News release

Compaq and Arcot Offer First Turnkey Solution for Visa Authenticated Payment Program

Visa issuing banks and card processors now have a single source available to provide them quickly and easily with a fully compliant Visa Authenticated Payment solution. Compaq Computer Corporation (NYSE: CPQ) and Arcot Systems, Inc., today announced a global partnership that will provide the first 3-D Secure compliant turnkey solution available to Visa's 21,000 issuing banks and card processors around the world. Visa Authenticated Payment is designed to bring the same level of security to the virtual world as Visa has in the physical world by confirming to the e-merchant that the online buyer is the actual cardholder.

Visa's Internet payment authentication process is based on the 3-D Secure interoperability standard and enables Visa card issuers to verify a cardholder's identity in real time, during an online payment transaction, thereby bringing the online payment experience closer to that of a card-present or physical world transaction. The bundled solution features Arcot's TransFort™ payer authentication product loaded on Compaq ProLiant™ servers. Compaq will sell the solution globally, license TransFort from Arcot for resale, then configure, deploy, support, and service the total solution through the worldwide network of 38,000 Compaq Global Services professionals.

"The combination of Arcot's leading payer authentication software and our industry standard ProLiant servers backed by Compaq Global Services will deliver a simple but powerful, scalable and reliable solution for banks and card processors around the world," said Gustavo Eichelmann, vice president of Compaq's global financial services solutions group. "This announcement enhances Compaq's comprehensive portfolio of solutions that we offer the financial markets and thus extends Compaq's leadership position in the Financial Services Industry."

"The Visa Authenticated Payment Program must work seamlessly 24/7, especially during peak shopping periods," said Chet Silvestri, president and CEO of Arcot Systems. "Our proven TransFort software running on Compaq ProLiant servers and backed by Compaq Global Services worldwide will assure banks they can deliver the highest level of service to their cardholders."

Arcot TransFort is the first solution to be named compliant by Visa's Interoperability Labs for the Visa Authenticated Payment Program, and has been field-tested by banks and merchants worldwide for over 15 months. Compaq ProLiant is a reliable and scalable server platform that delivers flexibility and ease of ownership. The solutions will be deployed and supported through Compaq Global Services.

How it Works

When a customer enters their Visa card number in a Web checkout form and hits the buy button, a TransFort Merchant software module at the merchant site alerts a TransFort module (the TransFort software on a Compaq ProLiant server) at the card-issuing bank that someone is making a purchase using a Visa card that is enrolled in the program. The TransFort module at the bank then requests that the customer authenticate himself or herself by entering a pass-code (or other means of authentication) in an authentication screen that appears on the customer's PC (PDA or mobile phone). Once authenticated, the bank notifies the TransFort merchant module that the cardholder has been authenticated. A receipt of this notification is archived for purposes of non-repudiation. This greatly reduces the merchant's exposure to fraud and dispute. The Visa Authenticated Payment Program offers dramatic benefits in fraud reduction and increased confidence to the customer and merchant with virtually no change in the online purchasing process.

About Arcot

Arcot Systems, Inc., is the leading provider of authentication and access control solutions for securing e-business in Internet-scale, transactional and wireless environments. Only Arcot provides cost-effective, scalable, software-based solutions for strongly authenticating users and transactions and managing access for payment systems, B2B extranets, 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. Leaders in financial services, healthcare, and e-commerce are using Arcot solutions to secure transactions, protect their customers' privacy, and reduce fraud. For more information, visit www.arcot.com.

About Compaq

Founded in 1982, Compaq Computer Corporation ("Compaq") is a leading global provider of enterprise technology and solutions. Compaq designs, develops, manufactures and markets hardware, software, solutions and services, including industry-leading enterprise storage and computing solutions, fault-tolerant business-critical solutions, communication products, and desktop and portable personal computers that are sold in more than 200 countries. Information on Compaq and its products and services is available at http://www.compaq.com.