News Release (Netscape): Monday, October 7, 1996 Netscape to Use CyberCash Technology Netscape Communications Corporation (NASDAQ: NSCP) and CyberCash, Inc. (NASDAQ: CYCH) today announced a technology and marketing relationship to broaden payment options for Internet consumers. As part of the agreement, CyberCash has licensed its CyberCoin Internet payment technology to Netscape. Netscape will bundle its technology into future versions of Netscape products, including Netscape LivePayment server software for online payment processing. The two companies will also collaborate on including future CyberCash payment services, such as CyberCash's electronic check services, into future Netscape commerce offerings. Netscape and CyberCash plan to jointly market these Internet payment solutions to consumers and businesses, and will work together on efforts to accelerate the deployment of Secure Electronic Transactions (SET) credit card payment protocol in the marketplace. "We have had customer demand for small value payment technology particularly from the professional information publishing industry -- the integration of CyberCash's CyberCoin with Netscape's commerce solutions provides our customers with a way to complete small transactions over the Internet," said Srivats Sampath, vice president of marketing for server, tools and applications at Netscape. "By offering a range of payment options for businesses and consumers, Netscape and CyberCash will help expand the range of goods and services available in the electronic marketplace." "Combined with Netscape's customer base, CyberCoin is filling a need in the marketplace for small payment processing," said Denis Yaro, executive vice president, products and operations at CyberCash. "This is a huge step in our efforts to bring Internet transaction technology to consumers and businesses and to increase online inventory, making the virtual mall a reality." "We are pleased to see this agreement between Netscape and CyberCash," said Chuck White, senior vice president of First Data Card Services Group's Electronic Funds Services unit. "The relationship between Netscape and CyberCash will make it easier to deliver integrated payment solutions to our client financial institutions, and their merchant customers that are using Netscape LivePayment." CyberCoin is a payment service which permits online purchases for items costing between 25 cents and $10.00. This new payment solution opens up significant opportunities for merchants to market low cost, high value items such as news and information, graphics, games and music. It also allows merchants to unbundle larger product offerings, and sell them in smaller increments. Financial institutions to offer the CyberCoin service include First Union Bank, First USA Paymentech, Michigan National Bank and First Data Corp. Bundling CyberCash's CyberCoin technology into future releases of Netscape's LivePayment point-of-sale software will enable online businesses to accept multiple payment methods and implement new pricing and business models. Netscape LivePayment will integrate this new payment functionality seamlessly and cost-effectively, providing business people with administration and configuration controls with flexible logging reports, and a variety of sample merchant applications to minimize the start-up development costs of merchants. Both Netscape and CyberCash will market Netscape LivePayment software to businesses looking to develop or expand online distribution channels. Netscape plans to integrate CyberCoin into future versions of Netscape Navigator client software, which includes technology that streamlines consumers' shopping experience by providing a uniform interface for Internet purchases and transactions. Similar to a real wallet, this technology will organize into one place a user's credit card numbers, shipping addresses, digital IDs, electronic receipts and other payment instruments needed to purchase goods and services on the Internet. Netscape and CyberCash will coordinate their efforts on SET to assure interoperability between their credit card-related electronic commerce implementations. Netscape was one of the principal architects of the SET specifications proposed by Visa International and MasterCard International. Committed to being among the first to deliver SET-compliant products to the marketplace, both Netscape and CyberCash will also collaborate with other important industry leaders in an effort to facilitate SET's arrival in the shortest possible timeframe. About Netscape Netscape Communications Corporation (NASDAQ: NSCP) is a leading provider of open software for linking people and information over enterprise networks and the Internet. The company offers a full line of clients, servers, development tools and commercial applications to create a complete platform for next-generation, live online applications. Netscape Communications Corporation is based in Mountain View, California. About CyberCash CyberCash, Inc., (NASDAQ: CYCH), of Reston, Virginia, founded in August 1994, is a leading developer of software and service solutions for secure financial transactions over the Internet. The CyberCash system is designed to allow banks to offer secure Internet payments to their customers. CyberCash works with virtually all financial processing institutions, and is currently working with VISA and MasterCard to develop and implement the Secure Electronic Transaction (SET) protocol for online credit card transactions. The company's initial service, which handles payments using major credit cards, was introduced in April 1995. CyberCoin, the company's innovative micropayment service that enables cash transactions, was launched on Sept. 30, 1996. CyberCash's electronic check service is expected to be released in Q4, 1996. Edge: Tuesday, October 8, 1996 VeriFone Introduces Personal ATM and VeriSmart VeriFone, Inc., Monday announced plans to bring the convenience of a bank automatic teller machine into the homes of millions of consumers around the world, enabling them to replace cash and access dozens of personal services anytime, anywhere, using telephones, televisions, personal computers and other low-cost devices and information appliances.Announced Monday at the ABA Bank Card Conference, VeriFone unveiled plans to introduce a low-cost, palm-sized, smart card reader/writer called the Personal ATM (P-ATM). The P-ATM will connect to any standard telephone line, allowing consumers to interact with their bank account to download cash,' securely and conveniently in the privacy of the home or office. In addition, leveraging VeriFone's leadership in Internet commerce, the P-ATM will also interface with the VeriFone vWallet, and any stored-value card scheme, enabling consumers to make purchases over the Internet, download funds from their bank onto their smart card, transfer funds between accounts, and perform on-line transactions between consumers and merchants. VeriFone also revealed the development of the VeriSmart System architecture, which is expected to accelerate consumer adoption of smart card applications. The VeriSmart System will integrate a low-cost personal ATM device, a powerful set of software applications that lets consumers securely interact with any provider offering smart card services, and a comprehensive package of support services. Applications might include the ability to download electronic cash from their bank, instantly receive rewards from loyalty programs, or provide selected healthcare information to their doctor or pharmacist. Six leading technology companies -- CIDCO, Gemplus, Key Tronic, Mondex International, Scientific Atlanta and WebTV Networks, Inc. -- have announced their support for VeriSmart and plan to work with VeriFone to develop further technologies around the system. "We are taking an aggressive role in developing the infrastructure for smart card applications with our plans to introduce the Personal ATM and the VeriSmart System," said Hatim Tyabji, chairman, president and CEO of VeriFone. "VeriSmart will be the first technology that is card-scheme and hardware-device independent, uniting all the elements in a truly end-to-end solution. We plan to actively layer VeriSmart technology into our merchant point-of-sale terminals and Omnihost client-server systems, to create solutions that bridge all VeriFone markets worldwide. This action unveils the third element in our three pronged strategy -- traditional debit/credit business, Internet commerce and now consumer smart card technologies -- expanding VeriFone's leadership in secure payments technologies worldwide." In addition, American Express, GTE, Hewlett-Packard Company, MasterCard, NIPSCO Industries, Inc., Sparbanken Bank (BABS), Sears Payment Systems (SPS), and Wells Fargo have all announced support of the VeriSmart System. The VeriSmart System is being designed to electronically link consumers to their banks, telephone and utility companies, retail merchants and other personal services. Using any one of a variety of smart card-ready devices, such as the Personal ATM, telephone, PC, or set-top-box, a consumer will access numerous personal services and interact with multiple stored-value card schemes, loyalty programs, identification, and health care information. The VeriSmart System will provide end-to-end security for all communications between the access device and the smart card applications on the VeriSmart server, ensuring data integrity of financial transactions and other confidential information. "This is the beginning of a new era for smart card applications," said Tom Kilcoyne, general manager of VeriFone's Consumer Systems Division. "The industry has been waiting for a compelling, cost-effective solution that enables financial institutions, and a broad range of consumer service providers, to move aggressively to build smart card applications. Endorsement in the consumer market from these respected companies, combined with VeriFone's global leadership position and expertise in the secure payment transaction market, supports our belief in VeriSmart as a powerful system that can accelerate development of the market for smart cards worldwide." Wide Industry Support VeriFone's Consumer Systems Division's effort to enhance the market for smart cards is drawing the support of consumer market leaders that will contribute in pivotal areas of the system. CIDCO Inc., the world's leading producer of subscriber terminal equipment that supports intelligent network services being offered by telephone operating companies, has formed an alliance with VeriFone to incorporate VeriSmart technology into its products and to work with VeriFone on future projects. "CIDCO is excited to be collaborating with VeriFone in the explosive consumer smart card market," said Paul Locklin, CIDCO president and CEO. "The VeriSmart system brings a strong added value to the products we market to our regional Bell operating company customers." "VeriFone and Gemplus have had a close and long-standing relationship over the years and we are proud to be part of this latest breakthrough solution," said Marc Lassus, Gemplus CEO. "As a market leader, our strategy has been to partner with companies that enable us to offer the best-of-breed solutions, and our participation in VeriSmart extends this strategy to the consumer market for smart cards." "As consumers become more accepting of smart cards, initiatives like VeriSmart will make it easier for banks and other institutions to introduce new products and services that provide greater choice and convenience," said Ruann F. Ernst, general manager of HP's Financial Services Business Unit. Associated Press: Tuesday, October 8, 1996 Bankers Hope to Control 'Electronic Cash' By E. SCOTT RECKARD The largest organization of U.S. banks wants "smart cards" and "electronic cash" limited to the banking industry. The American Bankers Association, in its first official position on how electronic cash should evolve, says such "stored-value" cards should be issued only by regulated institutions with direct access to Federal Reserve payment services -- namely banks, thrifts and credit unions. The bankers' recommendation comes as several software companies are also jockeying to provide payment systems over the Internet. At a convention here, the bankers trade group warned that users of prepaid phone cards have been ripped off by fly-by-night issuers. The same could happen in storing funds for general use on plastic cards like credit cards or in computers, the bankers said in issuing their report Sunday. "If a nonbank issuer of stored value fails, consumers could be left holding the bag - an empty bag," said James M. Culbertson, president for the past year of the ABA and chairman of First National Bank in Asheboro, N.C. The bankers' group acknowledged that some day computer companies may get into the business of electronic cash. But if that happens, banks want the computer companies to be subject to the same regulatory scrutiny that applies to banks and thrifts. While seeking exclusive rights to smart cards and their ilk, banks have resisted the idea that conventional bank regulations should apply to electronic cash. They oppose a proposal to apply the Federal Reserve's "Regulation E" to stored-value cards. That regulation requires banks to offer written confirmations of ATM transactions. Bankers say such a requirement would make stored-value cards too expensive to issue. And in pilot projects, banks have not treated the smart cards as deposits that are insured by the Federal Deposit Insurance Corp. That means the consumer does not earn interest on the unused cash backing up the card and the banks do not have to set aside reserves as they would for a conventional deposit. A smart card has a computer chip that stores information, including how much the consumer has deposited. As a purchase is made, the amount is automatically deducted from the balance in the card's memory. In the future, consumers will be able to transfer cash to smart cards from their home computers or at an automatic teller machine at a bank. Electronic money is also being tested to pay for purchases over the Internet. The move away from paper-based transactions has been a boon in many ways for banks. The replacement of manual check-processing by electronically stored images of the checks has probably paid off more for banks than any other high-tech innovation, bank technology consultant Charles O. Hinely said in an interview. But banks could be pushed out of the payment system altogether if they don't quickly get into computerized services and transactions, said Don Tapscott, author of "The Digital Economy." "If you don't, you're basically toast, and punishment is swift," he told the bankers. The trade group's new president, Walter A. Dods Jr., said he would work to improve the image of bankers, whom he described as unfairly maligned despite the financial support and considerable charity work they provide their communities. "But what do we get in return? We get legislation to limit ATM fees. We get a reader telling Business Week recently that 'banks are just sucking us dry,"' said Dods, the chairman of First Hawaiian Bank. --- Dr.Dimitri Vulis KOTM Brighton Beach Boardwalk BBS, Forest Hills, N.Y.: +1-718-261-2013, 14.4Kbps