[LOGO]iPayment Inc.                                          [Logo] FIRST DATA



FOR IMMEDIATE RELEASE

Contacts:                             First Data Corp.
                                      Investor Relations:
iPayment, Inc.                        Gary Kohn  (303) 967-8276
Investor & Media Relations:           gary.kohn@firstdatacorp.com
Clay Whitson
Chief Financial Officer               Media Relations:
(615) 665-1858, Ext. 115              Mary Walker (770) 857-7188
clay.whitson@ipaymentinc.com          mary.walker@firstdatacorp.com
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            iPayment Acquires Portfolio of Agent Bank Agreements and Merchant
                            Accounts from First Data

NASHVILLE, Tenn. & DENVER - December 22, 2003 - iPayment Inc. (NASDAQ/NM:  IPMT)
and First Data Corp. (NYSE: FDC) announced today that iPayment has completed the
acquisition of a portfolio of agent bank  agreements and merchant  accounts from
First Data Corp.'s  Merchant  Services  subsidiary  for $55 million in cash. The
transaction  will become  effective on December 31, 2003.  iPayment has expanded
its  revolving  credit  facility  from $30 million to $65 million  from its lead
bank, Bank of America, to finance the purchase.

The portfolio has  approximately  18,000 small  merchant  accounts  representing
approximately  $4  billion  in annual  bankcard  volume.  The  transaction  also
strengthens an existing strategic relationship between iPayment and First Data's
Merchant  Services unit to expand future growth by adding new merchant  accounts
generated by  approximately  170 small agent banks.  iPayment  will  continue to
utilize  processing  services from First Data for the acquired portfolio as well
as new  merchant  accounts  generated  by the banks.  iPayment  is  currently  a
customer of First Data for merchant processing services.

Greg Daily, chairman and chief executive officer of iPayment,  remarked, "We are
pleased to announce  another  successful  step in iPayment's  profitable  growth
strategy.  iPayment will obtain a significant  portfolio of small  merchants and
gain  access to a marketing  channel of  community  banks that will  continue to
generate  new  merchant   accounts  not  available   through  our  existing  ISO
relationships. As a result of the acquisition, we are currently comfortable with
a higher range for our  earnings  per diluted  share for 2004 of $1.20 to $1.25,
compared with the previous range of $1.06 to $1.12.  We remain  confident in our
ability to execute our growth strategy  through our ISO and bank channels,  with
occasional acquisitions in the fragmented small merchant marketplace."


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IPMT and FDC Completed Transaction
Page 2
December 22, 2003
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"This sale is consistent with First Data's Merchant Services partner and channel
strategy,"  said Charlie  Fote,  chairman and chief  executive  officer of First
Data. "This expanded arrangement with iPayment allows us to grow in the merchant
processing  business  without  generating   conflicts  with  our  alliance  bank
partners."

iPayment  was  advised by Merrill  Lynch & Co. in this  transaction.  First Data
engaged First Annapolis Capital, Inc. to assist in the sale of the portfolios.

iPayment also announced the Company will host a conference  call to discuss this
release today at 10:30 a.m. Eastern time. Participants will have the opportunity
to   listen   to  the   conference   call   over  the   Internet   by  going  to
www.ipaymentinc.com or www.fulldisclosure.com. Participants are encouraged to go
to the selected web sites at least 15 minutes early to register,  download,  and
install any  necessary  audio  software.  The online replay will be available at
approximately  1:30 p.m.  (Eastern  Time) and  continue  for 7 days. A telephone
replay  of the call  will  also be  available  through  December  29,  2003,  at
719/457-0820 (Confirmation Number 238150).

About iPayment, Inc.
--------------------
iPayment,  Inc. is a provider of credit and debit card-based  payment processing
services to over 70,000 small  merchants  across the United  States.  iPayment's
payment  processing  services  enable  merchants  to  process  both  traditional
card-present,   or   "swipe,"   transactions,   as  well   as   card-not-present
transactions,  including  transactions  over the  internet  or by  mail,  fax or
telephone.

This press release  contains  forward-looking  statements  about iPayment,  Inc.
within the meaning of Section 27A of the  Securities Act of 1933 and Section 21E
of the  Securities  Exchange  Act of 1934,  and  pursuant  to the "safe  harbor"
provisions of the Private Securities Litigation Reform Act of 1995. For example,
statements  in the  future  tense,  words  such as  "anticipates,"  "estimates,"
"expects,"  "intends,"  "plans,"  "believes,"  and words  and  terms of  similar
substance used in connection with any discussion of future results,  performance
or achievements identify such forward-looking statements.  Those forward-looking
statements  involve  risks and  uncertainties  and are not  guarantees of future
results,  performance  or  achievements,  and  actual  results,  performance  or
achievements could differ materially from the Company's current  expectations as
a result of numerous factors,  including but not limited to the following: risks
related to this acquisition  including  attrition of merchant  accounts or agent
bank  agreements;  liability  for merchant  chargebacks;  restrictive  covenants
governing  the  Company's  indebtedness;  actions  taken by its  bank  sponsors;
migration of merchant portfolios to new bank sponsors; the Company's reliance on
card payment  processors  and on  independent  sales  organizations;  changes in
interchange  fees; risks  associated with the  unauthorized  disclosure of data;
imposition  of  taxes  on  Internet  transactions;   actions  by  the  Company's
competitors;  and risks  related to the  integration  of companies  and merchant
portfolios  the Company has acquired or may  acquire.  These and other risks are
more fully  disclosed  in the  Company's  filings with the U.S.  Securities  and
Exchange  Commission,  including the registration  statement on Form S-1 for the
Company's initial public offering.


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<PAGE>

The Company  undertakes no  obligation  to revise or update any  forward-looking
statements in order to reflect events or circumstances  that may arise after the
date of this release.

About First Data
----------------
First Data Corp. (NYSE:  FDC), with global  headquarters in Denver,  helps power
the global  economy.  As an electronic  commerce and payment  services  company,
First Data serves approximately 3 million merchant locations, 1,400 card issuers
and  millions  of  consumers,  making it easy,  fast and  secure  for people and
businesses to buy goods and services using  virtually any form of payment.  With
29,000 employees worldwide,  the company provides credit,  debit, smart card and
stored-value card issuing and merchant transaction processing services; Internet
commerce solutions;  money transfer services; money orders; and check processing
and verification services throughout the United States. First Data also offers a
variety of payment  services in the United Kingdom,  Australia,  Canada,  Japan,
Mexico,  Spain, the Netherlands,  the Middle East and Germany. Its Western Union
and Orlandi Valuta money transfer networks include  approximately  169,000 Agent
locations in more than 195  countries  and  territories.  For more  information,
please visit www.firstdata.com.

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