American Payment Systems Completes Acquisition of Consumer Payment Services and Forms Strategic Alliance with Merchants Express.

Business Editors

HAMDEN, Conn.--(BUSINESS WIRE)--Feb. 5, 2002

American Payment Systems (APS), a wholly owned business unit of UIL Holdings Corporation (NYSE: UIL), today announced its acquisition of the walk-in bill payment business of Merchants Express Money Order Company (MEMO) and a joint marketing agreement with MEMO.

MEMO, one of the largest money order providers in the US, is a wholly owned subsidiary of the Pennsylvania Food Merchants Association (PFMA).

Under the agreement, APS will acquire the bill payment business of MEMO, launched in 1997. Under the joint marketing agreement MEMO will market APS' QuickPay! walk-in bill payment service to PFMA members and will also sell the prepaid telephone services of CellCards, APS's prepaid phone distribution company. In turn, APS will sell MEMO money orders and gift certificates to its bill payment agents in 44 states.

"We're pleased to be allying with MEMO and the Pennsylvania Food Merchants Association," said APS President, Paul Rocheleau. "MEMO's strong relationship with their money order agents and their superior footprint of agent locations in the Mid-Atlantic states will provide a terrific retail channel for our bill payment and prepaid telephone services. And, as MEMO grows its money order business across the country, we should be able to strengthen each others' business nationally," Rocheleau said.

David McCorkle, President of PFMA said "Our agreement with APS really plays to our strengths. We get to focus on expanding MEMO and to do what we do best: bringing a variety of profitable services that our member stores can sell to their customers at their location. Of course, we are pleased to be allying with the premier walk-in bill payment service in the US," McCorkle said.

"This alliance is the product of over a year's discussion and planning and a track record of working together," said Corey Stone, Executive Vice President at APS. MEMO participated as an alliance partner earlier this year in APS's successful bid for a contract to process walk-in bill payments on behalf of Verizon Communications in Pennsylvania, New Jersey and Delaware.

Under an Asset Purchase agreement, APS will assume responsibility for servicing retailers currently collecting walk-in bill payments under MEMO's CPS bill payment system. These agents will be converted to the new APS QuickPay! for Windows(TM) system. Under the joint marketing agreement, each company will market the others' products to their respected retailer locations in the US.

ABOUT AMERICAN PAYMENT SYSTEMS (APS)

American Payment Systems (APS) is a wholly owned business unit of UIL Holdings Corporation (NYSE:UIL). UIL Holdings owns the United Illuminating Company, a regulated utility company that distributes electric power and energy-related services to more than 300,000 customers in southern Connecticut.

APS is the nationwide leader in providing bill payment processing for customers who want the convenience of paying in-person. APS serves more than 90 utilities and billers in 44 states through a network of over 7,500 retail locations - including leading supermarkets, pharmacies, convenience stores, and check cashing outlets. These agents collectively process over 90 million payments totaling $9 billion annually. APS was founded in 1990 in New Haven, Connecticut by United Illuminating with the purpose of automating the walk-in bill payment process. Since then, APS has been an innovator in the industry and has introduced products that have improved bill payment processing and accuracy. QuickPay! a recent product announcement, allows APS agents to accept bill payments for hundreds of billers such as Sears, AT&T, ExxonMobil, Ameritech and The Gap. In the early part of 2002, APS Card Services Inc (CSI) will be launching ACCESS a stored value MasterCard as another cash alternative; this product is currently in a live test at several retail locations. Earlier in 2001 APS purchased a majority ownership of CellCards, a leading distributor of prepaid telephone services.

ABOUT PFMA and MEMO

The Pennsylvania Food Merchants Association (PFMA) is a statewide trade association headquartered in Wormleysburg, PA. PFMA represents more than 6,000 retail food stores, wholesale food distributors and other associated business members throughout Pennsylvania. Its membership represents all segments of the retail food industry including locally owned stores of all sizes, convenience stores and regional and national chains. The association is involved in many member services, including legislative representation, conventions, seminars, industry publications, member insurance programs, scanning and tobacco certification and member service businesses including Pennsylvania Coupon Redemption Services, Inc. (PCRS), a processor of manufacturer's coupons, and Merchants Express Money Order Company (MEMO) and subsidiaries. MEMO currently markets its products and services in 25 states with over 4,500 locations selling 28 million money orders and gift certificates annually.