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Arcot Partners with First Data to Provide Payment Authentication Solution to Merchants; Solution Will Enable Verified By Visa and MasterCard SecureCod

SANTA CLARA, Calif. And DENVER–(BUSINESS WIRE)–Jan. 6, 2003– Arcot Systems, Inc., a leading provider of solutions for securing electronic identity and First Data, a leader in electronic commerce and payment services , today announced an agreement whereby First Data Merchant Services(R) will provide Arcot’s TransFort(TM) for Merchants solution, the most widely adopted solution for payment authentication, to online merchants. Under the terms of this multi-year, global agreement, First Data will offer the TransFort Merchant Software as a hosted service for merchants and will also license and resell the solution to merchants for in-house use. With this agreement, Arcot can enable several hundreds of thousands of First Data merchants, including those acquired directly, through alliance partners and through processing customers.

TransFort provides cardholder authentication for all participants in online payment transactions in the Verified By Visa and MasterCard SecureCode programs to reduce online fraud. With the Arcot TransFort for Merchants product, the merchant is able to authenticate and verify the cardholder at the time of purchase. At online checkout, the cardholder is asked to confirm their identity to the card-issuing bank with a password. Upon verification, the issuing bank provides a confirmation response to the merchant using the Arcot software. The result is protection from fraud losses for the merchant and added confidence and protection for the online shopper. In conjunction with Arcot’s previous agreement with First Data to provide authentication services for Issuers, now, First Data and Arcot can offer solutions that cover the key participants in an electronic commerce transaction: the Issuers, Merchants and Consumers.

“We selected Arcot’s TransFort solution because it is a premier solution for authenticating online payments,” said Steven L. VanFleet, senior vice president of Product Development for First Data. “With Arcot’s solution, our worldwide merchants benefit from increased customer confidence in the online shopping experience and reduced incidence of fraud. Providing authentication of online payments is a key component in our efforts to provide a suite of alternative payments and secure protocols over the coming months.”

Ram Varadarajan, chief executive officer and president of Arcot Systems, said, “We are excited to combine Arcot’s online payment authentication expertise with First Data Merchant Service’s leadership as the unsurpassed electronic payment solutions provider. The broad reach of First Data will help ensure that end-to-end solutions exist and are available so that Issuers, Merchants and Consumers can conduct e-commerce transactions with an unprecedented level of security and confidence.”

About First Data<br />

First Data Corp., with global headquarters in Denver, helps power the global economy. As a leader in electronic commerce and payment services, First Data serves approximately 2.8 million merchant locations, 1,400 card issuers and millions of consumers, making it easy, fast and secure for people and businesses to buy goods and services using virtually any form of payment. With 29,000 employees worldwide, the company provides credit, debit, smart card and stored-value card issuing and merchant transaction processing services; Internet commerce solutions; money transfer services; money orders; and check processing and verification services throughout the United States. First Data also offers a variety of payment services in the United Kingdom, Australia, Canada, Japan, Mexico, Spain, the Netherlands, the Middle East and Germany. Its Western Union and Orlandi Valuta money transfer networks include a total of approximately 130,000 Agent locations in more than 190 countries and territories. For more information, please visit the company's Web site at www.firstdata.com.<br /><br />

About Arcot<br />

Arcot Systems, Inc. is the leading provider for securing identity and payments in Internet-scale, transactional and wireless environments. Only Arcot provides cost-effective, scalable, software solutions based on the ArcotID(TM) Software Smart Card for strongly authenticating users and transactions for payment systems, Web-based email, Web portals and virtual private networks. Arcot solutions meet the business need for strong transactional security while providing the customer a user-friendly experience with anytime, anywhere convenience. Arcot serves over 3000 customers today including leaders in financial services, healthcare, and e-commerce that use Arcot solutions to protect their customers' privacy and reduce fraud. For more information, visit www.arcot.com.<br /><br />

CONTACT: Arcot Systems, Inc.
Matt McOwen, 408/969-6143
[email protected]
or
First Data Merchant Services
Larry Reiff, 631/391-7544
[email protected]

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