FTC Fine

A U.S. District Court has held a magazine subscription telemarketing group in contempt of court and ordered it to pay $39 million in consumer redress for violating the terms of a 1996 Federal Trade Commission settlement. Judge Vicki Miles-LaGrange wrote that despite the 1996 permanent injunction that barred various deceptive selling practices by the telemarketers, evidence presented by the FTC “…clearly and convincingly indicates that defendants’ acts and practices in connection with the sale of magazine subscriptions and magazine subscription packages violate the . . . Permanent Injunction.” The judge ordered H.G. Kuykendall, Jr., Diversified Marketing Service Corp., H.G. Kuykendall, Sr.; C.H. Kuykendall; National Marketing Service, Inc., NPC Corporation of the Midwest, Inc.; and Magazine Club Billing Service, Inc. to turn over the money to the FTC within 30 days of her order and ordered the FTC to submit a plan for the disbursement of this money to the court for review and approval. The Kuykendalls and their companies are based in Oklahoma City, Oklahoma. In March 1996, the FTC filed suit charging the defendants with making misrepresentations in connection with the telemarketing of magazine subscription packages to consumers. Specifically, the agency charged that the defendants misrepresented the cost or duration of the subscriptions; misrepresented the reason they obtained consumers’ account information; charged consumers’ accounts without authorization; refused to cancel subscriptions; misrepresented consumers’ rights to cancel telemarketing contracts under state law; and threatened to harm consumers’ credit ratings.


Hypercom Debt

Hypercom Corp., the leading global supplier of electronic payment solutions, Friday announced that it has sold 7.87 million shares of its common stock at a price of $5 per share to select institutional investors and high net worth individuals.

The proceeds will be substantially used to pay down high-cost mezzanine debt and to return the company to a more typical lending structure. The company expects that the transaction will be accretive to 2002 earnings as a result of reduced interest costs.

“This transaction is the last step in refinancing Hypercom and achieves the important strategic objective of further strengthening the company’s balance sheet,” said Christopher S. Alexander, president and chief executive officer.

“Our strong balance sheet, industry-leading products and execution of several strategic initiatives over the past 18 months clearly positions us to capitalize on the opportunities ahead and to create long-term value for our stockholders.”

The net proceeds of the private offering have been used to repay two term loans in the amount of $15 million and $5 million, respectively, under Hypercom’s credit facility, to repay $3.1 million in outstanding loans from a director and principal stockholder, and to reduce the outstanding borrowings under the company’s $25 million revolving credit facility. The remaining proceeds will be used for general corporate purposes.

Hypercom offered and sold the shares pursuant to an exemption from registration provided by Section 4(2) of the Securities Act of 1933. Hypercom anticipates that on or before April 18, 2002 it will file a registration statement with the Securities and Exchange Commission to register the shares for resale by purchasers in the private offering.

In the first quarter of 2002, the company will take an approximate $1.3 million charge, net of tax, as it expenses deferred loan costs associated with its retired term loans. It is expected that this charge will be completely offset through interest savings throughout the remainder of the year.

About Hypercom ([www.hypercom.com][1])

Hypercom Corp. is the leading global provider of electronic payment solutions that add value at the point-of-sale for consumers, merchants and acquirers, and yield increased profitability for its customers.

Hypercom’s products include secure Web-enabled transaction terminals that work seamlessly with its networking equipment and software applications for e-commerce, m-commerce, smart cards and traditional payment applications.

The company’s widely-accepted ePOS-infocommerce(TM) (epic) framework of consumer-activated, EMV-certified, touch-screen ICE (Interactive Consumer Environment) terminals enable acquirers and merchants to decrease costs, increase revenues and improve customer retention. Headquartered in Phoenix, Hypercom is independently acknowledged as the leading provider of point-of-sale card payment terminals worldwide. Demand for Hypercom’s terminals surpassed 1 million units last year alone. Hypercom today maintains an installed base of more than 5 million terminals in over 100 countries which conduct over 10 billion transactions annually.

Hypercom is a registered trademark of Hypercom Corp. ePOS-infocommerce and ICE are trademarks of Hypercom Corp. All other products or services mentioned in this document are trademarks, service marks, registered trademarks or registered service marks of their respective owners.

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


Online Security

Americans believe the credit and debit card industry is doing a good job in making the Internet a safe place to conduct transactions. According to a recent homepage poll conducted by CardWeb.com, 63% of consumers say the industry is doing a good job, while 16% are not sure and 21% say “no.” Americans also find that entering passwords to secure transactions is not a hassle. However, consumers are not convinced that smart card readers connected to personal computers will make the Internet a more secure place to shop. More than 84% say password-enhanced card transactions, such as Verified by VISA, are not a hassle. Only 5% have ever taken advantage of a digital wallet. Slightly less than half of Americans believe a PC smart card reader will improve security. However, 25% are not sure, and 25% say the technology will not help security. Of those surveyed, 56% actively use credit and debit cards online (more than 10 times per month), while 31% used credit cards online between 5 and 10 times per month. Only 53% believe online merchants are doing a good job in protecting their personal information from hackers.


Target School Cash

Schools across the country will receive a $13 million windfall this month from the Target Stores School Fundraising program. From classroom supplies to playgrounds, K-12 schools can use the School Fundraising money at their discretion. Since the program began in 1997, School Fundraising has contributed more than $55 million to our nation’s schools.

School Fundraising allows families, teachers and members of the community to designate their school of choice to receive an amount equal to one percent of their Target(R) Visa(R) and Target Guest Card(R) purchases* at Target Stores and on target.com. Target also donates 1/2 percent of all Target Visa purchases made everywhere else. Currently, more than eight million Target guests are enrolled in the program.

“The addition of the Target Visa card in November is one of the reasons this donation to schools is so significant,” said Ann Aronson, director of community relations for Target Corporation. “The new card allows Target guests to contribute to School Fundraising wherever they shop in addition to Target or target.com. The remarkable growth and continued success of the School Fundraising program shows the need to continue to support fundraising efforts for education in our communities.”

School Fundraising is one of several programs under the Take Charge of Education initiative, which also includes scholarship programs and grants. School Fundraising checks are distributed to schools twice a year, once in March and again in September. Currently, more than 114,000 schools are enrolled in the program.

Guest Cardholders and school representatives can visit target.com or call 1-800-316-6142 to enroll or check school payout totals.

About Target Stores

Minneapolis-based Target Stores serves guests at 1,081 stores in 47 states nationwide by delivering today’s best retail trends at affordable prices. Whether visiting a Target store or shopping online at target.com, guests enjoy a fun and convenient shopping experience with access to thousands of unique and highly differentiated items. The largest division of Target Corporation (NYSE: TGT), Target Stores gives back more than $2 million a week to its local communities through grants and special programs. Since opening its first store in 1962, Target has partnered with nonprofit organizations, guests and team members to help meet community needs.

*Target Visa(R) and Target Guest Card(R) are credit cards issued by Retailers National Bank, an affiliate of Target. Subject to credit approval. Subject to School Fundraising program rules.



Koala International Wireless, Inc., a leader in the development of web-based, wireless network applications, announced it has entered into a letter of intent to acquire 100% of the shares of Transcard Limited of Toronto, Ontario, Canada, in exchange for common stock issued by Koala. The transaction is subject to a number of terms and conditions including the completion of mutual due diligence and approval by a majority of each company’s shareholders. Koala is building, through internal development and acquisition, a technology platform that incorporates state-of-the-art encryption and data compression techniques. The technology platform is integrated into a wireless communications device that allows access to a private cellular data network and/or the Internet. This capability enables Koala to exploit several existing complementary opportunities including Point of Sale (POS) and remittance applications that utilize credit and debit transaction processing for the restaurant, hospitality and entertainment industries.
In addition to POS applications, the Koala is in the final stage of developing the KIWI, a handheld wireless unit that is one of the most advanced personal telecommunications devices in the world. Basic services include instant messaging, Infrared Modem access, email, Internet browsing, office tools, business tools functionality, MP3 music player and others. The KIWI can be upgraded to a fully capable cellular phone that uses existing cellular networks. It can provide GPS functionality, extended telematics, screen signature capture, bar code recognition and other applications. The Company is currently evaluating a number of path-breaking compression technologies that are designed to enable wireless devices to deliver video teleconferencing and larger data packet transfer over GPRS or comparable cellular networks. By enabling the Koala Network central server platform to manage the bulk of the unit’s memory and processing capability, instead of locating them on the device, the KIWI can be produced and marketed at a price significantly lower than that of its competitors.

About Transcard

Transcard Canada Limited (www.transcardinter.com) is an International remittance and currency transfer company based in Toronto, Ontario, Canada. Transcard currently serves over 140,000 proprietary cardholders and offers its customers a variety of virtual account, currency conversion, and foreign exchange services. The company has deployed two finance cards, the TRAN$CARD International Finance Card and the TRAN$CARD Domestic Card. These cards offer stored-value electronic transfer debit cards permitting cross-border and global transfer of funds. Transcard’s cardholder can world-transfer funds electronically to a TRAN$CARD. The transferred funds can then be used wherever the TRAN$CARD brand is accepted to purchase goods and services or to withdraw money. Under an exclusive agreement, Transcard’s agent in the U.S. for collection is MoneyGram Payments Systems, Inc., of Lakewood, Colorado. MoneyGram is currently using Transcard’s proprietary stored-value card system to transfer funds to Cuba, under approval of the U.S. Government.

Stephen Dulong, CEO of Transcard, remarks: “The vision and technical capabilities of Koala and their expertise in secure, wireless banking services are extremely compatible with the growth plans of Transcard. Koala and Transcard, combined, represent an excellent opportunity to broaden and enhance Transcard’s functionality and offerings and further Transcard’s expansion into a number of additional international markets.”

Michael Johnston, President, CMO and co-founder of Koala, adds, “Koala’s technical and distribution infrastructure, coupled with Transcard’s proven formula for success in the international electronic collection and redemption business, will uniquely position Transcard to capture a large share of the international money transfer business.”


Super Sub-Prime

The demise of the Net 1st MasterCard issued by the now defunct Florida-based Net First National Bank, Colorado-based Equitex, and its Florida-based Key Financial Systems subsidiary has opened the door for new super sub-prime bank credit cards. According to CardTrak’s monthly commentary ([www.cardtrak.com][1]), the firm behind the Future VISA Card program has switched to promoting the AmeriOneCard MasterCard. Robert Johnson of Tampa, Florida and JohnsonLane.Com Marketing Services have unleashed a major promotional effort for the new card on the Internet. The AmeriOneCard MasterCard is issued by First National Bank of Central Texas. Unlike the Net 1st MasterCard, the AmeriOneCard does not come with an immediate balance. Rather, cardholders are required to deposit, preferably by ACH, at least $15 per month to the card to build an available balance. The card charges an $89.95 membership fee and a $9.95 monthly maintenance fee for essentially a debit card that is reported to the major credit bureaus as a credit card. On March 1st, the Office of the Comptroller of the Currency shut down Florida-based Net First National Bank. The patented “Pay-As-You-Go” credit card program, the basis for the Net 1st MasterCard, issued credit cards to consumers without a credit check or a security deposit. The card came with a $500 credit limit and a $500 balance. As the cardholder pays down the balance, the credit line will open and a credit history may build. Under the program, cardholders are required to make a $15 per month payment of which $7 is applied to the outstanding balance and $8 is applied to a ongoing monthly fee. (CF Library 3/4/02; 3/11/02)

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



Experian has been awarded a major contract to supply its web-based consumer identity authentication system ­ e-identity ­ to Camelot Interactive. E-identity will be used by Camelot Interactive as an identity authentication tool for its new online gaming website.

Camelot, the operator of the UK’s exclusive provider of the National Lottery games, expects to re-launch launch the new The National Lottery website later this year, which will allow, allowing users to play a wide range of National Lottery games through the Internet. The first Instants games should be available from around the end of 2002.. The service will then be extended to include mobileWAP technology and interactive television.

Central to the delivery of the new gaming service and one of the main reasons e-identity was chosen as an identification tool, is the support it can provide Camelot Interactive in its continued promotion and commitment to responsible playgaming. By introducing e-identity, Camelot Interactive will be able to verify and authenticate all new player registrations and confirm that all customers are who they claim to be. This will ensure that only people aged sixteen and over, resident at a UK address and legally entitled to playgamble will have access to the site. As a result, only those people meeting all the strict criteria laid down by Camelot Interactive will be able to register and play the National Lottery games using the Internet.

Internet and any other interactive remote channels.

Richard Hurd-’ Wwood, Director of Camelot Interactive, Camelot, commented: “With the addition of Experian’s e-identity, we can ensure that all our customers are authenticated during the registration process to guard against illegal and under-age use of the site.

“E-identity will also help to us to promote responsible playgaming by preventing people from registering at multiple or bogus addresses and limiting any exposure to irresponsible playgambling.”

Richard Fiddis, Chief Operating Officer of Experian UK & Ireland, added: “We are delighted that Camelot Interactive has chosen e-identity as its authentication solution, as this further cements our position as the leading provider of identity authentication solutions in the UK. As more and more business is conducted online there is an increasing need for electronic consumer identification solutions, removing the need for companies to resort to paper-based proofs of identity.

“Using e-identity, Camelot Interactive will be able to authenticate its customers remotely, in real time, gaining a wider understanding of its customer-base in a transparent and non-intrusive manner. As an authentication solution, e-identity can also help to reduce the number of fraudulent remote credit card transactions – safeguarding against card-not-present (CNP) fraud*.”

E-identity, which is available via the Internet on www.e-identitycheck.com, accesses Experian’s vast consumer databases and public information sources to return an ‘authentication score’ so that organisations can have sufficient confidence that a consumer is genuine before proceeding with a financial transaction or commercial agreement.

Well known as a leading provider of anti-fraud and money laundering prevention solutions, Experian provides e-identity and other identification tools to a wide range of leading organisations including many in the banking and finance sector, retail and travel industry sectors where it is currently consistently detecting 90 per cent of fraudulent online credit card transactions.


VeriFone & MicroPortal

VeriFone Inc., the worldwide leader in electronic payment solutions, and Atrana Solutions, Inc., Dallas, TX, a leader in point of sale (POS) terminal software solutions, announced the availability of MicroPortal, Atrana’s new technology designed to optimize delivery of value-added products and services to the POS, utilizing VeriFone’s extensive line of multi-application terminals.

MicroPortal enhances the POS terminal by enabling service providers to add and manage value-added applications without modifying the terminal’s payment software, and facilitates management of the terminal while working seamlessly with the resident application. MicroPortal can be used as a standalone application or in conjunction with any terminal payment software, including VeriFone’s SoftPay application. Value-added applications supported and enhanced by MicroPortal include activation and delivery of prepaid products, age and identity verification, gift cards and message delivery.

Accor Lodging North America, a division of Paris based Accor, is the first lodging chain to implement this new technology across the US. Two of its brands, Red Roof Inns and Motel 6 are deploying VeriFone terminals with Atrana’s MicroPortal technology to support prepaid long distance card services for one of the nation’s largest carriers.

“At Accor Lodging North America, we are constantly evaluating new technologies that enhance the lodging experience of our traveling customers,” said group executive vice president of marketing and sales Carol Kirby. “This solution will enable our sites to enhance customer service by providing superior prepaid long distance card service to our patrons. ”

“MicroPortal delivers new products and services to the terminal while totally eliminating costly software development projects or upgrades in the future,” said Atrana CEO, Salah Boukadoum. “We are pleased to work with VeriFone to introduce this new versatile product on their popular Omni line of terminals and to continue this effort with their next generation of payment solutions.”

“Multi-application capabilities give processors and ISO’s the ability to expand their portfolio of services, changing the point of sale into a new point of profit,” said Stuart Taylor, VP of Marketing, VeriFone Inc. “Value-added applications generate new revenue streams and improve merchant retention. The integration of Atrana’s MicroPortal with VeriFone’s Verix multi-application architecture facilitates the fastest delivery of new services by eliminating the need for re-certification of the existing payment application.”

VeriFone’s Verix architecture with both hardware and software separation provides a secure environment for the MicroPortal Applets, and also allows secure sharing of information between applications, eliminating the need for clerks to re-key critical data. The MicroPortal is available today on VeriFone’s Omni 3700 and Omni 3300 terminal families.

About Atrana

Based in Dallas, Atrana is a leader in providing point-of-sale (POS) card payment terminal software and systems to retailers, transaction processors and stored value providers. The company’s broad expertise in POS systems, back-end transaction servers and retail integration enables it to offer its clients complete technology solutions for credit, debit, fleet, loyalty, prepaid, gift card and other transaction-based services. Atrana’s customers include many of the industry’s largest transaction processors and service providers. Atrana’s Internet address is [www.atrana.com][1].

For further information on Atrana, Inc. please contact Brad Prizer at brad@atrana.com, or at 214-741-5222.

About Accor Lodging North America

Headquartered in Dallas, Texas, Accor Lodging North America is a division of Paris-based Accor ([www.accor.com][2]), the world’s third-largest hospitality company and the European leader in travel, tourism and corporate services. Accor Lodging North America operates more than 1,200 upscale and economy properties owned by Accor including the upscale Sofitel and Novotel hotel locations in the U.S. and Canada, as well as the nationwide economy leaders Red Roof Inns, Motel 6 and Studio 6. Together, Red Roof Inns ([www.redroof.com][3]), Motel 6 ([www.motel6.com][4]), and Studio 6 ([www.staystudio6.com][5]), comprise more than 10% of the entire U.S. budget lodging segment.

About VeriFone, Inc.

VeriFone, Inc., () is the leading global provider of secure electronic-payment solutions for financial institutions, merchants and consumers. VeriFone has shipped more than nine million electronic-payment systems, which are used in more than 100 countries. VeriFone, Inc. is held by Gores Technology Group, an international acquisition and management company.

About Gores Technology Group

With headquarters in Los Angeles, Gores Technology Group (GTG) is a privately held international acquisition and management firm that pursues an aggressive strategy of acquiring promising high-technology organizations and managing them for growth and profitability. GTG has a proven track record of acquiring and successfully managing companies including many divisions acquired from large publicly traded companies through its commitment to customers, employees and continued development of intellectual property. GTG has acquired and managed approximately 35 interrelated but autonomous technology-oriented companies with locations throughout the world. Those companies provide a broad range of technology-based products and services to a substantial customer base representing millions of active users worldwide. Visit the company’s Web site at [www.gores.com][6].

[1]: http://www.atrana.com
[2]: http://www.accor.com
[3]: http://www.redroof.com
[4]: http://www.motel6.com
[5]: http://www.staystudio6.com
[6]: http://www.gores.com



VISA International has hired Government Relations Australia to lobby against the proposals by the Reserve Bank of Australia which call for an end to merchant fees and the option of charging consumers a fee for each credit card transaction. Two of the principals in the VISA lobby effort are former NSW government minister Michael Yabsley and former Labor federal treasurer John Dawkins. Dawkins previously had ministerial responsibility with the Reserve Bank. The RBA’s proposal would significantly reduce interchange fees with the result that credit card issuers would be forced either to raise fees or reduce services to cardholders. The RBA proposal involves changes to what are known as four-party payment systems such as MasterCard, Bankcard and VISA. Three-party payment systems such as American Express and Diner’s Club, which typically carry higher fees than four-party systems, are excluded from the proposal. Under the terms of the proposals unveiled on December 14, 2001, the RBA would regulate three key areas of four-party credit card systems: the setting of interchange fees, surcharging, and who can join the system.


WA Bank Expands ATMs

Fujitsu Transaction Solutions Inc. and Electronic Transactions Advantage Inc., a Fujitsu business partner, have signed an exclusive, two-year contract with Columbia Bank to standardize Fujitsu’s ATM platform for the financial institution’s automated-teller machine (ATM) network.

Tacoma, Wash.-based Columbia Bank is purchasing 23 Fujitsu Series 8000(TM) ATMs, which offer a Microsoft Windows(R) 2000 platform, Web enablement, Americans with Disabilities Act (ADA) compliance, and Triple Data Encryption Standard (DES) for increased security. The Series 8000 ATMs are capable of supporting an array of next-generation transactions for dispensing cash, loan applications, concert tickets, stamps, and more. The bank is also upgrading 54 Series 7000 ATMs with Fujitsu’s Prism software to add a higher level of security and greater ADA compliance. Columbia Bank, a wholly owned subsidiary of Columbia Banking System Inc., is a Washington state-chartered full-service commercial bank with 33 branches located throughout the Puget Sound region.

“This agreement strengthens Columbia Bank’s ability to combine the convenience of modern technology with the care of old-fashioned, customer-friendly banking,” said Becky Kettenring, Columbia Bank’s ATM program vice president. “Years ago, we conducted competitive research on ATMs. Results showed that Fujitsu’s equipment provided industry-leading features at a competitive price. Fujitsu’s Series 8000 ATMs continue to offer these benefits and will enable us to increase revenue through expanded services, advertising and point-of-service (POS) displays.

“In addition to Fujitsu’s hardware,” said Kettenring, “Columbia Bank’s back-room operations team voted for Fujitsu’s Windows 2000 platform because it’s easier to operate, manage, and maintain than ATMs that use proprietary software.”

“Columbia Bank’s management is committed to building closer customer relationships through Web-enabled ATM technology that ‘personalizes’ communication. They’ve also determined to streamline and simplify operations by using one ATM vendor,” said Pat Scott, chief executive officer of Auburn, Wash.-based ETAdvantage. “We recommended Fujitsu as the exclusive ATM vendor because its Series 8000 can reduce the bank’s cost of ownership while adding value to its customers’ experience.”

Fujitsu Series 8000 ATM Features

Fujitsu’s Series 8000 ATMs offer North American banks, credit unions, and other financial service providers next-generation features, including:

— Lower cost of ownership (TCO), with large capacity dispensers, fewer moving parts, universal components, low-maintenance thermal printers, and color LCD displays.

— Americans with Disabilities Act (ADA) compliance.

— Web-enabled capabilities that will eventually allow customers to use ATMs for all the same banking transactions they currently conduct from their PCs, such as loan applications and bill payments. New types of transactions, such as phone cards and event ticket purchases, will further enhance the customer experience.

— The capability to dispense a range of media, such as stamps, coupons, event tickets, credit card-sized media, and other items of value.

— Windows 2000 operating system that supports both traditional financial transactions and future services. Windows XP will be available by mid-2002.

— World’s highest footprint-to-capacity ratio in an ATM.

“Fujitsu and ETAdvantage have successfully teamed together to offer ATM operators the most innovative, advanced ATM technologies,” said Neill Collins, Fujitsu vice president of financial systems sales. “This contract validates our commitment to become a customer’s total lifecycle management solutions provider, resulting in a winning combination of decreased costs and increased customer satisfaction.”

About Columbia Bank

Columbia Bank is a Washington state-chartered full-service commercial bank providing products and services to individuals, businesses and the real estate community. A wholly owned subsidiary of Columbia Banking System Inc. (Nasdaq:COLB), Columbia Bank currently has 33 branches in Pierce, King, Cowlitz, Kitsap, and Thurston counties. Web site: [www.columbiabank.com][1]

About Electronic Transactions Advantage Inc.

ETAdvantage is a full-service Fujitsu ATM business partner providing ATM services in Washington, Oregon, and Idaho. Services to all financial institutions include site surveys, recommendations of equipment, sales of new and refurbished equipment, installation, hardware services for all ATMs, first line service, depot repair, and dispatch. Web site: [www.etadvantage.com][2]

About Fujitsu Transaction Solutions Inc.

Fujitsu Transaction Solutions Inc., headquartered in Dallas, is a wholly owned subsidiary of Fujitsu Limited (TSE: 6702). The company is a total lifecycle solutions supplier for North American retailers and financial services providers. Fujitsu optimizes the customer’s technology lifecycle and reduces total cost of ownership with point-of-sale (POS) hardware and software, handheld devices and applications, Web-enabled automated-teller machines (ATMs) and infrastructure services, including asset management. Fujitsu offers world-class customer-service support, call centers, product staging/integration and rapid-response rollouts. It serves customers such as Allfirst Financial, Albertson’s, Recreational Equipment Inc., Safeway and Staples, among others. Web site: [www.ftxs.fujitsu.com][3]

For sales and product information call 800/340-4425

[1]: http://www.columbiabank.com
[2]: http://www.etadvantage.com
[3]: http://www.ftxs.fujitsu.com



Freestar Technologies, Inc. announced that it has opened its new North American headquarters in the heart
of New York City to launch the sales and marketing of its PaySafeNow system in
the North American market. Freestar’s PaySafeNow system is the first system
to allow consumers to execute PIN-secured ATM, debit card, credit card and
smart card transactions over the Internet.

The PaySafeNow solution bundles Freestar’s proprietary software with a
secure card reader that connects the consumer’s PC to the financial
institution holding the consumer’s banked funds. The reader is compatible
with both magnetic-stripe and smart-card technologies, and utilizes a secure
numeric keypad to enter PINs and passwords. This system creates two-factor
authentication, which is required for ATM/debit transactions.

The PaySafeNow System is endorsed and certified by Banco Nacional de
Credito, a division of the National Financial Group (GFN), a principal
financial institution in the Caribbean and Latin American region.

Supporting the expansion of its sales and marketing effort, the Company also
announced the appointment of Cynthia Aadal as Director of Business
Development. Prior to joining FSTI, Ms. Aadal was a founding partner and
Director of Business Development for Get Real Girl, Inc. a consumer and multi-
media company featured on Oprah, NBC, QVC, the Wall Street Journal, Red
Herring and other media. She was also a business development specialist for
Abacus Online, a division of Double-click – the world’s leading Internet
advertising firm. Ms. Aadal holds a degree in Political Science and
Communications from the University of Arizona.

Paul Egan, CEO of Freestar Technologies, said, “This is an extremely
important step for Freestar Technologies with regard to the execution of our
business plan and the globalization of our PaySafeNow system. New York is the
business center of the world and therefore it is a natural choice for our
North America headquarters.

Mr. Egan concluded, “We are also very pleased to announce the appointment
of Cynthia Aadal, who will bring additional strength and experience to the
management team and enhance our position in a competitive market place.”

About Freestar Technologies, Inc.

Freestar Technologies, Inc.’s Enhanced Transactional Secure Software
(“ETSS”) is a proprietary software package that enables consumers to
consummate secure e-commerce transactions over the Internet using credit,
debit, ATM (with PIN) or smart cards. The ETSS system integrates a consumer-
side card-swipe terminal 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 further market penetration for this secure e-commerce
payment system. For more information visit the Web site of the Company at
http://www.freestartech.com .