NEWS

GDP, Spending and Inflation Up

Gross Domestic Product increased at an annual rate of 3.9% in the first quarter of 2004, according to the U.S. Commerce Department. This increase is less than the 4.1% increase reported for the fourth quarter of 2003. Major contributors to the increase were personal consumption expenditures (PCE), exports, equipment and software and federal government spending. PCE increased 3.8% in the first quarter, compared with an increase of 3.2% in the fourth quarter. Inflation was also higher, as the price index for gross domestic purchases increased 3.5% in the first quarter of 2004; it was only 1.3% in the fourth quarter.

NYCE Shareholders Approve Metavante

As previously announced, Metavante Corp., the financial technology subsidiary of Marshall & Ilsley Corp., plans to purchase the stock of NYCE Corp. for approximately $610 million in cash. Bank of America Corp., Citigroup Inc., HSBC USA Inc. and J.P. Morgan Chase & Co., all minority shareholders of NYCE Corp., have waived their rights to match the terms of the agreement. The transaction remains subject to regulatory approvals.

Electronic Payments Drive Canadian Growth

Electronic payments contributed $C107 billion to the Canadian economy since 1983, accounting for nearly 25% of Canada's cumulative economic growth, according to a study commissioned by Visa Canada. "The Benefits of Electronic Payments in the Canadian Economy" was conducted by economic consulting firm Global Insight Inc. and quantifies the impact of electronic payments on the Canadian economy. The research found that $C60 billion of growth in personal spending by Canadians over the past 20 years is directly attributable to electronic payments. Credit cards accounted for more than 82% of this growth, while debit cards accounted for just over 17%.

ANNOUNCEMENTS

Chase Selected as Brand Name

After the merger of J.P. Morgan Chase & Co. and Bank One, the combined U.S. consumer and commercial banking businesses will operate under the Chase brand. These businesses include retail banking, credit card, home and auto finance, small business, middle market and mid-corporate banking. The company reports that research indicated that the Chase brand is stronger in its consumer and commercial banking businesses. The name change will first appear in credit cards and the companies expect to begin changing bank branches on a state-by-state basis in early 2005. The Chase brand will serve more than 11 million retail banking customers, 850,000 small businesses and 31,000 commercial businesses through 2,300 branches in 17 states. It also will have 87 million credit cards issued. The holding company will continue to be known as J.P. Morgan Chase & Co.

Equifax Enhances Credit Card Activity Alerts

Equifax Inc. added credit card fraud detection features to its Equifax Credit Watch credit-monitoring product. At no extra charge, Equifax Credit Watch customers can receive additional e-mail alerts notifying them of balance changes and activity on their credit cards. Alerts are also available wirelessly via text message to cell phones. The Balance Change Alert notifies customers within 24 hours when charge card balances have increased by a user-determined dollar amount. Another credit management tool, the inactive card alert, informs Equifax Credit Watch customers when charge card activity occurs on their credit file after a self-selected period of inactivity.

Global Payments Recognized for Growth; Chair Honored

BusinessWeek Magazine recognized Global Payments Inc. as a "Hot Growth Company" and ranked Global Payments number 89 in the magazine's list of 100 "Best Small Companies." The magazine considered a range of publicly traded companies with annual revenues ranging from $50 million to $1.5 billion. It then ranked them by sales and earnings growth and return on capital over a three-year period. Paul R. Garcia, Chairman, President and CEO of Global Payments Inc., was named the 2004 Ernst & Young Entrepreneur Of The Year Financial Services Award Recipient for the Alabama/Georgia/Tennessee Region. Ernst & Young Entrepreneur Of The Year recognizes outstanding entrepreneurs who are building and leading dynamic and growing businesses. The program honors entrepreneurs through regional, national and global award programs in over 100 cities and 35 countries. Previous recipients include Michael Dell of Dell Computer Corp., Steve Case of America Online and Howard Schultz of Starbucks Coffee.

Ingenico Wins Top POS Technology Award

Frost & Sullivan honored Ingenico with its Point-of-Sale Systems Technology of the Year Award for Ingenico's innovative use of Bluetooth. Bluetooth is a wireless technology using short-range radio links to replace the cable(s) connecting portable and/or fixed electronic devices. Bluetooth is a key component of the Pay@theTable program launched by Ingenico to bring the benefits of portable wireless payment technology to the restaurant and hospitality industries.

NPC Converts Providers to EFT

National Processing Co. (NPC), provider of payment solutions for the healthcare industry, announced results of a pilot program to migrate healthcare providers from paper checks to EFT. In less than eight weeks the company was able to migrate 24% of its targeted providers from paper checks to EFT. Another 4% opted to begin accepting their remittance information electronically. The program, part of NPC's HealthePay service offering, targets the top 100 provider offices, ranked by number of payments.

SLIM CD Certified by First Data

First Data Corp. certified SLIM CD software; the POS software supports both cardswipe and keyed transactions. This certification allows merchants to use the SLIM CD software on First Data's Nashville platform. Transactions are processed in two to five seconds through SLIM CD's Frame Relay connectivity to First Data, without requiring the merchants to have a leased line or dedicated Internet connection.

Smart Card Alliance Adds 21 Members

Twenty-one new members joined the Smart Card Alliance. The not-for-profit multi-industry organization works to accelerate the acceptance of smart card technology. VeriSign and Lockheed Martin joined at the highest level of membership. Security industry companies continue to make up the fastest-growing category of new members but card manufacturers, application developers and end user organizations also joined the Alliance.

State Department Gets Biometrics

The United States Department of State (US DoS) selected Datakey Inc. and Precise Biometrics AB's Match-on-Card biometric authentication Solution for the Biometrics Logical Access Development and Execution (BLADE) project. BLADE is an initiative to increase computer network security throughout the US DoS. Datakey expects the BLADE project to contribute revenue in the range of $600,000 to $1.0 million over the next two to three quarters.

TransAKT Corp. Closes Private Placement

TransAKT Corp. successfully closed its private placement financing of 3,552,215 shares for total proceeds of $1,065,664. Funds from the private placement will be used to implement the business plan for TransAKT USA. The company's shares are now traded on OTC:BB under the symbol TKTJF.

PARTNERSHIPS

CSC and US Dataworks Form Alliance

Computer Sciences Corp., a global information technology services company, and US Dataworks, Inc., a developer of payment processing software, have formed an alliance to jointly develop and market payment processing solutions to address the challenges presented by Check 21. Check 21 allows banks to exchange checks electronically, using digital images instead of paper. CSC and US Dataworks will combine CSC's payment, check and fraud solutions with US Dataworks' Clearingworks technology to provide an integrated end-to-end solution for electronic processing.

AmEx Rolls Out Service to Iceland

Kreditkort hf. and American Express formed an exclusive agreement for Kreditkort hf. to become the sole merchant acquirer for American Express in Iceland. Kreditkort hf. will begin the first phase of managing all aspects of American Express' merchant relationships in Iceland, including the acquiring of new American Express merchants and servicing existing merchants. American Express will continue to have responsibility for all elements of card operations, including card member billing and payment systems, accounting, customer service, credit and fraud control.

Coast ATM Allies with KeyBank

ATM and cash management company Coast ATM, LLC formed a marketing alliance with Cleveland-based KeyBank to place ATMs and cash management solutions in casinos, shopping malls, office buildings and other high-traffic locations. Coast ATM will be the sales and marketing arm for the two companies, building on its existing relationships within the gaming and commercial real estate industries to secure locations for installing turnkey ATM and cash management systems. KeyBank will provide a nationwide ATM network of 2,200 ATMs. ATMs will be branded as Coast ATM machines with KeyBank providing transaction processing and maintenance.

MasterCard, NameProtect Unite vs. Fraud

MasterCard International and NameProtect, the digital fraud detection company, are working together to combat illegal online activities such as identity theft and the brokering of illegally obtained payment card numbers. Working in cooperation with law enforcement, the partnership seeks to dismantle the online tools and venues used by identity thieves before they can use them to steal personal information.

NameProtect will continuously monitor Web pages, online discussions, spam e-mail and other online formats to identify online trading rings and other forms of fraud the moment each attack is launched. NameProtect then provides real-time exclusive reports back to MasterCard. MasterCard will be able to report illegal Web sites and illegal online forums to the proper authorities for appropriate action. Through its MC Alerts service, MasterCard also can provide this information immediately to its member financial institutions.

Mosaic Software the Choice for Pilot Travel Centers and CNB

Two organizations have recently selected Mosaic Software's Postilion online processing software for their transaction processing. Pilot Travel Centers LLC selected Postilion for its locations nationwide. Pilot operates 255 travel centers in 37 states, and 250 fast food restaurants and 65 convenience stores. Pilot will use Postilion as a central switch for processing debit and credit card transactions from their gas pumps and in-store check out lanes, and for verifying checks via positive and negative file databases. Mosaic's eSocket.POS will be used for acquiring these transactions from the existing POS systems and fuel pump terminals.

Oklahoma-based Central National Bank of Enid (CNB) selected Postilion to handle its ATM transaction processing and debit card management for a multi-bank network of ATMs/card issuers. The PostCard component of the system will be used at CNB for debit card management and to provides services for 25 issuers and more than 60 different card programs. Detailed reporting as well as automated settlement and reconciliation for all 25 issuers, networks and interfaces will be handled by the Postilion Office component of the system.

NamITech and Welcome Join in South Africa

NamITech Ltd. a secure technology provider focused on the mobile, banking and government industries formed an agreement with Welcome, an international provider of enhanced payment software. NamITech will become a value-added reseller of Welcome's enhanced EMV offerings to banking customers in South Africa.

NCHA to Automate COCHA Settlement

The National Clearing House Association (NCHA) will provide the Central Oklahoma Clearing House Association (COCHA) with automated paper and image check settlement services using NCHA's Web-based national settlement system. COCHA is currently the settlement agent for CheckClear's Endpoint Exchange within the 10th Federal Reserve District. NCHA is the settlement agent for Endpoint Exchange within all the remaining Federal Reserve Districts and for intradistrict exchanges across all districts. Converting COCHA's settlement process to the national settlement system will standardize the process for all of Endpoint Exchange's image exchanges.

University of Florida Implements UPIC

Wachovia Bank issued the University of Florida a Universal Payment Identification Code (UPIC). The University is the first entity to use a UPIC commercially. UPIC was created by The Electronic Payments Network, the nation's only private sector ACH operator. A UPIC is a unique number assigned to a bank account. It looks and acts like a standard bank account number, except it can only be used for ACH credit payments. Initially, the University's UPIC was provided to companies and agencies responsible for funding grants. Today, it is provided to virtually all non-consumer remitters as a payment option for financial aid, state reimbursements and funding for grants. University of Florida has received more than 1,700 UPIC payments totaling $221.3 million.

MERGERS

Wachovia and SouthTrust to Merge

Wachovia Corp. and SouthTrust Corp. have signed a merger agreement. The merger creates the number one bank in the Southeast, and the nation's fourth largest financial holding company based on assets. The banks expect the transaction to close in the fourth quarter of 2004 and estimate its value at $14.3 billion. The combined company will have approximately $267 billion in total deposits, 3,200 banking branches and 5,300 ATMs. It will have the top retail banking market share in North Carolina, Virginia, Georgia and South Carolina, and the second largest market share in Washington, D.C., Florida, Alabama, Pennsylvania and New Jersey.

Wallace Malone, Chairman and CEO of SouthTrust, will serve as Wachovia's Vice Chairman following the completion of the merger. David M. Carroll, Wachovia Senior Executive Vice President, and Frank Schmidt, SouthTrust Bank Vice Chairman, will co-lead the integration of the two companies. Malone and two other members of SouthTrust's board of directors will join the Wachovia's board when the transaction is completed.

APPOINTMENTS

Johnson Joins CSH Consulting

CSH Consulting, the executive search firm focused on the payments industry, hired Jeff Johnson as Vice President of Search Services. Johnson, a recruiting and payments veteran, previously led Paymentech's internal recruitment efforts for four years.

ProfitPoint Hires Finnamore

ProfitPoint named Deborah Finnamore, a 15-year veteran of retail marketing, as its Director of Marketing and Corporate Communications. Finnamore will be responsible for ProfitPoint's overall marketing direction as well as supporting the company's nationwide sales centers. Finnamore has worked on all sides of the retail equation from a staffer in a retail store to marketing manager of a store design firm.

ECC Elects Lucas Vice Chair

John Lucas, Vice President and head of electronic services for Mellon Global Cash Management was elected Vice Chairman of the Steering Committee of NACHA-The Electronic Payment Association's Electronic Check Council. Lucas has spent his entire career in the treasury services industry. He has been instrumental in the design and deployment of the suite of electronic payments solutions at Mellon GCM, a treasury services business of Mellon Financial Corp. The Electronic Check Council was established in 1995 as a forum to facilitate the development of electronic check products and services.

Tesmer Named CTO of Pipeline; Appointed to Q Comm Board

Thomas W. Tesmer was named Chief Technical Officer of Pipeline Data, Inc. Tesmer will oversee the implementation of processing technologies for the integrated transaction-processing provider. Tesmer has more than 25 years of experience in the transaction processing industry. At Heartland Payment Systems he served as Senior Vice President and created and implemented the company's stand-alone transaction processing division. He served as Executive Vice President and Director of the POS Technology Division of Southeast Switch, Inc. the precursor to STAR. Tesmer also served as President of TransNet, now Paymentech, and President and CEO of Access Services, Inc., a provider of risk management services. Tesmer has also been appointed to a seat on the Board of Directors of Q Comm International, Inc., provider of prepaid processing and electronic POS solutions. Bray Burbidge resigned his position on Q Comm's board.

MobileLime Appoints Wolf Vice President Sales

Peter T. Wolf joins MobileLime as Vice President of Sales. MobileLime's technology transforms a mobile phone into a shopping device. Wolf has more than 20 years' experience in software, services and hardware integration for grocery and general retailers. He will lead and oversee all new business relationships with restaurant and grocery retailers to build merchant sales and increase customer loyalty. Wolf was recently Vice President and General Manager of CRM Solutions for Triversity Incorporated; previously he was the Director of New Business Development at ICL Retail Systems and the Director of Business Development and Marketing at the British American Consulting Group Limited. He is also an adjunct professor to St. Joseph's University Retail MBA program.

Bottom Lines

• The U.S. Commerce Department reported that consumer spending in May increased by 1%, a considerable jump from the 0.2% increase the previous month, and the largest since October 2001.

• NCR Corp. will provide Cumberland Farms, a New England-based convenience store-petroleum marketer, with a complete store automation solution (including POS terminals and bar-code scanners) for its 650 company-operated stores and stations.

• A federal judge certified a class-action sexual-discrimination lawsuit against Wal-Mart Stores, Inc., which includes 1.6 million current and former female Wal-Mart employees. It is the biggest civil-rights class-action case in U.S. history, Reuters reported.