Pittsburgh Taxis Take Cards

Customers using People’s Cab now have an added convenience available to them thanks to the latest technology from Bell Atlantic Mobile.  Cab fares can now be paid by credit card, since People’s Cab has begun using wireless point-of-sale terminals to obtain credit authorizations.

“Most business travelers and many others prefer to pay their fares by credit card,” explained Mayvis Baumann, general manager for People’s Cab. “Until now, we weren’t able to accept credit cards because our drivers could not get proper authorization on the road.  These wireless point-of-sale units not only make that step possible, they make it easy and provide an immediate receipt for the customer.”

Baumann worked with Bell Atlantic Mobile and ECS, an independent service organization for credit card services, to equip the company’s entire fleet with the wireless point-of-sale units and to train drivers to use them.  The wireless units enable the user to access data without the need for a conventional wired phone line.

“This technology puts us on a level playing field with our competitors,” Baumann said.  “Our drivers look for the business traveler, and often being able to accept a credit card makes the difference in being able to pick up a particular fare.  We also serve a large student population on the campuses in Oakland.  Students can have unscheduled trips and may not have cash, so being able to use a credit card is important to them.”

Bell Atlantic Mobile offers wireless point-of-sale technology to transportation companies like People’s Cab as well as to vendors that need to authorize credit card purchases at remote locations such as trade shows, craft festivals or sporting events.  This technology is an attractive alternative for fixed-site retailers as well.  The cost of a wireless transaction is comparable to one done via a landline connection but there are no line installation costs or monthly landline local access charges.

“Transmitting data wirelessly is now an everyday occurrence that impacts the lives of virtually all consumers,” said Jerry Fountain, regional vice president for Bell Atlantic Mobile in Pittsburgh.  “Point-of-sale is only one example of how our technology carries data wirelessly.  We also work with utility companies to monitor pipelines for safety, vending machine companies to ensure quantities and freshness of products in remote locations, and, of course, business people who use our AirBridge(R) Internet Access for e-mail when they are traveling.”

People’s Cab began accepting credit cards in mid-December and, according to Baumann, they expect the added convenience will have a positive impact on the firm’s overall business.

Anyone seeking additional information about Bell Atlantic Mobile’s point- of-sale or other wireless data applications can call 1-800-308-DATA or visit .


Credit Card Stability

While a few issuers continue to struggle with poor performing vintages, stability will remain the watchword for credit card performance measures through the first half of 1998. Fitch IBCA’s February issue of “Credit Card Movers and Shakers” says since reaching an all-time high last May, credit card chargeoffs closed 1997 with a seven-month string of flat or slightly improving results. In the meantime, issuers boosted excess spread margins by successfully repricing riskier accounts and raising fees to offset the high level of defaults.

Diving this period of stability are lenders’ continued adherence to the tighter credit and collection standards put in place over the past 18 months and a slight leveling in the growth of personal bankruptcy filings. Equally helpful, if not more so, are favorable economic conditions. Given these factors and the overall high level of chargeoffs, Fitch IBCA does not anticipate issuers to begin loosening underwriting standards any time soon.

Also detailed in the report is the introduction of two new bankruptcy reform bills in Congress last week by legislators — The Bankruptcy Reform Act of 1998 and The Consumer Lenders and Borrowers Bankruptcy Accountability Act of 1998.

The Bankruptcy Reform Act addresses what many believe are key flaws in the current code — that those with the ability to repay debts are not required to do so and that there is no mechanism to determine their ability to repay. The bill attempts to rectify this by creating a needs-based system, under which a debtor’s ability to repay determines filing Chapter 7 or 13.

The Accountability Act features similar needs-based guidelines, but would limit claims by creditors that extended credit while aware of the consumer’s inability or potential inability to repay debts. Hearings on the bills will begin early next month and are expected to be completed by late March.

For a copy of the report, visit the Fitch IBCA web site at or call 800-853-4824.


TSYS & CheckFree

Total System Services, Inc.announced an alliance with CheckFree that will allow cardholders of TSYS clients to receive and pay their credit card bills over the Internet.

TSYS is one of the world’s largest credit, debit, commercial and private- label card processors.  The Columbus-based company serves card-issuing institutions throughout the United States, Puerto Rico, Canada and Mexico. CheckFree is the leading provider of electronic bill presentment and payment services to financial institutions. The alliance brings together the strengths and expertise of two technology leaders.

As a result of the agreement, TSYS will provide for its client a new on- line bill presentment and payment service called SureRemit(sm), one of the components of the TSYS SureTransact(sm) family of Electronic Commerce products. SureRemit will work the following way CheckFree will facilitate transmissions of billing data from TSYS to individual cardholders who will then be able to view their statements and pay them with point-and-click ease.

TSYS President Philip W. Tomlinson said, “This partnership will allow Total System to offer unprecedented functionality to the 92 million cardholders we currently process on behalf of our clients. Our clients benefit from reduced costs in printing and mailing statements, as well as in remittance processing fees. Cardholders save postage and check costs. The alliance is a win-win situation for everyone.”

“As one of the largest billers in the world, producing approximately 500 million statements a year, Total System is a perfect partner for CheckFree’s E-Bill bill presentment and payment services,” said Pete Kight, president and chief executive officer of CheckFree.  “Our alliance brings unique and unprecedented capability to Total System’s clients.”

Along with SureRemit, other products and services in the TSYS SureTransact family of services include SureService(sm) and SureCommerce(sm).  The SureService product offers TSYS clients the ability to provide balance inquiry, transaction inquiry and bank and corporate setup to their customers. SureCommerce will allow clients to issue card payment certificates over the Internet securely following the Secure Electronic Transaction protocol set forth by Visa(R) and MasterCard(R).

The only company with a proven, in-market tested solution for electronic billing and payment, CheckFree has contracts with 23 of the nation’s largest billers, as well as the largest statement processor, for electronic bill presentment.  In addition, Atlanta-based CheckFree will announce soon the full market launch of bill presentment for some of the largest billers in the world.  Combined, these billers represent nearly 400 million billing and payment transactions per month.

Founded in 1981, Atlanta-based CheckFree () is the leading provider of electronic commerce services, software and related products for 2.2 million consumers, 1,000 businesses and 850 financial institutions. CheckFree designs, develops and markets services that enable its customers to make electronic payments and collections, automate paper-based recurring financial transactions and conduct secure transactions over the Internet.

In March 1997, CheckFree introduced the nation’s first end-to-end system for electronic presentment of richly formatted bills over the Internet, as well as next-generation electronic payment and remittance capabilities. CheckFree’s E-Bill uses existing payment systems and allows consumers to access and pay their bills through the branded home-banking services of financial institutions.

Headquartered in Columbus, Ga., TSYS is one of the world’s largest credit, debit, commercial and private-label card processing companies, serving card- issuing institutions throughout the United States, Puerto Rico, Canada and Mexico, representing more than 92 million cardholder accounts. TSYS provides a comprehensive on-line system of data processing services marketed as THE TOTAL SYSTEM(R). In 1996, TSYS formed a joint venture with Visa(R) U.S.A. to create Vital Processing Services L.L.C. (), a leading full-service merchant services provider. TSYS’ 1997 revenues totaled $361.5 million; the company is an 80.7 percent owned subsidiary of Synovus Financial Corp. (NYSE SNV) (), a $9.3 billion asset, multi-financial services company and a component of the Standard and Poors 500 Index.  Synovus also includes 34 banking affiliates in four Southeastern states, a full-service brokerage firm, a comprehensive trust services provider and a mortgage services company. TSYS’ Internet address is .


AIG – Cendant

The fight to acquire credit insurance provider American Bankers Insurance Group is getting messy as AIG has taken on a public campaign to discredit Cendant. AIG is running full-page ads this week accusing Cendant of a highly leveraged balance sheet, few tangible assets and no experience managing insurance companies. According to this morning’s Wall Street Journal it is most likely AIG will have to boost its $2.2 billion bid for ABI even if it successfully discredits Cendant with state insurance regulators.


Record Profits

Based on results for 79% of the bank industry’s assets, SNL Securities estimates U.S. commercial banks generated $59 billion in net income last year with $15.1 billion occurring during the fourth quarter. The banking industry’s average ROA calculates to 1.26% while average ROE equaled 14.98%. Compared to 1997, ROAs grew three basis points and ROEs increased by 53 basis points. SNL notes as consumer credit concerns have subsided so have loan reserves, dropping by 1.83% from the third quarter. The most disturbing trend in the banking industry continues to be shrinking net interest margins, which dropped 10 basis points to 4.13% in the fourth quarter. For the bank credit card business the weighted, average, after-tax ROA stands at 1.56%, or 2.6% pre-tax, for 1997, according to calculations by R.K. Hammer Investment Bankers.


CyberCash Reports $4.5 Million 97 Rev

CyberCash, Inc. announced business and operating results for the fourth quarter and year ended December 31, 1997.  In addition, CyberCash announced on February 5 that it has raised $15 million in equity capital which will help fuel its strategy for expanding its leadership position in secure Internet Commerce Solutions.

                               CYBERCASH, INC.
                           Financial Summary Table

                          Three Months Ended                 Year Ended
                              December 31,                   December 31,
                           1997          1996            1997            1996
    Revenues        $2,005,174        $50,646      $4,487,173        $127,439

    Costs and
      expenses     $(6,592,824)  $ (8,603,655)   $(31,264,222)*  $(28,879,456)
    Interest and other
      income, net    $(544,078)**    $500,923        $555,139**    $2,197,276

    Net loss       $(5,131,728)   $(8,052,086)   $(26,221,910)   $(26,554,741)

    Net loss available to
      shareholders  $ (5,414,467) $(8,052,086)   $(26,504,649)   $(26,554,741)
    Net loss per share    $(0.49)      $(0.75)         $(2.43)         $(2.77)
    Weighted average
     outstanding      11,040,382   10,703,224      10,898,036       9,585,418

     *  Includes $2,162,500 for the acquisition of NetBill technology license
        from Carnegie Mellon University and a one-time $344,242 restructuring
    **  Includes $905,429 loss from investment in affiliates.

CyberCash reported revenues of $4.5 million for 1997, up from $127,000 in 1996.  The 1997 revenues were derived in substantial part from developing and licensing solutions for strategic alliances with financial institutions around the world.  CyberCash became the only Internet payment company handling payments in a multiplicity of currencies, including the yen, the pound and the mark. The year also saw a dramatic increase in the number of merchants using CyberCash services and in the number of transactions CyberCash is processing. At the same time, the Company delivered on its promise to hold its quarterly expenses to approximately $7.5 million.  “I am pleased with our fourth quarter and year-end performance.  Our accomplishments clearly illustrate the effectiveness of our strategy for 1997,” stated Bill Melton, President and CEO of CyberCash.  “For 1998, we are committed to a set of initiatives to solidify our position as the leader in secure Internet payment services worldwide and to promote the advancement of electronic commerce around the world.”

Strategies for 1998

CyberCash is undertaking a large-scale campaign aimed at increasing the number of merchants — and thus the number of transactions — using its payment services.  The Company’s strategy is to work with merchants, technical partners, Internet service providers, store builders and major credit card processors to bring CyberCash’s advanced technology to the attention of a wider audience.  The  Company is already seeing excellent results from this effort.  The number of merchants using CyberCash’s services increased over 50 percent in the fourth quarter compared to the third quarter.

The Company is adjusting its business model and fee structure to reflect the increasing acceptance of CyberCash’s suite of Internet payment services as well as e-commerce in general.  CyberCash is now charging merchants an initial set-up fee — which was previously waived — and a monthly service fee based on the number of transactions that take place.  This new fee structure is intended to have a positive impact on the Company’s revenue stream.

CyberCash is putting additional emphasis on its PayNow(TM) Secure Electronic Check Service.  The Company sees significant revenue growth potential in this market, because of the many benefits businesses can realize through electronic bill presentment.  Among the most important are cross- selling and marketing opportunities and reduced costs through a streamlined receivables process and better cash management.  The alliances we have forged with International Billing Services and NCR Corporation, two of the leading bill presentment companies, have already given CyberCash a firm foothold in this market.  In addition, the Company is licensing its check product software to an increasing number of companies offering on-line payment options to customers through their Internet home pages.

Finally, the Company intends to continue to develop strategic relationships with financial institutions and technology companies around the world with a view toward expanding its range of offerings and broadening its geographic coverage. “The Internet,” said Mr. Melton, “offers the potential for dramatic increases in global electronic commerce. As a provider of payment services to enable that commerce, CyberCash must be global, too.”

“In summary,” Mr. Melton concluded, we look forward to an excellent year in 1998.  As of December 31, 1997, we had over $22 million of cash and short- term investments.  Combined with the proceeds of our just-completed financing and projected revenues for the year, this will provide the Company both with the funds we need for our operations in 1998 and with resources to take advantage of strategic opportunities.”

Fourth Quarter Highlights

— CyberCash and Barclays Bank, UK, announced that BarclayCoin(TM) is now        available to UK consumers via Barclay Square, the UK’s most popular        e-commerce shopping environment with over 2 million visitors since its        launch.   Barclays and CyberCash formed the alliance to enable        consumers in the UK to make small purchases of between 25p and        10 pounds on the Internet.

— CyberCash announced it will deliver the payment options for Pandesic        LLC.  The partnership provides Pandesic’s merchant customers with all        the tools they need to run successful businesses on the Internet,        including marketing, order processing and fulfillment, payment        processing, shipping and handling logistics and vendor payment.

— CyberCash was selected by Imark Technologies, Inc. (Nasdaq MAXX) for        use in extending its award-winning NET-MAX(TM) service to offer local        currency credit card processing to electronic publishers, enhancing        their ability to localize their product offerings.  The service will        initially support Canadian dollars.

— CyberCash announced the appointment of Steve Crispinelli to the new        position of Vice President, Global Business Development.  Mr.        Crispinelli will oversee all strategic relationships and business        development outside the U.S., expanding CyberCash’s reach in Asia,        Europe and Latin America.

— The number of merchants using CyberCash’s services increased by over        50% and the average number of transactions per day increased by over        100% during the fourth quarter.

About CyberCash

CyberCash, Inc., headquartered in Reston, Virginia, USA, provides enabling technology and services that allow secure payment transactions on the Internet.  The Company offers a complete suite of Internet payment services including a credit card service which handles payments using major debit and credit cards, an innovative micropayment service which enables cash transactions and a secure electronic check service which allows consumer-to- business and business-to-business payments from a bank account.  CyberCash is traded on the Nasdaq Stock Market, under the symbol CYCH.  CyberCash’s Web address is .

This press release contains statements that are forward-looking. They are based on the Company’s current expectations, and are subject to a number of uncertainties and risks.  The Company’s actual results may differ materially.  The uncertainties and risks include the pace of growth of Internet commerce, the development by the Company and its competitors of new products and services, strategic decisions by major participants in the industry, competitive pricing pressures, legal and regulatory developments and general economic conditions.  Further information about these and other relevant risks and uncertainties may be found in the Company’s report on Form 10-K and its other filings with the Securities and Exchange Commission, all of which are available from the Commission and from the Company’s worldwide web site , as well as other sources.

To receive CyberCash’s latest news and corporate developments via fax at no cost, please call 1-800-PRO-INFO.  Use company code CYCH.

                               CYBERCASH, INC.
                     Consolidated Statement of Operations

                          Three Months Ended                Year Ended
                          December 31,                     December 31,
                           1997          1996           1997          1996
    Revenues         $2,005,174      $ 50,646    $ 4,487,173      $127,439
    Costs and
      expenses      $(6,592,824)  $(8,603,655) $(31,264,222)* $(28,879,456)
    Interest and
      other income,
      net             $(544,078)**   $500,923      $555,139**   $2,197,276
    Net loss        $(5,131,728)  $(8,052,086) $(26,221,910)  $(26,554,741)
    Net loss available to
      shareholders  $(5,414,467)  $(8,052,086)  $(26,504,649) $(26,554,741)
    Net loss per share   $(0.49)       $(0.75)        $(2.43)       $(2.77)
    Weighted average
      outstanding     11,040,382   10,703,224     10,898,036     9,585,418

     * Includes $2,162,500 for the acquisition of NetBill technology license
       from Carnegie Mellon University and a one-time $344,242 restructuring
    ** Includes $905,429 loss from investment in affiliates.

                               CYBERCASH, INC.
                         Consolidated Balance Sheets

                                             December 31,
                                         1997            1996
    Cash and cash equivalents   $  13,222,234    $ 33,687,076
    Short-term investments      $   8,779,773    $         —
    Other assets                $   4,685,917    $  1,733,341
    Property and equipment, net $   4,671,350    $  5,629,664
       Total assets             $  31,359,274    $ 41,050,081

    Current liabilities          $  1,748,993    $  2,940,595
    Series C Preferred Stock     $ 13,013,772    $         —
    Total stockholders’ equity   $ 16,596,509    $ 38,109,486
    Total liabilities and
      stockholders’ equity       $ 31,359,274    $ 41,050,081


Outstanding  . . . NOT

Revolving credit posted its smallest monthly increase in nearly five years according to December consumer credit figures released by the Federal Reserve Friday. Revolving credit inched up a mere 40 basis points following a 3.4% contraction during November. Overall outstanding consumer credit increased by 3.9% annual rate, due to a significant rebound in automobile credit. For December 1996 revolving credit grew at an annual rate of 10.3%. While final tabulations for fourth quarter credit card outstandings have not been released, a preliminary review of RAM Research’s ‘Fourth Quarter Portfolio Survey’ indicates credit card outstandings grew about 6%, on average, last year. It appears 1997 will post a slower rate of growth than the recessionary year of 1991. Tapped-out personal credit lines and the surge of consolidation loans via high LTV home equity credit have contributed to the weakness in credit card debt. Overall consumer credit for December totalled $1.2 trillion.

                                 REVOLVING CREDIT HISTORICAL
       Dec 97   Nov 97  Oct97  Sep97  Aug97 Jul97  Jun97  May97 Apr97  Mar97 
%GRWTH 0.4%    -3.4    8.7    6.2    8.0    9.4    4.2    4.6   6.9    0.5
$OWED 528.9   528.7  530.2  526.4  523.7 520.2  516.2  514.3 512.4  509.5
Source Federal Reserve; revised figures as of 02/06/98


NextCard VISA

A San Francisco firm rolled out a new credit card Friday billed as the “First True Internet VISA”. The ‘NextCard VISA’ offers instant credit approvals via the Internet and the company’s proprietary online application process called “Rapid Results”. The card, launched by Internet Access Financial Corporation, provides online access to account information and offers applicants the ability to design their own card features. The firm said Friday it has received “thousands” of applications since going online in December. The card is being issued through Heritage Bank of Commerce of San Jose.


VISA Names Emerging Tech Head

Visa International announced yesterday the appointment of Stephen Schapp as executive vice president, Emerging Electronic Payments group, a newly created position, effective immediately.

Schapp, a veteran of 23 years with Visa, most recently served as executive vice president, Products and Marketing, for Visa’s European Union region with headquarters in London.

“Steve brings a wealth of experience and expertise to this key position. His broad understanding of all phases of the payment service business will serve Visa well as we continue to help our Members take full advantage of new opportunities in emerging electronic payments,” said Daniel R. Eitingon, president, Global Support Services Group.

Under Schapp, Visa’s Emerging Electronic Payments group will focus on the acceptance environments and the payment services enabled by new technology.

Visa’s Chip Products group, which works with Visa Member financial institutions in implementing microchip-based card products, will also report to Schapp until such time as an executive is named to head that unit. Previously, both Chip Products and Emerging Electronic Payments were headed by Francois Dutray who has assumed a position with Motorola.

Visa leads the industry with more than 21 million chip cards issued in 30 countries, including more than 7 million Visa Cash stored value chip cards.

Schapp, a native of San Francisco, California, holds a BS degree in Business Administration from California State University.

As the world’s best way to pay, Visa is the preferred payment brand and the largest consumer payment system worldwide with more volume than all other major payment cards combined.  Visa plays a pivotal role in advancing new payment products and technologies to benefit its 21,000 member financial institutions, their cardholders and the global economy.  As the leader in emerging technologies, Visa has 70 chip card programs in 30 countries and on the Internet, with 21 million Visa chip cards, including more than 7 million Visa Cash cards.  Visa is pioneering SET Secure Electronic Transaction(TM) programs to enable and advance Internet commerce.  Visa’s 618 million cards, generating more than US$1 trillion in annual volume, are accepted at more than 14 million worldwide locations, including 380,000 ATMs in the Visa Global ATM Network.  Visa’s Internet address is .


United Expands E-Tickets

United Airlines will expand the airline industry’s most extensive international electronic ticketing service next month on flights operating between Canada and the United States.  The new international E-Ticket service(SM) between United’s U.S. gateway cities and Calgary, Toronto and Vancouver will be in addition to the service the airline already offers between the United States and the United Kingdom.

International E-Ticket service between the U.S. and Canada opened for sale on Feb. 1 and will be available for travel on flights beginning March 1.

Tickets can be purchased in the U.S. and Canada directly from the airline or through a U.S.-based travel agency.  Upon completion of software development by computer reservations systems companies Galileo and Sabre, Canadian-based travel agencies also will be able to sell United’s E-Ticket product.  This development is expected to be completed in March.

“We are seeing strong customer demand for both our international and domestic E-Ticket service,” says Sue Fullman, United Airlines director-sales distribution.  “This expansion into Canada solidifies United’s position as an industry leader with electronic ticketing, and reinforces our long-term goal to introduce the service to more markets around the world.”

Currently, the monthly usage of United Airlines E-Tickets is at an all- time high with 2.7 million coupons used last December.  During 1997, more than 40 percent of all eligible United Airlines itineraries were ticketed electronically.

Check-in, security and customs procedures for international travel using an E-Ticket are the same as current procedures for passengers with paper tickets.  Travelers using United’s international E-Ticket service will check in with their passport and the ticket receipt and, if booked by phone with United reservations, with the credit card used to purchase the ticket. Duplicate receipts and itineraries can be obtained at United ticket counters or via fax, and all customers are provided with a copy of the Warsaw Convention articles governing international travel.

United Airlines introduced its E-Ticket service in the United States on Shuttle by United flights in November 1994.  Less than one year later, United was the first airline to expand electronic ticketing nationwide on all its U.S. flights.

As the largest air carrier in the world and the largest majority employee- owned company, United Airlines offers more than 2,200 flights a day to 139 destinations in 30 countries and two U.S. territories.


MIFARE Standard

Philips’ ‘MIFARE Architecture Platform’ is emerging as the industry standard for contactless smart card systems with a 90% share of the current market. Thursday Hitachi Ltd. announced a joint agreement with Philips to produce, market and sell products based on the ‘MIFARE’ technology without any limitation. The Philips’ contactless platform is a family of compatible card ICs and IC readers based on ‘MIFARE’ and consists of card and reader components working at an operating frequency of 13.56 MHz.


Prepaid Cell Cards

A number of phone companies are jumping on the prepaid cellular phone card bandwagon as the projected number of wireless phone subscribers in the U.S. is expected to grow from 53.4 million to 80 million by the year 2000. Yesterday L.A. Cellular, a partnership controlled by AT&T and BellSouth, announced the ‘PayFirst’ prepaid cellular time card, targeted towards new market segments within the Southern California region. ‘PayFirst’ will be available as a $50 time card and will be distributed through 7- Eleven stores. L.A. Cellular prepaid rates are 75 cents per minute for local and long distance calls and $1.95 per minute for roaming.