Press Release

In Year-End 2001 Report:
BankServ Nails 80 Percent Share of Wire Transfer Competitions, Adds Important New ACH Customers, 7 Partnerships, Alliances

January 31, 2002 - SAN FRANCISCO — Capture of an estimated 80 percent of head-to-head competitions in the automated wire transfer business serving the nation's banks and credit unions at year-end 2001 was reported today by BankServ, a privately held electronic payments processing firm headquartered here.

In an internal report to its investor group, David F. Kvederis, president and CEO, said that 2001 was a record year for the company in its Fedwire (Federal Reserve Wire Network) business with installation of either its turnkey GFXN (Global Funds Exchange Network) or GFX (a related software package) products in 15 financial institutions across the country. He said that the institutions included commercial, savings, and Federal Home Loan banks, and credit unions with assets ranging from $750 million on up to a lofty $41 billion.

"We believe this represents an 80 percent share of head-to-head competitions in wire transfer business sales to financial institutions in 2001 based on an analysis of sales for the year," Kvederis said. "This has been our turn-around year in the wire business as we completed years of costly development early in the year and are now rapidly increasing profitability in our wire transfer sector," he told the investors of five-year-old BankServ.

"Installation of GFXN at the 15 financial institutions represented 50 percent growth during the year in our wire transfer business," Kvederis said, "with those institutions joining more than 30 financial services holding companies, representing more than 100 banks and credit unions, using BankServ's automated wire transfer solution.

" Amounts of dollars being transferred, incoming and outgoing, for these institutions by BankServ ranged from about $2 billion to over $3 billion on an average daily basis, according to Kvederis.

He told the investors that "customer satisfaction is at an all-time high, with many of the banks reporting reductions in manpower needed prior to installation of GFX automation features, increased throughput, seamless system integration, and the highest level of backup and redundancy for wire transfers. Demand for the product also remains high due to the government's renewed focus on enforcement of money laundering and anti-terrorism regulations.

Supporting that customer contention, John Murphy, first vice president-Bank Operations, Federal Home Loan Bank - Boston, says "the ease of implementation and the intuitive nature of the (BankServ) system made the install and subsequent training of staff relatively seamless to the operation of the funds business. The system's design provides the highest level of backup and redundancy for our most critical operation."

Echoing Murphy's comments, Keitha Shoupe, vice president and manager-Global Funds Transfer, Silicon Valley Bank, Santa Clara, Calif., adds that "BankServ has significantly enhanced the security procedures over our wire process as well as enabled us to bring extended wire products to our clients."

Kvederis also reported continuing improvement in other segments of BankServ, which not only is one of the nation's leading providers of Fedwire processing, but also of Automated Clearing House (ACH) electronic payment processing for financial services companies and businesses.

During 2001, he said that BankServ signed up significant new consumer-to-business or "point-of-sale" and business-to-business customers for its electronic check (eCheck) conversion and ACH processing services. "We can offer financial firms, marketplaces, exchanges and businesses a full spectrum of funds transfer and payment solutions, including real-time, secure on-line check processing, credit card processing and wire transfers - and they are joining us in growing numbers," Kvederis said.

U.S. Federal Reserve studies recently suggest that check writing in the U.S. is steadily giving away to electronic forms of payments as consumers, businesses, and financial institutions seek to be more efficient and cost-effective. American consumers and businesses, says the Fed, make 80 billion retail payments annually, nearly 50 billion by check and 30 billion by electronic instruments, such as credit cards, debit cards, and the ACH. Checks have declined from approximately 85 percent of non-cash payments since the last Fed study in 1979 to about 60 percent today.

"To meet this changing trend," says Kvederis, "our company announced during 2001 the addition of three new electronic payments processing products - BankServ Transfer, SameDayPay, and MOTOpay. All three of the products are designed to reach out to anyone who needs to move money or pay bills electronically, whether by average computer users on the Internet, between banks or brokers and their clients, ordinary or on-line businesses and their customers, and by mail order/telephone order businesses.

Kvederis also reported that BankServ entered into seven partnerships, joint ventures, or alliances during 2001, working with firms on everything from expediting Web-enabled electronic payroll tax payments to guarantees for check payments.