Providian and PayPal Forge Strategic Alliance
Partnership Brings Together America's Fifth Largest Bankcard Company with the Number One Online Payment Provider
San Francisco, CA - February 6, 2001 - Providian Financial Corporation (NYSE: PVN), the fifth largest bankcard issuer in the United States, and PayPal, Inc., the pioneer of e-mail payments, today announced the signing of a partnership agreement that brings together the power of a major credit card company and the expertise of a leading Internet-based payment system to benefit consumers online and offline. Providian has taken an equity stake in PayPal, will offer a co-branded credit card to PayPal's six million members, and has the opportunity to license PayPal's technology for private label person-to-person payments for Providian's 16 million customers.
"This partnership is an important milestone in Providian's expanding global e-commerce strategy," said Shailesh Mehta, chairman and CEO of Providian, who will join the PayPal Board of Directors. "We believe that PayPal is an innovative company with a tremendous track record of growth and will make an excellent strategic partner."
PayPal is a service that allows consumers and businesses to send and receive money from bank accounts or credit cards instantly and securely on the Internet. The planned co-branded credit card, scheduled to be made available to PayPal members in the spring, will be the preferred payment vehicle for all PayPal transactions, granting users a range of unique benefits and privileges when used with the PayPal service. Cardholders will also be able to use the card in all merchant locations that accept credit cards - on the Internet and in traditional merchant locations.
"We are delighted to gain Providian, one of the leading bankcard issuers and an important member of the Visa and MasterCard Associations, as our major U.S. strategic banking partner," said Peter Thiel, chairman of PayPal. "Providian's expertise in granting and managing credit, combined with the board participation of Shailesh - one of the leading CEOs in the banking industry -- will be tremendously valuable as PayPal continues to grow its business and expand its offerings. The co-branded credit card and possible private offering of the service are just two examples of the synergies these two financial companies can realize to the benefit of our customers."
"The alliance with PayPal is a great first step in Providian's business strategy of supplementing growth with co-branding," said David Alvarez, president of Providian's credit card business. "In the coming months, we expect to selectively find additional partners of the caliber of PayPal to leverage our combined strengths for the benefit of our customers and our shareholders."
About Providian Financial
San Francisco-based Providian Financial (www.providian.com) is a leading provider of lending and deposit products to customers throughout the U.S. and the UK and offers credit cards in Argentina. In 2000, Providian Financial was named one of America's Most Admired Companies by Fortune magazine, one of the nation's top financial institutions by U.S. Banker magazine, and one of the most technologically innovative companies by InformationWeek magazine. Providian has adapted its proven customer-focused business model for the Internet, and today offers retail deposit products at the corporate Web site, a financial services marketplace at www.getsmart.com, and credit cards at www.aria.com. The Company has more than $31 billion in assets under management and over 16 million customers. Providian's partnership program is managed by John Clark (E-Commerce partnerships) and Bill Buchanan (Integrated Card Business partnerships).
About PayPal
PayPal is the instant and secure online payment service that allows people and businesses to send and receive money by e-mail from bank accounts or credit cards. With more than six million members, PayPal is the world's first and largest Internet-based payment network, and the #1 financial site on the Internet, according to PC Data Online. PayPal is the preferred payment service for online auctions, online community and group Web sites, and is seeing tremendous growth in use for e-commerce. PayPal members send over $7 million in more than 150,000 payments each day. Free to consumers, PayPal can be used from PCs or web-enabled mobile phones.
A privately held company headquartered in Palo Alto, California, PayPal was recently named one of the 50 Most Important Private Companies in the World by Red Herring and one of the Top 25 New Companies by Fortune Small Business. The PayPal Website has been cited as among the "Best of the Web" by Forbes, Time, and U.S. News & World Report. For more information, please visit http://www.paypal.com.
Statements contained herein as to Providian Financial Corporation's expectations and goals are forward-looking statements under the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Among the significant risks and uncertainties are: competitive pressures arising from aggressive competition from other consumer lenders; factors that affect the delinquency rate on the Company's consumer loans and the rate at which the Company's consumer loans are charged off; changes in the cost and availability of funding due to changes in the deposit market, credit market, or securitization market, or the way in which the Company is perceived in such markets; the effects of government policy or regulation, including restrictions and/or limitations arising from banking laws, regulations and examinations; legal proceedings; and the ability to attract and retain key personnel. More information on risk factors affecting the Company is available in the Company's filings with the Securities and Exchange Commission, including its annual report on Form 10-K, quarterly reports on Form 10-Q and Form 8-Ks.
SOURCE: PayPal
Contacts:
PayPal 650-251-1207 vsollitto@x.com |
Media: Providian 415-278-4614 diane_castro@providian.com |