PointSpeed's Business Purchasing Centers to Offer BankServ e-Checks As New Payment Method For Small Businesses

Business Wire, August 11, 2000

Business Editors/High-Tech Writers

Internet World Chicago 2000

SAN FRANCISCO--(BUSINESS WIRE)--Aug. 11, 2000

E-checks enable small businesses to lower online

transaction costs and reduce losses from check fraud

Today PointSpeed, Inc. and BankServ announced a partnership to offer small businesses the ability to employ e-Checks as a payment method for online retailing. PointSpeed is the first Internet company to announce it will offer a completely online electronic check for business-to-business transactions using the BankServ e-Check product.

PointSpeed will offer BankServ's e-Checks through its Business Purchasing Centers, which are located on the Web sites of leading corporations that serve the small business market. In addition to offering e-Checks as a payment tool for its members, PointSpeed will also use e-Checks as a payment method for processing payments through the PointSpeed service.

"BankServ's e-Checks slash online transaction costs, thereby accelerating the rapid movement of business onto the Internet," said Neville Batliwalla, PointSpeed's vice president of supplier development. "Because e-Checks are just an electronic form of traditional paper checks, we believe our customers will be comfortable using them."

Online checking makes economic sense for businesses, said Dave Kvederis, president and CEO of BankServ. "The transaction fees for e-Checks are on average eighty percent lower than fees for credit card transactions," said Kvederis. "Instead of paying a $25 credit card merchant fee on a $1,000 transaction, an equivalent e-Check might cost a merchant $5.00 or even less to process with BankServ," said Kvederis. "That's money in the bank." Additionally, Kvederis noted that e-Checks are rigorously screened online to insure customer identity, reducing the risk of fraud or error.

Kvederis explained that BankServ's e-Check product is built on the backbone of the company's secure, proprietary electronic check conversion system, which is already used by hundreds of U.S. merchants to transform paper checks at the cash register into electronic funds transfers. These transactions are processed through the nation's Automated Clearing House (ACH) system, the same system that processes direct deposit of payroll and government benefits, direct payment of consumer bills, business-to-business payments and federal tax payments.

According to the National Automated Clearinghouse Association (NACHA), the ACH network serves 20,000 financial institutions, 2.5 million businesses, and 100 million individuals. In 1999 there were more than 6.2 billion ACH payments made worth more than $19 trillion.

"Moving our electronic check system onto the Internet with e-business specialists like PointSpeed is the next obvious step in the evolution of the checking system," said Kvederis.

PointSpeed's Online Business Purchasing Center offers small businesses a completely new way to shop online for office products and services. With PointSpeed's one-stop "business superstore," small businesses can purchase from a variety of premier online retailers and manufacturers at a single location. The PointSpeed service is unique in that it offers a single shopping cart with one checkout for purchases across all products and services from different online retailers. Using the PointSpeed service, small businesses enjoy everyday price discounts of up to 40% on a complete range of name-brand products and services from a variety of suppliers, such as Barnes & Noble, PC Mall, Online Office Supplies, AT&T and many other premier retailers and manufacturers.

"Offering e-Checks as an option to both our customers and our suppliers on their own Web sites gives all parties a new payment option that is safe, reliable and inexpensive. We're excited to be leading the industry in offering the convenience and security of checks online with BankServ e-Checks," said Batliwalla.

How an e-Check works

The process is simple. Initiating an e-Check begins when the customer enters his or her account information on a secure page on the merchant's Web site. The account information is encrypted and routed to the BankServ data center, where it is verified against proprietary databases for real-time authorization of the transaction. Once the information has been verified, authorized and authenticated, the transaction is processed. Additional security features can be added, if needed, depending on the merchant's requirements. As with physical checks, online checks processed through BankServ's ACH system retain 24 to 48 hours of float, as a benefit to the consumer. Also, checks that are returned for non-sufficient funds can be automatically represented to the customer's bank up to three separate times. This benefit reduces returned item losses by as much as 35 percent(1) and saves purchasers returned check fees.

(1) Source: Martaus & Associates

About PointSpeed

PointSpeed, Inc. (www.pointspeed.com) is leading the industry in helping small businesses streamline their operations with online purchasing. The PointSpeed Online Business Purchasing Center, offered on Web sites of leading corporations, enables small businesses to enjoy the level of discounts, selection and service previously available only to large corporations. PointSpeed offers small businesses a completely new way to purchase online, with one-stop discounted shopping from premier retailers, live customer support, and customizable online purchasing management tools. PointSpeed purchasing centers are currently available through the Web sites of Wells Fargo Bank (www.wellsfargo.com), AT&T (www.att.com), Bizography.com (www.bizography.com), Concentric Network Corporation (www.concentric.com), Digital Insight Corporation (www.digitalinsight.com), and DEXPO.com (www.dexpo.com). PointSpeed is a venture-financed company based in San Mateo, Calif. The company is led by a seasoned management team with proven success in the creation and management of technology ventures. For information on partnering with PointSpeed call 650/638-3720 or e-mail partners@pointspeed.com.