NEWS

rganizations are more willing to migrate from checks to electronic payments for business-to-business (B2B) transactions today than they were four years ago, according to a survey from the Association for Financial Professionals (AFP). Twenty-eight percent of respondents to "The AFP 2004 Electronic Payments Survey" indicated that their organization is very likely to move to electronics for the majority of their B2B payments in the next three years, while 50% said that it was somewhat likely. Four years ago, only 9% strongly agreed that their organizations were likely to convert to electronic payments within the next three years.

The survey found that 56% of larger organizations have already integrated part or all of their accounting systems with an electronic payments system, compared to 35% of smaller organizations. Survey respondents identified four solutions that would increase their use of electronic payments: accounting software that integrates with electronic payments; bank services that provide straight-through electronic payment processing to accounting systems; a standard data format and improved fraud control over automated clearing house (ACH) payments. The report is available at www.afponline.org/epay .

Commercial ACH Payments Up 24.6%

According to NACHA - The Electronic Payments Association, financial institutions originated more than 2 billion commercial ACH payments in the third quarter of 2004. Financial institutions' originated ACH volume for the quarter was up 24.6% over a year ago. Leading the way is accounts receivable check conversion (ARC). In the third quarter there were more than 266 million ARC payments, an increase of over 500% more than a year ago. The figures cited do not include estimates of "on-us" ACH payments, in which the originating and receiving financial institutions are the same institution. NACHA estimates that, including an allowance for on-us payments, ARC is on track to reach 1.25 billion transactions in 2004.

Trial Date Set in LML Suit

A federal judge set a trial date of April 17, 2006 in the patent infringement lawsuit filed by LML Patent Corp. against four companies that provide equipment, systems and services that convert paper checks presented at the POS into electronic transactions. LML alleges that TeleCheck Services Inc.; Electronic Clearing House Inc. (ECHO); Xpresschex Inc.; and NOVA Information Systems Inc. infringe U.S. Patent Nos. 5,484,988; 6,164,528 and 6,283,366.

ANNOUNCEMENTS

Electronic Payment Systems Announces Bilingual Staffing

Electronic Payment Systems LLC (EPS) completed the hiring and training of a bilingual staff to serve the Spanish-speaking demographic, which represents the largest and fastest growing minority for EPS emerging markets.

Future considerations currently under review include a Spanish language version of the www.eps-na.com Web page, in-house agent and ISO training, and conferences and focus groups to explore approaches to the market.

JUSTCHEX Adds ARC Returns Processing, Web Services

JUSTCHEX LLC now processes ARC returns for clients using the JU$TCHEX Internet-based solution, justchex.net . The service is provided to JU$TCHEX clients and processing partners that either process ARC transactions exclusively or have a mixture of paper and electronic processing needs. The company also provides funds verification delivered as Web services. The Web service check verification inquires real time about the status of personal, business or payroll checks.

The client enters or scans the routing and account number and within seconds the system queries combined databases that include up to 200 million check writer accounts and replies with a result.

SLIM CD Inc. Renews Visa Certifications

SLIM CD Inc., a software developer and service provider, successfully completed its annual Cardholder Information Security Program (CISP) review and has also continued its Third-Party Service Provider (TPS) registration with Visa U.S.A.

The SLIM CD software product is provided to ISOs, banks and other financial institutions for distribution to their merchants.

TransAKT Corp. Wins Thai Contract; Completes $745,000 Private Placement

CHOSEN Technology Co Ltd. of Bangkok, Thailand was selected as the exclusive distributor of TransAKT Corp.'s voice over Internet protocol (VoIP) products in Thailand. The products will be branded under the name "Axen."

A minimum of 3,000 units within three months and a total of 15,000 units every year of distribution is required to be purchased for CHOSEN to maintain its exclusivity status. CHOSEN has paid for the branding of 5,000 units and took delivery of its first shipment of 500 units. TransAKT also completed a private placement of units for a total of $745,000. It will use funds from the private placement to continue the company's advancement toward providing VoIP solutions as well as mobile POS payment solutions.

Pipeline Data Increases Cash Flow

Pipeline Data Inc. successfully deployed approximately $600,000 in funds received from The Laurus Master Fund in order to acquire several merchant credit card portfolios. The acquisitions represent approximately $350,000 in annual operating cash flow.

TrustCommerce Launches Virtual Terminal Solutions

TrustCommerce launched its Level II and Level III processing capabilities. The company can now capture, process and store Level II and Level III transaction data via the Internet. Level III includes the capture of supplier, amount, order number, employee name, code, description and price. Online reporting of this data can be accessed via the TrustCommerce Vault or TCLink API.

PARTNERSHIPS

BPS Markets Q Comm to VeriFone Customers

Business Payment Systems is marketing the Q Comm prepaid wireless application to merchant customers running VeriFone Inc.'s Omni 3750 terminal. VeriFone certified Q Comm's prepaid applications for the VeriFone Omni 3750 and named Q Comm as a value-added partner.

CO-OP Renews Relationship With STAR

CO-OP Network, the nation's largest credit union EFT network, renewed its relationship with First Data Debit Services for STAR PIN-secured debit services. The multi-year agreement extends CO-OP Network's STAR network membership for its more than 1,725 credit union members across the country. CO-OP Network selected STAR Network to complement CO-OP Network's ATM network, facilitating ATM access for CO-OP Network cardholders at STAR-branded terminals nationwide. In addition, CO-OP Network will process most of its PIN-debit POS volume through STAR.

Hypercom Wins Ireland Contract

EuroConex, the European affiliate of NOVA Information Systems and a wholly owned subsidiary of U.S. Bancorp, awarded Hypercom Corp. a $4 million contract to lead the changeover of card payment technology in Ireland.

More than 150 million POS card payment transactions annually, now conducted via magnetic stripe cards and signatures, will be migrated to chip and personal identification number (PIN) card transactions using Hypercom's ICE 5500 and HFT 106 terminal technology.

Three Companies Introduce LaunchPAD

VeriFone Inc., Mosaic Software and ID Data launched a new program aimed at helping card-issuing and acquiring banks maximize their investment in EMV. LaunchPAD is an agreement between the three companies to deliver an end-to-end solution for the implementation of pre-authorized debit (PAD), an offline payment method that slots into existing EMV infrastructure as an extension to credit and debit.

The pre-authorized transaction is debit-like, but reduces risk by guaranteeing that funds are available. The merchant terminal treats a purchase transaction as EMV-authorized offline and generates an audit trail showing the authenticity of the card and PIN.

Ingenico Partners With Desjardins; SIVA Certifies i7770

Ingenico will supply 30,000 payment terminals and PIN pads to Desjardins, the largest integrated cooperative financial group in Canada. The deal is for Ingenico's i3500 PIN pad and the i5300 terminal range to be deployed in Canada over the next few years. Ingenico will also provide Desjardins with an Ingenico developed download management system.

SIVA Corp. certified and integrated the Ingenico i7770 short-range wireless portable terminal with the iSiVA POS system. SIVA Corp. is a creator of Internet technologies for multi-unit restaurant operators.

The Ingenico i7770 is a wireless and portable terminal that enables restaurant patrons to pay at the table and is the first to leverage commercially available Bluetooth connection capability in a portable POS device.

Lynk Chosen as SYSCO's Preferred Processor; Adds VAR

Lynk Systems Inc. formed an alliance with SYSCO Intermountain Food Services Inc., a subsidiary of SYSCO Corp. SYSCO will market Lynk as the preferred payment processor of its iCare value-added service package.

The iCare package highlights Lynk's credit, debit, EBT and check processing capabilities, e-commerce solutions, gift card and loyalty programs. Lynk Systems also formed an agreement with Pittsburgh POS Systems Inc. Pittsburgh POS joins the OneLynk Alliance, Lynk's value-added reseller program.

Reed Data Inc. and SecurePipe Partner

Reed Data Inc. a provider of electronic document archiving and delivery solutions, partnered with SecurePipe, a provider of managed network security services, to bolster network security for financial institutions. Through SecurePipe, Reed Data will now offer network security solutions to its credit union and banking customers.

TNS Partners with Chockstone

Stored value transaction provider Chockstone Inc. partnered with Transaction Network Services Inc. to combine Chockstone's SingleSwipe POS service with TNS' TransXpress transaction network. Chockstone's transaction platform enables consumers to use gift card dollars, earn loyalty points and redeem points in real time with one retail-branded card. TNS will serve as Chockstone's network provider for authorizing debit and credit transactions.

Veterinarian Associations Choose TransFirst

TransFirst Health Services, a wholly-owned TransFirst subsidiary, signed agreements to provide transaction processing services for four veterinarian associations and their members: the Massachusetts Veterinary Medical Association, Illinois State Veterinary Medical Association, Wisconsin Veterinary Medical Association and Pennsylvania Veterinary Medical Association.

TransFirst Health Services created tailored programs around a pricing model based on represented volume of the entire membership. Additional value-added services include helping members handle privacy issues and account receivable reduction strategies.

U.S. Bancorp, Fiberlink Sign With VeriSign

U.S. Bancorp has selected the VeriSign Unified Authentication solution to provide an infrastructure for its commercial banking customers to communicate and transact with the bank. VeriSign Unified Authentication will integrate with U.S. Bancorp's existing directory and identity management technology to provide support for various forms of authentication.

Additionally, remote access solution provider Fiberlink will offer VeriSign Unified Authentication as part of its managed remote access services portfolio for new and existing customers. The two companies plan to develop new authentication solutions that address the needs of enterprises looking for support for devices such as tokens, smartcards, SIM cards and others where no user response is required.

ACQUISITIONS

Euronet Signs $40 Million Credit Agreement; Acquires Spanish Division

Euronet Worldwide Inc., provider of secure electronic financial transaction solutions, has entered into a $40 million, two-year global revolving credit agreement with Bank of America. The proceeds from the facility can be used for repayment of existing debt, working capital needs, acquisitions and other corporate purposes in the United States and overseas.

In other Euronet news, the company acquired the Movilcarga Division of Grupo Meflur Corporacion, a Spanish telecommunications distribution company. Euronet will own 80% of Movilcarga and Meflur will own the remaining 20%.

Movilcarga provides electronic prepaid voucher solutions in Spain and has a distribution agreement with Telefonica, which services 52% of that country's mobile telecommunications market.

Your Money Access Completes Acquisition

Your Money Access LLC, a privately held ACH and draft processor, purchased the assets of Check Recovery Systems. The acquired companies include Check Recovery Systems, NetChex and Universal Payment Solutions. The companies have processed more than $120 million for merchants over the past 12 months.

APPOINTMENTS

TransFirst Names Two New Executives

Ryan O'Connor joined TransFirst as President of the ISA Services division and Eric Barton joined as Vice President of the ISO Services division.

O'Connor is responsible for all agent reseller relationships. O'Connor previously served as Vice President of NOVA Information Systems. In addition, O'Connor served as Senior Vice President at CreditCards.com and Executive Vice President at Card Payment Systems.

Barton is responsible for the ISO division's business development strategies and execution. Barton began his career at Paymentech LP, where he was Senior Director of Relationship Management. Following his time at Paymentech, Barton was Director of National Account Relationship Management for Chase Merchant Services LLC.

New Sales and Marketing Leadership at First American Payment Systems

Russ Goebel joined First American Payment Systems LP as Senior Vice President of Sales and Marketing, and Rusty Martz also joined as Vice President of Sales. Goebel and Martz will be responsible for growing and building the company's sales force as well as increasing First American's presence in the industry.

Goebel comes to First American from Retriever Payment Systems, where he served as Senior Vice President of Sales and Marketing. He previously held sales and marketing leadership positions at eFunds Corp., Heartland Payment Systems and First Data Corporation/Unified Merchant Services.

Prior to coming to First American, Martz served as the Vice President of Sales at Sterling Technologies and the Business Development Manager at Paymentech Network Services.

Joseph Named Chairman, President and CEO of NOVA

NOVA Information Systems Inc. named Pamela A. Joseph Chairman, President and Chief Executive Officer. Joseph is responsible for managing all operations of NOVA, Transaction Services and EuroConex.

Previously, Joseph was President and Chief Operating Officer and was responsible for all business development and operational functions of NOVA Information Systems and managing all merger and acquisitions activities.

Joseph joined NOVA in July 1994 as Vice President of Marketing and has served as Chief Information Officer and Senior Executive Vice President of Business Development.

Before joining NOVA, Joseph was Director of New Market Development for Visa International and served more than eight years in the banking industry with Wells Fargo Bank.

Riese Elected to Hypercom Board of Directors

Phillip J. Riese, President of RIESE & OTHERS, was appointed to Hypercom Corp.'s Board of Directors. Riese spent 18 years at American Express where he was President of the Consumer Card Services Group for American Express Travel Related Services Company Inc. He had previously been a Division Executive at the Chase Manhattan Bank. Riese also served as CEO and a director of AirClic Inc. and of OptiMark Technologies.

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