Visa Introduces Smart-Card Rewards Platform; A Shared Transaction Highway Will Deliver Comprehensive Chip-Enabled Rewards Services, Says Visa U.S.A.

Business Editors/High-Tech Writers

CardTech/SecurTech 2002

SAN FRANCISCO--(BUSINESS WIRE)--April 23, 2002

Visa U.S.A. today unveiled the smart Rewards Platform, a fully integrated, chip-enabled rewards solution with end-to-end transaction and servicing capabilities.

Vying to significantly reduce financial, technical and time-to-market burdens currently faced by card issuers and merchants, Visa's shared-system initiative is expected to accelerate the adoption of rewards services on multi-application smart cards.

"Many of the centralized principles that have made the bankcard system so pervasive in the United States will be used to help card issuers and merchants implement their own rewards or customer-retention services in turnkey fashion," said Diana Knox, senior vice president of emerging channels for Visa U.S.A. "By consolidating essential rewards components that, until now, have been fragmented, the infrastructure and business framework will be substantially improved."

Building on the success of the smart Visa program introduced in September 2000, Visa's new platform is designed to support a range of customized or proprietary rewards services among issuers and merchants. Four financial institutions - First USA, FleetBoston, Providian, and Retailers National Bank - have issued more than 10 million smart Visa cards, many of which are enabled for rewards services.

Unlike previous smart-card initiatives, which focused mostly on card-application technologies, the smart Rewards Platform brings to market new services that are seamlessly integrated with Visa's existing payment infrastructure. The backbone of the smart Rewards Platform is a centrally hosted computing system that will manage the interaction between rewards applications on smart cards and software and administration rules residing on point-of sale terminals.

Visa will provide the necessary resources to support key platform functions, including:

- Host-computer and telecommunications operations.

- Transaction processing, funds settlement, clearing and reporting.

- Program set-up for card issuers and merchants.

- Complete implementation support.

- Marketing consulting services, including access to extensive consumer
research.

To support these and other functions being developed in cooperation with Catuity Inc., a leading developer of software systems, Visa is working closely with leading processors and acquirers that serve a number of issuers and merchants nationwide.

"Visa's loyalty platform complements today's payment environment," said T. Jack Williams, senior vice president of Relationship Management for National Processing Company (NPC). "Given the growing merchant interest in rewards programs, we consider Visa's development as a long-term opportunity to expand the functionality of card acceptance at the point of sale."

The smart Rewards Platform model will enable any combination of card issuers and merchants to jointly form rewards programs. "By the very nature of their design, rewards services must be networked in order to achieve the greatest efficiencies and synergies. Visa's shared-system platform will accommodate multi-company connectivity, thus ensuring that any number of businesses can easily link their promotional efforts," said Patrick Gauthier, senior vice president of smart card applications for e-Visa U.S.A., a division of Visa U.S.A.

Widely acknowledged among industry experts to be an important catalyst for U.S.-based smart cards, behavior-driven rewards services enable card issuers and merchants to efficiently deliver targeted incentives to their customers. The smart Visa Rewards service, to be supported by the new platform, features up to 36 concurrent programs for electronic couponing and punch cards. Cardholders at the point of purchase can instantly redeem rewards for their frequent patronage.

The smart Rewards Platform, designed to seamlessly integrate payment and rewards transactions at both the physical and Internet points-of-sale, is expected to be available to card issuers and merchants later this year.

About smart Visa

Visa U.S.A. launched its smart Visa smart card product platform in September 2000, enabling financial institutions to combine the purchasing power of traditional payment cards with chip-enabled technology. Enabling Web-delivered applications, online payments security, rewards services and a range of other functions, smart Visa gives Visa issuers a broad range of pre-packaged applications that readily adapt to individual issuer strategies for smart cards. With more than 80 smart card programs in more than 35 countries and on the Internet, Visa Members have issued more than 10 million cards in the United States, and approximately 50 million Visa smart cards worldwide.

About Visa U.S.A.

Visa is the world's leading payment brand and largest payment system, enabling banks to provide their consumer and merchant customers with the best way to pay and be paid. More than 14,000 U.S. financial institutions rely on Visa's processing system, VisaNet, to facilitate over $916 billion in annual transaction volume - including more than half of all Internet payments - with virtually 100 percent reliability. U.S. consumers carry more than 376 million Visa-branded smart, credit, commercial, stored value and check cards, accepted at approximately 23 million locations worldwide. Visa has long led the industry in developing payment security standards, and has been named the most trusted payment brand online. Visa's people, partnerships, brand and payment technology are helping to create universal commerce - the ability to safely conduct transactions anytime, anywhere and by any device. Please visit www.visa.com for additional information.