CyberCash Posts $31 Million Loss; Releases Upgrade for Microsoft Site Server

CyberCash, Inc. (Nasdaq: CYCH) made two announcements today, including 1998 year-end results, and release of enhanced payment software for Microsoft Site Server — the second bit of news coming, perhaps, to soften the impact of a $31 million loss (US$).

Despite the loss, chairman and CEO Bill Melton reports that, “CyberCash is well positioned to ride the crest of the e-commerce wave.” He indicates that the company intends to intensify focus on its core payment processing capabilities and its emerging InstaBuy Service.

Financial Results

For the year ending December 31, CyberCash posted a loss of approximately $31.6 million, amounting to $2.15 share, on revenues of $12.6 million. These 1998 results compare to a loss of $26.5 million on revenues of $4.5 million in 1997.

Fourth quarter revenues for 1998 were approximately $4.4 million, up 120% from $2.0 million the year before.

Software Upgrade for Security and Ease-of-Use

CyberCash’s upgraded payment software for the Commerce Edition of Microsoft Site Server provides two enhancements: improved security for payment processing, and an easier way for developers to integrate settlement transactions into back-end systems.

The Site Server, Commerce Edition was Microsoft’s first entry into the e-commerce market; and, it is still known as one of the easier solutions for building a comprehensive Web storefront.

Using CyberCash software, merchants can add real-time payment processing to their Site Server Commerce storefronts. This is achieved by first running an install Wizard, and then dropping the CyberCash payment components into the Order Processing Pipeline in Site Server.

Microsoft’s Anthony Bay, general manager of the Commercial Systems Division, indicates that, “A significant number of existing Site Server Commerce customers have turned to CyberCash to provide online payment technologies.” He expects that the new version will provide the flexibility and customization that Microsoft’s customers have been asking for.

Beyond The News: Additional Background

Based in Reston, Virginia, CyberCash develops technology that allows merchants to send payments securely to their credit card processing network, either over the Internet, or from a cash register in a retail store. The technology also enables merchants to receive credit card authorization and payment settlement from their acquiring banks.

CyberCash can process transactions for a variety of payment types, including credit, debit, and purchase cards, cash, checks, smart cards and alternative types of payment, like frequent buyer programs. CyberCash products and services include ICVERIFY, PCVERIFY, NetVERIFY, CashRegister, CyberCoin, PayNow, and InstaBuy.

The company is currently signing up about 700 new merchants per month to use its payment processing services. More than 9,400 online merchants were signed up by the end of 1998, representing a 275% increase over the prior year’s total.