FreeStar Technologies, Inc., a company providing one of the world’s first live
and operational debit and ATM with PIN-authenticated payment technology on the
Internet, announced that is has acquired privately-held Rahaxi
Processing Oy, a leading Northern European online credit card processing
enterprise headquartered in Helsinki, Finland. Rahaxi operates full, online
connectivity to all Finnish banks, including Nordea, Sampo, Oko and the
domestic bank credit card company, Luottokunta, and provides processing
services for over 1,300 merchants. Currently, Rahaxi supports a network
serving over 5,000 point-of-sale devices that generate over one million
transactions each month.
The terms of the acquisition, valued at $4.3 million, provide for FreeStar
to make incremental cash payments to the seller over the course of 13 months,
and to collateralize the full value of the acquisition in the form of an
equivalent amount of common stock of FreeStar. In addition, the seller shall
be entitled to receive 10% of the net profits generated by Rahaxi for the
first four quarters immediately following the closing date, which was
September 10, 2002.
Paul Egan, President and Chief Executive Officer of FreeStar, stated,
“This strategic acquisition marks a major milestone in FreeStar’s development
and helps to cement our position in the international marketplace as a
provider of leading PIN-authenticated payment technology and proprietary
processing solutions. FreeStar intends to rapidly leverage Rahaxi’s 10-year
track record, established customer base, growing revenue stream (currently
averaging approximately US$100,000 per month), robust processing platform and
historical ties to the point-of-sale industry to accelerate many of our
immediate growth objectives. Foremost, Rahaxi empowers FreeStar with an end-
to-end financial processing capability that few can rival. And, securing an
established processing base in what is arguably the European Union’s most
progressive telecommunications and electronic payments market clearly bodes
well for the successful implementation of FreeStar’s long term growth
strategy.”
FreeStar also announced that Mr. Frank Schoonbaert has been appointed as
Chief Operating Officer of Rahaxi Processing, now a wholly owned subsidiary of
FreeStar. Prior to joining the Company, Schoonbaert served as Senior Director
of eCommerce Strategy at EuroConex Technologies, the jointly held credit card
processing and acquiring company of Bank of Ireland and US Bancorp (Nova
Information Systems). Commenting on his appointment, Schoonbaert noted, “I am
delighted to play a role in FreeStar’s initiative to capitalize on the vast
potential of Rahaxi Processing in today’s fast-paced financial processing
environment. We have a very clear and focused set of objectives that I look
forward to working closely with FreeStar’s management to execute.” A Dutch
national who is fluent in four languages, Mr. Schoonbaert holds degrees in
Chemical Engineering and Commercial Technology and also received his Masters
degree in International Management from Boston University.
About Rahaxi Processing Oy
Established 10 years ago as a subsidiary of Telecom Finland (subsequently
Sonera SmartTrust), Rahaxi is a payment service provider based in Helsinki,
Finland, offering full, card present, payment processing; transaction
authorization; data capture and settlement facilities for Visa, MasterCard,
American Express, Diners Club, JCB, and all bank-issued domestic debit cards.
Rahaxi also provides specialist value-added processing applications for fleet,
fuel and loyalty card schemes. As the cornerstone of Sonera’s bid to become a
leading player in the Scandinavian payments market, approximately
US$10 million has been invested in the development of Rahaxi’s hardware,
software and brand name, to date. Rahaxi provides a wide range of payment
solutions that support sophisticated, integrated point-of-sale systems to meet
the ever changing, complex needs of a wide array of industry sectors. Its
end-to-end solutions are robust and reliable, ensuring a swift and secure
payment path for both low volume and multi-outlet, high volume retailers. The
Company currently processes approximately one million transactions per month,
but is readily capable of handling an additional seven million transactions
per month without significant upgrades or technical enhancements. For more
information, please visit the Company’s Web site at http://www.rahaxi.com .
About FreeStar Technologies, Inc.
With corporate headquarters in New York City, and continental headquarters
in Santo Domingo, Dominican Republic and Dublin, Ireland, FreeStar
Technologies is focused on exploiting a first-to-market advantage for enabling
ATM and debit card transactions on the Internet.
FreeStar Technologies’ Enhanced Transactional Secure Software (“ETSS”) is
a proprietary software package that empowers consumers to consummate secure
e-commerce transactions on the Internet using credit, debit, ATM (with PIN) or
smart cards. The ETSS system, marketed worldwide as PaySafeNow, integrates a
consumer-side card-swipe terminal (ePayPad) with a back-end host-processing
center. It encrypts sensitive financial data at the consumer’s personal
computer, using powerful DES encryption and algorithms. It sends an
authorization number to the e-commerce merchant, rather than the consumer’s
credit card information, to provide a maximum level of security. The Company
plans to link several large, established smart card systems together on an
ETSS-based standard to achieve economies of scale and enhance market
penetration for this secure e-commerce payment system. For more information,
please visit the Company’s Web site at http://www.freestartech.com .
