SunTrust Merchant Services and Peppercoin Join Forces for Small Payments Processing

WALTHAM, MA – Peppercoin, a payments company that enables profitable, new business models for low-priced digital content and physical goods, today announced an agreement with SunTrust Merchant Services, a joint venture between SunTrust Banks, Inc. and First Data Corporation. Together, Peppercoin and SunTrust Merchant Services will deliver a comprehensive small payment processing system to meet the needs of merchants.

With Peppercoin’s Small Transaction Suite, SunTrust Merchant Services’ clients can generate significant profits on low-priced transactions through a variety of business models. Reino Parking Systems, a global leader in on- street parking solutions, announced deployment today of the joint solution.

“To have SunTrust Merchant Services, one of the nation’s leading merchant acquirers, choose Peppercoin’s small payments platform demonstrates our market leadership and continuing ability to meet the needs of the financial services market,” said Mark Friedman, president of Peppercoin. “With our joint solution, SunTrust Merchant Services’ 67,000 business clients can immediately convert small cash payments, a $1.32 trillion annual market, to credit and debit card payments using an efficient and cost-effective payment processing alternative.”

“In the past six months, we have seen a dramatic increase in demand for small payments capability. Peppercoin’s solution is the only one that supports our merchants’ needs for digital, mobile and physical point of sale transactions,” said Barbara Roeber, General Manager/SVP, SunTrust Merchant Services. “We look forward to going to market with Peppercoin and enabling our existing and prospective merchants to grow their revenue and profits through flexible small payment business models.”

Peppercoin in Parking
Reino Parking Systems today announced deployment of the Peppercoin and SunTrust Merchant Services solution to process credit card transactions at Reino’s Multispace parking meters in various U.S. locations. With this deployment, consumers are able to pay for parking with their credit cards or mobile phones. One of the major features of mobile payments is that the consumer can receive an SMS text message on their cell phone before their parking expires — avoiding meter expiration and parking tickets.

Significant Market Opportunity
Consumers are demonstrating a clear and growing preference to use their credit and debit cards for all sizes and types of purchases. In a 2004 study, Ipsos-Insight estimated that roughly 37.5 million U.S. consumers would choose to use their credit and debit cards for transactions below $5.

Each year, more than 354 billion cash transactions occur in the U.S. for less than $5 at the physical point-of-sale, representing $1.32 trillion in aggregate revenue. Leading markets include vending ($18 billion), parking ($10 billion), coin-op ($6 billion) and quick-serve-restaurants ($110 billion).

The online and mobile small payment opportunities are substantial as well; fueled by music, games, video, publishing, and services TowerGroup estimates the digital micropayments opportunity reached more than $3 billion in 2004. And a September 2004 Ipsos-Insight study revealed that, in just one year, the number of U.S. consumers who have made small online purchases grew 250 percent, from 4 million to 14 million.

The Peppercoin Small Transaction Suite provides a transparent and scalable interface that easily integrates with, and brings additional transaction flow into, existing payments networks while reducing transaction processing and customer service costs. Peppercoin accepts credit and debit cards, which now eclipse cash and checks as consumers’ preferred payment method, and complies with the rules and regulations of the credit card associations. Peppercoin securely handles various business models.