Approximately 10 Million PayPass Cards and Devices Issued To Consumers and Approximately 32,000 Merchant Locations Accepting PayPass Globally.

MasterCard? PayPass users are showing a marked change in their behavior while making their small, everyday purchases, MasterCard Worldwide announced today. The results of internal MasterCard data, dating back to September 2005, coupled with performance data provided by a major PayPass issuer, showed that consumers are loyal to PayPass merchants, use their PayPass-enabled cards more often than traditional payment cards and are showing an overall preference for electronic forms of payment rather than cash.

PayPass offers consumers a convenient alternative to cash that allows for small ticket purchases to be completed quickly, securely and easily. Consumers no longer need to fumble for cash and coins, swipe a card, or sign a receipt for any PayPass purchase under $25. Users simply tap their PayPass-enabled card or device on the PayPass reader at participating merchants and they are on their way.

According to internal MasterCard data, the average PayPass transaction, credit or debit, is approximately $20. Consumers also use their payment cards more frequently once those cards become PayPass-enabled, approximately 18% more often on average. Though PayPass technology can also be used for transactions exceeding $25 (at which point a signature or PIN is required for verification), roughly 75% of all PayPass transactions were for purchases below $25 and approximately 45% of all PayPass transactions were for purchases below $10.

According to a major PayPass issuer's performance data* of PayPass users, based on a study of the same three-month time frame in 2006 vs. 2005, PayPass provided a:

? 36% increase in usage per account;
? 45% increase in total transactions per account;
? 230% increase in usage at PayPass merchants; and
? 270% increase in the number of transactions at PayPass merchants.

These latest research findings are consistent with the results of a national Consumer Payments Survey conducted in 2005 by Ipsos and commissioned by MasterCard, which showed that growing numbers of U.S. consumers are using less cash these days in favor of alternate payment methods, such as credit and debit cards. The Consumer Payments Survey was designed to gauge national attitudes towards the use of cash versus alternate payment methods, as well as to determine consumer interest in using new technologies, such as contactless payment technology.

According to the survey, consumers are carrying less cash and using less cash these days as compared to five years ago.

? Nearly half (49%) of respondents said they carry less cash today than they did five years ago ? representing a 9% jump as compared to a similar survey conducted in September 2003
? 60% of respondents had only $20 or less in cash on-hand ? representing an 11% jump as compared to 2003
? Three out of four respondents (74%) said they no longer believe it is necessary to carry large amounts of cash
? More than six in 10 (62%) use cash less often for purchases today, compared with five years ago
? 56% of respondents believe that there are few places that accept only cash, representing a 16% jump as compared to 2003

Sheetz, one of the top convenience retailers in the United States, announced acceptance of MasterCard PayPass in January 2005. "We have realized time savings of approximately eight seconds per transaction," said Rich Steckroth, Director of Business Development at Sheetz. "Consumer acceptance was the easiest part of the entire process. We are very thankful we went down this path."

There are a number of PayPass-related programs currently underway in ten countries around the world. PayPass rollouts and trials have been announced in the United States, Canada, United Kingdom, Japan, Korea, Lebanon, Malaysia, Australia, Taiwan, and the Philippines, with more programs and rollouts anticipated throughout 2006.

As of Q2 2006, there are nearly 10 million PayPass cards and devices in the market and approximately 32,000 merchant locations around the world that accept PayPass, including McDonald's, 7 Eleven, CVS, Duane Reade, Sheetz and Regal Entertainment Group. Interest in PayPass has not been limited to retail establishments. PayPass technology has proved popular in sports facilities as well, and PayPass is now accepted in many Major League Baseball and National Football League stadiums as well as at numerous golf events.

Earlier this year, MasterCard received two 2006 Breakthrough Awards from Card Technology magazine at the CardTech/SecurTech industry conference. MasterCard was honored with the "Most Significant Implementation" award for PayPass, while Art Kranzley was named "Visionary of the Year." Additionally, in recognition of its success in leading the contactless payment market with its innovative PayPass program, MasterCard was also awarded Frost & Sullivan's "2006 Market Penetration Leadership Award."

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