Microsoft and VeriFone Announce Strategic Agreement To Deliver Commerce-Enabled Internet Retailing Solution

REDWOOD SHORES, Calif./ REDMOND,Wash., Aug. 5, 1996 — VeriFone Inc. and Microsoft Corp. today announced a major agreement to deliver and distribute a comprehensive solution for Internet retailing by incorporating VeriFone
®
virtual point-of-sale (vPOS
™) software into Microsoft®
Merchant System. The combination of Microsoft Merchant System and VeriFone vPOS software represents the first deployment of a dual retailing and payment solution and is available today to merchants participating in the Microsoft Merchant System beta program. The combined product is designed to provide companies with a complete and easy-to-use solution for selling on the Internet.

“With Microsoft Merchant System and VeriFone’s vPOS Internet payment technology, businesses that want to sell on the Internet now have a compelling solution that combines powerful, easy-to-use tools for creating and managing an online store with real-world payment processing,”
said Bill Gates, chairman and CEO of Microsoft.
“VeriFone’s payment solution helps Microsoft provide merchants with the transaction capabilities required to make Internet commerce a reality today.”

“We are very pleased to be able to join Microsoft’s leadership ability in creating software applications and its innovative approach to Internet commerce software with VeriFone’s leadership in secure payment transaction products,”
said Hatim Tyabji, chairman, president and CEO of VeriFone.
“By offering commerce-ready solutions to a broad set of global merchants and financial institutions, this agreement should further accelerate the deployment of secure Internet commerce.”

Microsoft Merchant System is an integrated Internet retailing solution that allows companies to develop Internet storefronts quickly and easily. Microsoft Merchant System is designed to provide unparalleled functionality for Internet commerce, including detailed user and order tracking, the ability to conduct dynamic promotion-based merchandising, support for any product database schema, extensible APIs, and store-creation tools such as sample store templates and support for most HTML authoring tools. This integrated solution is intended to reduce the amount of custom development time and effort required by companies to set up a commerce site on the Internet.

VeriFone’s Internet commerce products vPOS and vGATE
™
provide open Internet payment solutions for financial institutions and merchants. The vPOS software, which will be included with every copy of Microsoft Merchant System, provides online merchants with an integrated payment solution designed to facilitate credit-card transactions and to test Internet payment functionality. Once a merchant is ready to conduct live online transactions, a relationship with a bank is necessary. The merchant’s bank provides a merchant ID, digital certificate and bank-specific vPOS software to complete the connection to the bank’s vGATE Internet gateway and financial host system.

Microsoft and VeriFone are committed to working together to advance secure Internet payment technologies based on industry standards. Microsoft was a principal architect of the secure electronic transaction (SET) specifications proposed by Visa and MasterCard as a standard for secure processing of credit-card payments over the Internet. VeriFone’s vPOS and vGATE are the first Internet payment products to implement the SET protocol between the merchants and financial institutions. Microsoft and VeriFone intend to enhance future versions of their products to support the SET protocol for the consumer, as well as add support for additional payment methods via an open architecture.

Microsoft Merchant System, packaged with VeriFone vPOS software, will be available to the more than 175 merchants, Microsoft Solution Providers and Internet service providers participating in the Microsoft Merchant System beta program that begins today. The final Microsoft Merchant System product is scheduled for general availability in the fourth quarter of 1996. Bank-specific VeriFone vPOS software is also scheduled to be available in the fourth quarter of 1996.

VeriFone Inc. (NYSE
“VFI”
) is a leading global provider of Transaction Automation solutions used to deliver electronic payment services to financial institutions, retail merchants and consumers, as well as government agencies, health-care providers and benefits recipients. The company’s more than 30 facilities – including regional offices, development centers, and manufacturing and distribution centers – are located throughout North and South America, Europe, Asia, Africa and Australia. To date, VeriFone has shipped more than 5 million Transaction Automation systems, which have been installed in 100 countries. The company’s 1995 net revenues totaled $387.0 million.

Founded in 1975, Microsoft (NASDAQ
“MSFT”
) is the worldwide leader in software for personal computers. The company offers a wide range of products and services for business and personal use, each designed with the mission of making it easier and more enjoyable for people to take advantage of the full power of personal computing every day.

Microsoft is either a registered trademark or trademark of Microsoft Corp. in the United States and/or other countries.

VeriFone is a registered trademark and vPOS and vGATE are trademarks of VeriFone Inc.

For online product information:

Microsoft Web site: (http://microsoft.com/)

VeriFone Web site: (http://www.verifone.com/)

Note to editors: If you are interested in viewing additional information on Microsoft, please visit the Microsoft Web page at http://microsoft.com/presspass/ on Microsoft’s corporate information pages.

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