Official Payments Launches New Website Accepting IRS Tax Payments; Federal Balance-Due, Estimated, and Extension Payments Can Now Be Made On the Internet, Via Credit Card, at Lowest Price

Business Wire, Jan 18, 2001

Business Editors

STAMFORD, CT--(BUSINESS WIRE)--January 17, 2001

Official Payments Corporation (NASDAQ: OPAY) announced today the company has launched a new website accepting credit card payments for year 2000 individual taxes.

Taxpayers can now make Form 1040 Balance Due Payments, Form 4868 Extension of Time to File, and Form 1040ES Estimated Payments (beginning March 1), on the Internet.

This service is authorized through a contract with the Internal Revenue Service and is offered by Official Payments at www.officialpayments.com. The company also announced new flat 2.5% pricing, which represents a reduction in cost of the service for many of its users and is the lowest price available from the two companies that are listed in IRS instructions as providing credit card tax payment services to taxpayers.

"Online tax payment is a matter of convenience, cash management, and rewards," said Thomas R. Evans, Chairman & CEO of Official Payments. "We offer consumers the lowest price in a convenient, safe, reliable, and secure environment for taxpayers to make their income tax payments over the telephone or Internet. As a bonus, taxpayers using credit cards with bonus rewards programs can, depending on their card's program, earn rewards, points, and cash-back or airline frequent flyer miles for paying their taxes," Mr. Evans added.

The new Internet option expands on a telephone program launched in 1999. That program enabled users to make payments with their credit cards by calling Official Payments at 1-800-2PAY-TAX. 2001 is the first year that anyone with access to an Internet browser will be able to charge their federal tax payment online, regardless of the software or method of tax preparation they use. The Internet and telephone payment channels are available to all taxpayers including paper filers, electronic/Internet filers, filers who use tax preparation software, and filers whose returns are prepared by accountants or tax preparation professionals. The IRS has included instructions on the credit card payment option in tax instruction booklets. Electronic copies of tax instruction booklets are available at www.irs.gov.

Features of the new Federal Payments section of the Online Payment Center include:

-- Digital Receipt and Payment Verification. Upon completion of a tax payment,
users are issued an onscreen confirmation number and a digital receipt, which
can be printed as a transaction record. Taxpayers will have the ability to
return to the site at any time for payment confirmation. In addition,
confirmation is e-mailed to the user as a verification of payment.

-- Multiple Payments Per Session. In addition to federal payments, users will
be able to make a variety of state or local tax and fee payments in the same
visit, eliminating the need to re-enter contact information for each payment.

-- User Registration. Taxpayers can register as users of Official Payments.
Registration enables users to maintain their complete transaction history, sign
up for e-mail reminders of upcoming payment dates, and receive notification of
new payment types available in their area.

-- Convenience Fee Calculator. To assist users in determining their convenience
fee prior to entering the payment process, Official Payments provides a
stand-alone Fee Calculator application, as well as a calculator integrated into
the payment process.

-- Online & Live Customer Support. The site provides easy access to answers to
Frequently Asked Questions and telephone numbers for live customer service
support.

-- Top Security. The Payment Center features the highest level of encryption
technology (128-bit SSL, version 3) and a secured private network. Official
Payments operates multiple payment server sites to ensure complete data
redundancy and reliability.

In 2001, taxpayers can use the American Express(R) Card, Discover(R) Card, and MasterCard(R) to make their tax year 2000 balance due, tax year 2000 extension, and tax year 2001 estimated payments by calling 1-800-2PAY-TAX or by visiting www.officialpayments.com on the Internet. Official Payments will charge taxpayers a convenience fee of 2.5% of their tax payment for the service. For example, a taxpayer who makes a $500 tax payment would be charged a total of $512.50; $500 for the tax payment, and a 2.5% fee, or $12.50, to cover the cost of the service. The flat 2.5 % price structure is a reduction in cost for many consumers over the company's previous pricing. In 1999 and 2000, the company used a sliding-scale convenience fee that ranged from 2.5% to over 3% depending on the amount of payment made.

"With such a high volume of transactions last year, we have been able to drive greater efficiencies and we are passing on cost savings to many of our consumers," said Mr. Evans. "We initiated the flat 2.5% pricing to increase consumer utilization of our service and help drive our business," added Mr. Evans.

In addition to processing IRS payments, Official Payments also processes a variety of tax payments for state, county, and municipal governments. The company has contracts with 17 state governments including Alabama, Arkansas, California, Connecticut, Illinois, Kansas, Maryland, Minnesota, New Jersey, New York, Ohio, Oklahoma, Virginia, Washington, West Virginia, Wisconsin and the District of Columbia. In addition, the company works with over 650 county and municipal authorities to collect a variety of taxes, fees, and fines.