Press Release

BankServ Rolls Out New Product Line; Chases After 25 Million-Plus Consumers

November 30, 2001 - SAN FRANCISCO, CA — In a bid to capture "first place" in serving one of the fastest-growing financial markets today — the electronic account funds transfer market — San Francisco-based BankServ today announced that it has begun marketing a suite of three newly developed products that could touch more than 25 million consumers by 2004.

All three of the products are designed to reach out to anyone who needs to move money or pay bills electronically, whether by average computer users on the Internet, between banks or brokers and their clients, ordinary or on-line businesses and their customers, and by mail order/telephone order businesses. The products are known as BankServ/Transfer, SameDayPay, and MOTOpay.

"At the moment, we are now the only U. S. company offering such an enterprise-wide suite of products," says David F. Kvederis, BankServ president and CEO, of privately held BankServ (www.bankserv.com). "Initial marketing efforts already have proven successful," he notes, "with recent signing of two new contracts by major banking and brokerage firms that will incorporate these products into their services." He said non-disclosure agreements prevented him from naming the companies involved, but that in aggregate they represented potential use of the BankServ product suite by an estimated three million prospective consumers.

Kvederis said he believes there are currently more than 15 million on-line consumer accounts, growing by several million per year. He points out that the Thomson Financial EC Media Group estimated 12.5 million U. S. households used on-line banking in mid-2000, up from 7.5 million as of mid-1999. "To give an idea of where we are going with this newest product line," he says, "Forrester Research estimates 23 million households in 2003 and 25 million in 2004 will be using on-line banking (figures based on Robinson-Humphrey Financial Technology Group Research, Jan. 2, 2001).

"And this is only the estimated tip of the iceberg for our new products," he adds. "When you consider all the potential uses beyond strictly on-line banking, our prospective market becomes astronomical - in the tens of millions of consumers. Regardless of how those consumers are touched for funds," he adds, "by positioning ourselves now -- we expect to be there in the future to help expedite the electronic transfers required." Included in the new set of products are the following:

BankServ/Transfer

This product allows consumers to fund depository or brokerage trading accounts on the Web site of a host institution. Once an account has been established, customers can also transfer funds from that established account to other accounts at any bank, savings bank, or credit union in the country. Accounts are funded in 24 - 48 hours through the Automated Clearing House (ACH) system. BankServ/Transfer also allows initial deposits to be made by credit card at banks.

"No one has to wait a week or more any longer for a paper check to arrive at the bank or brokerage house where they want to open an account," said Kvederis. "Until recently, unless you've already had an account at a brick-and-mortar institution, you have not been able to open an account with that firm's on-line bank or brokerage house directly through the Internet. Instead, you have to mail them a paper check, arrange for a physical wire transfer, or call their 800 number and arrange for a telephone-initiated transfer from your existing account somewhere else. Our experience shows, with BankServ/Transfer, that routine inter-bank funds transfers by consumers on the Internet are secure, fast and easy to complete," Kvederis said.

SameDayPay

SameDayPay allows both financial firms and businesses to create, clear, and settle electronic checks (eChecks) "on-the-fly" from a variety of sources as well as manage risk, clearing, settling, and reconciling daily work. This electronic check product allows customers of businesses to make payments to the business via the Automated Clearing House (ACH). The electronic check uses the same technology as BankServ/Transfer for financial institutions, the only difference being that the payee is the on-line business rather than the consumer's own account.

According to BankServ Chief Operating Officer Peter Hosokawa, "fraud and Customer Service Representatives (CSR) features as well as the enterprise nature of the product are the same as BankServ Transfer, making it unique in the marketplace. In some applications, such as mortgage loan closings or business-to-business transactions," he adds, "timely Fedwire (Federal Reserve Wire Network) transfer capabilities are also extremely important to the customers."

Money Order/Telephone Order (MOTOpay)

MOTOpay is designed to provide Automated Clearing House (ACH)-based eCheck services to business that take orders by mail or on the telephone. MOTOpay allows the merchant to process check information from the consumer via the telephone and enter the check data directly into BankServ's funds transfer system. Once all the data has been entered and submitted, the item is then checked for validity. If accepted, it becomes an ACH transaction.

According to the National Automated Clearing House Association (NACHA), the ACH network serves 20,000 financial institutions, three million businesses, and 100 million individuals with direct deposit of payroll and government benefits, direct payment of consumer bills, business-to-business payments, and federal tax payments.

"According to a recent NACHA announcement, last year there were more than 6.88 billion ACH payments made worth more than $20 trillion, an increase of 12.4 percent from 1999," Kvederis points out. "What that means for us," he quips, "is that the future is now."