EURONET 4Q/02

Euronet Worldwide reported annual consolidated revenues of $71.0 million
for 2002, an increase of 16.5% over 2001 revenues of $61.0 million.
Consolidated revenue for the fourth quarter 2002 was $18.6 million, an
increase of 10.4 percent over fourth quarter 2001 revenues of $16.8
million. The Processing Services Segment reported annual revenues for 2002
of $53.9 million, an increase of 17.4% over 2001 revenues of $45.9
million. Fourth quarter 2002 revenues were $15.1 million, up 10.5% over
fourth quarter 2001 revenues of $13.6 million and up 9.6% over third
quarter 2002 revenues of $13.8 million. As of December 31, 2002, Euronet
owned and/or operated a total of 3,005 ATMs compared to 2,951 ATMs in the
prior quarter. Quarterly transactions on the network reached 22.7 million
in the fourth quarter 2002, a 45% increase over 15.6 million in the fourth
quarter 2001. Fourth quarter transactions improved by 400,000 compared to
the prior quarter. Euronet owns and/or operates ATMs in Hungary, Poland,
Germany, Croatia, the Czech Republic, the UK, Greece and Egypt.

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BioPay

VA-based BioPay announced its ‘bCheck’ biometric payment service. Santoni’s Supermarket, a family-owned business in Baltimore, Maryland, with a customer count of more than 1.2 million last year, will offer ‘bCheck’ to its grocery customers this year. ‘bCheck’ is based on biometric technology used in ‘Paycheck Secure,’ a payroll check cashing system. During a short enrollment process, the customer gives the clerk his or her driver’s license or other ID for inputting into BioPay’s database. At the same time, the customer’s index fingers are scanned. The customer’s preferred checking account is also recorded.

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XPSN VOLUME

Xign Corporation reported this week that the total transaction volume over the Xign Payment Services Network has exceeded $10 billion. This represents a tenfold increase in transaction volume compared to the year-earlier period. XPSN automates all the core functions of the A/P process–invoice receipt, validation, routing, dispute management, approval, payment and posting–and offers a choice of settlement options that includes the ACH and MasterCard purchase card networks. The XPSN went into production as an electronic payment service in July of 2001, and became the first ePayables solution to combine electronic invoice and payment services over the Internet in the spring of 2002.

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EDS & CUs

EDS this week announced it has digitized the daily credit union process for balancing debit card and ATM network transaction totals. After credit union cardholders execute POS and ATM transactions, data is routed to an EDS-hosted core credit union system, where the transactions are posted to member accounts and appropriate general ledger entries made. However, each POS and ATM transaction routes through a variety of networks each business day, and each member’s financial institution is responsible for reconciling and balancing individual transaction totals and all the third-party organizations that touched each transaction. EDS has taken this process and standardized and automated it by fully digitizing the workflow required to balance transaction totals and reconcile general ledger accounts. Automated debit card and ATM network balancing cuts the processing time from up to a full day for a large credit union down to a few minutes.

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AmEx Home Improvement Rewards

American Express has added a home improvement reward category to its “Membership Rewards” program following a deal with The Home Depot. The Membership Rewards program is the world’s largest card-based rewards program, with more than 4 million U.S. enrollees and more than 9 million worldwide. The program allows Cardmembers to earn one point for virtually every dollar charged on eligible, enrolled American Express(R) Cards.

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EURONET & E-PAY

Euronet Worldwide has acquired e-pay Ltd, the largest electronic payments
processor of prepaid mobile air time top-up services in the U.K. and
Australia, for $76.2 million. Over the past year, e-pay has experienced
revenue growth of approximately 37% per quarter. In fourth quarter, e-pay
generated net revenue of approximately $24 million and operating income of
approximately $2.5 million. e-pay currently supports top-up purchases for
mobile service providers at more than 50,000 POS terminals in approximately
18,000 retail locations. e-pay has approximately a 35% and 75% market share
in the U.K. and Australia, respectively. In addition to the U.K. and
Australia operations, e-pay owns 40% of e-pay Malaysia, which offers
electronic top-up through approximately 2,600 POS terminals. e-pay Malaysia
has approximately 60% of the electronic top-up market share in that region.
e-pay has agreements with nine mobile service providers, including five
U.K. mobile service providers, Vodafone, T-Mobile, O2, Orange and Virgin.
Australian mobile operator agreements include Telstra, Virgin Mobile,
Vodafone and Optus. In addition to delivering top-up services at the mobile
operator retail outlets, e-pay also has distribution agreements with many
major retailers, such as Tesco, Safeway, Woolworths (Aus), Asda, Boots,
7-Eleven (Aus), BP, Esso and Forbouys. Additionally, e-pay has a
significant number of POS terminals in independent retail merchants.
Currently, Euronet supports top-up services for 16 mobile operators in nine
countries, including Hungary, Poland, Czech Republic, Croatia, Romania,
Slovakia, Egypt, India and Indonesia.

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FTC Settles AZ Scam

The FTC reached a $525,000 settlement with a pair of Arizona brothers who allegedly offered nonexistent advance-fee, low-interest credit cards, and bogus identity theft and telemarketing fraud protection services. According to the FTC, the Slonikers, operating out of Arizona, employed large numbers of telemarketers trained to deceive consumers. From their “contract rooms,” the defendants allegedly telemarketed nonexistent advance-fee, low-interest credit cards, and bogus identity theft and telemarketing fraud protection services, often on behalf of third-party client companies.

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Concord 4Q/02

Concord EFS yesterday reported that fourth quarter revenues increased 28% over 4Q/01, however, net income for the quarter inched up slightly from $89,082,000 to $89,760,000. The higher revenues were driven growth in PIN-based debit and the addition of new large multi-lane retailers, however, the volume from the new large retailers came at lower-than-average margin, which contributed to the margin decline in the fourth quarter and year over year. Concord also acknowledged yesterday that it faces intensifying competition in renewing bank contracts that has increased price compression and raised the cost of renewing contracts. Concord says it expects that diluted earnings per share will be in the range of $0.75 to $0.79 in 2003, instead of the previous guidance of $0.84 to $0.88 per share. The revised forecast reflects the contract renewing issues plus the ongoing low interest-rate environment and continued uncertainty about the economy. Network Services revenue increased 25% on transaction volume growth of 14% in 2002, plus network price increases effective in January. The transaction growth was largely driven by STAR PIN-debit payment transactions, up 30% in 2002. Network Services transaction volume was 6.3 billion in 2002. The STAR network ended the year with 127 million cardholders, 241,000 ATMs and approximately 1,000,000 point of sale locations that display the STAR mark. Concord also noted that it added a total of 4,800 quick service restaurant locations in 2002, bringing the total number of quick service restaurant locations to 14,800. For complete details on Concord’s 4Q/02 performance visit CardData ([www.carddata.com][1]).

[1]: http://www.carddata.com

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LML 4Q/02

Vancouver-based LML Payment Systems reported revenues for the quarter
ending 12/31/02 of $2.5 million, compared to $2.2 million for the same
year-ago quarter, an increase of approximately 13.6%. The revenue increase
was mainly attributable to an increase in revenues derived from the
software license revenues resulting from the company’s partnership with
CheckFree Corporation. There was a net loss of approximately $545,000 for
the quarter compared to a net loss of approximately $969,000 for the
quarter ended December 31, 2001. Revenues from electronic check
verification were approximately $369,000 for the quarter ended December 31,
2002 compared to approximately $249,000 for the third quarter ended
December 31, 2001, an increase of approximately 48.2%. The increase is
mainly attributable to the roll-out of check processing services, including
electronic check verification, to 49 multi-lane grocery stores with 268
locations in the Houston, Texas area during the third quarter ended
December 31, 2002.

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Bankruptcies 4Q/02

Bankruptcy filings hit 395,129 for the fourth quarter. For all of 2002, total bankruptcies filed were 1,577,651, up 5.7% from 2001. Previously, the largest number of bankruptcies filed in a single 12-month period was in the period between October 1, 2001-September 30, 2002 when it hit 1,547,669 filings. According to the Administrative Office of the U.S. Courts, of the total number of bankruptcy filings for the 12-month period ending December 31, 2002, there were 1,109,923 Chapter 7 filings, up 5.2% from the 1,054,975 Chapter 7 filings in the same period in 2001. The next largest group of filings was Chapter 13 filings at 455,877, up 7.2% from the 425,292 filings in calendar year 2001.

ANNUAL FILINGS BY BANKRUPTCY CHAPTER
Year Chap. 7 Chap. 13
2002 1,109,923 455,877
2001 1,054,975 425,292
2000 859,220 383,894
1999 927,074 382,214
1998 1,035,696 397,619
1997 989,372 403,025
Source: Administrative Office of the U.S. Courts

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