PaymentNet™ Secures Second Round Funding

Wells Fargo, AT&T Ventures, others take stake in
e-commerce transaction processing service company

Pleasanton, CA . - February 24, 1999 - PaymentNet (www.paymentnet.com), a service leader in outsourced e-commerce transaction processing, announced today that it has secured new funding from a number of investors. Participants include Wells Fargo, AT&T Ventures, Convergence Partners, Bay View Investors, Ltd., and GC&H Investments.

The funds will be used for general working capital purposes, including investments in research and development and in marketing programs.

"This funding will help us solidify our position as the service leader in e-commerce transaction processing for businesses ranging from the small Web merchant to the enterprise," said Bruce Hendrix, PaymentNet’s president and CEO. "We are working with partners today to deploy our service to multiple market segments, spanning: consumer-to-business, business-to-business e-commerce, electronic bill payment, and other emerging applications."

The PaymentNet service is gaining recognition as one of the best engineered and most reliable, scalable and secure Internet transaction processing systems available. These attributes and the depth of automation and service infrastructure built around the system have made it attractive to a wide variety of businesses that are capitalizing on the huge growth in electronic commerce.

According to Matthew C. Graves, senior vice president, payment strategies for Wells Fargo, "We are investing in PaymentNet because Internet transaction processing will clearly be a core competency for financial institutions as the business infrastructure surrounding e-commerce matures. PaymentNet operates a scalable, extensible payments framework that leverages industrial strength transaction systems and provides services delivering extraordinary customer care. We are pleased with this investment and believe the relationship will provide Wells Fargo business customers with essential payments services they need to thrive on the Internet."

Thomas L. Rosch, a partner at AT&T Ventures added, "PaymentNet enables critical business functions over the public Internet. This company’s leadership position in transaction and payment processing technologies adds value to merchants, ISPs and consumers along multiple dimensions. Its powerful model fits our portfolio of e-commerce enabling companies perfectly. We are looking forward to working with PaymentNet to explore complementary market synergies."

About the PaymentNet Service

PaymentNet is a service leader in outsourced e-commerce transaction processing. The company provides secure, Internet-based transaction and payment processing for a broad range of businesses that sell goods and services through a variety of e-commerce media.

PaymentNet offers industry-leading automation and customer care with its high-reliability credit card, debit card, and electronic check processing services. The service has been deployed across a wide range of businesses with excellent results. The service is based on client/server architecture, and leverages the Internet as a virtual private network between PaymentNet’s proprietary transaction processing server and individual clients dispersed on Internet and Intranet locations.

The PaymentNet Service represents a powerful alternative for merchants who have been disappointed by slow, cumbersome, inefficient and costly Internet-based payment processing solutions that have their architectural and feature origins in the "pioneering" era of Internet payment technologies.

About PaymentNet

PaymentNet, Inc. is an outsourced provider of automated, highly secure, Internet-based, real-time transaction processing services for merchants of all sizes and business approaches. PaymentNet is headquartered in Pleasanton, California, and can be found on the Web at www.paymentnet.com. Contact PaymentNet corporate offices at
925/225-1670.

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PaymentNet is a trademark of PaymentNet, Inc. All other trademarks are property of their respective owners.