PRESS RELEASES

Contact: Valarie Harris
(704) 383-7742

June 30, 1998
First Union-MARTA Smart Card Relationship Proves Excellent Testing Ground

CHARLOTTE, N.C. - Smart card acceptance and usage are expected to make significant gains over the next several years. First Union and the Metropolitan Atlanta Rapid Transit System (MARTA) Visa Cash program, the first of its kind in the United States, has proven to be an important testing ground for stored-value technology.

Launched during the Atlanta Olympic Games in 1996, the First Union-MARTA Visa Cash project has begun a two-phase process to conclude the program. MARTA Visa Cash card sales will end June 30; however, riders will be able to use their cards throughout July. At the end of July, riders will be able to redeem any remaining cash on the card at First Union branches.

Smart cards are plastic cards with embedded computer-chip technology and are viewed by many industry experts as playing a key role in electronic banking. Chip-card technology allows for several functions to reside on the card, including debit, credit and stored value and non-financial applications such as frequent shopper loyalty programs and customer internet authentication. Smart cards are ideal for everyday purchases at corporate cafeterias, vending machines, fast-food restaurants, cleaners, convenience stores and other businesses.

The First Union-MARTA Visa Cash program has provided both program participants significant findings to develop and refine future product offerings. "The MARTA program is the first step in gaining a wider understanding of merchant and customer acceptance," said Michael G. Love, vice president, relationship access products. "Through the program we were able to prove that customers can come to rely on stored-value cards, such as VISA Cash, as a convenient alternative to cash. Although card usage was highest during the Olympics, after the games, a core group of riders continued to use the card on a weekly basis."

"A substantive finding of the MARTA program was that "contactless" or touch- and-go technology is needed for quick and easy entry," explained Love. "In addition, a robust transportation chip-card application must have multiple payment programs that can accommodate riders who use daily, weekly or monthly passes."

MARTA's commitment to customer service was a key driver in the decision to participate in the program and is helping to shape how smart cards can add value to customer relationships. "Our customer-service objective - to consistently offer convenient and fast service - made stored-value cards a perfect payment option," said Jack Stephens, executive vice president, MARTA Customer Development. "In addition, the First Union smart card program opened our eyes to a range of opportunities that exist because of chip technology. We want to explore adding other functions to the card to build loyalty and offer customers opportunities to use the card with other merchants who provide products and services to MARTA riders."

"MARTA was a tremendous partner to have for the Centennial Games and played an important role in demonstrating the strategic value of open-system smart cards," said Diana P. Knox, senior vice president of Chip Products for Visa U.S.A. "Our partnership with MARTA and First Union has helped us to take the next step in providing a transit solution based on contactless, multi-function chip technology."

Chip-based stored value is an operationally reliable, efficient and convenient payment product for transit companies. First Union is working on new contactless technology that will support an even broader range of transit and other programs.

MARTA is the nation's seventh-largest transit system serving half a million passengers daily. MARTA operates a 36-station rail system and its 704 buses total 31 million bus miles a year.

Visa is the leading card brand and the largest consumer payment system worldwide. It plays a pivotal role in advancing new payment products and technologies to benefit its 21,000 member financial institutions, cardholders and the global economy. Visa's nearly 600 million cards are accepted at more than 14 million worldwide locations.

Charlotte-based First Union Corp. is the nation's sixth-largest bank holding company with assets of about $220 billion as of March 31, 1998. The company serves approximately 16 million customers throughout the East Coast and the nation.

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