Due to problems in its iBill merchant processing division, InterCept announced that its 2002 earnings per share will come in below earlier expectations and also withdrew previously issued guidance for 2003.
Reduced revenues in our merchant area resulted primarily from the
iBill operations, which experienced a large loss of merchant customers
following the implementation of a new credit card association rule in mid-
November. A number of iBill’s web merchants declined to pay a registration
fee mandated by the new rule, resulting not only in reduced revenues from our
portion of the registration fee but also lost transaction processing fees from
the departed merchants. Moreover, iBill incurred costs to transfer its
transaction processing from our subsidiary, EPX, to a third party processor.