Visa Sues First Data Over Alternative Processing<@SM>System

- SAN FRANCISCO (04/30/02) - A suit filed in federalcourt here earlier this month by Visa USA charges First Data Corp.,the leading card processor in the world with trademark infringementand breach of contract over the so-called intra-FDC closed-loopcard processing system that bypasses Visa's VisaNet authorization,clearing and settlement system. Visa claims that transactionsbypassing VisaNet can lead to increased fraud and chargebacks.First Data has claimed that intra-FDC simplifies card processingand could lead to reduced clearing and authorization fees forcustomers by allowing them to bypass VisaNet. Expansion of FirstData's network was the focus of the company's purchase last year ofa controlling interest in the NYCE electronic funds transfer (EFT)network, facilitating the company's plans to allow participatingfinancial institutions to bypass the two national EFT networks runby Visa and MasterCard, cutting out the extra step and expense ofthird-party processing.