AmEx Results

American Express’ card volume continues to grow at an above average pace while card loans soar, according to third quarter results released Monday. U.S. card volume is up 16.4% over 3Q96 for a total quarterly volume of $38 billion. AmEx year-to-date volume now logs in at $109.8 billion according to CardData. Card receivables are growing 20.3% annually, hitting $13.5 billion at the end of 3Q97. Meanwhile AmEx fee income continues to dwindle as its worldwide average fee per card over the past twelve months has dropped from $43 to $38 and its average discount rate has slipped from 2.75% to 2.72%. American Express ended the third quarter with 29.6 million cards-in-force in the U.S., 30+ day delinquency of 3.6% and net chargeoffs of 6.5%.


NDC Signs Two Natl Accts

National Data Corporation (NDC) announced several new contract signings today for its electronic payment services. The agreements are with Taylor Made Golf, Calico Corners and the Empire State Restaurant and Tavern Association.

Under the terms of the agreements, NDC will provide credit card processing services to the new accounts.

“We are pleased with the continued, strong demand and growth that we are seeing in our payment systems business,” said Tom Dunn, NDC’s senior vice president of Integrated Payment Systems. “At the same time, signing these prestigious accounts demonstrates our ability to serve a wide array of vertical markets with our full range of payment solutions.”

Taylor Made Golf, based in Carlsbad, Calif., is one of the nation’s leading manufacturers of golf supplies and equipment. The company will use NDC’s business to business credit card transaction services.

Pennsylvania-based Calico Corners, a nationwide interior design, fabrics and furniture store chain with 83 locations, has signed with National Data for credit card processing services.

NDC also renewed a marketing agreement with the Empire State Restaurant and Tavern Association, based in Albany, New York. As its preferred provider, NDC will market a full range of payment solutions to the association’s more than 3,000 restaurant members.

National Data Corporation is a leading provider of information services for the payment systems and health care markets.


Blue Monday

Yesterday’s 554 point DJIA drop left little untouched as the massive sell-off produced a 7.2% overall drop, erasing $700 billion in market cap. Among card industry stocks First Data and Advanta realized higher than average erosion. Advanta gave up 9% of its Class A stock value, 8% on its Class B stock while FDC closed down 8% lower at $28.62. MBNA, Capital One and American Express all dropped about 7%.


MC Settles Nuisance Suit

MasterCard International reached a settlement with St. Louis-based Meridian Enterprises pertaining to alleged infringement of Meridian’s rewards card patent. Meridian holds a 1994 patent for the administering of an incentive award program using a credit card as the redemption mechanism. Meridian has previously reached out- of-court settlements with VISA, Associates and Union Oil. The company said it also extracted settlements yesterday with Banc One and British Petroleum although no actual suit was filed in those two claims. Meridian says it currently has open litigation with GE Capital, Exxon, Chase, Shell Oil, Fleet, BankAmerica, Cumberland Farms and Sun Co.


Internet Phone for JCB Cardholders

NetUSA is pleased to announce that it has reached an agreement with Crenet Company, Ltd., Tokyo, Japan. Under the agreement, NetUSA will install Internet phone services in 70 cities in Japan.

NetUSA’s Global Voice Over the Net (GVON) service employs state-of-the-art Internet technology to provide high-quality voice transmission over the Internet. However, unlike conventional Internet Phone (I-Phone) service, no computer hardware or software is required by the end user. The costs to the user will be much lower than regular phone systems, as NetUSA’s technology allows multiple signals to be transmitted at the same time. “The new technology is an opportunity for entrepreneurs to build a ‘poor man’s’ version of long-distance carriers such as AT&T or MCI,” said Dr. Wun C. Chiou, Sr., the President of NetUSA. NetUSA currently possesses six voice servers in Taiwan and one in Hong Kong, and this agreement will greatly increase NetUSA’s Asian presence.

Other than its voice-service, Crenet is a major credit card settlement company in Japan, Thanks to its strategic partnership with Japan Credit Bureau (JCB), Crenet has access to 25 million JCB credit card holders along with its own 6 million customers. These cardholders form a potential customer base for the NetUSA/Crenet Internet Phone System. Mr. Kanehide Yoneyama, the President of Crenet, said, “Because of our existing relationship with these 25 million cardholders, a significant number of them will become customers of the new Internet Phone System.”

Crenet Company, Ltd., was established in 1992 and is headquartered at 5-18-9 Shiroganedai Minato-Ku, Tokyo, Japan. Crenet is Japan’s largest private network. Its services, other than its credit card services, include information and data processing outsourcing, network and system strategy planning for telephony and PBX, payment system, digital network project management, and telecommunications services.

NetUSA is a public company with three business divisions: NetUSA Communications, Software, and Web Center. NetUSA Communications offers Global Access, Interfaxing, and Voice over the Net service, allowing inexpensive worldwide communications and connectivity. The software division operates under the name Pacific Micro and is the publisher for the well-known software products Mac-In-DOS and Common-Link. The Web Center owns 25 domain names, including, which has become one of the largest software shopping malls on the World Wide Web, and the NetUSA Internet Centers. NetUSA’s web site is .


CyberCash Txs Up 84%

CyberCash, Inc., a technology-driven company that provides software and services to enable secure financial transactions on the Internet, today announced business and operating results for the third quarter ended September 30, 1997.

Financial Summary Table

Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
Revenues $ 1,514,243 $39,088 $ 2,481,999 $76,793

Costs and expenses $ 7,479,162 $ 8,324,172$24,671,398 * $20,275,801

Interest and other
income, net $405,851 $618,320 $ 1,099,217 $ 1,696,353

Net loss $ (5,559,068) $ (7,666,764)$ (21,090,182)$ (18,502,655)

Net loss per share $(0.51) $(0.72) $(1.94) $(2.00)
Weighted average
shares outstanding 10,912,656 10,656,536 10,843,558 9,233,691

*- Includes $2,162,500 for the acquisition of the NetBill technology license from Carnegie Mellon University and a one-time $344,242 restructuring charge.

CyberCash President and CEO Bill Melton said, “Many important developments have taken place for CyberCash in the third quarter of 1997. On the financial side, the Company raised $15 million in equity capital through a private placement of convertible preferred stock. As we reported when the financing closed in August, we believe the terms of the transaction are very favorable to the Company and its current shareholders. This infusion of new equity provides CyberCash with a strong capital base on which to continue to build its business.”

“On the operating side,” Mr. Melton said, “we are beginning to see the increases in transaction volumes we had been anticipating. The average number of credit card transactions per day grew by 84% over the prior quarter. We continue to build powerful strategic alliances and we have succeeded in integrating our technology into nearly every major e-commerce platform. For example, in September we became a premier Commerce Application Partner of Microsoft, delivering two new CyberCash payment components for the Microsoft Wallet and Microsoft Site Server, Enterprise Edition. This and similar relationships with other e-commerce solutions providers simplifies online payment for all parties involved.”

“We have also continued to develop strategic relationships with large financial institutions and major merchants around the world in order to establish CyberCash as the vendor of choice for Internet payment applications. In August we announced a joint venture with Softbank Corporation and other leading Japanese partners to provide secure yen-based Internet payment services to banks, credit card companies, merchants and consumers. Just last week, we joined with Barclays Bank, UK, in announcing that BarclayCoin is now available to UK consumers via BarclaySquare, the UK’s leading virtual mall. Other well-known retailers that are now using CyberCash’s payment solutions are Macy’s, Virtual Vineyards and OshKosh B’Gosh.”

In addition to growth in the credit and coin services, the third quarter saw increasing acceptance of the PayNow(TM) Secure Electronic Check Service. PayNow enables billers to accept electronic check payments directly at their website. In September of 1997, CyberCash extended its lead in the “biller direct” processing model for Internet-based bill presentment and payment by entering a partnership with BlueGill Technologies, Inc. The second generation of the PayNow software and services (originally introduced in January of 1997) has now been brought online and is processing live electronic check transactions for companies in the utility, telecommunications and financial services industries. CyberCash’s processing capabilities and partnerships with companies such as International Billing Services, Price Waterhouse, Coopers & Lybrand, and eDocs positions it to take a leading role in what is expected to be a very large market for Internet bill presentment and payment services.

During the third quarter the Company’s core business increased significantly. Revenues for the three months ended September 30, 1997 increased to $1.5 million from $39,000 for the third quarter of 1996. Recurring revenues increased 24% from the prior quarter to $114,000 and other revenues increased 94% to $1.4 million primarily from software development and technology licensing related to our international expansion. The number of merchants using CyberCash’s Internet payment services increased from 1,048 to 1,676 during the third quarter of 1997, while the number of daily credit card transactions increased 84% during the same period to 22,300.

“These increases provide an important measure of the growing acceptance of e-commerce,” Mr. Melton said. “Equally important, for the third consecutive quarter, CyberCash kept its operating costs under our target of $7.5 million per quarter. And we remain committed to maintaining operating expenses at this level through 1997.”

Third Quarter 1997 Highlights

— CyberCash announced the availability of two new payment components for the Microsoft Wallet and Microsoft Site Server, Enterprise Edition. This will provide users of Microsoft’s e-commerce software with integrated solutions that simplify electronic commerce and increase flexibility and security for all parties involved.

— CyberCash raised $15 million in equity capital through a private placement of convertible preferred stock to two private equity funds. The transaction was structured with a view to limiting dilution to existing stockholders.

— CyberCash announced a joint venture, CyberCash K.K., to offer yen-based Internet payment services in Japan. The Company’s joint venture partners include Softbank Corporation and other leading Japanese companies including banks, credit card companies and technology companies. The service will be launched with approximately 20 Japanese merchants selling products online.

— CyberCash announced the establishment of a joint venture, CyberCash GmbH, to offer Deutsch Mark-based Internet payment services throughout Germany. The partners in the joint venture include Dresdner Bank, AG and Sachsen, LB. The joint venture will launch CyberCoin, a micropayment service, and electronic direct debit (EDD) from personal bank accounts to merchant banks accounts for payment of goods and services in the fourth quarter of 1997.

— Charles T. Russell, former CEO and President of Visa International, joined CyberCash’s Board of Directors. Mr. Russell headed Visa International, a bankcard association of more than 18,400 member financial institutions which operate the world’s largest consumer card payment system, from 1984 to 1994.

— CyberCash formed an agreement with Price Waterhouse to help financial institutions empower their Internet merchants and billers to accept electronic payments directly on their websites. As part of this agreement, Price Waterhouse will provide financial institutions and their billers with advisory services for evaluating their electronic currency options and will identify a solution that positions the financial institution for the commercial marketplace of the future.

— CyberCash joined with iCat and First USA Paymentech to offer merchants a one-stop-shop for electronic commerce, from catalog creation, management and delivery to secure transaction processing. This combination of industry leading Internet catalog software and complete payment services eliminates confusion for merchants, providing them with a single source to completely set up shop online.

— CyberCash’s CyberCoin(R) micropayment system was selected by SegaSoft(TM) for HEAT(TM), Sega Soft’s new game network, and, the company’s corporate web site. With CyberCoin service, SegaSoft will be able to offer consumers hundreds of low-cost items that they can order and pay for online.

— CyberCash announced that it will offer an Internet billing solution with BlueGill Technologies 1to1Server(TM), providing a full, interactive solution to companies that want to deliver bills and statements online and have them paid directly at their website.

— Merchants using CyberCash’s services increased to 1,676 at the end of the third quarter from 1,048 at the end of the second quarter, while the average number of credit card transactions per day increased 84% during the same period to 22,300.

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 Statements of Operations
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
Revenues $ 1,514,243 $39,088 $ 2,481,999 $76,793

Costs and expenses $7,479,162 $8,324,172 $24,671,398* $20,275,801

Interest and other $405,851 $618,320 $ 1,099,217 $1,696,353
income, net
Net loss $(5,559,068) $(7,666,764)$(21,090,182) $(18,502,655)

Net loss per share $(0.51) $(0.72) $(1.94) $(2.00)
Weighted average
shares outstanding 10,912,656 10,656,536 10,843,558 9,233,691

* – Includes $2,162,500 for the acquisition of the NetBill technology
license from Carnegie Mellon University and a one-time $344,242

Consolidated Balance Sheets

September 30, December 31,
1997 1996
Cash and cash equivalents $20,526,142 $33,687,076
Short-term investments 8,779,773 —
Other assets 2,889,225 1,733,341
Property and equipment, net 4,833,187 5,629,664
Total assets $37,028,327 $41,050,081

Current liabilities $2,514,189 $2,940,595
Series C Preferred Stock 14,275,945 —
Total stockholders’ equity 20,238,193 38,109,486
Total liabilities and
stockholders’ equity $37,028,327 $41,050,081


Global Internet Roadmap

In response to recent calls for the private sector to play a leadership role in charting the future of the Internet, the Global Internet Project (GIP) today released a series of recommendations on electronic commerce to the European Union.

The proposals cover:

– security and authentication

– telecommunications infrastructure

– taxation and customs

– international commercial principles

– intellectual property

– standards and interoperability

– regulation of content

– import and export regulations

GIP members believe that Internet expansion will depend to a great extent on the ability of companies and consumers to obtain products and services in a secure, flexible, convenient, and easy-to-use manner.

“A fundamental precept of the GIP is that as a global medium, barriers to the Internet’s growth must be addressed on a global basis. As such, we welcome efforts to encourage this dialogue and note the recent thought-provoking comments by Commissioner Bangemann calling for an ‘International Charter for Global Communications.’ We believe that our recommendations on electronic commerce should be the foundation of any such global policy,” said John Gerdelman, Chairman of the GIP and President of networkMCI Services.

“We are pleased that Commissioner Bangemann emphasized the importance of telecommunications deregulation and the need to address questions of security and authentication, which have also been at the top of the GIP’s agenda,” said Dr. James Clark, founder of the GIP and Founder and Chairman of Netscape Communications. “Our goals must be to promote user choice and encourage competition and innovation,” he argued.

The group also injected a note of caution related to Internet governance. “The open, standards-based nature of the Internet is largely responsible for its remarkable growth. We believe that the private sector must continue to drive the development and progress of this emerging medium to enable new technologies and applications,” said John Patrick, Vice President, Internet technology, IBM.

The Global Internet Project has previously made proposals to the International Telecommunication Union (ITU) on the Internet’s impact upon telecommunications markets and presented recommendations on security and authentication to the Organization of Economic Cooperation and Development (OECD). On April 8th, 1997, the GIP held an encryption summit in London in which European Union (EU) and other officials from around the world participated. Today’s recommendations on electronic commerce as well as these earlier reports can be found at the GIP’s web site [at][1].

“We are very pleased that the EU’s recently released communication on security and authentication, ‘Ensuring Security and Trust in Electronic Communication,’ echoes many of the themes in our proposals and many of the sentiments expressed during our encryption feasibility summit in London earlier this year,” said Bob Foster, Manager of Online and Multimedia at British Telecom. “We look forward to discussing this paper in greater detail with EU officials,” Foster continued.

“Let us continue the dialogue with Commissioner Bangemann and work with the EU, ITU, the OECD, and the Asia Pacific Economic Cooperation forum (APEC) and other international organizations to achieve the goals suggested by the GIP to facilitate the growth of the Internet and electronic commerce,” said Michio Naruto, Executive Vice President of Fujitsu Limited.

The Global Internet Project is composed of 13 CEOs and senior executives representing the global software and telecommunications industries whose companies have a direct stake in the development of the Internet. Last year, the group produced a paper entitled, “The Emergence of a Networked World,” which looked at the nature of the Internet and what it can become. It has also developed recommendations for the OECD on information security, proposals on telecommunications and the Internet for the ITU and earlier this year held an encryption feasibility summit in London attended by industry leaders and government officials from around the world.

Global Internet Project members include:

Dr. James Clark (Founder), Chairman

Netscape Communications Corporation

Mr. John Gerdelman (Chairman), President

networkMCI Services

Mr. Dan Schulman, President,

AT&T WorldNet Service

Mr. Robert Foster, Manager,

Online & Multimedia

British Telecom

Mr. Volker Steiner, Executive Vice President,

Broadcasting, Multimedia & Online Services

Deutsche Telekom

Mr. Barry Sullivan, Corporate Vice President

Electronic Data Systems Corporation

Mr. Michio Naruto,

Executive Vice President

Fujitsu Limited

Mr. Paul Gudonis, President, Internet

GTE Internetworking

Mr. John Patrick, Vice President,

Internet technology

IBM Corporation

Mr. Yukio Mizuno, Executive Advisor

NEC Corporation

Oracle Corporation

Sun Microsystems, Inc.

Visa International

The Global Internet Project is managed and staffed by the Information Technology Association of America, a high tech trade group representing 9,000 members and affiliates in the Internet, software, systems integration, services and telecommunications segments of the industry. For more information contact Jon Englund at 703-284-5301; email:



QI SmartKits in Treasury Pilot

QI Technologies Corp., is installing QI SmartKits in vending machines at the Department of Veterans Affairs, Bronx Medical Center, New York. The installation is part of the U.S. Treasury’s program to test the use of electronic cash card technology to improve service to citizens, reduce government costs and streamline Federal operations. The pilot will place NationsBank VisaCash in the hands of patients, physicians, visitors, volunteers and employees of the VA facility.


Royal Bank SET

Royal Bank announced the implementation of a system that ensures secure credit card payments over the Internet. Using software products developed by VeriFone Inc., and with the grated participation of IBM Canada Ltd. and UUNET Canada Inc., the new system provides an Internet payment solution based on the SET protocol. The first retailer to use the service is Proof in Advance Education Corp. of Toronto, which produces Learn As You Drive audio-cassettes.


$50 Bill Smartview

Florida-based Smartview says its device will avoid problems associated with the printing of the new $50 bill. The Smartview counterfeit detector was developed specifically to counteract fraud by showing the flow of the embedded security thread. Its patented Adarkroom technology is the only on of its kind to clearly show the glow of the security device in any light conditions. The devise is already in widespread use for verifying conditions. The devise is already in widespread use for verifying the newly printed $100 bills, which were redesigned in 1996 to include a red security thread to the left of the portrait.