Blackstone Awards Hypercom $50 Million Contract To Support Major Rollout of Prepaid Point-of-Sale Services.

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MIAMI & PHOENIX--(BUSINESS WIRE)--Feb. 8, 2001

Demand for Blackstone POS System Soars as Market

Embraces Internet-Enabled, Touch-Screen Terminals and

Industry Revenues Top $4 Billion

Agreement Will Accelerate Merchant Sales and Consumer Use of Prepaid

Calling Cards, Internet Services, Wireless and Paging Services

Blackstone, one of the nation's leading providers of prepaid products and services, has awarded Hypercom Corporation (NYSE:HYC) a $50 million contract for a widescale rollout of Hypercom's ePic(TM) ICE(TM) card payment terminals and web appliances in support of Blackstone's POS (point-of-sale) activation program.

The agreement represents one of the largest contracts ever awarded to a point-of-sale payments terminal manufacturer. It follows Blackstone's initial pilot rollout in November 2000. The size of the order reflects retailer demand for the devices and coincides with the rapid expansion of the prepaid calling card market segment. That segment climbed to almost $4 billion in 2000, and prepaid wireless products now coming to market are expected to increase that by as much as 50% this year.

The rollout will allow tens of thousands of retailers across the United States to more easily sell prepaid calling cards as well as the new prepaid products and services -- including prepaid dial tone, Internet access and prepaid wireless services -- on the same device that handles their traditional credit card payment functions.

The Blackstone POS multiple function card payment (credit, debit, EBT) and prepaid product activation program is an industry first. Retailers no longer have to purchase several devices to handle each function. They also no longer have to inventory cards, count prepaid inventory, reconcile payments or store paper transactions. Using Hypercom's secure, browser-based ICE touch-screen, menu-driven terminal, merchants can quickly and easily print and activate the calling cards, access accounting information via the Internet, accept smart cards/ATM/debit and EBT (electronic benefits transfer) cards, process check verifications and American Express, Discover Card, MasterCard and Visa transactions.

With Hypercom's electronic signature and receipt capture system, merchants can capture and store millions of signatures and receipts and have them retrieved automatically to address disputed charges and meet card association chargeback requirements without having to store the receipts in each retail outlet.

"Merchants using the Blackstone POS activation program with Hypercom ICE terminals are enthusiastic. Now they can meet the surging consumer demand for prepaid products and generate new revenue opportunities while reducing their POS equipment investment and streamlining transactions," said Luis Arias, president and CEO, Blackstone. "That's no small achievement for merchants in today's highly competitive market, even more so for smaller retailers who must compete with their often larger and more established chain competitors."

"Hypercom's ePic ICE terminals are the first to integrate fast, secure and reliable card payment capabilities, prepaid service activation and printing of the cards at the point-of-sale," said Chris Alexander, president and CEO, Hypercom Corporation. "The Hypercom ePic ICE solution goes beyond current magnetic strip activation that requires a separate prepaid calling card activation terminal and a separate printout for the PIN and access number. Hypercom's solution integrates everything into one package, incorporating a new stock card printer for improved convenience and ease-of-use for the merchant, and an easy to access, expanded category of prepaid products for the consumer."

Hypercom's ePic (ePOS-infocommerce(TM)) ICE devices are high performance, touch screen-based, Internet-enabled card payment terminals and web appliances that incorporate a firewall-protected multi-application operating system, EMV chip card capability, secure PIN pad, built-in HTML/HTTP web browser and integrated receipt printer. In addition to the embedded applications, Hypercom's ePic ICE terminals support a range of value-added applications and services including: electronic signature and receipt capture, e-mail, on-screen advertising, interactive electronic coupons, user e-commerce function and cash management reporting through a standard browser -- as well as secure credit, debit and smart card functions.

Blackstone Inc.

Blackstone, a leading manufacturer and distributor of prepaid products and telecommunication services, is headquartered in Miami. Today, the company offers more than 50 prepaid calling cards, prepaid paging, prepaid dial tone, prepaid wireless, one plus long distance, Internet services, and point-of-sale terminals at more than 300,000 retail locations nationwide.

Hypercom Corporation

Hypercom Corporation (NYSE:HYC) is a leading global provider of electronic payment solutions that add value at the point-of-sale for consumers, merchants and acquirers. Hypercom's products include secure card payment terminals and web appliances, networking equipment and software applications for e-commerce, m-commerce, smart cards and traditional payment applications.

Headquartered in Phoenix, Hypercom maintains an installed base of more than 3.5 million card payment terminals which operate in over 100 countries and conduct more than 2.5 billion transactions annually.

Certain matters discussed within this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although management of Hypercom believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from expectations include industry, competitive and technological changes; risks associated with international operations and foreign currency fluctuations; the composition, timing and size of orders from and shipments to major customers; inventory obsolescence; market acceptance of new products and other risks detailed from time to time in Hypercom's SEC reports, including the company's most recent 10K and subsequent 10Qs

                           PREPAID SERVICES
                              Fact Sheet
                           Facts and Figures

      --  The number of U.S. consumers using prepaid calling cards is
        expected to jump from 2.5 million to 20 million within the
        next three years as consumers learn more about programs that
        let them pay up front instead of having monthly bills.

      --  Frost & Sullivan predicts the global prepaid market will reach
        about $15 billion by 2005.

      --  The U.S. prepaid calling card market grew 56% in 1998 to just
        under $2 billion.

      --  At last count, that represented approximately 4.5 billion
        minutes of talk time.

      --  In 2000, the U.S. prepaid calling card market segment climbed
        to almost $4 billion.

      --  At least one person in one-half of all of the English-speaking
        households with telephones in the United States has purchased
        and/or used a prepaid phone card as of August 2000. This is
        nearly double the number of households recorded as of July
        1999.

      --  The Yankee Group predicts that prepaid wireless will account
        for approximately 50% of new customers over the next five
        years.

                          History At A Glance

      --  The prepaid phone card was introduced more than 20 years ago.
        Italy introduced prepaid phone cards to combat payphone
        vandalism in 1976. Several European countries then tested and
        rolled out prepaid cards in 1977-1978. Nippon of Japan
        introduced prepaid phone cards for subway riders in Tokyo and
        Osaka in 1982.

      --  In 1987, World Telecom Group became the first company to
        launch a significant phone card product in the United States.
        Two years later, in 1989, AT&T entered the prepaid calling
        market. In 1990, NYNEX became the first US company to offer
        prepaid calling cards that use PIN numbers instead of the
        magnetic stripe, which is still very popular in Europe and
        Asia.

      --  In 1999, Hypercom Corporation introduced the first
        Internet-enabled, touch-screen card payment terminals.

      --  In November 2000, Blackstone pilot tested the new terminals at
        retail sites. Merchants using the Blackstone POS activation
        program with Hypercom(R) terminals responded enthusiastically.

      --  February 2001: Blackstone and Hypercom announce a major
        national rollout of prepaid point-of-sale services. The
        rollout will allow tens of thousands of retailers across the
        U.S. to more easily sell prepaid calling cards as well as the
        new prepaid products and services -- including prepaid dial
        tone, Internet access and prepaid wireless services -- on the
        same devices that handles their traditional credit card
        payment functions.

      The above is a compilation of information obtained from various
commercial Internet sites.

Note to Editors: Hypercom is a registered trademark of Hypercom Corporation. ICE, ePic and ePOS-infocommerce are trademarks of Hypercom Corporation. All other products or services mentioned in this document are trademarks, service marks, registered trademarks or registered service marks of their respective owners.

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