Redwood City, CA – December 13, 2006 – Authernative, Inc., the developer of innovative user and transaction authentication and identity management technologies, announced today that the People’s Republic of China Patent Office has granted the company its patent for a private and secure financial transactions method.

The newly issued patent number 01143367.1, entitled “System and Method For Private and Secure Financial Transactions,” adds to similar patent issuances in Canada, Australia, and New Zealand. The patent describes an enhanced security and fraud protection system which enables financial account holders to perform secure financial transactions with or without disclosing private personal information to merchants. The method describes a transaction-processing architecture for secure online and offline transactions that are initiated and authenticated directly through the financial institutions where the consumers’ accounts reside. The patent introduces for the first time a random partial PIN/password recognition algorithm to authenticate the account holder.

Electronic payments represent a significant growth opportunity for banks, payment processors and retailers, as the focus shifts from replacing paper instruments to the next generation of electronic payment solutions. According to ACI Worldwide and Global Insight research in May 2006, the annual number of electronic payment transactions, currently at approximately 210 billion worldwide, is expected to double by 2010.

As credit card payments and other types of offline and online electronic payments continue to grow, so does the fraud which undermines consumers’ trust in the financial system, and constitutes billions of dollars in losses for financial institutions, businesses and consumers. The methods of committing fraud are also growing in sophistication, including card theft, skimming devices, counterfeiting, mail interception, spoof sites, mass financial database breaches, and consumer identity theft. The increasing involvement of organized criminals, driven by a profit motive, further exacerbates the fraud trends which are expected to continue.

Authernative patented method’s key capabilities allow preventing fraud, giving the account holder control over the transaction, securely authenticating an account holder along with the transaction authentication, and protecting the account holder’s private personal information from merchants and other transaction counterparts.

The issued patents solidify the company’s ability to provide and license secure and private electronic payment solutions.

About Authernative:

Authernative develops, markets, and sells innovative patented software security solutions offering identity and access management capabilities including strong authentication, authorization, administration, and auditing. The company’s products are used to prevent unauthorized access to confidential data, protected resources and financial transactions. They allow businesses to lower the cost of providing, deploying and managing strong user authentication for enabling e-commerce and regulatory compliance with customers, suppliers, and employees.