iPayment, Inc. Announces Acquisition of Transaction Solutions

NASHVILLE, TN – iPayment, Inc. (Nasdaq: IPMT) today announced the acquisition of Transaction Solutions, an ISO with a portfolio of approximately 4,000 small merchants and annual charge volume of approximately $500 million. iPayment expects the transaction to be accretive to its 2005 financial results, providing earnings of approximately $0.03 per diluted share.

Gregory S. Daily, Chairman and Chief Executive Officer of iPayment, remarked, “We are pleased to join forces with Brian Shanahan, Chief Executive Officer of Transaction Solutions, and with the entrepreneurial organization he has built. Transaction Solutions brings us a substantial existing portfolio, as well as an innovative marketing approach that generates over 250 new merchants per month. Furthermore, this transaction again illustrates the continuing potential of accretive acquisitions to contribute to our profitable growth, and we will continue to evaluate additional transactions.”