing

SMART System Technologies, Inc. (SST), a hosted, multi-channel provider of cashless and contactless payment and marketing analytics services, including the PowerPay cashless payment and CRM solution, announced it closed $6 million in Series A financing from Draper Fisher Jurvetson Gotham Ventures, The Grosvenor Funds and Apex Venture Partners.

PARTNERSHIPS

Toronto Credit Union Selects EFT Canada

Toronto-based Metro Credit Union is offering EFT Canada Inc.'s Web-based electronic transaction processing solution to its members. Metro Credit Union is a financial co-operative that provides banking services to its 42,000 members, including commercial loans, lines of credit, mortgages, term deposits and other investment options.

In addition, EFT Commerce LLC, a Fla.-based transaction processor, acquired exclusive rights to market in the United States, all of EFT Canada Inc.'s Canadian electronic transaction processing solutions.

Global Payments and Plug'n Pay in Referral Partnership

Global Payments Inc. and Plug & Pay Technologies, Inc., joined forces in a referral partnership that will enable Plug'n Pay to offer its Internet gateway and fraud protection services through Global Payment's direct sales force, agents and ISO channel.

Humboldt Merchant Services Partners with Northern Leasing

Humboldt Merchant Services announced it has formed a strategic partnership with Northern Leasing Systems, Inc. to provide a one-stop shop for merchant processing and equipment leasing. Founded thirteen years ago, Northern Leasing Systems, Inc. is a "micro-ticket" leasing company specializing in providing leasing and financing services for point-of-sale credit card verification equipment; it manages more than 150,000 accounts.

Ingenico Integrates Terminals with Shift4 and ECHO

Shift4 Corp. integrated Ingenico's e^N-Touch 1000 POS terminal with its Micros 8700 solution, a POS system for the food and beverage industry. Ingenico's payment terminal products are certified with Shift4's $$$ ON THE NET solution, which enables merchants using Ingenico and Shift4 products to process credit, debit and gift card transactions regardless of the point-of-sale system used.

Electronic Clearing House, Inc.'s (ECHO) will integrate its check verification and conversion services on Ingenico Elite POS terminals, including the new I5300 and I7770. ECHO's services include debit and credit card processing, check risk management services, automated clearing house processing and check conversion in the Visa POS Check program.

NPC Teams with EWI for Prepaid Offerings

National Processing Company, LLC joined forces with EWI Holdings, Inc., integrating EWI's technology with its own existing POS transaction services to offer processing services for prepaid and cash payment transactions to NPC merchants.

ACQUISITIONS

Jack Henry & Associates Buys e-ClassicSystems

Jack Henry & Associates, Inc. plans to purchase e-ClassicSystems, Inc. e-Classic develops software, including ATM Manager Pro, that enables financial institutions and ISOs to manage the operations and accounting of their ATM networks. Jack Henry & Associates provides integrated computer systems and processes ATM and debit card transactions for banks and credit unions. e-Classic will continue to operate as a wholly owned subsidiary of the company. The terms of the transaction were not disclosed.

TransFirst Announces Another Acquisition
TransFirst acquired Newport Beach, Calif.-based Internet payment processor Payment Resources International (PRI) on March 1, 2004. With the acquisition of this company, TransFirst adds approximately $1.8 billion in annual processing volume, 7,500 total merchant contracts and PRI's proprietary technology that will support the company's growth in Internet-based credit card processing, ACH/check conversion processing, recurring billing and wireless processing. PRI will now be known as Payment Resource International, a TransFirst Company.

TransFirst also recently completed its acquisition of the third party and agent bank merchant division of Fifth Third Bank Processing Solutions. Financing for the transaction was provided by GTCR and third-party debt sources. The acquisition of these two companies more than doubles TransFirst's size, increasing annual processing volume from approximately $8.5 billion to $18.5 billion.

APPOINTMENTS

GMS Adds Two to Management Team

Payment processor GM Merchant Solution (GMS) announced two new appointments: Marla Freeman joined the company as Director of Regional Sales. In this position she will maintain and grow GMS' presence in the Northeast. Freeman is the former Chase Merchant Services District Sales Manager. She has also worked with the Muscular Dystrophy Association and Paychex Payroll Systems.

In addition, the company hired Gregory Owens as Director of Corporate Sales. Owens has more than 25 years' experience in the payment processing industry. He previously worked at Sovereign Merchant Services (First Data), where he was responsible for Corporate Sales, and at American Express Co. in various management positions, including Director of Merchant Sales.

U.S. Merchant Services Appoints CFO

Stuart-Fla.-based U.S. Merchant Services (USMS) appointed Debra Millar to the position of Chief Financial Officer. Millar most recently held a similar position with Big Brothers, Big Sisters of Martin County.

In addition to her duties at USMS, Millar will also be responsible for the financial proceedings of US Advance, the latest addition to the USMS companies. Through US Advance, USMS offers capital funding against future credit card sales to its new and existing merchants.

TransFirst Has New Independent Sales Services Division

TransFirst launched the TransFirst Independent Sales Services, a new division that is focused on ISO/ISC and agent partnerships. Nancy Newton will serve as President of the new division. Newton has more than 20 years of experience in the payment processing industry.

Prior to joining TransFirst, she served as Senior Vice President and National Sales and Operations manager for Compass Bank; and as Vice President, ISO Management and Support Services and Group Manager of Third-party Sales and Support for Paymentech Merchant Services Inc. She was Senior Vice President of Merchant Sales and Support at AmStar Systems Inc. and Assistant Vice President and MPACT Installation Manager at Affiliated Computer Systems.

CardSystems Hires President/CEO and CFO

John M. Perry joined CardSystems Solutions, Inc. as President and CEO. Perry has more than 15 years of experience in the payment processing industry. Prior to joining CardSystems, he served as President and CEO of InterCept Payment Solutions, a wholly owned subsidiary of InterCept Inc.; and worked with Spectrum EBP, NOVA Information Systems, First Data Corp. and Visa.

CardSystems also hired Michael Brady as its Chief Financial Officer. Brady most recently served as the CFO for First National Bank of Omaha's Merchant Service Division. He has also held a variety of positions with Citibank, Harbridge Merchant Services and Deluxe Corporation.

Heartland Appoints New Board Member

Heartland Payment Systems, Inc. appointed George Raymond to its Board of Directors. Raymond has served as President of Buckland Corp., a consulting company to the information technology industry, since 1989. Prior to that, he founded and served as CEO of Automatic Business Centers, Inc., which merged with ADP in 1989.

Raymond served on the boards of several companies, including Concord EFS, First Fidelity Bank, Balance Bar Co. and Atlantic Data Services. He currently is on the boards of BMC Software, DocuCorp International, Emtec Inc. and Analytical Graphics, Inc.

Wachovia Elects Chairman of The Clearing House

G. Kennedy Thompson, Chairman and CEO of Wachovia Corp., was elected Chairman of the Board of The Clearing House. He will serve a one-year term. Thompson is the 71st head of The Clearing House Board in its 150-year history.

He succeeds Victor Menezes, Senior Vice Chairman of Citigroup. Menezes served two terms as Chairman and will continue to hold a seat on the Board. Thompson led the First Union-Wachovia merger, which formed the nation's fourth-largest financial services company.

AB Member Starts New Company

Scott Wagner, a member of The Green Sheet Advisory Board since its inception, announced he has started a new company: Scottsdale, Ariz-based GO DIRECT Merchant Services, Inc.

Wagner has extensive sales experience in the payments industry. Previously, he served as an agent of Card Establishment Services (CES). He then started his own ISO, registered through Chittenden Bank in Vermont. Wagner reunited with CES and then later worked at First Data Corp. After leaving First Data, he joined Hypercom Corp., and served five years as Sales Director; he was responsible for product sales to all First Data entities in the West.

Wagner said GO DIRECT Merchant Services will initially be an agent of Cornerstone Payment Systems. For more information, visit their Web site www.godirectmerchantservices.com

BOTTOM LINES

• Foot Locker Inc. announced plans to buy about 350 Footaction stores from bankrupt retailer Footstar, Inc. for $160 million.
• Voters in the city of Inglewood, Calif., rejected Wal-Mart's plan to build one of its Supercenters, The New York Times reported.
• The U.S. Department of Commerce reported U.S. March 2004 retail sales totaled $333 billion, an increase of 1.8% from the previous month and up 8.2% from March 2003.
• McDonald's now accepts Visa, MasterCard, American Express, Discover and STAR credit and debit card payments at more than 3,000 stores in the United States and expects that number to more than double before the end of 2004.