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FSTI (OTCBB) FreeStar Technologies Announces Details of $200 Million Processing Agreement

MONDAY , DECEMBER 16, 2002 07:31 AM

Dec 16, 2002 (Hugin via COMTEX) -- Monday December 16 --(www.FinancialNewsUSA.com)-- FreeStar Technologies, Inc. (OTCBB: FSTI), a company providing one of the world's first live, operational debit and ATM solutions with PIN-authenticated payment solution on the Internet, PaySafeNow, and a leading Northern European Processing subsidiary, Rahaxi Processing Oy, is pleased to announce details of a major processing agreement providing the foundation for substantial revenue growth in fiscal year 2003. The agreement, between Rahaxi's previous owner, Heroya Investments Limited and Settlement Services Limited, provides for a strategic alliance between FreeStar's subsidiary, Rahaxi Processing, and Settlement Services, a company specializing in global high margin payment processing aggregation and advanced fraud screening services. The agreement terms outline the rapid deployment of Rahaxi's online operations over an 18-month period, leveraging Settlement Services' established client base and substantial high-margin turnover to yield a gross processing volume of $200 million per month to Rahaxi. Paul Egan, President and Chief Executive Officer of FreeStar, stated, "The agreement with Settlement Services Limited illustrates the tremendous opportunity inherent in our long-term processing strategy. Indeed, the $200 million per month volume of high-margin business provides a very solid base from which to launch our global sales and marketing campaign in the near term." Continuing, Egan added, "We anticipate swift completion of preparations necessary to accommodate Settlement Services' volumes, including the implementation of our Internet Payment Gateway - due for launch in early January - and acquiring bank contracts. We are also revising our earnings projections to reflect the full impact of this deal; based on preliminary calculations, we expect the Settlement Services' account alone to contribute approximately $1.6 million to FreeStar's bottom line per month [i.e. approximately $20 million per annum] when volumes stipulated by the agreement are flowing through our system, with no significant increase in the existing infrastructure of Rahaxi, which translates to approximately $0.40 earnings per share on the number of shares currently outstanding as stated in the company's recent quarterly report. Graham Gilmour, President and Chief Executive Officer of Settlement Services, stated, "We are very pleased to be associated with FreeStar Technologies. Our commitment to the processing deal, originally relating to Rahaxi's proven 10-year track record and competitive strengths, is additionally bolstered by the wealth of synergies readily available to us through this relationship. We are excited about FreeStar's product suite, especially the proprietary PaySafeNow system, which we feel has great potential in the global marketplace." Rahaxi Processing Oy, acquired by FreeStar Technologies from Heroya Investments in September 2002, 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 and all bank-issued domestic debit cards. Rahaxi also provides specialist value-added processing applications for fleet, fuel and loyalty card schemes. 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 robust payment solutions that support sophisticated, integrated point-of-sale systems to meet the ever changing, complex needs of a wide array of industry sectors. The Company currently processes approximately one million transactions per month, but is 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 www.rahaxi.com. About FreeStar Technologies, Inc. With Corporate headquarters in Santo Domingo, Dominican Republic, Dublin, Ireland, and Helsinki, Finland. 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. 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. For more information, please visit the Company's Web sites at www.freestartech.com, www.Rahaxi.com and www.epaylatina.com About Settlement Services Limited Settlement Services, a privately held sister company of Storms Commerce Limited, UK, with offices in the United Kingdom and British Virgin Islands, specializes in advising high risk industries on payment solutions. Being a recognized leader in the provision of fraud scrubbing technologies and services, the Company has close relationships with a number of major banks focused on high risk transaction processing. Settlement Services Limited is an independent company which partners with major financial institutions to provide its global client base with fast access to comprehensive payment methods through a single technical connection. For more information, please visit the Company's web site at www.settlementservices.info Certain statements in this news release may contain forward-looking information within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. All statements, other than statements of fact, included in this release, including, without limitation, statements regarding potential future plans and objectives of the company, are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. FOR MORE INFORMATION, PLEASE CONTACT: AT FREESTAR TECHNOLOGIES, INC. Paul Egan, President / CEO 809-503-5911 or via email at [e-mail] OR Frank Schoonbaert, COO Fax: [phone] Ph: +353.86.8338000 Email: [e-mail] HEROYA INVESTMENTS Lars-Erik Bengtsson Phone: [phone] Fax: [phone] Email: [e-mail] AT SETTLEMENT SERVICES LIMITED Graham Gilmour / President and Founder 011 44 134 488 7630 or via email at [e-mail]

Financial News USA Tel: [phone] Email: [e-mail] Web: http://www.financialnewsusa.com



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