PRINCETON ECOM CORP, S-1/A, 1999-07-22

PRINCETON ECOM CORP
S-1/A, 1999-07-22
BUSINESS SERVICES, NEC

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<PAGE>

As filed with the Securities and Exchange Commission on July 22, 1999
Registration No. 333-75385
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

-------------------

AMENDMENT NO. 3
TO

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

-------------------
PRINCETON ECOM CORPORATION
(Exact name of registrant as specified in its charter)

Delaware 7374 22-2528267
(Primary standard (I.R.S. employer
(State or other industrial classification identification no.)
jurisdiction of code number)
incorporation or
organization)
165 Wall Street
Princeton, New Jersey 08540
(609) 924-1244
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)

-------------------
Donald C. Licciardello
Chairman and Chief Executive Officer
Princeton eCom Corporation
165 Wall Street
Princeton, New Jersey 08540
(609) 924-1244
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

-------------------
Copies to
James P. Prenetta, Jr., Russell U. Schenkman, Ellen B. Corenswet, Esq.
Esq. Kelley Drye & Warren Esq. Hale & Schenkman 13 Brian B. Margolis, Esq.
LLP 101 Park Avenue New Roszel Road Suite C-225 Brobeck, Phleger &
York, New York 10178 Princeton, New Jersey Harrison LLP 1633
(212) 808-7800 08540 (609) 452-0110 Broadway New York, New
York 10019 (212) 581-1600

-------------------

Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after this Registration Statement becomes
effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act of 1933, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434
under the Securities Act of 1933, please check the following box. [_]

-------------------
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

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<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ +
+We will amend and complete the information in this prospectus. Although we +
+are permitted by U.S. federal securities law to offer these securities using +
+this prospectus, we may not sell them or accept your offer to buy them until +
+the documentation filed with the SEC relating to these securities has been +
+declared effective by the SEC. This prospectus is not an offer to sell these +
+securities or our solicitation of your offer to buy these securities in any +
+jurisdiction where that would not be permitted or legal. +
+ +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

SUBJECT TO COMPLETION , 1999

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- --------------------------------------------------------------------------------

Prospectus

, 1999

[PRINCETON ECOM LOGO]

3,000,000 Shares of Common Stock

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<TABLE>
<S> <C>
Princeton eCom The Offering:
Corporation:
. We are offering 3,000,000 shares of our common
. We provide comprehensive stock.
electronic bill
presentment and payment . At our request, the underwriters will reserve
services via the at the initial public offering price up to
telephone and Internet. 150,000 shares of our common stock for Billing
Concepts Corp., one of our existing
. Princeton eCom stockholders that owns 23.2% of common stock as
Corporation of June 30, 1999, which has expressed a non-
165 Wall Street binding interest in acquiring these shares.
Princeton, New Jersey
08540 . The underwriters have an option to purchase an
1-800-PayBill additional 450,000 shares from us to cover
www.princetonecom.com. over-allotments.

Proposed Symbol and . This is our initial public offering, and no
Market: public market currently exists for our common
stock.
. ECOM/Nasdaq National
Market. . Closing: , 1999.
</TABLE>

---------------------------------------------
<TABLE>
<CAPTION>
Per Share Total
--------------------------------------------------------
<S> <C> <C>
Public Offering Price (estimated): $9.00 - 11.00 $
Underwriting fees:
Proceeds to Princeton eCom:
</TABLE>

---------------------------------------------

This investment involves risk. See "Risk Factors" beginning on Page 7

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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.

- --------------------------------------------------------------------------------

Donaldson, Lufkin & Jenrette

First Union Capital Markets Corp.

DLJdirect Inc.

<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page Page
<S> <C> <C> <C>
Prospectus Summary....... 4 Business................. 28
Risk Factors............. 7 Management............... 42
Use of Proceeds.......... 15 Certain Transactions..... 51
Dividend Policy.......... 15 Principal Stockholders... 52
Capitalization........... 16 Description of Capital
Dilution................. 17 Stock.................. 53
Selected Financial Data.. 18 Shares Eligible for
Management's Discussion Future Sale............ 55
and Analysis of Underwriting............. 57
Financial Condition and Legal Matters............ 59
Results of Operations.. 19 Experts.................. 59
Additional Information... 59
Index to Financial
Statements............. F-1

</TABLE>

---------------------

Digital Scanline, els Electronic Lockbox Service and 1-800-PayBill are our
registered trademarks. e-Collect is also a trademark of ours. All other
trademarks or trade names referred to in this prospectus are the property of
their respective owners.

3
<PAGE>

[GRAPHIC]

[Graphic inset with the following customer logos: Citibank, Southern California
Edison, BEll Atlantic Mobile, SallieMae, PSEG, First USA, Washington Gas,
Sears, Western Union and Boston Gas.

The graphic also contains the following industry quotes:

"With An Emphasis On Bill Presentment, Princeton (eCom) Catches a New Wave."
- - - Report on Home Banking and Financial Services
March 25, 1998

"Princeton (eCom) is the pioneer in electronic bill presentment and payment and
a market leader in the Internet bill presentment and payment industry."
- - - Jules F. Street, Vice President, Killen & Associates Research - EBPP3 -
Volume Study

The graphic also includes the "Princeton eCom" logo and the quotes: "Electronic
bill presentment and payment solutions for business" and "If you are looking for
a simple outsourced solution, our model speaks for itself".

The graphic also includes a tiered depiction of Princeton eCom's Publishing
Model and of the Biller in House EBPP Model.]

[END OF GRAPHIC]
<PAGE>

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus.
You should read the entire prospectus, including "Risk Factors" and the
financial statements, carefully before making an investment decision.

Princeton eCom

Our telephone bill publishing service enables consumers to access billing
information and to pay bills in as few as five keystrokes and to set up
automatic payment of recurring bills. Our Internet bill publishing service
eliminates the need for billers to generate and mail paper bills. Both our
telephone and Internet services eliminate the need for consumers to write and
mail paper checks. Our Internet bill publishing service allows billers to
publish bills directly through their own web sites or indirectly through web
sites of financial institutions and Internet portals. An Internet portal is a
high-traffic web site that allows people to search, navigate, retrieve
information and access services via the Internet. Using our service, consumers
have numerous options of how, where and when to access, analyze and pay their
bills. Our electronic lockbox service, which is a stand-alone service as well
as a key component of both our telephone and Internet bill publishing services,
is a clearinghouse for electronic consumer-initiated payments. Our credit card
balance transfer service allows electronic transfers of balances from one
credit card institution to another. During the first quarter of 1999, 45 of our
more than 250 corporate customers used our electronic bill publishing services.
Eight of these customers used our Internet bill publishing service. Since March
31, 1999, six additional companies have begun to use our Internet bill
publishing service, for a total of fourteen Internet customers. We have
incurred losses in each of the last five years and expect to continue to incur
losses from operations for the foreseeable future.

According to Jupiter Communications, in 1998 approximately 15 billion
consumer paper bills were received by approximately 100 million U.S.
households. Creating and presenting a paper bill is a multiple-step process
that is costly and labor intensive for a biller. According to Gartner Group,
the average cost to a biller of creating and delivering a paper bill is $1.00.
The bill payment process is also time consuming for the consumer.

Billers have traditionally mailed their consumers paper bills and, in turn,
consumers have paid their bills by mailing checks. With technology
advancements, billers have begun to use non-paper based billing alternatives
designed to reduce their billing costs and to provide their consumers with
increased convenience. The Internet has provided the opportunity to
dramatically simplify the bill presentment and payment process, to greatly
reduce the cost to billers and to improve the convenience for consumers. As the
Internet gains increased acceptance as a medium for financial services, we
believe that more billers will begin to utilize Internet bill presentment and
payment services.

Most billers lack the expertise to cost-effectively implement and maintain
the hardware and software necessary to present bills and process consumer
payments through the Internet. Billers choosing to use the Internet to
facilitate the billing process must decide whether to develop Internet bill
presentment and payment capabilities internally or to outsource the process.
Our electronic bill publishing services dramatically simplify the bill
presentment and payment process, providing the following key benefits to our
customers:

. comprehensive, cost-effective outsourcing of the entire bill presentment
and payment process;
. broad distribution that provides consumers with numerous options of how,
where and when to access and pay their bills;

4
<PAGE>

. fully customized Internet-based consumer billing interface that allows
billers, financial institutions and Internet portals to preserve the
existing look and feel of their web sites;
. reliable system architecture that is expandable at relatively low cost;
. enhanced network and data security; and
. ease of integration with billers' financial accounting systems.

As the demand for Internet bill presentment and payment increases, we will
continue to transition our existing electronic lockbox and telephone bill
publishing customers, as well as add new customers, to our Internet bill
publishing services.

On January 25, 1984, we were incorporated in the State of Delaware under
the name Princeton TeleCom Corporation. On March 24, 1999, we changed our name
to Princeton eCom Corporation. Our principal office is located at 165 Wall
Street, Princeton, New Jersey 08540 and our telephone number is 1-800-PayBill.
Our web site address is www.princetonecom.com. The information on our web site
is not a part of this prospectus.

Unless otherwise noted, the information in this prospectus assumes that the
underwriters will not exercise their over-allotment option.

5
<PAGE>

The Offering

<TABLE>
<S> <C>
Common stock offered by Princeton eCom....... 3,000,000 shares
Common stock to be outstanding after the
offering................................... 14,344,002 shares
Use of proceeds.............................. We plan to use the proceeds from
this offering to invest in the
further growth and expansion of
our business and for working
capital and other general
corporate purposes. See "Use of
Proceeds."
Nasdaq National Market symbol................ ECOM
</TABLE>

Summary Financial Data
(in thousands, except per share data)

The As Adjusted Balance Sheet Data summarized below reflects the
application of the net proceeds from the sale of the 3,000,000 shares of common
stock offered by Princeton eCom at an assumed initial public offering price of
$10.00 per share, after deducting the underwriting discounts and commissions
and our estimated offering expenses.

<TABLE>
<CAPTION>
Three
Months
Ended
Year Ended December 31 March 31
----------------------------------------- --------------
1994 1995 1996 1997 1998 1998 1999
------ ------ ------- ------- ------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Total revenues.......... $ 797 $2,235 $ 1,836 $ 3,032 $ 3,822 $ 831 $1,142
Operating loss.......... (764) (556) (2,184) (2,126) (3,341) (520) (1,075)
Net loss................ (546) (629) (2,191) (2,142) (3,355) (524) (1,077)
Basic and diluted net
loss per share........ $(0.07) $(0.08) $ (0.26) $ (0.25) $ (0.36) $(0.06) $(0.10)
Shares used in computing
net loss
per share............. 8,351 8,351 8,454 8,568 9,423 8,615 11,126
</TABLE>

<TABLE>
<CAPTION>
March 31, 1999
--------------------
Actual As Adjusted
-------- -----------
<S> <C> <C>
Balance Sheet Data:
Cash and cash equivalents.............................. $8,775 $35,475
Working capital (deficit).............................. (823) 25,877
Total assets........................................... 11,686 38,386
Long term debt, less current portion................... 44 44
Total stockholders' equity............................. 189 26,889
</TABLE>

6
<PAGE>

RISK FACTORS

Any investment in our common stock involves a high degree of risk. You
should carefully consider the risks described below, together with the other
information contained in this prospectus, before making an investment decision.
The risks and uncertainties described below are not the only ones faced by our
company. Additional risks and uncertainties not presently known to us or that
we currently deem immaterial may also impair our business operations. If any of
the following risks actually occur, our business, results of operations or
financial condition could be materially and adversely affected. In such case,
the trading price of our common stock could decline, and you may lose all or
part of your investment.

Risks Related To Our Business

We have a history of losses and expect to continue to incur losses

We have incurred net losses in each of the last five years and expect to
continue to incur losses from operations for the foreseeable future. We cannot
assure you that we will ever become profitable. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations."

We intend to expend significant resources on our sales, marketing and new
customer implementation operations. As a result, we will need to achieve
significant revenue increases to achieve and maintain profitability. We cannot
assure you that we will be able to achieve the necessary revenue growth. Our
number of customers or the number of services which our customers buy from us
may grow more slowly than we anticipate or may decrease in the future.

Our business model is unproven and is evolving

The electronic bill presentment and payment industry, which includes all
non-paper based mediums, is an evolving industry. During the first quarter of
1999, 30% of our service fee revenues were generated from our 14 customers who
use both our telephone and Internet bill publishing services. Although we have
expended and will continue to expend considerable resources in developing our
Internet bill publishing service, we need to achieve critical mass in terms of
number of billers and consumers that use the service in order for it to
succeed. Even with the successful growth of Internet usage, our business model
will not succeed if consumers are not receptive to using the Internet to pay
their bills. If a significant number of billers fail to adopt our Internet bill
publishing service or adopt this service more slowly than we anticipate, or if
we fail to retain new billers or further expand this service to penetrate our
existing non-Internet customer base, our business would be materially and
adversely affected. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations," and "Business -- The Princeton eCom
Strategy."

Our operating results may fluctuate significantly from quarter to quarter,
which may negatively impact our stock price

Our quarterly operating results may fluctuate significantly in the future
as a result of a variety of factors, many of which are outside of our control.
These factors include:

. the rate at which we increase our customer base and their use of our
various services;

. the amount and timing of costs related to our sales and marketing efforts
and other initiatives;

. sales and implementation cycles of our customers;

. the loss of a number of existing customers;

. the loss of key employees and the time and expense needed to recruit,
hire and train new personnel, particularly service development personnel;

. our ability to upgrade, enhance and maintain our systems and
infrastructure and the timing and cost of this;

. interest rate fluctuations; and

. economic conditions which may affect the budgets of billers, financial
institutions and consumers for technological expenditures.

7
<PAGE>

Because of these factors, we believe that comparisons of our quarterly
operating results are not necessarily meaningful. In addition, it is possible
that in some future quarters our operating results will be below the
expectations of research analysts and investors, and in that case, the price of
our common stock is likely to decline.

If we fail to respond to rapid technological change, our business will suffer

The electronic bill presentment and payment industry is characterized by
rapid technological change. As a result, the emergence of new industry
standards and practices could render our existing technologies and systems, and
thus our services, obsolete. The development of our technologies and necessary
service enhancements entails significant technical and business risks and
requires substantial lead-time and expenditures. We may not be able to keep
pace with the latest technological developments, successfully identify and meet
our customer demands, use new technologies effectively or adapt our services to
customer requirements or emerging industry standards. If we cannot adapt or
respond in a cost-effective and timely manner to technological changes, our
business, operating results and financial condition will be materially and
adversely affected.

If we do not develop relationships with significant Internet aggregators of
consumer bills, our business will suffer

We believe that in order to be successful in the Internet bill presentment
and payment industry, we must have relationships with a number of aggregators
that will enable our customers, through our Internet bill publishing service,
to reach a significant portion of their consumer audience. An aggregator is a
company that consolidates bills from different billers and bill publishers and
then distributes the bills to web sites of financial institutions and portals
where consumers can go to pay their bills. We cannot assure you that we will be
able to achieve or maintain this minimum number of relationships and our
failure to do so would have a material and adverse effect on our business,
operating results and financial condition.

Increased competition in the electronic bill presentment and payment markets
could materially and adversely affect our business

Increased competition in the electronic bill presentment and payment market
could have a material and adverse effect on our business, operating results and
financial condition. We believe that the principal competitive factors are:

.ability to identify and respond to customer needs;

.technical expertise;

.quality of the service;

.price of the service;

.breadth of distribution; and

. possible preexisting relationships between companies that process paper
bills or lockbox service providers and our potential customers.

In addition to the foregoing, our Internet bill presentment services also
face competitive pressures from various third-party software vendors, which
provide some of the software necessary for the development of an integrated,
in-house Internet bill publishing service. In addition, these companies could
potentially leverage their existing capabilities and relationships to enter the
outsourced Internet bill presentment and payment market.

8
<PAGE>

than we do. In addition, some of these potential competitors may be able to
devote greater resources to the development, promotion and sale of their
services, adopt more aggressive pricing strategies and devote substantially
more resources to the development of technology and systems development than we
are able.

Increased competition may result in reduced operating margins, loss of
market share and diminished value of our services, as well as different
pricing, service and marketing strategies. We may not be able to compete
successfully against current and future competitors, and competitive pressures
we face could have a material and adverse effect on our business, operating
results and financial condition.

If we fail to successfully expand our sales and marketing activities, our
business will be materially and adversely affected

We intend to expand our sales and marketing activities by hiring additional
sales and marketing personnel. Our ability to expand our sales and marketing
activities involves a number of risks including:

. our ability to successfully integrate future sales and marketing
personnel; and

. our ability to hire, retain, integrate and motivate sales and marketing
personnel in a very competitive environment.

We cannot assure you that we will be successful in expanding our sales and
marketing personnel, and our failure to do so would have a material and adverse
effect on our sales and marketing efforts and on our business, operating
results and financial condition.

A number of members of our management team have little experience working
together, and we depend on a few key employees

Our future success will depend upon the continued service of key management
and technical personnel. Ronald W. Averett, our President and Chief Operating
Officer, joined us in March 1999 and Christopher S. Sugden, our Senior Vice
President and Chief Financial Officer, joined us in February 1999. Three other
members of our senior management team have joined us since April 1999. Given
their limited experience with our business and other members of management, it
is possible that these officers may not integrate well into our business. Their
failure to integrate well would have a material and adverse effect on our
business, operating results and financial condition.

We currently do not maintain key man life insurance policies on any of our
employees. We do not have employment agreements with any of our employees other
than Messrs. Averett and Sugden. The loss of the services of any of our key
employees or our inability to hire and retain additional key employees would
have a material and adverse effect on our business, operating results and
financial condition. See "Management -- Employment Agreements."

If we fail to effectively manage our internal growth, our business will be
materially and adversely affected

We recently began to significantly expand our operations and intend to
continue this expansion. We increased our employee base from 56 at December 31,
1997 to 95 at May 31, 1999. This expansion has placed, and is expected to
continue to place, a significant strain on our managerial, operational and
financial resources. We must hire additional managerial, and sales and
marketing employees. In addition, we cannot assure you that we can successfully
integrate any new management personnel into our existing management team. We
cannot assure you that current and planned personnel, systems, procedures and
controls will be adequate to support our future operations. If we are unable to
manage our growth effectively, the quality of our services, our ability to
train and retain key personnel, and our business, operating results and
financial condition will be materially and adversely affected.

9
<PAGE>

We will be dependent on our relationships with financial institutions to help
market our services and our business would be materially and adversely affected
if we were to lose some of these relationships

We will be dependent on our relationships with financial institutions to
help market our services to more billers. Our ability to increase revenues
depends partially upon our ability to market our services through new and
existing relationships. If we lose some of these relationships or fail to
develop new ones, our business will not meet growth expectations and our
business, operating results and financial condition will be materially and
adversely affected.

If our system security is breached, our business will be materially and
adversely affected

A fundamental requirement for Internet bill presentment and payment
services is the secure transmission of confidential information over public
computer networks. Third parties may attempt to breach our system security or
that of our customers. If they are successful, we may be liable to our billers
or their consumers for any breach in our system security and any breach could
harm our reputation.

Our computer servers are vulnerable to computer viruses, physical or
electronic break-ins and similar disruptions, which could lead to interruptions
or delays in processing transactions, or the manipulation or loss of data. We
may be required to expend significant capital and other resources to license
encryption technology and additional technologies to protect against system
security breaches or to alleviate problems caused by any breach. Our failure to
prevent system security breaches would have a material and adverse effect on
our business, operating results and financial condition.

Our operations are dependent upon systems which are located at a single site
and an interruption of our systems could materially and adversely affect our
business

Our success depends largely upon the efficient and uninterrupted operation
of our operating systems. All of our operating systems are located at a single
facility leased by us in Princeton, New Jersey. Our systems are vulnerable to
damage or interruption from fire, power loss, telecommunications failure,
break-ins and similar events. We cannot assure you that we will not experience
system failures in the future. The occurrence of a system failure or similar
event could have a material and adverse effect on our business, operating
results and financial condition.

A constraint in capacity to process transactions would materially and adversely
affect our business

Capacity constraints in processing transactions, due to a sharp increase in
traffic, may cause unanticipated system disruptions, impair quality and lower
the level of our service. If this were to happen, our business, operating
results and financial condition will be materially and adversely affected.

We do not have any long-term contracts with our billers or aggregators

All of our contracts with our billers and aggregators are short-term and
can be terminated without cause, generally upon 30 to 90 days' notice. Our
future success depends on our ability to retain our current billers and
aggregators and attract new billers and aggregators. The loss of several of our
larger existing billers or aggregators, or our inability to attract new billers
or a major aggregator, would have a material and adverse effect on our
business, operating results and financial condition.

If our services do not function as designed, we may incur significant liability

Our electronic bill publishing services are designed to provide payment
management functions and to limit the billers' risk of fraud or loss in
effecting transactions with their consumers. As our electronic services become
more critical to our billers, there is a potential for significant liability
claims for the processing of fraudulent or erroneous transactions. If a
liability claim were brought against us, even if not successful, its

10
<PAGE>

defense would likely be time consuming and costly and could injure our
reputation. A successful liability claim may have a material and adverse effect
on our business, operating results and financial condition.

Our failure to successfully integrate any future acquisitions would strain our
managerial, operational and financial resources

As part of our business strategy, we intend to pursue strategic
acquisitions that would provide additional technologies, billers, services or
experienced personnel. Acquisitions present a number of potential risks that
would have a material and adverse effect on our business, operating results and
financial condition, including:

. difficulties in assimilating the acquired company's personnel,
operations and technologies;

. the potential loss of key employees of the acquired company;

. the distraction of our management's attention from other business
concerns; and

. potentially dilutive issuances of our common stock or the incurrence of
substantial amounts of debt.

Year 2000 problems would adversely affect our business

In order to accurately provide our services, we must rely on technology
supported by billers, financial institutions, aggregators, presenters and
consumers. Furthermore, our services rely on the transmission of information
over the phone lines, over the Internet, third party data and voice
communication lines, and through wire transfer systems, including the Federal
Funds system. Failure by us, our billers, aggregators, presenters or suppliers
to adequately address Year 2000 issues in a timely manner could impede our
ability to provide our services and have a direct impact on our ability to
generate revenue. This, in turn, could have a material and adverse impact on
our business, financial condition and results of operations.

If we are unable to protect our intellectual property rights, our business will
be materially and adversely affected

We protect our intellectual property rights through a combination of
trademark, copyright and trade secrets laws. We cannot assure you that the
steps we have taken to protect our intellectual property rights, however, will
be adequate to deter misappropriation of those rights. In addition, we cannot
be certain that our services do not infringe valid patents, copyrights and
intellectual property rights held by third parties. See "Business --
Proprietary Rights."

Our revenue could be negatively impacted by decreases in interest earned on
overnight investments

For the three months ended March 31, 1999, approximately 36% of our revenue
was generated from interest paid on amounts deposited overnight with financial
institutions pending payment. The interest earned is based on the prevailing
short-term interest rates. Accordingly, fluctuations in the short-term interest
rates will affect our revenues. Likewise, a decrease in revenue generated by
overnight investment may not be met by a corresponding decrease in any
borrowing costs which we may incur in the future. Thus, either a fall in the
prevailing short-term interest rates or an increase in future borrowing costs
could materially and adversely affect our business, operating results and
financial condition.

11
<PAGE>

Risks Related to Our Industry

Government regulation and legal uncertainties relating to the services we
provide could cause our business to suffer

Our management believes that we are not required to be licensed by the
Office of the Comptroller of the Currency, the Federal Reserve Board, or other
federal or state agencies that regulate or monitor banks or other types of
providers of financial services. We cannot assure you that a federal or state
agency will not attempt, either now or in the future, to require that providers
of services like ours be licensed. This would impede our ability to do business
in the areas within the regulator's jurisdiction. In conducting several aspects
of our business, we are subject to various laws and regulations relating to
commercial transactions generally, such as the Uniform Commercial Code. For
consumer transactions, we are also subject to the electronic funds transfer
rules embodied in Regulation E promulgated by the Federal Reserve Board. Given
the expansion of the electronic commerce market, it is possible that the
Federal Reserve might revise Regulation E or adopt new rules for electronic
funds transfer affecting users other than consumers. It is possible that
Congress or individual states could enact laws regulating the electronic
commerce market. If enacted, these laws, rules and regulations could be imposed
on our business and industry and could have a material and adverse effect on
our business, operating results and financial condition. In addition, any new
laws or regulations relating to the Internet could have a material and adverse
effect on our business, operating results and financial condition. See
"Business -- Government Regulations."

We depend on the continued growth in the use of the Internet and the
development of the Internet infrastructure

The growth of our business would be materially and adversely affected if
Internet usage does not continue to grow rapidly. Internet usage may be
inhibited for a number of reasons, including:

. concerns about the security of confidential information;

. lack of reliability and ease of access;

. lack of cost-effective, high-speed service;

. inconsistent quality of service;

. inadequate network infrastructure; or

. adoption of onerous governmental regulations.

In addition, the Internet infrastructure may not be able to support the
demands placed on it by increased Internet usage and its performance and
reliability may decline. Internet web sites have experienced interruptions in
their service as a result of outages and other delays occurring throughout the
Internet network infrastructure. If these outages or delays frequently occur in
the future, Internet usage, as well as the use of our Internet bill publishing
service, could grow more slowly than projected or decline.

We may encounter Internet security concerns that would hinder Internet commerce

The secure transmission of confidential information over the Internet is an
important component of electronic commerce and communications over the
Internet. Because a number of our services involve the transfer of confidential
information, our business, operating results and financial condition could be
materially and adversely affected if Internet users significantly reduce their
use of the Internet because of system security concerns. We may also be
required to expend significant time and resources to protect our services
against the threat of security breaches or to alleviate problems caused by such
breaches.

12
<PAGE>

Risks Relating to this Offering

We are controlled by Donald C. Licciardello, our Chairman and Chief Executive
Officer, whose interests may differ from those of other stockholders

After this offering, and assuming that Billing Concepts exercises an option
to purchase 400,000 shares from Donald C. Licciardello, our Chairman and Chief
Executive Officer, he will control, either directly or indirectly through the
Donald Licciardello Family Limited Partnership, approximately 45.8%, or 44.4%
if the underwriters' overallotment option is exercised in full, of our
outstanding common stock. As a result, he will have the ability to control our
management and affairs, and to control substantially all matters submitted to
our stockholders for approval, including the election and removal of directors
and any merger, consolidation or sale of all or substantially all of our
assets. This concentration of control may have the effect of deterring a change
in control of Princeton eCom, including impeding a merger, consolidation,
takeover or other business transaction involving us or discouraging a potential
acquirer from making a tender offer or otherwise attempting to obtain control
of Princeton eCom. Any of the foregoing results could, in turn, materially and
adversely affect the market price for our common stock. See "Principal
Stockholders."

Billing Concepts Corp. has the ability to appoint two members of our Board of
Directors

Pursuant to the terms of a voting agreement, as amended, entered into among
Billing Concepts, Donald C. Licciardello and the Donald Licciardello Family
Limited Partnership, of which Mr. Licciardello is the general partner, in
connection with Billing Concepts' purchase of shares of Princeton eCom in
September 1998, Billing Concepts, Mr. Licciardello and the Donald Licciardello
Family Limited Partnership have agreed to vote all of their respective shares
of common stock to elect to our board two individuals designated by Billing
Concepts and three individuals designated by Mr. Licciardello. As a result,
Billing Concepts, the holder of 22.5% of our common stock after this offering,
21.8% if the underwriters' overallotment option is exercised in full, can
designate 40% of the members of our board. Through this disproportionate voting
power, Billing Concepts may be able to influence the outcome of a decision
which may not be in the best interests of all stockholders. See "Certain
Transactions."

Certain provisions of Delaware law, our certificate of incorporation and our
by-laws may make a takeover of our company more difficult which could
materially and adversely affect the market price for our common stock

We are subject to the anti-takeover provisions of Section 203 of the
Delaware General Corporation Law. Section 203 could delay or prevent a third
party or a significant stockholder from acquiring control of us. In addition,
provisions of our certificate of incorporation and by-laws may have the effect
of discouraging, delaying or preventing a merger, tender offer or proxy contest
involving Princeton eCom, even if such transaction would be beneficial to our
stockholders. See "Description of Capital Stock."

Future sales of our common stock in the public market may depress our stock
price

The market price of our common stock could decline as a result of sales by
our existing stockholders of a large number of shares of common stock in the
market after this offering, or the perception that these sales may occur. These
sales also might make it more difficult for us to sell equity securities in the
future and at a price that we deem appropriate. See "Shares Eligible for Future
Sale."

You will experience an immediate and substantial dilution in the book value of
your investment

Investors purchasing shares in this offering will incur immediate and
substantial dilution in net tangible book value per share. To the extent
outstanding options to purchase common stock are exercised, there will be
further dilution. See "Dilution."

13
<PAGE>

Trading in our common stock could be subject to extreme price and volume
fluctuations and you could have difficulty trading your shares of common stock

We cannot predict the extent to which investor interest in Princeton eCom
will lead to the development of an active trading market or that the market
price of our common stock will not decline below the initial public offering
price. The stock market has experienced significant price and volume
fluctuations and the market prices of securities of technology companies,
particularly Internet-related companies, have been extremely volatile.
Investors may not be able to resell their shares at or above the initial public
offering price.

14
<PAGE>

USE OF PROCEEDS

The net proceeds we receive from this offering are estimated to be
approximately $26.7 million, $30.9 million if the underwriters' over-allotment
option is exercised in full, assuming an initial public offering price of
$10.00 per share, after deducting the underwriting discounts and commissions
and estimated offering expenses payable by us. The principal uses of the net
proceeds will be to invest in the further growth and expansion of our business
and for working capital and other general corporate purposes. In addition, we
may use a portion of the net proceeds from this offering to acquire or invest
in complementary businesses. However, we do not currently have commitments or
agreements to make such investment.

As of the date of this prospectus, we have not identified with certainty
the specific uses for the net proceeds from this offering. Consequently, our
management will have discretion over their use and investment. Pending their
use, the net proceeds will be invested in short-term, investment grade,
interest-bearing instruments, certificates of deposit or direct or guaranteed
obligations of the United States government.

DIVIDEND POLICY

We have never declared or paid any cash dividends on our common stock and
do not intend to pay any cash dividends in the foreseeable future. We currently
anticipate that all future earnings, if any, will be retained to finance the
further expansion and continued growth of our business. Any future
determination regarding the payment of cash dividends will be within the sole
discretion of our board of directors and will depend upon, among other things,
our earnings, operating results, financial condition and current and
anticipated cash needs.

15
<PAGE>

CAPITALIZATION

The following table sets forth our capitalization as of March 31, 1999 on
an actual basis and as adjusted to reflect the sale by us of the shares of
common stock to be sold in this offering at an estimated offering price of
$10.00 per share. The As Adjusted data is calculated after deducting the
estimated underwriting discounts and commissions and offering expenses payable
by us. See "Use of Proceeds." The capitalization information set forth in the
table below is qualified by and should be read in connection with the more
detailed financial statements and related notes thereto included elsewhere in
this prospectus.

<TABLE>
<CAPTION>
As of March 31, 1999
---------------------
Actual As Adjusted
(in thousands)
<S> <C> <C>
Long-term debt, less current portion..................... $ 44 $ 44
-------- --------
Stockholders' equity:
Common stock, $0.01 par value; 50,000,000 shares
authorized; 11,284,002 shares issued and outstanding,
actual; and 14,284,002 shares issued and outstanding,
as adjusted.......................................... 113 143
Additional paid-in-capital............................. 14,587 41,257
Accumulated deficit.................................... (11,970) (11,970)
Subscriptions receivable............................... (188) (188)
Deferred compensation.................................. (2,353) (2,353)
-------- --------
Total stockholders' equity............................. 189 26,889
-------- --------
Total capitalization................................. $ 233 $ 26,933
======== ========
</TABLE>

The above capitalization table excludes (1) 2,697,900 shares of common
stock issuable upon the exercise of options outstanding under our stock option
plans, as of March 31, 1999, at a weighted average price of $1.87 per share and
(2) 2,361,150 shares of common stock reserved for issuance, and not
outstanding, under our existing stock option plans as of March 31, 1999.

16
<PAGE>

DILUTION

Our net tangible book value as of March 31, 1999 was $188,611, or $0.02 per
share of common stock. Net tangible book value per share represents the amount
of our total tangible assets less our total liabilities, divided by the number
of shares of our common stock outstanding. After giving effect to our sale of
3,000,000 shares of common stock in this offering at an estimated offering
price of $10.00 per share and the application of the estimated net proceeds of
this offering, our net tangible book value as of March 31, 1999 would have been
approximately $26,888,611, or $1.88 per share of common stock. This represents
an immediate increase in the net tangible book value of $1.86 per share to
existing stockholders and an immediate dilution in the net tangible book value
of $8.12 per share to new investors buying common stock in this offering. The
following table illustrates this per share dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share.............. $10.00
Net tangible book value per share as of March 31, 1999..... $0.02
Increase attributable to new investors .................... 1.86
-----
Adjusted net tangible book value per share as of March 31,
1999....................................................... 1.88
------
Dilution per share to new investors.......................... $ 8.12
======
</TABLE>

The following table summarizes, as of March 31, 1999, the total number of
shares of common stock purchased from us, the total consideration paid to us
and the average price per share paid by existing stockholders and by new
investors:

<TABLE>
<CAPTION>
Shares Purchased Total Consideration
------------------ ------------------- Average Price
Number Percent Amount Percent Per Share
---------- ------- ----------- ------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders..... 11,284,002 79% $10,959,000 27% $ 0.97
New investors............. 3,000,000 21 30,000,000 73 $10.00
---------- ----- ----------- -----
Total................... 14,284,002 100.0% $40,959,000 100.0%
========== ===== =========== =====
</TABLE>

The foregoing discussion excludes (1) 2,697,900 shares of common stock
issuable upon the exercise of options outstanding under our stock option plans,
as of March 31, 1999, at a weighted average price of $1.87 per share and (2)
2,361,150 shares of common stock reserved for issuance, and not outstanding,
under our existing stock option plans as of March 31, 1999.

17
<PAGE>

SELECTED FINANCIAL DATA

The following selected financial data has been derived from our financial
statements. The selected financial data as of December 31, 1997 and 1998 and
for each of the three years in the period ended December 31, 1998 are derived
from our financial statements that have been audited by Arthur Andersen LLP,
independent public accountants, and are included elsewhere in this prospectus.
The selected financial data as of December 31, 1996 has been derived from our
audited balance sheet which is not included in this prospectus. The selected
financial data as of December 31, 1994 and 1995 and for each of the two years
in the period ended December 31, 1995 are derived from our unaudited financial
statements not included in this prospectus. The selected financial data as of
March 31, 1999 and for the three-month periods ended March 31, 1998 and 1999
have been derived from our unaudited financial statements, which in our
opinion, include all adjustments necessary for a fair presentation of the
information below. The results of operations for the three months ended March
31, 1999 are not necessarily indicative of the results expected for the entire
year. The following financial data should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the financial statements and the related notes included
elsewhere in this prospectus.

<TABLE>
<CAPTION>
Three Months
Ended
Year Ended December 31, March 31,
------------------------------------------- -----------------
1994 1995 1996 1997 1998 1998 1999
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Revenues:
Service fees......... $ 792 $ 1,868 $ 1,632 $ 2,333 $ 2,386 $ 583 $ 735
Interest............. 5 367 204 699 1,436 248 407
------- ------- ------- ------- ------- ------ -------
Total revenues...... 797 2,235 1,836 3,032 3,822 831 1,142
------- ------- ------- ------- ------- ------ -------
Operating expenses:
Cost of services..... 476 1,054 1,363 1,801 1,967 430 555
Development costs.... 216 410 834 820 895 216 332
Selling, general and
administrative..... 869 1,327 1,823 2,537 3,283 671 1,100
Amortization of
deferred
compensation....... -- -- -- -- 1,018 34 230
------- ------- ------- ------- ------- ------ -------
Total operating
expenses.......... 1,561 2,791 4,020 5,158 7,163 1,351 2,217
------- ------- ------- ------- ------- ------ -------
Operating loss........ (764) (556) (2,184) (2,126) (3,341) (520) (1,075)
Interest expense...... 84 73 7 16 14 4 2
------- ------- ------- ------- ------- ------ -------
Loss before
extraordinary item.. (848) (629) (2,191) (2,142) (3,355) (524) (1,077)
Extraordinary gain
from debt
forgiveness......... 302 -- -- -- -- -- --
------- ------- ------- ------- ------- ------ -------
Net loss.............. $ (546) $ (629) $(2,191) $(2,142) $(3,355) $ (524) $(1,077)
======= ======= ======= ======= ======= ====== =======
Basic and diluted net
loss per share...... $ (0.07) $ (0.08) $ (0.26) $ (0.25) $ (0.36) $(0.06) $ (0.10)
======= ======= ======= ======= ======= ====== =======
Shares used in
computing net loss
per share........... 8,351 8,351 8,454 8,568 9,423 8,615 11,126
======= ======= ======= ======= ======= ====== =======
<CAPTION>
As of December 31, As of
------------------------------------------- March 31,
1994 1995 1996 1997 1998 1999
------- ------- ------- ------- ------- ---------
(in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance Sheet Data:
Cash and cash
equivalents........... $ 443 $ 1,408 $ 523 $ 505 $ 6,362 $ 8,775
Working capital
(deficit)............. (2,463) (3,266) (5,635) (7,908) (308) (823)
Total assets............ 1,031 2,748 1,799 2,110 9,344 11,686
Long-term debt, less
current portion....... 20 26 121 75 50 44
Total stockholders'
equity (deficit)........ (2,425) (3,055) (5,244) (7,385) 278 189
</TABLE>

18
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

You should read the following discussion in conjunction with our financial
statements and the related notes which are included elsewhere in this
prospectus. This discussion contains forward-looking statements that involve
risks and uncertainties. Our actual results could differ significantly from
those discussed in these forward-looking statements as a result of various
factors, including, but not limited to, those set forth under "Risk Factors"
and elsewhere in this prospectus.

Overview

We provide comprehensive electronic bill publishing services via the
telephone and Internet to large businesses that generate recurring bills and to
financial institutions. Our bill publishing services are comprised of both the
presentment and payment of bills. We also provide electronic lockbox and credit
card balance transfer services to large businesses and financial institutions.
Our telephone bill publishing service enables consumers to access billing
information and to pay bills in as few as five keystrokes and set up automatic
payment of recurring bills. Our Internet bill publishing service allows billers
to publish bills directly through their own web sites or indirectly through web
sites of financial institutions and Internet portals.

Our revenues are primarily derived from two sources.

. Service Fees. We derive revenue from contractual relationships with
billers and financial institutions. Service fee revenues, which
represent transaction fees charged by us for our services, are
recognized as the services are performed. We currently derive service
fee revenue from the processing of bill payments and not from the
presentment of bills.

. Interest. We also derive revenue through the investment of funds
received pending payment. These funds are invested, in accordance with
the terms of the respective customer contract, in investment grade and
government securities while we reconcile consumer and financial
institution payments with our customers' accounting databases. Interest
revenue is recorded as it is earned.

We intend to significantly increase our sales and marketing and new
customer implementation expenditures during 1999. We believe these expenditures
will enable us to grow our biller base and continue to expand our relationships
with aggregators. We also believe that we can increase our share of the
Internet bill presentment and payment market through the establishment or
expansion of strategic relationships with providers of paper-based billing
services and financial institutions that have existing relationships with our
targeted biller customer base.

We incur development costs in connection with developing our services. To
date, we have not capitalized any development costs. We expect to significantly
increase our development costs in the future as we enhance our current services
and develop new service offerings. This increase will primarily relate to the
hiring of additional employees performing technical support and computer
programming functions.

During 1998, we recorded an aggregate deferred compensation expense of
approximately $1.9 million in connection with the grant of stock options to our
employees and directors at exercise prices below the fair market value of our
common stock. We are amortizing this deferred compensation expense over the
vesting periods of the options, which range from immediate vesting to periods
of up to four years. Of the $1.9 million of deferred compensation expense
recorded, approximately $1.0 million was charged to expense during the year
ended December 31, 1998.

We have incurred significant losses since our inception and we expect to
continue to incur significant losses for the foreseeable future. As of December
31, 1998, we had an accumulated deficit of approximately $10.9 million and
approximately $8.6 million of net operating loss carryforwards for federal
income tax purposes. Our net loss carryforwards begin to expire in 2003.

19
<PAGE>

Results of Operations

The following table sets forth financial data as a percentage of revenues
for the periods indicated.

<TABLE>
<CAPTION>
Three Months
Year Ended Ended
December 31, March 31,
---------------------- ---------------
1996 1997 1998 1998 1999
<S> <C> <C> <C> <C> <C>
Revenues:
Service fees...................... 88.9% 77.0% 62.4% 70.2% 64.4%
Interest.......................... 11.1 23.0 37.6 29.8 35.6
------ ----- ----- ------ ------
Total revenues................. 100.0 100.0 100.0 100.0 100.0
------ ----- ----- ------ ------
Operating expenses:
Cost of services.................. 74.2 59.4 51.5 51.7 48.6
Development costs................. 45.4 27.0 23.4 26.0 29.0
Selling, general and
administrative.................. 99.3 83.7 85.9 80.8 96.3
Amortization of deferred
compensation.................... 0.0 0.0 26.6 4.1 20.2
------ ----- ----- ------ ------
Total operating expenses....... 218.9 170.1 187.4 162.6 194.1
------ ----- ----- ------ ------
Operating loss...................... (118.9) (70.1) (87.4) (62.6) (94.1)
Interest expense.................... 0.4 0.5 0.4 0.5 0.2
------ ----- ----- ------ ------
Net loss............................ (119.3)% (70.6)% (87.8)% (63.1)% (94.3)%
====== ===== ===== ====== ======
</TABLE>

Three Months Ended March 31, 1999 Compared to Three Months Ended March 31, 1998

Revenues

Total revenues increased by $311,000 to $1.1 million for the three months
ended March 31, 1999 from $831,000 for the three months ended March 31, 1998,
an increase of 37%.

Service Fees. Service fees increased by $152,000 to $735,000 for the three
months ended March 31, 1999 from $583,000 for the three months ended March 31,
1998, an increase of 26%. This increase is primarily attributable to services
provided to new financial institutions implemented in the quarter as well as
increases in revenues from increased volume from current customers of our
Internet bill publishing service and our 1-800-Paybill service. Service fees
represented 64% of total revenues for the three months ended March 31, 1999
compared to 70% for the three months ended March 31, 1998.

Interest. Interest revenue increased by $159,000 to $407,000 for the three
months ended March 31, 1999 from $248,000 for the three months ended March 31,
1998, an increase of 64%. This increase is primarily attributable to an
increase in the number of transactions per existing customer, higher dollar
amounts associated with each transaction and the addition of new customers.
Interest represented 36% of total revenues for the three months ended March 31,
1999 compared to 30% of total revenues for the three months ended March 31,
1998.

Operating Expenses

Total operating expenses increased by $800,000 to $2.2 million for the
three months ended March 31, 1999 from $1.4 million for the three months ended
March 31, 1998.

Cost of Services. Cost of services consists primarily of data processing
costs, new customer implementation, customer service and technical support, as
well as third party transaction fees like automated clearinghouse transaction
charges associated with wiring funds in performing our services. Cost of
services increased by $125,000 to $555,000 for the three months ended March 31,
1999 from $430,000 for the three months ended March 31, 1998, an increase of
29%. This increase was primarily attributable to the corresponding increase in
revenue, as well as an increase in the number of employees in anticipation of
future growth. Cost of services was 49% of total revenues for the three months
ended March 31, 1999 compared to 52% of total revenues for the three months
ended March 31, 1998.

20
<PAGE>

Development Costs. Development costs consist primarily of salaries for
software engineers and programming personnel. Development costs increased by
$116,000 to $332,000 for the three months ended March 31, 1999 from $216,000
for the three months ended March 31, 1998, an increase of 54%. This increase
was primarily attributable to increases in payroll associated with additional
headcount in anticipation of future growth. Development costs represented 29%
of total revenues for the three months ended March 31, 1999 compared to 26% of
total revenues for the three months ended March 31, 1998.

Selling, General and Administrative. Selling, general and administrative
expense consists primarily of salaries for sales and marketing personnel and
accounting and administrative personnel, as well as sales commissions and
public relations expense. Selling, general and administrative expense increased
by $429,000 to $1.1 million for the three months ended March 31, 1999 from
$671,000 for the three months ended March 31, 1998, an increase of 64%. This
increase was primarily attributable to an increase in the number of sales and
marketing and administrative personnel in anticipation of future growth.
Selling, general and administrative expense represented 96% of total revenues
for the three months ended March 31, 1999 compared to 81% of total revenues for
the three months ended March 31, 1998.

Amortization of Deferred Compensation. Amortization of deferred
compensation increased by $196,000 to $230,000 for the three months ended March
31, 1999 from $34,000 for the three months ended March 31, 1998. Deferred
compensation represents the difference between the exercise price of options
granted by us and the fair market value of our common stock on the grant date
of the options in cases where the exercise price was below fair market value on
the grant date. At March 31, 1999, we had $2.4 million of deferred compensation
that will be amortized over the remaining vesting periods of the options, which
range from one to four years.

Interest Expense. Interest expense consists of interest paid on leased
equipment. Interest expense decreased to $2,100 for the three months ended
March 31, 1999 from $3,700 for the three months ended March 31, 1998.

Year Ended December 31, 1998 Compared to Year Ended December 31, 1997

Revenues

Total revenues increased by $790,000 to $3.8 million in the year ended
December 31, 1998 from $3.0 million in the year ended December 31, 1997, an
increase of 26%.

Service Fees. Service fees were relatively unchanged at $2.4 million for
the year ended December 31, 1998 compared to $2.3 million for the year ended
December 31, 1997. Revenue was relatively flat because the increase in revenues
from our 1-800-PayBill service and Internet bill publishing service was offset
by a decrease in revenue from our payment services resulting from some
financial institutions electing to bring these services in-house. Service fees
represented 62% of total revenues for the year ended December 31, 1998 compared
to 77% of total revenues for the year ended December 31, 1997.

Interest. Interest revenue increased by $737,000 to $1.4 million for the
year ended December 31, 1998 from $699,000 for the year ended December 31,
1997, an increase of 105%. This increase is primarily attributable to an
increase in the use of our Balance Transfer Utility service during 1998 which
generates higher interest revenue because of the higher dollar amounts
associated with this service compared to our other services. Interest revenue
represented 38% of total revenues for the year ended December 31, 1998 compared
to 23% of total revenues for the year ended December 31, 1997.

Operating Expenses

Total operating expenses increased by $2.0 million to $7.2 million for the
year ended December 31, 1998 from $5.2 million for the year ended December 31,
1997, an increase of 38%.

21
<PAGE>

Cost of Services. Cost of services increased by $166,000 to $2.0 million
for the year ended December 31, 1998 from $1.8 million for the year ended
December 31, 1997, an increase of 9%. This increase was due primarily to
incremental costs associated with the increased use of our 1-800-PayBill
service and Internet bill publishing service in 1998 compared to 1997. Cost of
services was 52% of total revenues for the year ended December 31, 1998
compared to 59% of total revenues for the year ended December 31, 1997. This
percentage decrease is due to increased revenues during 1998 from our Balance
Transfer Utility service, which generates higher interest revenue without a
significant increase in cost because of the higher dollar amounts associated
with each transaction compared to our other services.

Development Costs. Development costs increased $75,000 to $895,000 for the
year ended December 31, 1998 from $820,000 for the year ended December 31,
1997, an increase of 9%. This increase was primarily attributable to the
addition of database and software development personnel during the fourth
quarter of 1998. Development costs were 23% of total revenues for the year
ended December 31, 1998 compared to 27% of total revenues for the year ended
December 31, 1997. This percentage decrease resulted from relatively flat
development costs being spread over a larger revenue base in 1998.

Selling, General and Administrative. Selling, general and administrative
expense increased $746,000 to $3.3 million for the year ended December 31, 1998
from $2.5 million for the year ended December 31, 1997, an increase of 30%.
This increase was primarily attributable to an increase in the number of sales
and marketing and administrative personnel in 1998. Selling, general and
administrative expense was 86% of total revenues for the year ended December
31, 1998 compared to 84% of total revenues for the year ended December 31,
1997.

Amortization of Deferred Compensation. Amortization of deferred
compensation expense was $1.0 million in the year ended December 31, 1998.
Deferred compensation is being amortized over the respective vesting periods of
the options. At December 31, 1998, we had $867,000 of deferred compensation
that will be amortized over the remaining vesting periods of the options which
range from one to four years.

Interest Expense. Interest expense consists of interest paid on leased
equipment. Interest expense was relatively unchanged from $16,000 for the year
ended December 31, 1997 to $14,000 for the year ended December 31, 1998.

Year Ended December 31, 1997 Compared to Year Ended December 31, 1996

Revenues

Total revenues increased by $1.2 million to $3.0 million for the year ended
December 31, 1997 from $1.8 million for the year ended December 31, 1996, an
increase of 67%.

Service Fees. Service fees increased by $701,000 to $2.3 million for the
year ended December 31, 1997 from $1.6 million for the year ended December 31,
1996, an increase of 44%. This increase was primarily attributable to increased
use of our 1-800-PayBill service and our Balance Transfer Utility service in
1997. Service fees represented 77% of total revenues for the year ended
December 31, 1997 compared to 89% of total revenues for the year ended December
31, 1996.

Interest. Interest revenue increased by $495,000 to $699,000 for the year
ended December 31, 1997 from $204,000 for the year ended December 31, 1996, an
increase of 243%. This increase is primarily attributable to an increase in the
number of transactions processed in 1997 compared to 1996, in addition to an
increase in the dollar volume of transactions processed due to an increase in
use of our Balance Transfer Utility service. Interest revenue represented 23%
of total revenues for the year ended December 31, 1997 compared to 11% of total
revenues for the year ended December 31, 1996.

Operating Expenses

Total operating expenses increased by $1.1 million to $5.2 million for the
year ended December 31, 1997 from $4.0 million for the year ended December 31,
1996, an increase of 28%.

22
<PAGE>

Cost of Services. Cost of services increased by $438,000 to $1.8 million
for the year ended December 31, 1997 from $1.4 million for the year ended
December 31, 1996, an increase of 31%. This increase corresponds to the
increase in revenues generated from increased transaction processing in 1997.
Cost of services was 59% of total revenues for the year ended December 31, 1997
compared to 74% of total revenues for the year ended December 31, 1996. This
percentage decrease is due to increased revenues from our Balance Transfer
Utility service, which generates higher interest revenue without a significant
increase in cost because of the higher dollar amounts associated with each
transaction compared to our other services.

Development Costs. Development costs remained relatively unchanged at
$820,000 for the year ended December 31, 1997 compared to $834,000 for the year
ended December 31, 1996, due to the consistent number of personnel and payroll
expenses in this department. Development costs were 27% of total revenues for
the year ended December 31, 1997 compared to 45% of total revenues for the year
ended December 31, 1996. The percentage decrease is due to a similar amount of
development costs being spread over a larger revenue base in 1997.

Selling, General and Administrative. Selling, general and administrative
expense increased by $714,000 to $2.5 million for the year ended December 31,
1997 from $1.8 million for the year ended December 31, 1996, an increase of
40%. This increase is primarily attributable to an increase in payroll expense
resulting from headcount increases in several departments including sales,
accounting and system administration. Selling, general and administrative
expense was 84% of total revenues for the year ended December 31, 1997 compared
to 99% of total revenues for the year ended December 31, 1996.

Interest Expense. Interest expense increased by $9,000 to $16,000 for the
year ended December 31, 1997 from $7,000 for the year ended December 31, 1996,
an increase of 129%. This increase is attributable to a capital equipment lease
entered into in early 1997.

23
<PAGE>

Selected Unaudited Quarterly Results of Operations

The following table sets forth our unaudited quarterly results of
operations for each of the five quarters ended March 31, 1999. In management's
opinion, this unaudited information has been prepared on the same basis as our
audited financial statements included elsewhere in this prospectus and includes
all adjustments, consisting only of normal recurring adjustments, necessary to
present fairly the unaudited quarterly results when read in conjunction with
our audited financial statements and notes thereto included elsewhere in this
prospectus. The results of operations for any quarter are not necessarily
indicative of future results of operations.

<TABLE>
<CAPTION>
Three Months Ended
--------------------------------------------------
Mar. 31, June 30, Sept. 30, Dec. 31, Mar. 31,
1998 1998 1998 1998 1999
Statement of Operations
Data: (in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Service fees........... $ 583 $ 517 $ 623 $ 663 $ 735
Interest............... 248 186 486 516 407
------ ------ ------ ------- -------
Total revenues........ 831 703 1,109 1,179 1,142
------ ------ ------ ------- -------
Operating expenses:
Cost of services....... 430 490 466 580 555
Development costs...... 216 230 188 261 332
Selling, general and
administrative....... 671 768 740 1,104 1,100
Amortization of
deferred
compensation......... 34 14 55 916 230
------ ------ ------ ------- -------
Total operating
expenses............ 1,351 1,502 1,449 2,861 2,217
------ ------ ------ ------- -------
Operating loss.......... (520) (799) (340) (1,682) (1,075)
Interest expense........ 4 4 4 2 2
------ ------ ------ ------- -------
Net loss................ $ (524) $ (803) $ (344) $(1,684) $(1,077)
====== ====== ====== ======= =======
Basic and diluted net
loss per share........ $(0.06) $(0.09) $(0.04) $ (0.15) $ (0.10)
====== ====== ====== ======= =======
Shares used in computing
net loss per share.... 8,615 8,615 9,320 11,116 11,126
====== ====== ====== ======= =======
<CAPTION>
Percentage of Total Revenues
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Service fees........... 70.2% 73.5% 56.2% 56.2% 64.4%
Interest............... 29.8 26.5 43.8 43.8 35.6
------ ------ ------ ------- -------
Total revenues........ 100.0 100.0 100.0 100.0 100.0
------ ------ ------ ------- -------
Operating expenses:
Cost of services....... 51.7 69.7 42.0 49.2 48.6
Development costs...... 26.0 32.7 17.0 22.2 29.0
Selling, general and
administrative....... 80.8 109.3 66.7 93.6 96.3
Amortization of
deferred
compensation......... 4.1 2.0 5.0 77.7 20.2
------ ------ ------ ------- -------
Total operating
expenses............ 162.6 213.7 130.7 242.7 194.1
------ ------ ------ ------- -------
Operating loss.......... (62.6) (113.7) (30.7) (142.7) (94.1)
Interest expense........ 0.5 0.5 0.3 0.1 0.2
------ ------ ------ ------- -------
Net loss................ (63.1)% (114.2)% (31.0)% (142.8)% (94.3)%
====== ====== ====== ======= =======
</TABLE>

We have experienced year-to-year revenue growth with some seasonal
fluctuations during the second half of the year. These fluctuations relate
primarily to increases in interest revenue derived from our Balance Transfer
Utility service during the last two quarters of the year. These increases
result from direct marketing programs initiated by credit card issuers which
cause increased demand for our Balance Transfer Utility service. The increased
demand in Balance Transfer Utility services causes interest revenue to increase
because of the higher dollar amounts associated with this service compared to
our other services.

24
<PAGE>

Revenues decreased slightly from the first quarter of 1998 to the second
quarter of 1998 as a result of some financial institutions electing to bring
payment services provided by us in-house. Cost of services as a percentage of
revenue was higher in the second quarter of 1998 than in previous quarters as a
result of increases in payroll expense related to increased headcount during
this quarter. We increased the number of personnel in this quarter in
anticipation of future growth. Selling, general and administrative expense was
also high in this quarter due to increases in sales and marketing expenses
primarily attributable to the addition of personnel and tradeshow expenses
incurred during this quarter.

In addition to seasonal fluctuations, quarterly results of operations may
be subject to significant fluctuations due to several factors, including:

. the rate at which we increase our customer base and their use of our
various services;

. the amount and timing of costs related to our sales and marketing
efforts and other initiatives;

. sales and implementation cycles of our customers;

. the loss of a number of existing customers;

. the loss of key employees and time and expense needed to recruit, hire
and train new personnel, particularly service development personnel;

. our ability to upgrade, enhance and maintain our systems and
infrastructure and the timing and costs of this;

. interest rate fluctuations; and

. economic conditions which may affect the budgets of billers, financial
institutions and consumers for technological expenditures.

We anticipate that our operating expenses will continue to increase
significantly due to development and implementation costs associated with our
Internet bill publishing service. These expenses will relate to personnel
increases and technological expenditures. We expect that revenues will increase
due to biller and consumer adoption of our Internet bill publishing service. If
biller or consumer adoption is slower than expected, revenues may not increase
at the same rate as expenses in the future. If revenues in any quarter do not
increase correspondingly with increases to expenses, our results of operations
for that quarter would be materially and adversely affected. For the foregoing
reasons, we believe that quarter-to-quarter comparisons of our results of
operations are not necessarily meaningful and that our results of operations in
any particular quarter should not be relied upon as necessarily indicative of
future performance.

Liquidity and Capital Resources

Historically, we have experienced significant operating losses and working
capital deficits. Our working capital deficit was $5.6 million at December 31,
1996 and $7.9 million at December 31, 1997. In September 1998, we sold
2,493,870 shares of our common stock to Billing Concepts for $10.0 million. At
December 31, 1998 our working capital deficit was $308,000 and as of March 31,
1999, our working capital deficit was $823,000.

Net cash used in operating activities was $3.4 million for both the year
ended December 31, 1998, and the year ended December 31, 1996 and $414,000 for
the three months ended March 31, 1998. For the year ended December 31, 1997 and
the three months ended March 31, 1999, our operating activities generated cash
of $2.5 million and $2.3 million. Cash provided by operating activities in the
three months ended March 31, 1999 was primarily the result of increases in
customer deposits payable. The cash used in operating activities in 1998 was
primarily the result of our net loss and an increase in other current assets,
partially offset by an

25
<PAGE>

increase in accounts payable. For the year ended December 31, 1997, cash
provided by operating activities was primarily attributable to an increase in
customer deposits payable, in addition to increases in accounts payable and
accrued expenses. During 1996, cash used in operating activities was primarily
attributable to our net loss.

Net cash used in investing activities was $257,000, $373,000 and $298,000
for the years ended December 31, 1998, 1997 and 1996 and $483,000 and $36,000
for the three months ended March 31, 1999 and 1998. This cash was used
primarily for the purchase of computer equipment and software.

Net cash provided by financing activities was $9.5 million in the year
ended December 31, 1998 and $2.9 million in the year ended December 31, 1996.
Net cash used in financing activities was $2.2 million in the year ended
December 31, 1997. Net cash provided by financing activities was $634,000 and
$585,000 for the three months ended March 31, 1999 and 1998. The cash generated
in the three months ended March 31, 1999 resulted from the net proceeds from
the sale of shares of our common stock in March 1999. The cash generated in
1998 resulted from the net proceeds of $10.0 million from the sale of shares of
our common stock in September 1998, partially offset by decreases in bank
overdrafts and payments on long-term debt. The cash used in 1997 was primarily
due to a decrease in the bank overdraft. The cash generated in 1996 was
primarily attributable to an increase in the bank overdraft.

We believe that, based on our current business plan, the net proceeds from
this offering and existing cash and cash equivalents will be sufficient to meet
our operating activities, capital expenditures and other obligations for the
next twelve to eighteen months.

Year 2000 Considerations

Many currently installed computer systems and software products are coded
to accept and recognize only two-digit rather than four-digit entries to define
the applicable year. These systems may recognize a date using "00" as the year
1900 rather than the year 2000. As a result, computer systems and/or software
used by many companies, including our billers and financial institutions upon
which we rely to perform our services, may need to be upgraded to comply with
Year 2000 requirements or risk system failure or miscalculations causing
disruptions of normal business activities.

State of Readiness. We have completed our assessment of our services and
information technology systems. We believe that our mission critical systems
and a majority of our non-mission critical systems are Year 2000 compliant. We
anticipate that our systems will be Year 2000 compliant by October 1999. We
have also completed our initial survey of the information systems of our
principal vendors and service providers. Based on the oral representations of
these vendors and service providers, we believe that the information technology
systems of these third parties, as they relate to us, do not pose significant
operational issues. We have replaced any of our principal vendors that are
unable to certify that their products are Year 2000 compliant. Our assessment
is on-going and will continue with all principal vendors and service providers
with which we do business. In addition, we do not believe our embedded systems
pose Year 2000 concerns because we believe that we have identified all of our
software and hardware that require Year 2000 updates or modifications.

Costs. We currently anticipate that our total expenses for Year 2000
compliance will be less than $300,000. As of March 31,1999, we have spent
approximately $130,000 in personnel and other costs related to our Year 2000
risk assessment and remediation efforts.

Risks. In order to accurately provide our Internet bill publishing service,
we must rely on technology supported by billers, financial institutions,
aggregators, presenters and consumers. Furthermore, our services rely on
transmission of data over the Internet, third party data and voice
communication lines, and data transmission through wire transfer systems,
including the Federal Funds system. Failure by us, our billers, aggregators,
presenters or suppliers to adequately address Year 2000 issues in a timely
manner could impede our ability to provide our services and have a direct
impact on our ability to generate revenue. This, in turn,

26
<PAGE>

could have a material and adverse impact on our business, operating results and
financial condition. Accordingly, we plan to correct our remaining Year 2000
issues by October 1999. We believe that associated costs are adequately
budgeted for in our 1999 business plan. However, if our efforts or the efforts
of billers, aggregators, financial institutions and others with which we engage
in business, fail to adequately address their own Year 2000 issues, the most
likely worst case scenario would be a substantial loss of our revenue for some
period of time.

Contingency Plan. We are currently developing a contingency plan to address
situations that may result if we are unable to achieve complete Year 2000
compliance by October 1999. We cannot provide any assurance that the plan we
develop will be successful in addressing any remaining Year 2000 issues.

New Accounting Pronouncement

In March 1998, the American Institute of Certified Pubic Accountants issued
Statement of Position 98-1, "Accounting for the Cost of Computer Software
Developed or Obtained for Internal Use," or SOP 98-1. SOP 98-1 provides
guidance on accounting for computer software developed or obtained for internal
use, including the requirement to capitalize specified costs and amortization
of such costs. We adopted SOP 98-1 in January 1999. The adoption did not have a
material effect on our financial position or results of operations.

Market Risk

A significant portion of our revenue is generated from interest paid on
amounts deposited for up to 48 hours with financial institutions pending
payment. The interest earned is based on prevailing short-term interest rates.
Our weighted daily average balance was $26.4 million for the year ended
December 31, 1998 and $30.2 million for the three months ended March 31, 1999.
Accordingly, fluctuations in short-term interest rates will affect our
revenues. Likewise, a decrease in revenue generated by overnight investment may
not be met by a corresponding decrease in any borrowing costs which we may
incur in the future. Thus, either a fall in prevailing short-term interest
rates or an increase in future borrowing costs could materially and adversely
affect our business, operating results and financial condition. In the future,
we may manage our interest rate risk through interest rate hedging techniques.
However, we currently do not use such techniques and they may not be successful
in reducing or eliminating our interest rate risk in the future.

27
<PAGE>

BUSINESS

Company Overview

Industry Background

Traditional Paper-Based Billing and Payment Process

According to Jupiter Communications, in 1998 approximately 15 billion
consumer paper bills were received by approximately 100 million U.S.
households. Most of these are recurring monthly or quarterly bills mailed to
consumers primarily by retailers, utilities and credit card companies. Paper
bills are prepared by either the biller itself or, more often, by an outsourced
bill fulfillment vendor. Creating and distributing a paper bill is a costly
multiple-step process that includes extracting relevant data from the internal
accounts receivable system of the biller, organizing the data into a billing
format, printing and separating the bills, stuffing envelopes, applying postage
and mailing the bill to the consumer. The bill payment process is also costly
and labor intensive. The biller must currently contract with a commercial
lockbox which receives consumer payments. The lockbox vendor opens the payments
and separates checks from the remittance stub. The lockbox vendor also sends
the biller reports which allow the biller to update both its accounts
receivable system and its accounting records. We estimate that the cost to the
biller of preparing and sending a paper bill and receiving and posting a bill
payment ranges from approximately $0.75 to $1.50 per bill. According to Gartner
Group, the average cost to the biller of creating and delivering a paper bill
is $1.00.

28
<PAGE>

Similarly, the paper-based billing and payment process is time-consuming
and can be costly for the consumer. Jupiter Communications currently estimates
that, during each 12-month period, U.S. households will spend an average of 24
hours on bill management, $46 on postage and $144 on check-writing fees to
handle an average of 12 recurring monthly bills. The graph below depicts the
steps involved in the traditional paper-based billing and payment process:

[GRAPHIC DEPICTING THE 11 STEPS INVOLVED IN THE TRADITIONAL PAPER-BASED BILLING
AND PAYMENT PROCESS APPEARS HERE, WITH THE FOLLOWING TEXT:]

Step 1 Biller prepares the paper bill

--In-house

--Out-sourced to bill fulfillment vendors

Step 2 Biller delivers the bill to the post office bulk mail center

Step 3 Post office delivers the bill to the consumer's mailbox

Step 4 Consumer reviews the bill, writes the check, and mails the check and
payment stub back to the biller

Step 5 Post office delivers the check and payment stub to the biller's mailbox
or traditional lockbox service

Step 6 Biller or lockbox service opens the envelope, separates the check and
the payment stub, records the payment and updates the biller's accounts
receivable system.

--In-house

--Out-sourced to traditional lock box service

Step 7 Biller or lockbox service encodes and deposits the check and the bank
forwards the check to the Federal Reserve

Step 8 The Federal Reserve sorts each individual check and forwards them to the
consumer's bank

Step 9 For each check, the Federal Reserve debits the account at the consumer's
bank and credits the reserve account at the biller's bank

Step 10 Consumer's bank account is debited and the biller's bank account is
credited; the consumer's bank receives the check from the Federal
Reserve

Step 11 Consumer's bank prepares a monthly statement and sends it with the
canceled paper checks to the consumer

[END OF GRAPHIC]

<PAGE>

Internet Bill Presentment and Payment Process

In the past, consumers were only able to access basic billing information
and process payments electronically through the use of the telephone. With new
technology, consumers are able to obtain detailed billing information and
process payments through the Internet. These recent advances in technology have
provided and will continue to provide opportunities to dramatically simplify
the bill presentment and payment process, to greatly reduce the cost to the
biller and to improve the convenience for the consumer. The biller compiles
relevant data from its internal accounts receivable database and can either
make its billing information available through its own Internet web site, or
indirectly through Internet web sites of financial institutions and Internet
portals. Consumers are able to access their bill and account information
whenever they wish and may pay bills by clicking a payment symbol on the
computer screen. Funds are electronically transferred from the consumer's bank
account, through a payment network like the Federal Reserve System, to a
concentration account of an electronic lockbox service where all payments to a
particular biller are deposited and transferred to the biller's bank account.
Bill and account information is continuously updated to reflect consumer
payments. We estimate that the total cost to the biller and the consumer for
our Internet Bill Publishing Service ranges from $0.35 to $0.50 per
transaction. The graph below depicts the steps involved in the Internet bill
presentment and payment process in the instance where the biller's Internet web
site is the sole means through which its consumers access their bills:

[GRAPHIC DEPICTING THE 5 STEPS INVOLVED IN THE INTERNET BILL PRESENTMENT AND
PAYMENT SERVICE PROCESS APPEARS HERE, WITH THE FOLLOWING TEXT:]

1 A Co. creates an electronic bill:

A Created In-house, or

B Out-sourced to internet bill publisher

2 The consumer accesses the bill at A Co.'s Internet web site and initiates a
payment, and A Co.'s accounts receivable system receives instructions for
updating.

3 The payment funds are electronically transferred through the Federal Research
system to a concentration account of an electronic lockbox service.

4 All amounts for A Co. are electronically transferred to A Co.'s bank account
from the electronic lockbox provider.

5 The consumer's bank prepares a monthly statement and sends it to the consumer
or presents it electronically to the consumer.

[END OF GRAPHIC]

The Internet bill presentment process can be viewed as analogous to the
process of creating, distributing and selling books. A number of parties are
potentially involved in this process. The parties involved typically include
the following:

. Billers: The principal billers are retailers, utilities and financial
institutions that issue credit cards. Although there are thousands of
billers, we believe that a large portion of total bills generated are
produced by a concentrated number of billers. The biller would be
equivalent to the author in the book publishing analogy.

<PAGE>

. Publishers: The publisher compiles, formats and verifies the information
in the accounts receivable data base and then creates a bill for
presentment on the Internet. A publisher may be either the biller itself
or an entity, like us, that provides an outsourced publishing solution
for multiple billers. This publishing role is similar to the role of the
book publisher which takes the content provided by the author and
packages the book for distribution.

. Aggregators: An electronic biller may choose to engage one or more
aggregators which collect consumer bills from numerous publishers and
sort and present these bills to consumers through the Internet. These
aggregators enable, through presenters, a consumer to access account
information regarding multiple billers on a single web site, rather than
having to go to each individual biller's web site to access account
information. The aggregator performs a role similar to that of a book
distributor, which has arrangements with multiple publishers and retail
outlets to facilitate the distribution of the publishers' books to the
retail outlets.

. Presenters: Once an aggregator has received and sorted bills created by
the publishers, these bills can be presented on the web sites of one of
two types of presenters: financial institutions or Internet portals.
These presenters are comparable to the retail outlets and other means by
which consumers directly purchase books.

The following chart shows the players involved in the Internet bill
presentment process.

[GRAPHIC DEPICTING PRINCETON ECOM'S VIEW OF THE FOLLOWING "LAYERS OF PLAYERS"
INVOLVED IN THE INTERNET BILL PRESENTMENT PROCESS APPEARS HERE]

CONSUMERS

PRESENTERS

AGGREGATORS

PUBLISHERS

BILLERS

[END OF GRAPHIC]

<PAGE>

Growth of the Internet and Internet-based Financial Services

The Internet has experienced rapid growth and has developed into a
significant tool for global communications and commerce. Advances in online
security and payment mechanisms have encouraged businesses and consumers to
engage in electronic commerce. Forrester Research estimates that sales over the
Internet will increase from $7.8 billion in 1998 to $108 billion in 2003.
Internet-based financial services, like electronic brokerage and banking,
represent a significant portion of the electronic commerce market. The
attractiveness of Internet-based financial services stems in large part from
the speed of conducting financial transactions over the Internet, as well as
the ability of the Internet user to access extensive amounts of information.
Forrester Research estimates that the number of online brokerage accounts will
grow from 3.0 million in 1997 to 14.4 million by the year 2002 and that assets
managed online will reach $688 billion by the year 2002. Similarly, Forrester
Research estimates that online banking will grow from 2.4 million households in
1998 to 18 million in 2002. The Internet is also becoming a more significant
platform for broad consumer-based financial services like insurance, mortgages
and bill presentment and payment.

Outsourcing Opportunity

As the use of electronic bill presentment and payment grows, billers
choosing to accommodate customer demands must decide whether to develop
electronic bill presentment and payment capabilities internally or to outsource
the process entirely. Billers that choose to manage their own electronic bill
presentment and payment process may encounter a number of obstacles. To be in a
position to publish and achieve wide distribution of their bills, billers must
purchase, successfully integrate and maintain:

. software which enables the biller to parse and decode bill data print
streams;

. in-house servers which will update and display bill content;

. automated clearinghouse software which enables the biller to instruct
its bank to electronically debit consumer accounts;

. messaging software which enables the biller to communicate with multiple
aggregators;

. a dedicated interface with a major bank which enables the biller to
receive funds and data through automated clearinghouse transactions; and

. lockbox software which enables the biller to update internal accounts
receivable files.

In addition, once billers are capable of publishing and handling payments,
they must then make arrangements with multiple aggregators or presenters that
present bills for multiple billers.

Many billers lack the expertise to cost-effectively implement, maintain,
scale, enhance and service the hardware and software necessary to provide their
own electronic bill presentment and payment system and to develop and maintain
multiple relationships with aggregators or presenters and financial
institutions. An outsourced solution is attractive to billers because it allows
them to focus on their core competencies and to accelerate the time in which
they can offer electronic bill presentment and payment services to their
customers.

The Princeton eCom Solution

Our electronic bill publishing services provide a comprehensive, cost-
effective, outsourced process for billers desiring to reduce costs and to
provide their consumers with a convenient presentment and payment method. Our
electronic bill publishing services allow billers to publish bills to
consumers, by telephone and through the Internet, either directly through
billers' own web sites or indirectly through web sites of financial
institutions and Internet portals. Our services dramatically simplify the bill
presentment and payment process, providing the following key benefits:

Comprehensive, Cost-Effective Outsourcing. Our comprehensive solution
offers billers the full range of services necessary to outsource their entire
electronic bill presentment and payment process. Our services

32
<PAGE>

reduce the costs to and administrative burden on billers by eliminating the
need to develop and manage an in-house system and by capitalizing on our
economies of scale and implementation expertise.

Broad Distribution and Access. Our relationships with multiple aggregators
enable billers using our Internet bill publishing service to publish their
bills through multiple presenters, thereby providing their consumers with
numerous options of where and when to access and/or pay their bills. In
addition, our technology allows consumers to access their bills through the
telephone, the computer, personal digital assistants and a variety of other
devices.

Branding. In all aspects of our electronic bill publishing services, the
Princeton eCom name is virtually invisible to the consumer. Our fully
customized electronic-based consumer billing interface allows billers,
financial institutions and Internet portals to preserve the existing look and
feel of their web sites.

Reliability and Ease of Expansion. Our system architecture is designed to
ensure reliability through the use of parallel processing and redundant
hardware and software components. Currently, our system supports over 80
million accounts receivable records monthly and can be easily expanded.

Enhanced Security. We have integrated third-party licensed and internally-
developed technology with sophisticated third-party hardware to reduce the
potential for network security breaches. We maintain network and data center
surveillance 24 hours a day, seven days a week.

Ease of Implementation. Our services can be easily integrated with a
biller's existing internal accounts receivable systems. We enable billers to
provide electronic bill presentment and payment to their consumers without
modifications to their existing systems or to their processing and
reconciliation procedures.

The Princeton eCom Strategy

Our goal is to become a leading provider of Internet bill presentment and
payment services. We plan to achieve this goal by implementing the following
key strategies:

Further Penetrate Our Existing Customer Base. We believe that our existing
base of billers and financial institutions which do not currently use our
Internet bill publishing and payment service provides substantial opportunities
for expansion of this service. During the first quarter of 1999, 45 of our more
than 250 corporate customers used our electronic bill publishing services.
Eight of these customers used our Internet bill publishing service. Since March
31, 1999, six additional companies have begun to use our Internet bill
publishing service, for a total of fourteen Internet customers. We intend to
further penetrate this existing customer base by substantially expanding our
sales and marketing efforts and service offerings.

Expand Our Sales and Marketing Efforts. We are developing a sales and
marketing plan directed towards the largest billers in the United States that
do not currently use any of our services. To implement this sales and marketing
plan, we are recruiting a number of experienced sales professionals. To date,
we have spent a nominal amount on our sales and marketing efforts. We intend to
substantially increase these expenditures during the next several years. In
addition, we intend to expand our indirect sales channels by establishing
strategic relationships with companies that process paper bills for billers,
which should enable us to gain access to the biller bases of these companies.

Expand Our Distribution Channels. We intend to expand our distribution
channels by developing relationships with additional aggregators. Because
aggregators rely upon bill publishers with significant biller relationships, we
believe that aggregators will find us more attractive as our biller base
expands. To date, we have relationships with a number of aggregators, including
TransPoint, a Microsoft/First Data Corporation/Citicorp joint venture, and
Intuit.

Introduce New Services and Service Enhancements. We seek to remain on the
forefront of the developing Internet bill presentment and payment industry by
continuing to develop more advanced services designed to address our customers'
needs. We use customer feedback, including surveys, to design service
enhancements that meet evolving customer needs. Examples of service
enhancements which we have

33
<PAGE>

previously developed include interactive data capability, which enables
consumer-initiated bill analysis on the Internet, one-to-one marketing direct
from the biller to the consumer and electronic commerce transaction capability.
In some circumstances, we also develop specific applications to meet the needs
of particular customers. For example, we developed a system for Sallie Mae that
electronically updates student loan information.

Pursue Strategic Acquisitions. We intend to pursue strategic acquisitions
that complement our business. We may acquire companies to obtain additional
technologies, billers, services or experienced personnel.

Our Services

Our services are targeted at large billers and financial institutions.
Depending on the services provided and transaction volume, we generally charge
our customers between $0.10 and $0.50 for the processing of each bill payment.
Our current services are as follows:

<TABLE>
<CAPTION>
Service Description Benefits
------- ----------- --------
<S> <C> <C>
. 1-800-PayBill Service for accessing . Permits consumers to
Publishing Service billing information and access billing
paying bills by telephone information and to
make a bill payment in
as few as five
keystrokes
. Provides accurate and
prompt posting of bill
payments
. Enables the consumer
to set up automatic
payment of recurring
bills without
additional consumer
intervention
. Synchronized with
Internet Bill
Publishing: a payment
made through one
device is immediately
reflected on the other
device
. Internet Bill Publishing Service for publishing and . Bills are accessible
Service paying bills using the through the web sites
Internet of billers, financial
institutions and
Internet portals
. Allows for the
consolidation of
consumer bills from
multiple billers on
one web site
. Provides additional
value-added
capabilities like
real-time billing
information and one-
to-one marketing
. Allows billers to
expand the number of
consumers using the
service without
additional
infrastructure
investment
. Maintains biller or
web site brand name
. Can be modified to
biller specifications
. els Clearinghouse service for . Reduces payment
Electronic Lockbox Service consumer-initiated payments accounting errors
that originate from a through consumer
computer or phone account validation
procedures
. Provides the consumer
real-time access to
data through
dedicated, dial-up
facilities or virtual
private networks
. Enables biller to
provide timely
response to consumer
status inquiries
. Compatible with all of
our electronic
services
</TABLE>

34
<PAGE>

<TABLE>
<CAPTION>
Service Description Benefits
------- ----------- --------
<S> <C> <C>
. BTU Service that electronically . Processes balance
Balance Transfer Utility transfers balances from one transfers rapidly,
credit card institution to accurately and cost-
another effectively
. Protects the identity
of the new credit card
institution
. Provides the new
credit card
institution with a
report detailing all
transactions which
have been effected
. Remits aggregate
dollar amounts to the
recipient credit card
institution
. e-Collect Service that collects . Facilitates rapid debt
outstanding balances collection
electronically . Replaces manual
processing and
significantly reduces
collection costs and
human error
. Validates account
number information for
each collected payment
. Enables daily
reconciliation of the
collection process
. RDF Service that produces and . Enables payment
Remote Disbursement Facility disburses paper checks validation through an
electronic checkbook
that we maintain
. Provides consumers
with the information
on the front and back
of all checks,
including all
endorsements stamps
and notations
. Automatically
electronically
confirms addresses
with post office
databases
</TABLE>

Sales and Marketing

Historically, our sales and marketing efforts have involved specific face-
to-face meetings with a limited number of potential billers and financial
institutions and we have spent a nominal amount on these efforts. We are
developing a sales and marketing plan directed towards further penetrating our
existing base of billers that do not currently use our Internet bill publishing
and presentment service, while simultaneously targeting the largest billers in
the United States that do not currently use any of our services. To implement
this sales and marketing plan, we are recruiting a number of experienced sales
professionals. We intend to substantially increase our sales and marketing
efforts and expenditures over the next several years. In addition, we intend to
expand our indirect sales channels by establishing strategic relationships with
various financial institutions in order to enable us to gain access to the
biller bases of these companies. We also intend to further develop
relationships with aggregators in order to make our services more attractive to
billers.

We intend to use a variety of marketing programs to build market awareness
of Princeton eCom and our services and to generate new business. These programs
include:

. market research;
. service and strategy updates with industry analysts;
. public relations activities including press releases and featured news
articles;
. direct mail and relationship marketing;
. trade shows;
. speaking engagements; and
. web site marketing.

35
<PAGE>

Implementation Resources

Concurrent with our expanded sales and marketing efforts, we intend to
invest additional funds to strengthen our implementation resources. Our
implementation staff is responsible for all aspects of bringing a new customer
online and for resolving any technical issues which may arise. To date, this
process has been designed to meet our current sales volume. Additional
investment in implementation will enable us to meet the requirements of the
additional billers and financial institutions which we anticipate will result
from our expanded sales and marketing efforts. Our additional investment in
implementation resources will focus on additional programming and project
management resources and on new project management software.

Service Development

We use customer feedback, including surveys, to develop new services as
well as enhancements to our existing services. These new services and
enhancements are designed to meet the evolving needs of our customers. We also
develop, from time to time, specific services and service enhancements to meet
the needs of particular billers and financial institutions.

Our service development department currently consists of 17 software
developers who have extensive knowledge of, and practical experience with,
systems developed by Sun Microsystems, Microsoft and Oracle. Members of our
development team use hyper-text mark up language (HTML), along with desktop
tools such as Adobe PhotoShop and MicroSoft Image Composer.

We expense development costs as incurred. In 1998, we spent approximately
$895,000 on service development. We expect to significantly increase
expenditures in this area over the next several years.

Customers

During the first quarter of 1999, we serviced over 250 billers and
financial institutions, including eight customers who used both our telephone
and Internet bill publishing services. Since March 31, 1999, six additional
customers, from which we have yet to derive significant revenue, have begun
using our telephone and Internet bill publishing services, for a total of
fourteen Internet customers. We intend to continue to cross-market this service
to the balance of our existing customer base. No individual customer accounted
for more than 7% of our total revenues, or 11% of our service fee revenues, for
the three months ended March 31, 1999. The following is a list of our top 40
customers based on revenue for the three months ended March 31, 1999:

Telecommunications Financial Services
Bell Atlantic Mobile* Arrow Corporation
Lucent Technologies Consumer Allied Bond
Products, L.P.* Chase Manhattan Bank
Citibank Universal Card
Utilities Debt Control Center
Adelphia Cable Discover Card
Ameren Union Electric* First Union
Boston Gas Company First USA
Eastern Utilities* Ford Motor Credit Corp.
GPU (General Public Utilities) Great Lakes Bureau Liberty Mutual
Laclede Gas Insurance
Los Angeles Department of Water & Merchant Express
Power* NationsBank
Metropolitan St. Louis Sewer Ohio Savings Bank
District Sallie Mae
Michigan Consolidated Gas SPS (Sears Payment Systems)
NUI (National Utility Investors)* Sovereign Bank
Public Service Electric & Gas Stillwater National Bank
St. Louis Water
Southern California Edison* Travelers Express
Washington Gas* Vendor Payments (CFI)
Media and Retail Washington Mutual
Los Angeles Times Western Union
Sears

- --------
*Customers currently using both our telephone and Internet bill publishing
services.

36
<PAGE>

Technology

We have created a proprietary infrastructure by combining internal
expertise with advanced technology.

We have designed a system which is reliable, flexible, and can be easily
expanded to meet growth demands without significant cost or change. Our system
can handle an increase in transaction volume by simply making additions to the
core components such as data storage, central processing units and other
technological components. As of May 31, 1999, we support over 80 million bills
monthly. Our back-end systems have ample internal redundancy to ensure
reliability 24 hours a day, 7 days a week. Our system utilizes state-of-the-
art technologies developed by Novell, Oracle, Microsoft, Hewlett Packard and
Sun Microsystems. We employ technology such as mirrored storage devices and
redundant power supplies. As a means of protecting our data we have employed
offsite storage facilities. We recently established a Sungard hot site in
Philadelphia, Pennsylvania where our system can be mirrored in the event of an
equipment failure or a natural disaster at our Princeton, New Jersey site.

We implement industry best practices for data security rather than relying
on any single vendor's solution. Our local and wide area networks are
connected via firewall technology which provides several custom security
services.

Our network includes three core systems--our retail, wholesale and Digital
Scanline systems. These systems are based on open standards and interface with
many consumer input and output devices, financial institutions, payment
mechanisms and billing systems.

Our retail system, which provides for the publishing of bills to consumers
and allows consumers to pay their bills electronically, houses millions of
bills each day from our billers' internal accounting databases. Our real-time
processing engine publishes the data to various devices. We reduce the risk of
technological obsolescence of our system by using device-independent
interfaces. Our retail system interfaces with web servers, interactive
telephony and customer service interfaces.

Web servers act as an open platform for several forms of communication
through:

. Hyper-Text Mark-up Language, or HTML, based Internet bill publishing
service that allows billers to offer Internet bill presentment and
payment directly on their own web sites or indirectly on the web sites
of presenters;

. Open Financial Exchange-based communication, or OFX, that allows access
to Intuit's Quicken and, with some modifications, Microsoft's Money
personal financial manager programs;

. Biller Interface System, BIS, that allows access to aggregators like
TransPoint; and

. Electronic collection systems that allow close integration between us
and our customers through the deployment of extranets across the web
using a dual-certificate secure-sockets layer.

The same technology and data that support our interactive telephony and
customer service systems also support our web servers. This standardization
gives our customers seamless integration across each of our three core
systems. Consequently, a bill paid by any of these methods is immediately
reflected on a bill accessed through any of the other methods.

Our retail system communicates with aggregators through custom interfaces
designed by us. For example, we have customized software created by TransPoint
to allow us to interface with this aggregator. These custom interfaces allow
us to publish bills and accept payment instructions through aggregators.

Our wholesale system disburses payments and funds to the billers' bank
accounts through the Federal Reserve System's Fed-wire or the automated
clearinghouse system. Private networks are also used to make payments from a
consumer's checking account or credit card as necessary to complete the
payment process. Through els, our wholesale system also conveys both payments
and payment data information electronically to the respective biller, enabling
the biller to update its billing and accounts receivables systems.

37
<PAGE>

The Digital Scanline system ensures the veracity of data that is
transmitted from the retail system to the wholesale system for payment. Our
technology uses account validation to reduce processing errors and fraud. In
addition, we provide other payment services for financial institutions. These
payments are tested with Digital Scanline before being loaded into our
wholesale database. This process is designed to ensure that every payment
accepted by our wholesale system will post when transmitted to the biller.

Operational Controls

We have developed our own set of operating procedures and proprietary
processing management applications, controls and practices designed to minimize
transmission and processing related errors. We believe that our current
controls provide reasonable assurance that our processing environment:

. is stable;

. processes the data promptly and accurately; and

. reconciles incoming remittance data and funds with all related outgoing
data and funds prior to each transmission.

We use internally developed proprietary reconciliation control applications
that are managed and operated independently from the actual processing
environment. By using this approach we can confirm the accuracy of the outcome
of each transaction on both an aggregate customer level as well as on an
individual transaction basis. Our processes provide us with a real-time control
audit that is independent from any disruptions, disturbances, or malfunctions
of the live processing environment. Trained computer operators are responsible
for ensuring the accuracy of the data input to the system, and for reconciling
the remittance data and monetary transactions to the control totals. Any
reconciliation discrepancies are displayed on monitors and must be resolved
prior to transmission of remittance data and funds to billers and their banks.

Customer Support

Our customer support program is designed to provide high quality,
personalized customer support on a timely basis. We strive to achieve this
objective through the use of both internally developed monitoring and training
systems as well as customer surveys which have been designed to identify areas
in need of improvement and solicit ideas for future service needs. We have also
implemented internal procedures that are designed to bring unusual customer
support issues to the attention of senior management. We provide customer
service free of charge for our financial institution customers. In addition, we
offer to our billers, on a fee basis, an outsourcing service whereby we act as
their consumer support operation.

Billers. Each of our billers is assigned an account representative who
provides a direct point of contact for general inquiries and service requests.
This representative is responsible for coordinating the availability of
appropriate business and technical resources to respond to that particular
biller's service and support requirements. Escalation procedures are designed
to assure the availability of technical personnel on a 24 hour a day, seven
days a week basis. For fast resolution of payment inquiries, we offer some
billers customized on-line customer service interfaces. These interfaces enable
the biller to access real-time payment information that is stored in our
payment disbursement warehouse.

Financial Institutions. Each of our financial institution customers is
assigned a customer service representative who responds to requests for
information about consumers and payments. This representative provides the
financial institution with documentation regarding payments in sufficient
detail to enable the financial institution to track payment disbursement and
respond to inquiries.

Consumers. We operate a call center that answers all 1-800-PayBill, els and
Internet Bill Publishing related consumer inquiries. Each of our billers is
offered the opportunity to outsource its customer service function to our
experienced customer service staff.

38
<PAGE>

Competition

. ability to identify and respond to customer needs;

. technical expertise;

. quality of the service;

. price of the service;

. breadth of distribution; and

. possible preexisting relationships between companies that process paper
bills or lockbox service providers and our potential customers.

In addition to the foregoing, our Internet bill publishing service also
faces competitive pressures from various third-party software vendors, which
provide some of the software necessary for the development of an integrated,
in-house Internet bill presentment and payment service. In addition, these
companies could potentially leverage their existing capabilities and
relationships to enter the outsourced Internet bill presentment and payment
market.

Many of our actual and potential competitors have significantly greater
financial, marketing, technical, sales and customer support and other
resources, larger customer bases and longer relationships with customers than
we do. In addition, some of these potential competitors may be able to devote
greater resources to the development, promotion and sale of their services,
adopt more aggressive pricing strategies and devote substantially more
resources to the development of technology and systems development than we are
able to.

Increased competition may result in reduced operating margins, loss of
market share and diminished value of our services, as well as different
pricing, service and marketing strategies. We may not be able to compete
successfully against current and future competitors, and competitive pressures
we face could have a material adverse effect on our business, operating results
and financial condition.

Proprietary Rights

We have registered the trademarks Digital Scanline, els Electronic Lockbox
Service, and 1-800-PayBill. We have also applied for registration for the
trademark e-Collect. We protect our intellectual property rights through a
combination of trademark, copyright and trade secrets laws. We cannot assure
you that the steps we have taken to protect our intellectual property rights,
however, will be adequate to deter misappropriation of those rights. We may not
be able to detect unauthorized use of and take appropriate steps to enforce our
intellectual property rights. It may also be possible for unauthorized third
parties to copy certain portions of our proprietary information or reverse
engineer the proprietary information utilized in our services.

In order to limit access to and disclosure of our proprietary information,
all of our employees are subject to confidentiality and invention assignment
arrangements, and we enter into nondisclosure agreements with third-parties
with whom we do business. We cannot assure you that these arrangements or other
steps we have taken or will take in the future will be sufficient to protect
our technology from infringement or misappropriation or deter independent
development of similar or superior technologies by others.

Many parties are actively developing Internet billing and telephone
analysis systems technologies. We expect these developers to continue to take
steps to protect these technologies, including seeking patent protection. For
example, we are aware that a number of patents have been issued in the areas of
web-based information indexing and retrieval, online direct marketing and
telephone statistical analysis systems. As a

39
<PAGE>

result, we believe that disputes over the ownership of these technologies are
likely to arise in the future. We anticipate that additional third-party
patents will be issued in the future. We cannot be certain that our services do
not infringe valid patents, copyrights or other intellectual property rights
held by third parties.

Furthermore, we cannot assure you that third parties will not claim that we
have infringed upon their patents or other proprietary rights. From time to
time, we expect to be subject to claims by third parties in the ordinary course
of our business, including claims of alleged infringement of trademarks,
copyrights and other intellectual property rights of third parties. Although
there has not been any litigation relating to these claims to date, these
claims and any resultant litigation, should they occur, would subject us to
significant liability for damages and would result in the invalidation of our
proprietary rights. In addition, even if we prevail the litigation could be
time-consuming and expensive to defend and could result in diversion of our
time and attention, any of which would materially and adversely affect our
business, operating results and financial condition. Any claims or litigation
from third parties may also result in limitations on our ability to use the
trademarks and other intellectual property subject to these claims or
litigation, unless we enter into agreements with the third parties. However,
these agreements may be unavailable on commercially reasonable terms, or at
all.

Government Regulation

Our management believes that we are not required to be licensed by the
Office of the Comptroller of the Currency, the Federal Reserve Board, or other
federal or state agencies that regulate or monitor banks or other types of
providers of financial services. We may, however, be periodically audited by
banking authorities since we are a supplier of services to financial
institutions. We cannot assure you that a federal or state agency will not
attempt, either now or in the future, to require that providers of services
like ours be licensed. This could impede our ability to do business in the
regulator's jurisdiction. A number of states have legislation regulating or
licensing check sellers or money transmitters, which may require us to register
under such legislation in specific instances. Management does not believe that
any state or federal legislation of this type would materially affect our
business. We may be subject to audit or examination under any of the foregoing
requirements. Violations by us of these requirements could limit or restrict
our access to the payment clearance systems or our ability to obtain access to
such systems from banks. Further, the Federal Reserve rules provide that we can
only access the Federal Reserve's automated clearinghouse system through a
bank. If the Federal Reserve rules were to change to further restrict access to
the automated clearinghouse system or limit our ability to provide automated
clearinghouse transaction processing services, our business would be materially
and adversely affected.

In conducting various aspects of our business, we are subject to laws and
regulations relating to commercial transactions generally, such as the Uniform
Commercial Code. For consumer transactions, we are also subject to the
electronic funds transfer rules embodied in Regulation E issued by the Federal
Reserve Board. The Federal Reserve's Regulation E implements the Electronic
Fund Transfer Act, which was enacted in 1978. Regulation E protects consumers
engaging in electronic transfers, and sets forth basic rights, liabilities and
responsibilities of consumers who use electronic payment services and of
financial institutions that offer these services. Among other things, for us,
Regulation E sets forth disclosure and investigative procedures. For consumers,
Regulation E establishes procedures and time periods for reporting unauthorized
use of electronic money transfer services and limitations on the consumer's
liability if the notification procedures are followed within prescribed
periods. Such limitations on the consumer's liability may result in liability
to us.

Given the expansion of the Internet commerce market, it is possible that
the Federal Reserve might revise Regulation E or adopt new rules for electronic
funds transfer affecting users other than consumers. Because of growth in the
Internet commerce market, Congress has held hearings on whether to regulate
providers of services and transactions in the Internet commerce market. It is
possible that Congress or individual states could enact laws regulating the
Internet commerce market. If enacted, these laws, rules, and regulations could
be imposed on our business and industry and could have a material adverse
effect on our business, operating

40
<PAGE>

results and financial condition. Federal, local and state laws and regulations
may be adopted in the future to address issues like:

. user privacy, including restrictions on the use of customer
information;

. pricing;

. online content regulation;

. taxation; and

. the characteristics and quality of online products and services.

Any new laws or regulations relating to the Internet could have a material
and adverse effect on our business, operating results and financial condition.

Legal Proceedings

We are not involved in any material legal proceeding nor are we aware of
any threatened legal action. We are involved, from time to time, in litigation
incidental to the conduct of our business. We believe that any potential
adverse determination in such litigation will not have a material adverse
effect on our business, operating results and financial condition.

Employees

As of May 31, 1999, we had 95 employees, employed in implementation, sales
and marketing, service development, finance and administration. We have never
experienced a work stoppage and none of our employees is represented by a labor
union. Except for certain members of management who will execute employment
agreements prior to the closing of this offering, our employees work on an at-
will basis. We consider our relations with our employees to be good.

Facilities

We currently lease approximately 11,000 square feet of space at our
headquarters in Princeton, New Jersey under a lease that expires on August 31,
2002. We believe that our existing facility is adequate for our current needs
and that suitable additional space will be available, on acceptable terms, when
additional space is needed.

41
<PAGE>

MANAGEMENT

Directors and Executive Officers

Our executive officers and directors, their respective ages and their
positions with us as of May 31, 1999 are as follows:

<TABLE>
<CAPTION>
Name Age Position
- ---- --- ---------------------------------------------------
<S> <C> <C>
Donald C. Licciardello.. 53 Chairman and Chief Executive Officer
Ronald W. Averett....... 43 President and Chief Operating Officer
C. Richard Corl......... 61 Executive Vice President, Secretary and Director
Christopher S. Sugden... 29 Senior Vice President and Chief Financial Officer
Donald Brenton.......... 43 Senior Vice President and Chief Information Officer
Steven D. Greenwood..... 34 Senior Vice President, Marketing
Jayson A. Goldberg...... 37 Senior Vice President, Sales
Parris H. Holmes, Jr.(1) 55 Director
William C. Jennings(1).. 60 Director
Robert S. McClane....... 59 Director
</TABLE>
- --------
(1)Member of the Compensation Committee.

Donald C. Licciardello. Mr. Licciardello, one of our founders, has served
as our Chief Executive Officer and Chairman of the Board since our inception in
1984. From 1984 to March 1999, Mr. Licciardello also served as our President.
For seven years prior to our founding, Mr. Licciardello was a professor of
theoretical solid states physics at Princeton University. While at Princeton,
Mr. Licciardello co-authored a paper on two dimensional quantum diffusion which
was selected as one of the seminal works of the past 100 years by the American
Physical Society. From 1977 to 1984, Mr. Licciardello served as a technical
consultant in theoretical physics to IBM, Schlumberger, Bell Laboratories and
RCA Laboratories. From 1974 to 1976, Mr. Licciardello was also a Science
Research Council Fellow at the University of Birmingham, England. Mr.
Licciardello holds Ph.D., M.S. and B.S. degrees in Physics.

Ronald W. Averett. Mr. Averett has served as our President and Chief
Operating Officer since March 1999. Prior to joining us, from April 1998 to
December 1998 Mr. Averett was a Senior Vice President and Credit Card Division
Executive for Chevy Chase Bank's Credit Card Business. Mr. Averett contributed
to the spin-off of this division from Chevy Chase Bank in December 1998. From
January 1988 to April 1998, Mr. Averett held various executive positions in
Operations, Risk Management and Marketing with Advanta Corp, most recently as
the Senior Vice President and member of the Business Policy Committee of its
Credit Card unit. From June 1980 to December 1987, Mr. Averett held various
executive positions with Citibank, most recently as a Vice President and
Operations Consultant.

C. Richard Corl. Mr. Corl has served as our Executive Vice President since
June 1993, Secretary since May 1995, and as one of our directors since
September 1998. For more than 20 years, Mr. Corl held various executive
positions with TeleCheck Services, Inc., including Vice President of Franchise
Relations and Vice President of Marketing and Director of Strategic Planning.
Mr. Corl founded his own business in 1976 with the launch of part of the
TeleCheck Services, Inc. franchise network and served as its President and
Chief Executive Officer. In 1981, Mr. Corl sold this business to Tymshare,
Inc., which is now a part of First Data Corporation.

Christopher S. Sugden. Mr. Sugden has served as our Senior Vice President
since May 1999, and as our Chief Financial Officer since February 1999. Mr.
Sugden also served as one of our Vice Presidents from February 1999 to May
1999. Prior to joining us, from June 1996 to February 1999, Mr. Sugden was the
Director of Finance and Operations of B.Y.O.B. Freedom Ventures, Inc.,
publishers of two magazines. From September 1992 to June 1996, Mr. Sugden held
various positions with Coopers & Lybrand LLP, now known as
PricewaterhouseCoopers LLP, including supervisor. Mr. Sugden is a certified
public accountant and a member of the American Institute of Certified Public
Accountants.

42
<PAGE>

Donald Brenton. Mr. Brenton has served as Senior Vice President and Chief
Information Officer since May 1999. Prior to joining us, from September 1997 to
May 1999, Mr. Brenton was Director of Operations, Business Administration
Services of Towers Perrin. From September 1987 to September 1997, Mr. Brenton
was associated with ADVANTA Corp., most recently as Manager, Network Operations
and Engineering.

Steven D. Greenwood. Mr. Greenwood has served as Senior Vice President,
Marketing since April 1999. Prior to joining us, from October 1993 to April
1999, Mr. Greenwood was Senior Vice President, Marketing, of TeleBank. From
July 1990 to June 1993, Mr. Greenwood was a Financial Analyst, Corporate
Finance and Budgeting, for Bell Atlantic, Inc.

Jayson A. Goldberg. Mr. Goldberg has served as Senior Vice President, Sales
since June 1999. Prior to joining us, from May 1996 to May 1999, Mr. Goldberg
was the Associate Publisher for B.Y.O.B. Freedom Ventures, Inc., publishers of
two magazines. From May 1988 to May 1996, Mr. Goldberg was associated with
Times Mirror Magazines, most recently as Eastern Regional Sales Director for
Field & Stream and Outdoor Life.

Parris H. Holmes, Jr. Mr. Holmes has served as one of our directors since
September 1998. Mr. Holmes is currently Chairman of the Board and Chief
Executive Officer of Billing Concepts Corp., a significant stockholder of
Princeton eCom, which provides billing services to the telecommunications
industry, positions which he has held since May 1996. From September 1986 to
August 1996, Mr. Holmes served as Chief Executive Officer of USLD
Communications Corp., a long distance telecommunications provider, and from
September 1986 to June 1997, also served as its Chairman of the Board. Mr.
Holmes currently serves as Chairman of the Board of Tanisys Technology, Inc., a
developer, manufacturer and marketer of computer peripheral equipment, and as a
director of Sharps Compliance Corp., a provider of mail sharps disposal
services for certain types of medical sharps (needles, syringes and razors)
products. On December 18, 1996, the SEC filed a civil injunctive action in the
United States District Court for the District of Columbia alleging that Mr.
Holmes failed to file timely twelve Section 16(b) reports regarding certain
1991 and 1992 transactions in the stock of USLD Communications Corp. as
required by Section 16(a) of the Securities Exchange Act of 1934. Section 16(a)
requires officers and directors of public companies to file reports with the
SEC regarding their personal transactions in the securities of such public
companies. Mr. Holmes settled this action on December 18, 1996, without
admitting or denying the allegations of the complaint, by consenting to the
entry of an injunction with respect to these requirements and paying a civil
penalty of $50,000. The staff of the SEC also has notified Mr. Holmes of its
decision to terminate its investigation of trading in the securities of USLD
Communications Corp. and the securities of Value-Added Communications, Inc. (In
the Matter of Trading in the Securities of Value-Added Communications, Inc.
(HO-2765)).

William C. Jennings. Mr. Jennings has served as a director of the Company
since July 1999 . Mr. Jennings served as one of our directors from September
1998 until March 15, 1999 at which time he elected to resign as a result of
uncertainty as to PricewaterhouseCoopers LLP's current policy regarding the
ability of its partners to serve as directors of for-profit companies. Mr.
Jennings had served with predecessors of PricewaterhouseCoopers LLP from 1964
to 1985 and from 1992 to June 1999. He provided risk management and internal
control consulting services for clients. He has been featured on many risk and
control forums, as well as CNN, The New York Times, Forbes, Fortune, Business
Week, CFO, American Banker and many industry-specific publications. Until the
recent merger with Pricewaterhouse, Mr. Jennings had led the development of
Coopers & Lybrand LLP's Internal Control Services practice into a $150 million
business. During his career at Coopers & Lybrand LLP, Mr. Jennings was the lead
partner for some of that firm's largest clients, including Philip Morris,
Shearson Lehman Brothers, Midlantic Bank, Lipton and New Jersey Bell. From 1988
to 1991, Mr. Jennings served as Executive Vice President and Chief Financial
Officer of Banker's Trust. From 1985 to 1988, Mr. Jennings served as Senior
Executive Vice President, Administration of Shearson Lehman Brothers.

43
<PAGE>

Robert S. McClane. Mr. McClane has served as one of our directors since
July 1999. Mr. McClane is currently owner of McClane Partners, LLC, a
consulting and investment firm. Mr. McClane also currently serves as Vice
Chairman of Tobin International, Inc., a provider of geographic information
systems based land management solutions. Mr. McClane also currently serves as a
director of Cullen/Frost Bankers, Inc., Frost National Bank and Benefit
Planners, Inc., a provider of medical benefits administration and claims
management services. From April 1985 to May 1997, Mr. McClane served as
President of Cullen/Frost Bankers, Inc. Mr. McClane has participated in bank
regulatory and legislative issues as a member of the American Bankers
Association Leadership Council and the Association of Bank Holding Companies,
now part of the Banker's Roundtable.

Board of Directors and Committees

Our Board is divided into three classes of directors serving staggered
three-year terms. As a result, approximately one-third of our board is elected
each year. Currently, the term of office of Messrs. Corl and Simmons expires at
the annual meeting of stockholders to be held in 2000 and the term of office of
Messrs. Licciardello and Holmes expires at the annual meeting to be held in the
year 2001. The director up for election at the 1999 annual meeting is currently
vacant. Our staggered board, together with advanced notice procedures which
will be added to our by-laws prior to the completion of this offering, may
deter a stockholder from removing incumbent directors and filling vacancies
with the stockholder's own nominees in order to gain control of our board. See
"Description of Capital Stock -- Certificate of Incorporation and By-law
Provisions."

We have established a compensation committee which reviews and approves the
compensation and benefits for our key executive officers, administers our
employee benefit plans and makes recommendations to our board regarding such
matters. The compensation committee currently consists of Messrs. Holmes and
Jennings.

We will establish an audit committee, consisting of at least two
independent directors, within 90 days following the completion of this
offering. Our audit committee will be responsible for reviewing our audited
financial statements and accounting practices, and considering and recommending
the employment of, and approving the fee arrangements with, independent
accountants for both audit functions and for advisory and other consulting
services.

Compensation Committee Interlocks and Insider Participation

Prior to October 20, 1998, our board did not have a compensation committee
and all compensation decisions were made by the full board. Messrs.
Licciardello and Corl did not participate in board deliberations with respect
to their individual compensation. Subsequent to October 20, 1998, the
compensation committee has made compensation decisions with respect to our key
executive officers, including the Chief Executive Officer and the President.
None of our executive officers serves as a member of the board of directors or
compensation committee of any entity that has one or more of its executive
officers serving as a member of our board or compensation committee. Our
compensation committee currently consists of Messrs. Holmes and Jennings.

Director Compensation

Employee directors do not receive compensation for their service on our
board. Non-employee directors are awarded 10,000 stock options under our Non-
Employee Director Plan for each year of service on our board. See "--Non-
Employee Director Plan."

44
<PAGE>

Executive Compensation

The following table sets forth the compensation paid, earned or accrued for
all services rendered to us in all capacities during the year ended December
31, 1998 by our Chief Executive Officer and our other most highly compensated
executive officers, other than our Chief Executive Officer, whose aggregate
cash and cash equivalent compensation exceeded $100,000.

Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
------------
Annual Compensation Awards
-------------------- ------------
Securities
Other Annual Underlying
Name and Principal Position Year Salary Compensation Options
<S> <C> <C> <C> <C>
Donald C. Licciardello,................ 1998 $52,000 $198,000(1) 90,000
President and Chief
Executive Officer
C. Richard Corl,....................... 1998 100,000 -- 60,000
Executive Vice President
and Secretary
Lawrence Greenberg,.................... 1998 100,000 -- 90,000
Vice President and
Chief Information Officer
</TABLE>
- --------
(1)Reflects personal expenses paid on Mr. Licciardello's behalf.

45
<PAGE>

Stock Option Grants

The following table sets forth information regarding stock options granted
to the officers named in the Summary Compensation Table during 1998. No stock
appreciation rights were granted during 1998.

Option Grants in Fiscal 1998

<TABLE>
<CAPTION>
Individual Grants
-------------------------------------------------
Percent Potential Realizable Value
Number of of Market At Assumed Annual
Securities Total Price Rates of Stock Price
Underlying Options On Date Appreciation For
Options Granted Exercise of Option Term (2)
Granted in Price Grant Expiration --------------------------
Name (#) 1998(1)($/Share) ($/Share) Date (0%) (5%) (10%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Donald C. Licciardello.. 90,000(3) 7.3% $0.03 $4.00 10/20/03 $357,000 $456,461 $576,784
C. Richard Corl......... 60,000(3) 4.9 0.03 4.00 10/20/03 238,000 304,308 384,522
Lawrence Greenberg...... 60,000(4) 4.9 0.03 0.70 03/01/03 40,000 51,604 65,641
30,000(4) 2.4 4.00 4.00 12/21/08 -- 75,467 191,249
</TABLE>
- --------
(1) We granted options to purchase a total of 1,225,500 shares of common stock
during the fiscal year ended December 31, 1998.
(2) Amounts reported in these columns represent amounts that may be realized
upon exercise of options immediately prior to the expiration of their term
assuming the specified compounded rates of appreciation (0%, 5% and 10%) on
our common stock over the term of the options. These assumptions are based
on rules promulgated by the SEC and do not reflect our estimates of future
stock price appreciation. Actual gains, if any, on the stock option
exercises and common stock holdings are dependent on the timing of the
exercise and the future performance of our common stock. We cannot assure
you that the rates of appreciation assumed in this table can be achieved or
that the amounts reflected will be received by the option holder.
(3) Options to purchase 30,000 shares of common stock vested on October 20,
1998 and options to purchase an additional 30,000 shares of common stock
will vest on each anniversary thereafter.
(4) These options vest and become fully exercisable as to 25% on the first
anniversary of the date of grant and as to an additional 25% on each
anniversary thereafter until all these options are fully vested and
exercisable.

Year-End Option Values

The following table sets forth information concerning the number and year
end value of unexercised options held by each of the officers named in the
Summary Compensation Table at December 31, 1998. None of the Named Executive
Officers exercised stock options or stock appreciation rights in the year ended
December 31, 1998.

Fiscal 1998 Year-End Option Values

<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised "In-the-Money" (1)
Options at Fiscal Options at Fiscal
Year-End Year-End
------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C>
Donald C. Licciardello..... 30,000 60,000 $119,000 $238,000
C. Richard Corl............ 30,000 30,000 119,000 119,000
Lawrence Greenberg......... 30,000 150,000 119,000 476,000
</TABLE>
- --------
(1) Options are "in-the-money" if the fair market value of the underlying
securities exceeds the exercise price of the options. The amounts set forth
represent the difference between $4.00 per share, the fair market value of
our common stock issuable upon exercise of options at December 31, 1998 (as
determined by our board), and the exercise price of the option, multiplied
by the applicable number of options.

46
<PAGE>

Stock Option Plan

Our Amended 1996 Stock Option Plan, which became effective on July 1, 1996
and was amended in December 1998, provides for the granting of incentive stock
options intended to qualify under Section 422 of the Internal Revenue Code
("incentive stock options"), and stock options not intended to qualify as
incentive stock options ("non-qualified stock options"). All of our officers,
key employees and consultants are eligible to participate in the Stock Option
Plan. The total number of shares of common stock which we may issue under the
Stock Option Plan is 4,500,000. Under present law, incentive stock options may
only be granted to our employees and employees of our subsidiaries.

The Stock Option Plan is administered by our compensation committee which
has the authority to:

. construe and interpret the plan;

. create, amend and rescind rules and regulations for the plan;

. determine the individuals entitled to participate in the plan;

. determine the timing of specific option grants, the number of options to
be granted, the vesting schedule for the options and their exercise
price;

. determine whether the options granted will be incentive stock options or
non-qualified stock options; and

. make all other determinations which may be necessary or advisable for
the administration of the plan.

Our compensation committee may grant options at an exercise price less
than, equal to or greater than the fair market value of our common stock on the
date of grant. Under present law, incentive stock options and options intended
to qualify as performance-based compensation for purposes of Section 162(m) of
the Internal Revenue Code, may not be granted at an exercise price less than
the fair market value of our common stock on the date of grant or less than
110% of the fair market value of our common stock in the case of incentive
stock options granted to optionees holding more than 10% of our voting power.
Incentive stock options may not be assigned or transferred during the lifetime
of the holder except as may be required by law. The maximum term of each stock
option granted under the Stock Option Plan to persons other than 10%
stockholders is ten years from the date of grant.

The Stock Option Plan permits the optionee to determine how they will pay
the exercise price of their options. The plan provides that the option price
may be paid:

. in cash;

. with shares of common stock valued at the fair market value of the
common stock on the date of exercise;

. in cash by a broker-dealer to whom the holder of the option has
submitted an exercise notice consisting of a fully endorsed option;

. through the surrender of options then exercisable valued at the excess
of the aggregate fair market value of the common stock subject to such
option on the date of exercise over the aggregate option price of such
common stock;

. by directing us to withhold such number of shares of common stock
otherwise issuable upon exercise of the option having an aggregate fair
market value on the date of exercise equal to the exercise price of the
option; or

. by some other method of payment as may be authorized by our compensation
committee or any combination of the foregoing payment options as our
compensation committee may permit in its sole discretion.

47
<PAGE>

No incentive stock option awards may be granted under the Stock Option Plan
after June 30, 2006. Our compensation committee may, at any time, terminate,
suspend or modify the Stock Option Plan, except that no amendment or revision
may, unless appropriate stockholder approval is obtained, increase the maximum
number of shares of common stock in the aggregate for which we may grant
options under the Stock Option Plan, change the minimum purchase price of an
incentive stock option, increase the maximum term of an incentive stock option,
or grant options to persons not then currently contemplated by the plan. In
addition, no termination, suspension or modification of the Stock Option Plan
may adversely affect any right acquired by an optionee before the date of any
termination, suspension or modification without the optionee's consent.

The Stock Option Plan provides that outstanding options vest in their
entirety and become exercisable in the event we undergo a change of control. A
change of control will be deemed to occur if:

. a person or group becomes the beneficial owner of more than 50% of the
total voting power of our outstanding stock; or

. there occurs a change in the majority of the members of our board from
one year to the next, except any changes approved by the former board of
directors.

As of May 31, 1999, there were (1) outstanding options under the Stock
Option Plan to purchase an aggregate of 2,442,900 shares of common stock at a
weighted average price of $2.06, (2) outstanding options under the Stock Option
Plan to purchase an aggregate of 350,100 shares of common stock at the initial
public offering price, and (3) 1,636,050 additional shares of common stock
reserved for future option grants.

As soon as practicable following completion of this offering, we intend to
file with the SEC a registration statement on Form S-8 covering the shares of
common stock underlying options granted and reserve for future issuance under
the Stock Option Plan.

Non-Employee Director Plan

Our 1998 Non-Employee Director Plan, which was approved by our board on
October 20, 1998 and became effective on October 20, 1998. It provides for the
grant of non-qualified stock options to our directors. The Director Plan
provides for the issuance of up to 600,000 shares of common stock upon exercise
of options.

Under the terms of the Director Plan, each non-employee director who was a
director on the date the plan went into effect received options to purchase a
number of shares of common stock equal to the product of the number of years he
was elected to serve as a director multiplied by 10,000. These options vest as
to 10,000 shares on the date of grant and on each of the first two
anniversaries of the date of grant, subject to a maximum of two anniversaries.
Further, non-employee directors are also entitled to receive on the first
business day after each of our annual meetings of stockholders at which the
director is re-elected to the board options to purchase an additional number of
shares equal to the number of years he or she is elected to the Board
multiplied by 10,000. These options would vest under the same terms discussed
above. In addition to the automatic grants provided by the plan, non-employee
directors may also receive additional grants of options at the discretion of
our compensation committee. The exercise price of each option under the
Director Plan, other than options granted on October 20, 1998, will be 100% of
the fair market value of our common stock on the date of grant. Each option
will have a term of six years.

The Director Plan provides that outstanding options vest in their entirety
and become exercisable in the event we undergo a change of control. For
purposes of the Director Plan, change in control has the same meaning given
such term in the Stock Option Plan.

The exercise price may be paid in cash or with shares of common stock
valued at the fair market value of the stock on the exercise date.

48
<PAGE>

As of May 31, 1999, there were outstanding options under the Director Plan
to purchase an aggregate of (1) 195,000 shares of common stock at a weighted
average price of $0.03 and (2) 375,000 additional shares of common stock
reserved for future option grants.

As soon as practicable following the completion of this offering, we also
intend to file a Registration Statement on Form S-8 covering the shares of
common stock underlying options granted, or to be granted, under the Director
Plan.

401(k) Plan

Our employees participate in our 401(k) profit sharing plan, a defined
contribution plan intended to qualify under Section 401 of the Internal Revenue
Code. All personnel who have completed one year of service with us are eligible
to participate and may enter the plan as of the first day of January or July.
Participants may make pre-tax contributions to the plan of up to 15% of their
eligible earnings, subject to a statutorily prescribed annual limit. We may
make matching contributions on a discretionary basis to the plan. Each
participant is fully vested in his or her contributions, and any investment
earnings thereon. Contributions by the participants or us, and the income
earned on such contributions, are generally not taxable to the participants
until withdrawn. Contributions by us, if any, are generally deductible by us
when made. Contributions are held in trust as required by law. Individual
participants may direct the trustee to invest their accounts in authorized
investment alternatives. In 1998, we did not make any matching contributions.
In 1999, we have begun to match 100% of all employee contributions up to 6% of
that employee's annual base salary.

Employment Agreements

We have entered into an employment agreement with Mr. Averett pursuant to
which Mr. Averett has agreed to serve full time as our President and Chief
Operating Officer until March 30, 2003, unless earlier terminated in accordance
with the terms of his agreement. Mr. Averett's annual base salary under the
agreement is $200,000 per year. In addition, Mr. Averett was granted options to
purchase 300,000 shares of our common stock at $5.33 per share, which options
will vest as to 25% on each anniversary. Mr. Averett's employment agreement
also provides for vacation and reimbursement of business-related expenses.

In addition, we have entered into an employment agreement with Mr. Sugden,
pursuant to which Mr. Sugden has agreed to serve full time as our Vice
President and Chief Financial Officer until February 15, 2003, unless earlier
terminated in accordance with the terms of his agreement. Mr. Sugden's annual
base salary under the agreement is $100,000 per year. In addition, under the
terms of his agreement Mr. Sugden was granted options to purchase 150,000
shares of our common stock at $4.00 per share, which options vest as to 25% on
each anniversary, and will be entitled to receive bonuses based on the
achievement of performance goals. Mr. Sugden's employment agreement also
provides for vacation and reimbursement of business-related expenses.

Pursuant to each employment agreement, if the executive is terminated for
"cause," as defined within the employment agreements, we will be required to
pay the executive, within ten days following this termination, any unpaid base
salary accrued through the date of termination and we will be required to
reimburse the executive for reasonable business expenses incurred prior to that
date. If we terminate Mr. Averett's employment without cause, we will be
required to pay him any unpaid base salary accrued through the date of
termination, plus an additional $200,000 (or $400,000 if he terminates his
employment as a result of a change in control). For purposes of the employment
agreements, a change in control has the same meaning as in the Stock Option
Plan. If we terminate Mr. Sugden's employment without cause, we will be
required to pay him any unpaid base salary accrued through the date of
termination, plus three months salary, at the then current rate, and his
options will vest as if his termination date was twelve months after the actual
termination date. After termination of Mr. Sugden's employment, he will be
entitled to exercise his exercisable options for a fifteen day period. We will
be required to reimburse Mr. Averett and Mr. Sugden for reasonable business
expenses incurred prior to the date of termination. We will be required to pay
the executives their unpaid base salary within 30 days following a termination
without cause, but can, at our option, pay Mr. Averett amounts in

49
<PAGE>

excess of his base salary in equal monthly installments over the 12-month
period following the date of termination and pay Mr. Sugden amounts in excess
of his base salary in equal installments over three months.

Each of Messrs. Averett and Sugden's employment agreements also provides
that the executive will not, during a one year period after termination,
without our prior written consent, directly or indirectly conduct or engage in
or be associated with any person or entity which conducts or engages in
electronic bill payment, electronic bill publishing or electronic bill
presentment. Each of the employment agreements also provides that the
executives shall not disclose confidential information and may not interfere
with, disrupt or attempt to disrupt the relationship, contractual or otherwise,
between us or any of our subsidiaries and our respective customers or
employees.

50
<PAGE>

CERTAIN TRANSACTIONS

Stock Purchases and Registration Rights

In September 1998, we sold 2,493,870 shares of our common stock to Billing
Concepts, a publicly traded corporation with stock listed on the Nasdaq Stock
Market, for an aggregate purchase price of $10.0 million. Under the terms of
the stock purchase agreement for this sale, the parties agreed, among other
things, that (1) in the event that Billing Concepts desires to sell its shares
of common stock, we have a right of first refusal to purchase such shares, (2)
in the event that we offer, sell or grant any option to purchase or otherwise
dispose of any of our equity-equivalent securities or promissory notes in a
transaction intended to be exempt or not subject to registration under the
Securities Act of 1933, except under any employee, officer or director stock
option plan or through mergers or acquisitions not designed to raise capital
approved by our stockholders, Billing Concepts shall have a right of first
refusal to purchase such securities, and (3) Billing Concepts has the right, so
long as it owns at least 10% of our common stock, to have two representatives
on our board of directors. In addition, the agreement provides that if our
working capital deficit at June 30, 1998 was in excess of $8.5 million, then
Billing Concepts had a right to purchase additional shares of our common stock
at a price of $4.01 per share. As a result of our June 30, 1998 working capital
deficit having exceeded $8.5 million, on March 30, 1999, we sold 134,376 shares
of common stock to Billing Concepts for $538,848. In connection with its
acquisition of our stock, Billing Concepts entered into a voting agreement with
Mr. Licciardello, our Chairman and Chief Executive Officer. Under the terms of
this voting agreement, as amended, Mr. Licciardello, the Donald Licciardello
Family Limited Partnership and Billing Concepts have agreed to vote all of
their respective shares of common stock to elect to our board the two
individuals designated by Billing Concepts and three members designated by Mr.
Licciardello. As a result of this voting agreement, Billing Concepts has
appointed two of its executive officers, Parris H. Holmes, Jr. and Kelly E.
Simmons, to serve as directors on our board. In addition, Mr. Licciardello and
the Donald Licciardello Family Limited Partnership agreed to have any
transferee or purchaser of any of their shares of common stock become a party
to the voting agreement, other than purchasers pursuant to sales in a
registered public offering or under Rule 144. The voting agreement
automatically terminates when Billing Concepts ceases to own 10% of our issued
and outstanding common stock. The total number of shares covered by the voting
agreement is 9,620,970.

At our request, the underwriters will reserve up to 150,000 shares of our
common stock for sale at the initial public offering price for Billing Concepts
Corp., one of our existing stockholders that owns 23.2% of our common stock as
of May 31, 1999, which has expressed a non-binding interest in acquiring these
shares.

After this offering, Billing Concepts will be entitled to register under
the Securities Act up to 450,000 shares which it has an option to purchase from
Donald C. Licciardello and C. Richard Corl. Under the terms of the registration
rights agreement between us and Billing Concepts, if we propose to register any
of our securities under the Securities Act, Billing Concepts will be entitled
to notice of such registration and is entitled to include up to 450,000 of its
shares in the registration statement. We will bear the costs associated with
this registration, except for any of Billing Concepts own counsel and
accountants and any transfer taxes or underwriting discounts or commissions,
applicable to the shares being registered for Billing Concepts. Additionally,
Billing Concepts is entitled to require us on one occasion to file a
registration statement under the Securities Act at the expense of Billing
Concepts with respect to their up to 450,000 shares of common stock, and we are
required to use all reasonable efforts to cause such registration to become
effective. The term of this registration right begins 180 days after this
offering and ends eighteen months after that date.

Guarantee of Loan to Donald C. Licciardello

Until March 26, 1999, some of our certificates of deposit were pledged as
collateral for a guarantee we issued in connection with a loan obtained by Mr.
Licciardello. On March 26, 1999, the collateral and our guarantee were released
by First Union National Bank.

Loan to C. Richard Corl

Mr. Corl issued to us a demand note evidencing the outstanding purchase
price for shares of our common stock purchased by him in June 1996. This demand
note, in the amount of $210,308, bears interest at a rate of 6% annually.

51
<PAGE>

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information known to us regarding
the beneficial ownership of our common stock, as of May 31, 1999, before and
after giving effect to this offering by (1) each person known by us to own
beneficially 5% or more of our common stock, (2) each of our directors, (3)
each of the Named Executive Officers, and (4) all of our current directors and
executive officers, as a group. All information with respect to beneficial
ownership has been furnished to us by our respective stockholders.

<TABLE>
<CAPTION>
Shares
Beneficially Shares
Owned Prior to Beneficially
this Owned After the
Offering(1)(2) Offering(1)(2)
-------------------- --------------------
Name of Beneficial Owner Number Percent Number Percent
- ------------------------ --------- ------- --------- -------
<S> <C> <C> <C> <C>
Donald C. Licciardello (3)(4)...... 6,562,724 57.9% 6,562,724 45.8%
Billing Concepts Corp. (5)......... 3,078,246 27.1 3,228,246(6) 22.5(6)
7411 John Smith Drive, Suite 200
San Antonio, Texas 78229
Patricia F. Corl................... 660,000 5.8 660,000 4.6
1107 Robin Road
Gladwyne, PA 19035
C. Richard Corl (4)(7)............. 1,133,620 10.0 1,133,620 7.9
Parris H. Holmes, Jr .............. 60,000 * 60,000 *
Steven D. Greenwood................ 30,000 * 30,000 *
All executive officers and
directors,
as a group (10 persons) ......... 7,876,344(1) 69.2% 7,876,344(1) 54.7%
</TABLE>
- --------
* Represents beneficial ownership of less than 1% of our outstanding shares
of common stock.

(1) Unless otherwise indicated above, the address for each executive officer
and director identified above is 165 Wall Street, Princeton, New Jersey
08540.
(2) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership of that person,
shares of common stock subject to options and warrants held by that person
that are currently exercisable or exercisable within 60 days of May 31,
1999 are deemed outstanding. Such shares, however, are not deemed
outstanding for the purposes of computing the percentage ownership of any
other person. Except as indicated in the footnotes to this table, each
stockholder named in the table has sole voting and investment power with
respect to the shares set forth opposite such stockholder's name.

(3) Includes 5,100,000 shares held by the Donald Licciardello Family Limited
Partnership, of which Mr. Licciardello is the general partner.
Mr. Licciardello has voting and dispositive control over these shares.

(4) Excludes 400,000 shares owned by Mr. Licciardello and 50,000 shares owned
by Mr. Corl that are subject to an option to purchase such shares by
Billing Concepts. This option terminates prior to this offering.

(5) Includes 450,000 shares which Billing Concepts has the right to purchase
from Donald C. Licciardello and C. Richard Corl (as set forth in footnote
4).

(6) Includes 150,000 shares which Billing Concepts has been allocated in this
offering.

(7) Includes the 660,000 shares owned by Patricia F. Corl, Mr. Corl's wife, for
which Mr. Corl disclaims beneficial ownership.

52
<PAGE>

DESCRIPTION OF CAPITAL STOCK

Upon completion of this offering, our authorized capital stock will consist
of 50,000,000 shares of common stock, $0.01 par value per share, and 3,000,000
shares of preferred stock, $0.01 par value per share. As of May 31, 1999, there
were outstanding (1) 11,344,002 shares of our common stock held of record by 27
stockholders and (2) options to purchase an aggregate of 2,988,000 shares of
common stock.

The following summary of some provisions of our common stock, preferred
stock, certificate of incorporation and by-laws, as in effect on the closing
date of this offering, is not intended to be complete and is qualified by
reference to the provisions of the applicable law and our certificate of
incorporation and by-laws included as exhibits to the registration statement of
which this prospectus is a part.

Common Stock

Holders of our common stock are entitled to one vote per share on all
matters on which the holders of common stock are entitled to vote and do not
have cumulative voting rights. This means that the holders of more than 50% of
our shares of common stock voting for the election of directors can elect all
of the directors up for election if they choose to do so; if this event occurs,
the holders of the remaining holders of shares of our common stock will not be
able to elect any person to our board. Subject to rights of any holders of any
shares of our preferred stock, holders of our common stock are entitled to
receive ratably such dividends as may be declared by our board from time to
time out of funds legally available for this purpose. See "Dividend Policy."
Holders of our common stock are not entitled to any preemptive, conversion,
redemption, subscription or similar rights. In the event of a liquidation,
dissolution or winding-up of Princeton eCom, whether voluntary or involuntary,
holders of our common stock are entitled to share ratably in our assets legally
available for distribution, if any, remaining after the payment or provision
for the payment of all of our debts and other liabilities and the payment and
setting aside for payment of any preferential amount due to any holders of any
shares of our outstanding preferred stock. All of our outstanding shares of
common stock are, and all of our shares of common stock offered in this
offering when issued will be, upon payment, duly and validly issued, fully paid
and nonassessable. The rights, preferences and privileges of holders of our
common stock are subject to, and may be adversely affected by, the rights of
the holders of any series of our preferred stock which our board may designate
and issue in the future.

Our common stock has been approved for listing on the Nasdaq National
Market under the trading symbol ECOM.

The transfer agent for our common stock is Continental Stock Transfer &
Trust Company.

Preferred Stock

Our certificate of incorporation authorizes our board to issue, from time
to time and without any further action of our stockholders, up to 3,000,000
shares of preferred stock, in one or more series. The board is authorized to
fix or alter the designations, preferences, rights and any qualifications,
limitations or restrictions of the shares of each of these series, including
the voting rights, dividend rights, dividend rates, conversion rights, terms of
redemption, redemption price or prices, liquidation, preferences and the number
of shares constituting any series or designations of these series. The issuance
of preferred stock, while providing flexibility in connection with possible
acquisitions and other corporate purposes could, among other things, have the
effect, under certain circumstances, of delaying, deferring or preventing a
change in control of Princeton eCom. We have no current plan to issue any
shares of our preferred stock. See "--Authorized But Unissued Shares."

Anti-Takeover Effects of Certain Provisions of Delaware Law

We are subject to the provisions of Section 203 of the Delaware General
Corporation Law, or the DGCL. Section 203 of the DGCL generally prohibits a
publicly-held Delaware corporation from engaging in a

53
<PAGE>

"business combination" with an "interested stockholder" for a period of three
years after the date of the transaction in which the person became an
interested stockholder, unless the interested stockholder attained that status
with the approval of the board or unless the business combination is approved
in a prescribed manner. A "business combination" includes mergers, asset sales
and other transactions resulting in a financial benefit to the interested
stockholder. Subject to exceptions, an "interested stockholder" is a person
who, together with affiliates and associates, owns, or within three years did
own, fifteen percent (15%) or more of a corporation's voting stock. This
statute could prohibit or delay the accomplishment of mergers or other takeover
or change in control attempts with respect to us and, accordingly, may
discourage attempts to acquire us.

Certificate of Incorporation and By-law Provisions

Our by-laws currently divide the board into three classes with staggered
three year terms. This classified board could make it more difficult for a
third party to acquire, or discourage a third party from acquiring, control of
us. Our by-laws also currently authorize our board to fill vacant directorships
or increase the size of the board. This may deter a stockholder from removing
incumbent directors and simultaneously gaining control of the board by filling
the vacancies created by that removal with its own nominees. See "Management."

Our certificate of incorporation and by-laws also include the provisions
described in the following paragraphs, which are intended to further enhance
the likelihood of continuity and stability in the composition of the board and
which may have the effect of delaying, deterring or preventing a future
takeover or change in control of us unless such takeover or change of control
has been approved by our board.

Advanced Notice Provisions for Stockholder Proposals and Director
Nominations. Our by-laws provide for advance notice procedures with regard to
the nomination, other than by or at the direction of the board, of candidates
for election as directors and with regard to some matters to be brought before
an annual meeting of stockholders. In general, these provisions require that
notice be received by us not less than 120 days prior to the meeting and must
contain specified information concerning the persons to be nominated or the
matter to be brought before the meeting and concerning the stockholder
submitting the proposal.

Stockholder Action; Special Meeting of Stockholders. Our by-laws provide
that stockholders may not take action by written consent, but only at duly
called annual or special meeting of stockholders. Our by-laws also provide that
special meetings of our stockholders may be called only by our Chairman of the
Board, Chief Executive Officer, a majority of the directors or a holder of a
majority of our outstanding stock.

Authorized But Unissued Shares. Our authorized but unissued shares of our
common stock and preferred stock will be available for future issuance without
stockholder approval, subject to limitations imposed by the Nasdaq National
Market. These additional shares may be utilized for a variety of corporate
purposes, including future public offerings to raise additional capital,
acquisitions and employee benefit plans. The existence of authorized but
unissued and unreserved common stock and preferred stock could render it more
difficult or discourage an attempt to obtain control of us by means of a proxy
contest, tender offer, merger or otherwise.

Limitation of Liability and Indemnification of Directors

Our amended and restated certificate of incorporation provides that, except
to the extent prohibited by the DGCL, our directors shall not be personally
liable to us or our stockholders for monetary damages for any breach of
fiduciary duty as a director. Under the DGCL, our directors have a fiduciary
duty to us that is not eliminated by this provision of our amended and restated
certificate of incorporation and, in appropriate circumstances, injunctions and
other nonmonetary relief will remain available. This provision also does not
affect the directors' responsibilities under any other laws, including the
Federal securities laws or state or Federal environmental laws.

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<PAGE>

Section 145 of the DGCL enables a corporation to indemnify its directors
and officers and to purchase insurance with respect to liability arising out of
their capacity or status as directors and officers. However, this provision
does not eliminate or limit the liability of a director:

. for any breach of the director's duty of loyalty to the corporation or
its stockholders;

. for acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law;

. for payments of dividends or approval of stock repurchases or
redemptions that are prohibited by the DGCL; or

. for any transaction from which the director derived an improper personal
benefit.

Our by-laws provide that we may fully indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeds, whether civil, criminal, administrative or
investigative, by reason of the fact that the person is or was one of our
directors, officers, employees or agents or is or was serving at our request as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise, against
expenses, including attorney's fees, judgments, fines and amounts paid in
settlement actually and reasonably incurred by that person in connection with
any threatened, pending or completed action, suit or proceeding.

We intend to enter into indemnification agreements with our directors and
executive officers. We believe that the provisions of our by-laws and these
indemnification agreements are necessary to attract and retain qualified
directors and executive officers. We intend to secure insurance on behalf of
any officer, director, employee or other agent for any liability arising out of
his or her actions, regardless of whether the DGCL would permit
indemnification.

At present, there is no pending litigation or proceeding involving any
director, officer, employee or agent for which indemnification will be required
or permitted under our by-laws. We are not aware of any threatened litigation
or proceeding that may result in a claim for indemnification.

Registration Rights

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering, we will have outstanding an aggregate of
14,344,002 shares of common stock, assuming no exercise of the underwriter's
over-allotment option and no exercise of outstanding options. Of these shares,
all of the shares sold in this offering will be freely tradeable without
restriction or further registration under the Securities Act of 1933, except
that shares purchased by Billing Concepts Corp. or any of our other affiliates,
as that term is defined in Rule 144 under the Securities Act of 1933, may
generally only be sold in compliance with the limitations of Rule 144 described
below.

55
<PAGE>

Sales of Restricted Securities

The remaining shares of our common stock are deemed "restricted securities"
under Rule 144. Of the restricted securities, approximately 160,962 shares of
common stock, which are not subject to lock-up agreements with the
representatives for the underwriters, will be eligible for immediate sale in
the public markets pursuant to Rule 144(k) under the Securities Act of 1933.
Approximately an additional 38,100 shares of common stock, which are not
subject to any lock-up agreement, will be eligible for sale in the public
market in accordance with Rule 144 or Rule 701 under the Securities Act of 1933
beginning 90 days from the date of this prospectus. Upon expiration of the
lockup agreements, approximately 9,356,594 additional shares of common stock
will be available for sale in the public markets in accordance with the
provisions of Rule 144. In addition, we may be required to register up to
450,000 shares of our common stock for which Billing Concepts has the option to
purchase from Donald C. Licciardello and C. Richard Corl.

Rule 144 and Rule 701

In general, under Rule 144 as currently in effect, beginning 90 days after
the date of this prospectus, a person, including one of our affiliates, who has
beneficially owned his or her restricted securities for at least one year from
the later of the date such securities were acquired from us or, if applicable,
one of our affiliates, is entitled to sell, within any three-month period, a
number of shares that does not exceed the greater of:

. 1% of our then outstanding shares of common stock, which will equal
approximately 143,440 shares immediately after this offering; or

. the average weekly trading volume of our common stock on the Nasdaq
National Market during the four calendar weeks preceding the sale.

Sales under Rule 144 are also subject to certain requirements concerning
the availability of public information, manner of sale and notice. In addition,
under Rule 144(k), if a period of at least two years has elapsed between the
later of the date the restricted securities were acquired from us or, if
applicable, one of our affiliates, a stockholder who is not an affiliate at the
time of sale and has not been one of our affiliates for a period of three
months prior to the sale is entitled to sell the shares immediately without
compliance with the foregoing requirements of Rule 144.

Securities issued in reliance on Rule 701 prior to the completion of this
offering, like shares of common stock acquired pursuant to the exercise of
stock options issued by us, are also restricted securities and, beginning 90
days after the date of this prospectus is a part, may be sold by stockholders
who are not affiliates subject only to the manner of sale provisions of Rule
144 and by affiliates under Rule 144 without compliance with the one-year
holding period requirement of the rule.

Stock Options

Immediately following this offering, we intend to file registration
statements on Form S-8 under the Securities Act of 1933 to register all shares
of common stock issuable under the Stock Option Plan and the Directors Plan.
Shares issued upon exercise of stock options granted under the Stock Option
Plan and the Directors Plan after the effective date of the Form S-8
registration statements will be eligible for resale in the public markets
without restriction, subject to Rule 144 limitations applicable to affiliates
and subject to the lock-up agreements discussed above.

Effect of Sales of Shares

Prior to this offering, there has been no public trading market for our
common stock, and no prediction can be made as to the effect, if any, that
market sales of shares of common stock or the availability of shares for sale
will have on the market price of our common stock prevailing from time to time.
Nevertheless, sales of significant numbers of shares of our common stock in the
public markets could adversely affect the market price of our common stock and
could impair our ability to raise capital through an offering of our equity
securities.

56
<PAGE>

UNDERWRITING

Subject to the terms and conditions contained in an underwriting agreement
dated, 1999, the underwriters named below, who are represented by
Donaldson, Lufkin & Jenrette Securities Corporation, First Union Capital
Markets Corp. and DLJdirect Inc. have severally agreed to purchase from
Princeton eCom the respective number of shares of common stock set forth
opposite their names below.

<TABLE>
<CAPTION>
Number of
Underwriters Shares
- ------------ ---------
<S> <C>
Donaldson, Lufkin & Jenrette Securities Corporation..................
First Union Capital Markets Corp.....................................
DLJdirect Inc........................................................
---------
Total.............................................................. 3,000,000
=========
</TABLE>

The underwriting agreement provides that the obligations of the several
underwriters to purchase and accept delivery of the shares of common stock
offered hereby are subject to approval by their counsel of certain legal
matters and to certain other conditions. The underwriters are obligated to
purchase and accept delivery of all the shares of common stock offered hereby
(other than those shares covered by the over-allotment option described below)
if any are purchased.

The underwriters initially propose to offer the shares of common stock in
part directly to the public at the initial public offering price set forth on
the cover page of this prospectus and in part to certain dealers (including the
underwriters) at such price less a concession not in excess of $ per share.
The underwriters may allow, and such dealers may re-allow, to certain other
dealers a concession not in excess of $ per share. After the initial offering
of the common stock, the public offering price and other selling terms may be
changed by the representatives of the underwriters at any time without notice.

The underwriters do not intend to confirm sales to any accounts over which
they exercise discretionary authority.

The following table shows the underwriting fees to be paid to the
underwriters by Princeton eCom in connection with this offering. These amounts
are shown assuming both no exercise and full exercise of the underwriters'
option to purchase additional shares of Princeton eCom common stock.

<TABLE>
<CAPTION>
No
Exercise Full Exercise
-------- -------------
<S> <C> <C>
Per share................................................ $ $
Total....................................................
</TABLE>

Princeton eCom will pay the offering expenses estimated to be $1.2 million.

Princeton eCom has granted to the underwriters an option, exercisable
within 30 days after the date of this prospectus, to purchase, from time to
time, in whole or in part, up to an aggregate of 450,000 additional shares of
common stock at the initial public offering price less underwriting discounts
and commissions. The

57
<PAGE>

underwriters may exercise such option solely to cover overallotments, if any,
made in connection with the offering. To the extent that the underwriters
exercise such option, each underwriter will become obligated, subject to
certain conditions, to purchase its pro rata portion of such additional shares
based on such underwriter's initial purchase commitment.

Princeton eCom has agreed to indemnify the underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended, or to contribute to payments that the underwriters may be required to
make in respect thereof.

Each of Princeton eCom, its executive officers and directors and certain
stockholders and optionholders of Princeton eCom, have agreed, subject to
certain exceptions, not to

. offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer, or dispose of,
directly or indirectly, any shares of common stock or any securities
convertible into or exercisable or exchangeable for common stock, or

. enter into any group or other arrangement that transfers all or a
portion of the economic consequences associated with the ownership of
any common stock

for a period of 180 days after the date of this prospectus without the prior
written consent of Donaldson, Lufkin & Jenrette Securities Corporation. During
such 180-day period, Princeton eCom may issue shares of common stock in
connection with acquisitions of other businesses, products or technologies, so
long as the recipients of common stock in such acquisitions agree in writing to
be bound by the same restrictions applicable to Princeton eCom. In addition,
during such 180-day period, Princeton eCom has also agreed not to file any
registration statement with respect to, and each of its executive officers,
directors and certain stockholders of Princeton eCom, has agreed not to make
any demand for, or exercise any right with respect to, the registration of any
shares of common stock or any securities convertible into or exercisable or
exchangeable for common stock without the prior written consent of Donaldson,
Lufkin & Jenrette Securities Corporation.

At the request of Princeton eCom, the underwriters have reserved up to five
percent of the shares of common stock to be issued by Princeton eCom and
offered hereby for sale, at the initial public offering price, to directors,
officers, employees, some stockholders and their employees and affiliates,
consultants, customers, distributors and other persons. The number of shares of
common stock available for sale to the general public will be reduced to the
extent such individuals purchase such reserved shares. Any reserved shares
which are not so purchased will be offered by the underwriters to the general
public on the same basis as the other shares offered hereby.

Prior to the offering, there has been no established trading market for
Princeton eCom's common stock. The initial public offering price for the shares
of Princeton eCom common stock offered hereby will be determined by negotiation
among Princeton eCom and the representatives of the underwriters. The factors
to be considered in determining the initial public offering price include the
history of and the prospects for the industry in which Princeton eCom competes,
the past and present operations of Princeton eCom, the historical results of
operations of Princeton eCom, the prospects for future earnings of Princeton
eCom, the recent market prices of securities of generally comparable companies
and the general condition of the securities markets at the time of the
offering.

The common stock has been approved for quotation on the Nasdaq National
Market under the symbol "ECOM."

58
<PAGE>

Other than in the United States, no action has been taken by Princeton eCom
or the underwriters that would permit a public offering of the shares of common
stock offered hereby in any jurisdiction where action for that purpose is
required. The shares of common stock offered hereby may not be offered or sold,
directly or indirectly, nor may this prospectus or any other offering material
or advertisements in connection with the offer and sale of any such shares of
common stock be distributed or published in any jurisdiction, except under
circumstances that will result in compliance with the applicable rules and
regulations of such jurisdiction. Persons into whose possession this prospectus
comes are advised to inform themselves about and observe any restrictions
relating to the offering and the distribution of this prospectus. This
prospectus does not constitute an offer to sell or a solicitation of an offer
to buy any shares of common stock offered hereby in any jurisdiction in which
such an offer or a solicitation is unlawful.

In connection with the offering, the underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of
Princeton eCom's common stock. Specifically, the underwriters may overallot the
offering, creating a syndicate short position. The underwriters may bid for and
purchase shares of common stock in the open market to cover such syndicate
short position or to stabilize the price of the common stock. In addition, the
underwriting syndicate may reclaim selling concessions from syndicate members
and selected dealers if they repurchase previously distributed common stock in
syndicate covering transactions, in stabilizing transactions or otherwise.
These activities may stabilize or maintain the market price of the common stock
above independent market levels. The underwriters are not required to engage in
these activities, and may end any of these activities at any time.

LEGAL MATTERS

The validity of the common stock offered hereby will be passed upon for us
by Kelley Drye & Warren LLP, New York, New York. Certain legal matters in
connection with this offering will be passed upon for the underwriters by
Brobeck, Phleger & Harrison LLP, New York, New York.

EXPERTS

The financial statements of Princeton eCom Corporation as of December 31,
1997 and 1998 and for the three years in the period ended December 31, 1998
included in this prospectus have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and are included herein upon the authority of said firm as experts in
giving said reports.

ADDITIONAL INFORMATION

We have filed with the SEC a registration statement on Form S-1 with
respect to the shares of common stock offered hereby. This prospectus, which is
a part of the registration statement, does not contain all of the information
included in the registration statement and the exhibits and schedules thereto.
You may review a copy of the registration statement, including exhibits, at the
SEC's public reference room at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 or Seven World Trade Center, 13th Floor, New York, New
York 10048 or Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Please call the SEC at 1-800-SEC-0330 for further information
on the operation of the public reference rooms.

We will also file annual, quarterly and current reports, proxy statements
and other information with the SEC. You may read and copy any reports,
statements or other information on file at the public reference rooms. You can
also request copies of these documents, for a copying fee, by writing to the
SEC.

Our SEC filings and the registration statement can also be reviewed by
accessing the SEC's Internet site at http://www.sec.gov, which contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the SEC.

We intend to distribute to our stockholders annual reports containing
audited consolidated financial statements. We also intend to make available to
our stockholders, within 45 days after the end of each fiscal quarter, reports
for the first three quarters of each fiscal year containing interim unaudited
financial information.

59
<PAGE>

PRINCETON ECOM CORPORATION

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Public Accountants................................... F-2
Balance Sheets............................................................. F-3
Statements of Operations................................................... F-4
Statements of Stockholders' Equity (Deficit)............................... F-5
Statements of Cash Flows................................................... F-6
Notes to Financial Statements.............................................. F-7
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders of Princeton eCom Corporation:

We have audited the accompanying balance sheets of Princeton eCom
Corporation (a Delaware corporation), formerly Princeton TeleCom Corporation,
as of December 31, 1997 and 1998, and the related statements of operations,
stockholders' equity (deficit) and cash flows for each of the three years in
the period ended December 31, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Princeton eCom Corporation
as of December 31, 1997 and 1998, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1998,
in conformity with generally accepted accounting principles.

/s/ Arthur Andersen LLP

Philadelphia, Pa.,

March 30, 1999 (except for
Note 13, for which the

date is June 17, 1999)

F-2
<PAGE>

PRINCETON ECOM CORPORATION

BALANCE SHEETS

<TABLE>
<CAPTION>
December 31 March 31
------------------------- ------------
1997 1998 1999
----------- ------------ ------------
(unaudited)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents........... $ 504,844 $ 6,362,453 $ 8,774,968
Accounts receivable, net of
allowance of $52,941, $49,942 and
$49,942........................... 607,071 637,603 661,101
Prepaid expenses and other.......... 115,586 1,511,743 996,597
----------- ------------ ------------
Total current assets............. 1,227,501 8,511,799 10,432,666
Property and equipment, net........... 852,270 822,142 1,228,358
Other assets.......................... 29,839 10,217 25,280
----------- ------------ ------------
$ 2,109,610 $ 9,344,158 $ 11,686,304
=========== ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT)
Current liabilities:
Bank overdraft...................... $ 843,548 $ 399,809 $ 419,521
Customer deposits payable........... 7,769,416 7,452,033 9,366,078
Current portion of long-term debt... 48,049 29,441 30,478
Accounts payable.................... 211,239 502,650 722,817
Accrued expenses.................... 263,541 435,913 716,414
----------- ------------ ------------
Total current liabilities........ 9,135,793 8,819,846 11,255,308
----------- ------------ ------------
Long-term debt........................ 75,392 49,614 43,949
----------- ------------ ------------
Other liabilities..................... 283,611 196,411 198,436
----------- ------------ ------------
Commitments and contingencies (Note 6)
Stockholders' equity (deficit):
Preferred stock, $.01 par value,
3,000,000 shares authorized, none
issued............................ -- -- --
Common stock, $.01 par value,
50,000,000 shares authorized,
8,614,806, 11,119,626, and
11,284,002
shares issued and outstanding..... 86,148 111,196 112,840
Additional paid-in capital.......... 334,366 12,194,183 14,586,878
Accumulated deficit................. (7,539,193) (10,893,829) (11,970,703)
Subscriptions receivable............ (266,507) (266,507) (187,893)
Deferred compensation............... -- (866,756) (2,352,511)
----------- ------------ ------------
Total stockholders' equity
(deficit)...................... (7,385,186) 278,287 188,611
----------- ------------ ------------
$ 2,109,610 $ 9,344,158 $ 11,686,304
=========== ============ ============
</TABLE>

The accompanying notes are an integral part of these statements.

F-3
<PAGE>

PRINCETON ECOM CORPORATION

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
Year Ended December 31 Three Months Ended March 31
------------------------------------- ----------------------------
1996 1997 1998 1998 1999
----------- ----------- ----------- ------------- --------------
(unaudited)
<S> <C> <C> <C> <C> <C>
Revenues:
Service fees.......... $ 1,632,200 $ 2,332,995 $ 2,385,587 $ 582,683 $ 735,347
Interest.............. 204,205 698,602 1,436,448 247,937 406,478
----------- ----------- ----------- ------------ --------------
Total revenues..... 1,836,405 3,031,597 3,822,035 830,620 1,141,825
----------- ----------- ----------- ------------ --------------
Operating expenses:
Cost of services...... 1,363,278 1,800,368 1,966,956 430,455 555,021
Development costs..... 833,899 820,335 895,152 216,395 331,581
Selling, general and
administrative...... 1,823,284 2,536,791 3,282,669 670,971 1,099,720
Amortization of
deferred
compensation........ -- -- 1,017,744 33,575 230,245
----------- ----------- ----------- ------------ --------------
Total operating
expenses......... 4,020,461 5,157,494 7,162,521 1,351,396 2,216,567
----------- ----------- ----------- ------------ --------------
Operating loss.......... (2,184,056) (2,125,897) (3,340,486) (520,776) (1,074,742)
Interest expense........ 6,467 15,687 14,150 3,683 2,132
----------- ----------- ----------- ------------ --------------
Net loss................ $(2,190,523) $(2,141,584) $(3,354,636) $ (524,459) $ (1,076,874)
=========== =========== =========== ============ ==============
Basic and diluted net
loss per share........ $ (0.26) $ (0.25) $ (0.36) $ (0.06) $ (0.10)
=========== =========== =========== ============ ==============
Shares used in computing
net loss per share.... 8,454,397 8,567,792 9,423,068 8,614,806 11,126,452
=========== =========== =========== ============ ==============
</TABLE>

The accompanying notes are an integral part of these statements.

F-4
<PAGE>

PRINCETON ECOM CORPORATION

STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
Common Stock Additional
------------------- Paid-in Accumulated Subscriptions Deferred
Shares Amount Capital Deficit Receivable Compensation Total
---------- -------- ----------- ------------ ------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, January 1,
1996.................. 8,350,806 $ 83,508 $ 327,156 $ (3,207,086) $(258,157) $ -- $(3,054,579)
Sale of common stock... 174,000 1,740 5,110 -- (5,350) -- 1,500
Net loss............... -- -- -- (2,190,523) -- -- (2,190,523)
---------- -------- ----------- ------------ --------- ----------- -----------
Balance, December 31,
1996.................. 8,524,806 85,248 332,266 (5,397,609) (263,507) -- (5,243,602)
Sale of common stock... 90,000 900 2,100 -- (3,000) -- --
Net loss............... -- -- -- (2,141,584) -- -- (2,141,584)
---------- -------- ----------- ------------ --------- ----------- -----------
Balance, December 31,
1997.................. 8,614,806 86,148 334,366 (7,539,193) (266,507) -- (7,385,186)
Sale of common stock... 2,493,870 24,939 9,975,061 -- -- -- 10,000,000
Exercise of stock
options.............. 10,950 109 256 -- -- -- 365
Issuance of options to
purchase common stock
below fair market
value................ -- -- 1,884,500 -- -- (1,884,500) --
Amortization of
deferred
compensation......... -- -- -- -- -- 1,017,744 1,017,744
Net loss............... -- -- -- (3,354,636) -- -- (3,354,636)
---------- -------- ----------- ------------ --------- ----------- -----------
Balance, December 31,
1998.................. 11,119,626 111,196 12,194,183 (10,893,829) (266,507) (866,756) 278,287
Sale of common stock... 134,376 1,344 537,504 -- -- -- 538,848
Exercise of stock
options.............. 30,000 300 700 -- -- -- 1,000
Issuance of options to
purchase common stock
below fair market
value................ -- -- 1,716,000 -- -- (1,716,000) --
Issuance of options for
services............. -- -- 138,491 -- -- -- 138,491
Amortization of
deferred
compensation......... -- -- -- -- -- 230,245 230,245
Repayment of
subscription
receivable........... -- -- -- -- 78,614 -- 78,614
Net loss............... -- -- -- (1,076,874) -- -- (1,076,874)
---------- -------- ----------- ------------ --------- ----------- -----------
Balance, March 31, 1999
(unaudited)........... 11,284,002 $112,840 $14,586,878 $(11,970,703) $(187,893) $(2,352,511) $ 188,611
========== ======== =========== ============ ========= =========== ===========
</TABLE>

The accompanying notes are an integral part of these statements.

F-5
<PAGE>

PRINCETON ECOM CORPORATION

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Three Months Ended
Year Ended December 31 March 31
------------------------------------- ---------------------------
1996 1997 1998 1998 1999
----------- ----------- ----------- --------- -----------
(unaudited)
<S> <C> <C> <C> <C> <C> <C>
Operating activities:
Net loss.............. $(2,190,523) $(2,141,584) $(3,354,636) $(524,459) $(1,076,874)
Adjustments to
reconcile net loss to
net cash provided by
(used in) operating
activities--
Depreciation and
amortization....... 152,479 226,466 276,791 67,191 76,862
Amortization of
deferred
compensation....... -- -- 1,017,744 33,575 230,245
Provision for bad
debts.............. 25,165 27,776 15,500 9,103 --
Issuance of common
stock for
services........... 1,500 -- -- -- --
Loss on disposal of
assets............. -- -- 10,664 10,413 --
Changes in operating
assets and
liabilities--
Accounts
receivable....... 82,952 (231,481) (46,032) (54,762) (23,498)
Prepaid expenses
and other
assets........... 232,371 25,540 (1,376,535) 24,572 638,574
Customer deposits
payable.......... (1,676,315) 4,247,161 (317,383) (43,869) 1,914,045
Accounts payable... (76,578) 98,668 291,411 5,225 220,167
Accrued expenses... 10,526 196,608 76,372 56,283 280,501
Other liabilities.. -- 68,256 8,800 2,442 2,025
----------- ----------- ----------- --------- -----------
Net cash provided
by (used in)
operating
activities...... (3,438,423) 2,517,410 (3,397,304) (414,286) 2,262,047
----------- ----------- ----------- --------- -----------
Investing activities:
Purchases of property
and equipment....... (298,369) (372,818) (257,327) (36,352) (483,078)
----------- ----------- ----------- --------- -----------
Net cash used in
investing
activities...... (298,369) (372,818) (257,327) (36,352) (483,078)
----------- ----------- ----------- --------- -----------
Financing activities:
Net increase
(decrease) in bank
overdraft........... 2,879,337 (2,133,248) (443,739) 590,639 19,712
Payments on long-term
debt................ (26,810) (29,747) (44,386) (6,081) (4,628)
Proceeds from sale of
common stock........ -- -- 10,000,000 -- 538,848
Proceeds from
subscription
receivable.......... -- -- -- -- 78,614
Proceeds from exercise
of stock options.... -- -- 365 -- 1,000
----------- ----------- ----------- --------- -----------
Net cash provided
by (used in)
financing
activities...... 2,852,527 (2,162,995) 9,512,240 584,558 633,546
----------- ----------- ----------- --------- -----------
Net increase (decrease)
in cash and cash
equivalents.......... (884,265) (18,403) 5,857,609 133,920 2,412,515
Cash and cash
equivalents,
beginning of period.. 1,407,512 523,247 504,844 504,844 6,362,453
----------- ----------- ----------- --------- -----------
Cash and cash
equivalents, end of
period............... $ 523,247 $ 504,844 $ 6,362,453 $ 638,764 $ 8,774,968
=========== =========== =========== ========= ===========
</TABLE>

The accompanying notes are an integral part of these statements.

F-6
<PAGE>

PRINCETON ECOM CORPORATION

NOTES TO FINANCIAL STATEMENTS

(Information as of March 31, 1999, and for the three months ended March 31,
1998 and 1999, is unaudited)

1. Background:

On January 25, 1984, Princeton eCom Corporation (the "Company") was
incorporated in the State of Delaware as Princeton TeleCom Corporation. In
March 1999, the Company changed its name to Princeton eCom Corporation. The
Company is a provider of comprehensive electronic bill presentment and payment
services to financial institutions and large businesses which generate a
significant number of recurring bills. The Company's current customers consist
primarily of utilities and financial institutions.

The Company has incurred significant losses and expects to incur
significant losses on a quarterly and annual basis for the foreseeable future.
As of December 31, 1998, the Company had an accumulated deficit of $10,893,829
and during 1998 the Company incurred a net loss of $3,354,636. Since its
inception, the Company has incurred costs to develop and enhance its
technology, establish marketing and customer relationships and build its
administrative organization. The Company currently intends to substantially
increase its operating expenses to further develop its business. To the extent
that such expenses do not subsequently lead to increased revenues, the
Company's business, results of operations and financial condition will be
materially and adversely affected. In addition, the Company's business model is
unproven and evolving and is subject to possible changing governmental
regulations (see Note 6). Also, the Company may not realize the critical mass
necessary to achieve profitability.

The accompanying financial statements have been prepared in conformity with
principles of accounting applicable to a going concern. These principles
contemplate the realization of assets and the satisfaction of liabilities in
the normal course of business. Management believes that the Company's existing
cash and cash equivalents will provide sufficient funding for its operating
activities, capital expenditures and other obligations to at least January 1,
2000. Therefore, the accompanying financial statements do not include necessary
adjustments should the Company be unable to continue as a going concern.

2. Significant Accounting Policies:

Interim Financial Statements

The financial statements as of March 31, 1999 and for the three months
ended March 31, 1998 and 1999 are unaudited and, in the opinion of management,
include all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of results for those interim periods. The
results of operations for the three months ended March 31, 1998 and 1999 are
not necessarily indicative of the results to be expected for the entire year.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Revenue Recognition

Service fees are based on contractual rates with customers. Service fee
revenues, which represent transaction fees charged to billers and financial
institutions are recognized as services are performed. Interest income on the
overnight investment of funds received from consumers pending payment
processing is recorded as earned.

F-7
<PAGE>

PRINCETON ECOM CORPORATION

NOTES TO FINANCIAL STATEMENTS--(Continued)

(Information as of March 31, 1999, and for the three months ended March 31,
1998 and 1999, is unaudited)

Cash and Cash Equivalents

Cash and cash equivalents include highly liquid investments with original
maturities of three months or less and funds received from consumers pending
payment processing.

Prepaid Expenses and Other

In December 1998, the Company mistakenly made certain overpayments to
billers on behalf of consumers. Included in prepaid expenses and other at
December 31, 1998 is $862,906 of such overpayments, which were reimbursed to
the Company in early 1999. At December 31, 1998 and March 31, 1999, prepaid
expenses and other also included certificates of deposit in the aggregate of
$370,000 with original maturities greater than three months and certain related
party amounts (see Note 12).

Property and Equipment

Property and equipment are recorded at cost. Property and equipment
capitalized under capital leases are recorded at the present value of the
minimum lease payments due over the term of the lease. Depreciation and
amortization are provided using the straight-line method over the estimated
useful lives or the lease term, whichever is shorter. Expenditures for
maintenance, repairs and betterments that do not prolong the useful life of an
asset have been charged to operations as incurred. Additions and betterments
that substantially extend the useful life of the asset are capitalized. Upon
sale or other disposition of assets, the cost and related accumulated
depreciation and amortization are removed from the respective accounts, and the
resulting gain or loss, if any, is included in operating results.

The Company reviews its long-lived assets for possible impairment whenever
events or changes in circumstances indicate that the carrying amount of an
asset may not be recoverable. When factors indicate that such assets should be
evaluated for possible impairment, the Company uses an estimate of the related
future undiscounted cash flow in measuring whether the asset should be written
down to fair value. As of March 31, 1999, management believes that there are no
material impairment losses or needed revisions to remaining useful lives.

Customer Deposits Payable

Customer deposits payable represents funds received from consumers that are
held by the Company pending payment processing.

Development Costs

Research and development costs are charged to expense as incurred. In
conjunction with the development of its services, the Company incurs certain
software development costs. No costs have been capitalized pursuant to
Statement of Financial Accounting Standards ("SFAS") No. 86, "Accounting for
the Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed,"
since the development period is relatively short and software development costs
qualifying for capitalization have been relatively insignificant.

Income Taxes

Income taxes are accounted for using the liability method. Accordingly,
deferred income tax assets and liabilities are determined based on differences
between the financial statement carrying amounts of assets and liabilities and
their respective income tax basis, measured using enacted tax rates.

F-8
<PAGE>

PRINCETON ECOM CORPORATION

NOTES TO FINANCIAL STATEMENTS--(Continued)

(Information as of March 31, 1999, and for the three months ended March 31,
1998 and 1999, is unaudited)
Stock Compensation

The Company has elected to follow Accounting Principles Board ("APB")
Opinion No. 25, "Accounting for Stock Issued to Employees," and related
interpretations in accounting for its employee stock options. Under APB No. 25,
if the exercise price of the Company's employee stock options equals or exceeds
the market price of the underlying stock on the date of the grant, no
compensation expense is recognized. If the exercise price of an option is below
the market price of the underlying stock on the date of grant, compensation
cost is recorded and is recognized in the statements of operations over the
vesting period (see Note 9).

Earnings Per Share

The Company follows SFAS No. 128, "Earnings Per Share," which requires a
dual presentation of "basic" and "diluted" earnings per share ("EPS") on the
face of the statements of operations. Basic EPS is computed by dividing net
income (loss) by the weighted average number of shares of common stock
outstanding for the period. Diluted EPS includes the dilutive effect, if any,
from the potential exercise or conversion of securities like stock options,
which would result in the issuance of additional shares of common stock. For
each of the three years in the period ended December 31, 1998 and the three
months ended March 31, 1998 and 1999, the impact of stock options was not
considered as their effect on EPS would be anti-dilutive (see Note 9).

Fair Value of Financial Instruments

Cash, accounts receivable, prepaid expenses, customer deposits payable,
accounts payable and accrued expenses are reflected in the accompanying
financial statements at fair value due to the short-term nature of those
instruments. The carrying amount of long-term debt obligations approximate fair
value at the balance sheet dates.

Recent Accounting Pronouncements

In June 1997, the Financial Accounting Standards Board issued SFAS No. 130,
"Reporting Comprehensive Income." SFAS No. 130 is effective for fiscal years
beginning after December 31, 1997. SFAS No. 130 establishes standards for the
reporting and display of comprehensive income in a set of financial statements.
Comprehensive income is defined as the change in net assets of a business
enterprise during a period from transactions generated from non-owner sources.
It includes all changes in equity during a period except those resulting from
investments by owners and distributions to owners. The Company has no other
comprehensive income items, therefore, the adoption of SFAS No. 130 had no
impact on the financial statements.

In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information." SFAS No.
131 applies to all pubic companies and is effective for fiscal years beginning
after December 15, 1997. SFAS No. 131 requires that business segment financial
information be reported in the financial statements utilizing the management
approach. The management approach is defined as the manner in which management
organizes the segments within the enterprise for making operating decisions and
assessing performance. Management believes the Company operates in one business
segment, therefore, the adoption of SFAS No. 131 had no impact on the financial
statements.

In March 1998, the American Institute of Certified Public Accountants
issued Statement of Position ("SOP") 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use."

F-9
<PAGE>

PRINCETON ECOM CORPORATION

NOTES TO FINANCIAL STATEMENTS--(Continued)

(Information as of March 31, 1999, and for the three months ended March 31,
1998 and 1999, is unaudited)
The Company adopted SOP 98-1 in January 1999. The adoption had no material
effect on the Company's financial position or results of operations.

3. Supplemental Cash Flow Information:

For the years ended December 31, 1996, 1997 and 1998 and the three months
ended March 31, 1998 and 1999, the Company paid interest of $6,467, $15,687,
$14,150, $3,683 and $2,132, respectively. During 1996 and 1997, the Company
financed equipment purchases of $129,624 and $4,445 with capitalized lease
obligations, respectively.

During the three months ended March 31, 1999, the Company issued options to
purchase common stock to a consultant in exchange for services provided during
the Company's planned initial public offering. The fair value of the options
using the Black-Scholes option pricing model of $138,491 was included in
prepaid expenses and other as of March 31, 1999 in the accompanying balance
sheets.

4. Property and Equipment:

<TABLE>
<CAPTION>
December 31 March 31
Useful ---------------------- ----------
Lives 1997 1998 1999
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Computer and telephone
equipment.............. 5 years $1,372,184 $1,404,057 $1,869,451
Furniture and fixtures... 5 years 50,290 67,452 85,136
Leasehold improvements... Lease term 38,828 38,828 38,828
---------- ---------- ----------
1,461,302 1,510,337 1,993,415
Less--Accumulated
depreciation and
amortization........... (609,032) (688,195) (765,057)
---------- ---------- ----------
$ 852,270 $ 822,142 $1,228,358
========== ========== ==========
</TABLE>

Depreciation and amortization expense for the years ended December 31,
1996, 1997 and 1998 and the three months ended March 31, 1998 and 1999 was
$152,479, $226,466, $276,791, $67,191 and $76,862, respectively. At December
31, 1997 and 1998 and March 31, 1999, the Company had property and equipment
under capitalized lease obligations of $134,069, net of accumulated
amortization of $31,061, $57,874 and $65,271, respectively.

5. Long-Term Debt:

<TABLE>
<CAPTION>
December 31 March 31
------------------ --------
1997 1998 1999
-------- -------- --------
<S> <C> <C> <C>
Note payable, repaid in 1998................ $ 20,293 $ -- $ --
Capitalized lease obligations............... 103,148 79,055 74,427
-------- -------- --------
123,441 79,055 74,427
Less--Current portion....................... (48,049) (29,441) (30,478)
-------- -------- --------
$ 75,392 $ 49,614 $ 43,949
======== ======== ========
</TABLE>

F-10
<PAGE>

PRINCETON ECOM CORPORATION

NOTES TO FINANCIAL STATEMENTS--(Continued)

(Information as of March 31, 1999, and for the three months ended March 31,
1998 and 1999, is unaudited)

6. Commitments and Contingencies:

Lease Commitments

The Company leases facilities and equipment under capital and noncancelable
operating leases with expiration dates through September 2003. Rent expense for
the years ended December 31, 1996, 1997 and 1998 and the three months ended
March 31, 1998 and 1999 was $106,753, $111,830, $119,216, $31,041 and $37,050,
respectively. Future minimum lease payments as of December 31, 1998 are as
follows:

<TABLE>
<CAPTION>
Operating Capital
Leases Leases
--------- --------
<S> <C> <C>
1999.................................................. $145,473 $ 38,666
2000.................................................. 141,348 38,666
2001.................................................. 141,704 16,375
2002.................................................. 100,148 --
2003.................................................. 5,691 --
-------- --------
Total minimum lease payments.......................... $534,364 93,707
========
Less--Amount representing interest.................... (14,652)
--------
Present value of future minimum lease payments........ 79,055
Less--Current portion................................. (29,441)
--------
$ 49,614
========
</TABLE>

Litigation

The Company is involved, from time to time, in various legal matters and
claims which are being defended and handled in the ordinary course of business.
None of these matters is expected, in the opinion of management, to have a
material adverse effect upon the financial position or results of operations of
the Company.

Employment Agreements

In early 1999, the Company entered into employment agreements with two
officers of the Company. The agreements provide for, among other things,
salaries, bonuses, severance payments and certain other payments payable upon a
change in control, as defined.

Government Regulation

Management believes that the Company is not required to be licensed by the
Office of the Comptroller of the Currency, the Federal Reserve Board or other
federal or state agencies that regulate or monitor banks or other providers of
electronic commerce. However, the Company may be periodically audited by
banking authorities since the Company is a supplier of services to financial
institutions. Laws regulating Internet commerce may be enacted to address
issues such as user privacy, pricing, content, taxation and the characteristics
and quality of online products and services, among other things. If enacted,
these laws could have a material adverse effect on the Company's business.

7. Common Stock:

On September 4, 1998, the Company entered into an agreement with Billing
Concepts Corp. ("BCC") whereby BCC acquired 2,493,870 shares of the Company's
common stock for $10,000,000. BCC was also given the right to purchase the
number of additional shares of the Company's common stock which is equal to

F-11
<PAGE>

PRINCETON ECOM CORPORATION

NOTES TO FINANCIAL STATEMENTS--(Continued)

(Information as of March 31, 1999, and for the three months ended March 31,
1998 and 1999, is unaudited)
the Company's working capital deficit as of June 30, 1998 in excess of $8.5
million divided by $4.01. On March 30, 1999, the Company sold BCC 134,376
shares for $538,848 in full settlement of this provision. In addition, this
agreement provides for, among other things, the right of first refusal on
certain equity transactions.

In February 1999, the Company's Chief Executive Officer sold 102,000 shares
of his holdings of the Company's common stock to certain BCC affiliates and to
a former director of the Company at $5.33 per share.

8. Income Taxes:
The reconciliation of the statutory federal income tax rate to the
Company's effective income tax rate is as follows:

<TABLE>
<CAPTION>
Year Ended
December 31
---------------------
1996 1997 1998
----- ----- -----
<S> <C> <C> <C>
Statutory federal income
tax rate.............. (34.0)% (34.0)% (34.0)%
State income taxes, net
of federal tax
benefit............... (6.3) (6.3) (6.3)
Nondeductible expenses.. -- 1.2 0.2
Valuation allowance..... 40.3 39.1 40.1
----- ----- -----
-- % -- % -- %
===== ===== =====
</TABLE>

Deferred taxes are determined based upon the estimated future tax effects
of differences between the financial statements and income tax basis of assets
and liabilities given the provisions of the enacted tax laws. The tax effect of
temporary differences that give rise to deferred taxes are as follows:

<TABLE>
<CAPTION>
December 31
----------------------
1997 1998
---------- ----------
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards............. $2,145,851 $3,485,424
Deferred compensation........................ -- 410,151
Development costs............................ 567,476 446,454
Accruals and reserves not currently
deductible................................. 109,555 124,403
Property and equipment....................... 60,223 --
---------- ----------
2,883,105 4,466,432
---------- ----------
Deferred tax liabilities:
Property and equipment....................... -- (141,987)
Other........................................ -- (20,132)
---------- ----------
-- (162,119)
---------- ----------
2,883,105 4,304,313
Less--Valuation allowance...................... (2,883,105) (4,304,313)
---------- ----------
Net deferred tax asset......................... $ -- $ --
========== ==========
</TABLE>

Due to the uncertainty surrounding the realization of the net deferred tax
asset, the Company has provided a full valuation allowance. As of December 31,
1998, the Company has net operating loss carryforwards of

F-12
<PAGE>

PRINCETON ECOM CORPORATION

NOTES TO FINANCIAL STATEMENTS--(Continued)

(Information as of March 31, 1999, and for the three months ended March 31,
1998 and 1999, is unaudited)
approximately $8,600,000 for federal tax purposes, which begin to expire in
2003, and $7,200,000 for state tax purposes, which begin to expire in 1999. The
Tax Reform Act of 1986 contains provisions that may limit the net operating
loss carryforwards available in any given year in the event of a 50% cumulative
change in ownership over a three-year period.

9. Stock Options:

Effective July 1, 1996, the Company adopted the 1996 Stock Option Plan (the
"Plan"). The Plan provides for the granting of incentive and non-qualified
stock options to employees and consultants of the Company. The Compensation
Committee of the Board of Directors administers the Plan and awards grants and
determines the terms of such grants at its discretion. The Company has reserved
4,500,000 shares of common stock for issuance pursuant to the Plan.

Effective October 20, 1998, the Company adopted the 1998 Non-Employee
Director Plan (the "Director Plan"). The Director Plan provides for the
granting of non-qualified stock options to non-employee directors of the
Company. The Director Plan provides for grants based on a formula, as defined,
and additional grants at the discretion of the Compensation Committee of the
Board of Directors. The Company has reserved 600,000 shares of common stock for
issuance pursuant to the Director Plan.

Information with respect to the options under the Company's plans is as
follows:

<TABLE>
<CAPTION>
Weighted
Average
Exercise Exercise
Shares Price Price
--------- ---------- --------
<S> <C> <C> <C>
Balance, January 1, 1996........................ -- $ -- $ --
Granted at fair market value.................. 512,700 0.03 0.03
--------- ---------- -----
Balance, December 31, 1996...................... 512,700 0.03 0.03
Granted at fair market value.................. 696,000 0.03 0.03
Canceled...................................... (115,500) 0.03 0.03
--------- ---------- -----
Balance, December 31, 1997...................... 1,093,200 0.03 0.03
Granted at fair market value.................. 492,000 4.00 4.00
Granted below fair market value............... 733,500 0.03 0.03
Exercised..................................... (10,950) 0.03 0.03
Canceled...................................... (140,850) 0.03 0.03
--------- ---------- -----
Balance, December 31, 1998...................... 2,166,900 0.03-4.00 0.93
Granted below fair market value............... 621,000 4.00-5.33 4.87
Exercised..................................... (30,000) 0.03 0.03
Canceled...................................... (60,000) 0.03 0.03
--------- ---------- -----
Balance, March 31, 1999......................... 2,697,900 $0.03-5.33 $1.87
========= ========== =====
Balance Exercisable, March 31, 1999............. 561,450 $ 0.03 $0.03
========= ========== =====
</TABLE>

All options have terms ranging from five to ten years and generally vest
over four years. The weighted average contractual life of options outstanding
as of March 31, 1999 was four years for options granted at $0.03 per share and
ten years for options granted at $4.00 and $5.33 per share. At March 31, 1999,
there were 2,361,150 shares available for future option grants under the plans.

F-13
<PAGE>

PRINCETON ECOM CORPORATION

NOTES TO FINANCIAL STATEMENTS--(Continued)

(Information as of March 31, 1999, and for the three months ended March 31,
1998 and 1999, is unaudited)

In connection with certain options granted to employees during the year
ended December 31, 1998 and the three months ended March 31, 1998 and 1999, the
Company recorded $1,884,500, $159,000 and $1,716,000 of deferred compensation,
respectively. These amounts represent the difference between the fair market
value of the Company's common stock on the date of grant and the exercise price
of options to purchase 733,500, 238,500 and 576,000 shares, respectively, of
the Company's common stock. Deferred compensation is amortized over the vesting
periods of the options, which range from immediate vesting to periods of up to
four years. For the year ended December 31, 1998 and the three months ended
March 31, 1998 and 1999, $1,017,744, $33,575 and $230,245 of deferred
compensation, respectively, was charged to expense. At March 31, 1999, the
Company had $2,352,511 of deferred compensation to be amortized over the
remaining vesting periods, which range from one to four years.

Pro forma information provided below has been determined as if the Company
had accounted for its employee stock options in accordance with SFAS No. 123,
"Accounting for Stock-Based Compensation." The determination of the fair value
of the options noted above was estimated at the date of grant using a Black-
Scholes option pricing model with the following weighted-average assumptions
for the years ended December 31, 1996, 1997 and 1998: risk free interest rate
of 6.2%, 5.8% and 4.9%, respectively, dividend yield of 0%, volatility factor
of the expected market price of the Company's common stock of 70%, and an
expected life of the options of four years.

The weighted average fair value of the options granted is as follows:

<TABLE>
<CAPTION>
Year Ended
December 31
-----------------
1996 1997 1998
----- ----- -----
<S> <C> <C> <C>
Granted at fair market value........................... $0.02 $0.02 $2.24
Granted below fair market value........................ -- -- 2.80
</TABLE>

For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the option vesting periods. The Company's
pro forma information is as follows:

<TABLE>
<CAPTION>
Year Ended December 31
-------------------------------------
1996 1997 1998
----------- ----------- -----------
<S> <C> <C> <C>
Net loss, as reported............. $(2,190,523) $(2,141,584) $(3,354,636)
Net loss per share, as reported... (0.26) (0.25) (0.36)
Pro forma net loss................ (2,191,728) (2,144,657) (3,364,955)
Pro forma net loss per share...... (0.26) (0.25) (0.36)
</TABLE>

10. Employee Benefit Plan:

The Company has a Section 401(k) retirement savings plan (the "401(k)
Plan"). The 401(k) Plan allows employees to contribute 2% to 15% of their
annual compensation subject to statutory limitations. Company contributions to
the 401(k) Plan are discretionary. Effective January 1999, the Company began
matching contributions of 100% of the first 6% of employee contributions.
Company contributions were $31,181 for the three months ended March 31, 1999.

11. Concentration of Credit Risk:

For the years ended December 31, 1996, 1997 and 1998 and the three months
ended March 31, 1998 and 1999, the Company had four, two, one, three and one
customer(s) which accounted for 61%, 22%, 12%, 35%

F-14
<PAGE>

PRINCETON ECOM CORPORATION

NOTES TO FINANCIAL STATEMENTS--(Continued)

(Information as of March 31, 1999, and for the three months ended March 31,
1998 and 1999, is unaudited)
and 11% of service fee revenues, respectively. At December 31, 1997 and 1998
and March 31, 1999 these customers had aggregate accounts receivable of
$79,402, $63,675 and $79,612 respectively. The loss of one or more of these
customers could have a materially adverse effect on the Company's business.

12. Related Party Transactions:

Prepaid expenses and other at December 31, 1998 and March 31, 1999 includes
$64,000 and $63,000 of advances made to the Company's Chief Executive Officer,
respectively. At December 31, 1998, certificates of deposit in the aggregate of
$370,000 were pledged as collateral for a guarantee by the Company of a
personal bank loan to this individual. In March 1999, the certificates of
deposit and loan guarantee were released.

13. Recapitalization and Public Offering Subsequent to December 31, 1998:

On March 30, 1999, the Company's Board of Directors authorized management
to file a Registration Statement with the SEC to permit the Company to commence
an initial public offering of 3,000,000 shares of its common stock, of which
none will be sold by current stockholders. In June 1999, the Company's
Certificate of Incorporation was amended to, among other things, authorize
3,000,000 shares of $0.01 par value preferred stock and 50,000,000 shares of
common stock, and to effect a 3-for-1 split of its common stock in the form of
a stock dividend. The authorized preferred stock and common stock and the stock
split have been retroactively reflected in the financial statements.

F-15
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders
of Princeton eCom Corporation:

We have audited in accordance with generally accepted auditing standards,
the financial statements of Princeton eCom Corporation, formerly Princeton
TeleCom Corporation, included in this registration statement and have issued
our report thereon dated March 30, 1999. Our audit was made for the purpose of
forming an opinion on the basic financial statements taken as a whole. The
accompanying financial statement schedule is the responsibility of the
Company's management and is presented for purposes of complying with the SEC's
rules and is not part of the basic financial statements. This schedule has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, fairly states in all material
respects the financial data required to be set forth therein in relation to the
basic financial statements taken as a whole.

/s/ Arthur Andersen LLP

Philadelphia, Pa.,

July 15, 1999

S-1
<PAGE>

PRINCETON ECOM CORPORATION

SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS

Allowance for Doubtful Accounts:

<TABLE>
<CAPTION>
Balance at Charged to Balance at
Beginning Costs and End of
of Year Expenses Write-offs Year
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
December 31, 1998................... $52,941 $15,500 $(18,499) $49,942
December 31, 1997................... 25,165 27,776 -- 52,941
December 31, 1996................... -- 25,165 -- 25,165
</TABLE>

S-2
<PAGE>

[CIRCULAR GRAPHIC APPEARS HERE DEPICTING THE INTEGRATION OF PRINCETON ECOM'S
SERVICES. ABOVE THE GRAPHIC IS THE QUOTE "PRINCETON ECOM PROVIDES A FULLY
INTEGRATED SUITE OF OUTSOURCED SERVICES FOR BILLER'S ELECTRONIC BILL PRESENTMENT
AND PAYMENT NEEDS."]
<PAGE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

, 1999

[LOGO FOR PRINCETON CECOM]

3,000,000 Shares of Common Stock

---------------------

PROSPECTUS

---------------------

Donaldson, Lufkin & Jenrette

First Union Capital Markets Corp.

DLJdirect Inc.

- --------------------------------------------------------------------------------

We have not authorized any dealer, salesperson or other person to give you
written information other than this prospectus or to make representations as to
matters not stated in this prospectus. You must not rely on unauthorized
information. This prospectus is not an offer to sell these securities or our
solicitation of your offer to buy the securities in any jurisdiction where that
would not be permitted or legal. Neither the delivery of this prospectus nor
any sales made hereunder after the date of this prospectus shall create an
implication that the information contained herein or the affairs of Princeton
eCom have not changed since the date hereof.

- --------------------------------------------------------------------------------

Until , 1999 (25 days after the date of this prospectus), all dealers
that effect transactions in these shares of common stock may be required to
deliver a prospectus. This is in addition to the dealer's obligation to deliver
a prospectus when acting as an underwriter and with respect to their unsold
allotments or subscriptions.

- --------------------------------------------------------------------------------
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution

The following table sets forth the various expenses in connection with the
sale and distribution of the securities being registered, other than
underwriting discounts and commissions. All the amounts shown are estimated
except the SEC registration fee, the National Association of Securities Dealers
filing fee and the Nasdaq National Market listing fee.

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee........... $ 12,788
NASD filing fee............................................... 5,100
Nasdaq National Market listing fee............................ 85,000
Printing and engraving expenses............................... 175,000
Legal fees and expenses....................................... 500,000
Accounting fees and expenses.................................. 150,000
Blue Sky fees and expenses (including legal fees)............. 25,000
Transfer agent and registrar fees and expenses................ 10,000
Miscellaneous................................................. 237,112
----------
Total $1,200,000
==========
</TABLE>

Item 14. Indemnification of Directors and Officers

Section 102 of the Delaware General Corporation Law ("DGCL"), as amended,
allows a corporation to eliminate the personal liability of directors of a
corporation to the corporation or its stockholders for monetary damages for a
breach of fiduciary duty as a director, except where the director breached his
duty of loyalty, failed to act in good faith, engaged in intentional misconduct
or knowingly violated a law, authorized the payment of a dividend or approved a
stock repurchase in violation of Delaware corporate law or obtained an improper
personal benefit.

Section 145 of the DGCL provides, among other things, that we may indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding (other than an
action by or in our right) by reason of the fact that the person is or was a
director, officer, agent or employee of ours or is or was serving at our
request as a director, officer, agent, or employee of another corporation,
partnership, joint venture, trust or other enterprise, against expenses,
including attorneys' fees, judgment, fines and amounts paid in settlement
actually and reasonably incurred by the person in connection with such action,
suit or proceeding. The power to indemnify applies (a) if such person is
successful on the merits or otherwise in defense of any action, suit or
proceeding, or (b) if such person acted in good faith and in a manner he
reasonably believed to be in our best interest, or not opposed to our best
interest, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The power to indemnify
applies to actions brought by or in our right as well, but only to the extent
of defense expenses (including attorneys' fees but excluding amounts paid in
settlement) actually and reasonably incurred and not to any satisfaction of
judgment or settlement of the claim itself, and with the further limitation
that in such actions no indemnification shall be made in the event of any
adjudication of negligence or misconduct in the performance of his duties to
us, unless the court believes that in light of all the circumstances
indemnification should apply.

Section 174 of the DGCL provides, among other things, that a director, who
willfully or negligently approves of an unlawful payment of dividends or an
unlawful stock purchase or redemption, may be held liable for such actions. A
director who was either absent when the unlawful actions were approved or
dissented at the time, may avoid liability by causing his or her dissent to
such actions to be entered in the books containing the

II-1
<PAGE>

minutes of the meetings of the board of directors at the time such action
occurred or immediately after such absent director receives notice of the
unlawful acts.

Our Amended and Restated Certificate of Incorporation will include a
provision that eliminates the personal liability of its directors for monetary
damages for breach of fiduciary duty as a director, except for liability:

. for any breach of the director's duty of loyalty to Princeton eCom or
its stockholders;

. for acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law;

. under the section 174 of the Delaware General Corporation Law regarding
unlawful dividends and stock purchases; or

. for any transaction from which the director derived an improper personal
benefit.

Our Amended and Restated Bylaws provide that:

. we must indemnify our directors and officers to the fullest extent
permitted by Delaware law;

. we may indemnify our other employees and agents to the same extent that
we indemnified our officers and directors, unless otherwise determined
by our board of directors; and

. we must advance expenses, as incurred, to our directors and executive
officers in connection with a legal proceeding to the fullest extent
permitted by Delaware law.

Prior to the completion of this offering, we intend to enter into indemnity
agreements with each of our directors and executive officers to give them
additional contractual assurances regarding the scope of the indemnification
described above and to provide additional procedural protections. In addition,
we intend to obtain directors' and officers' insurance in the amount of $15.0
million providing indemnification for our directors, officers and certain
employees for certain liabilities. We believe that these indemnification
provisions and agreements are necessary to attract and retain qualified
directors and officers.

The limitation of liability and indemnification provisions in our Amended
and Restated Certificate of Incorporation and Amended and Restated Bylaws may
discourage stockholders from bringing a lawsuit against directors for breach of
their fiduciary duty. They may also have the effect of reducing the likelihood
of derivative litigation against directors and officers, even though such an
action, if successful, might otherwise benefit us and our stockholders.
Furthermore, a stockholder's investment may be adversely affected to the extent
we pay the costs of settlement and damage awards against directors and officers
pursuant to these indemnification provisions.

At present, there is no pending material litigation or proceeding involving
any of our directors, officers or employees regarding which indemnification is
sought, nor are we aware of any threatened litigation that may result in claims
for indemnification.

Item 15. Recent Sales of Unregistered Securities

In the last three years, we sold the following securities:

In June 1996, we amended a stock purchase agreement with C. Richard Corl
dated June 29, 1993. By the terms of this amended stock purchase agreement, an
adjustment was made for the issuance of an additional 9,000 shares of common
stock to Mr. Corl and an adjustment increasing the amount owed to us by Mr.
Corl under a promissory note for an additional $1,350. This sale of securities
was made under the exemption of (S)4(2) under the Securities Act of 1933.

In July 1996, we sold an aggregate of 120,000 shares of common stock, of
which 30,000 shares were sold to each of Lawrence Greenberg, Diane Hancharik,
Susan Hubbard-Walker, and Alex Peterhans at a purchase price of $1,000. The
consideration for each of these purchases was a promissory note with a
principal

II-2
<PAGE>

amount of $1,000 and 6% interest per annum. Each of these promissory notes was
satisfied in March 1999. In addition, in July 1996 we delivered 45,000 shares
to Benson Lapides in satisfaction of amounts which we owed Mr. Lapides for
consulting services which he performed for us. These sales of securities were
made under the exemption of (S)4(2) under the Securities Act of 1933.

In March 1997, we sold an additional 30,000 shares of common stock to Mr.
Peterhans for an aggregate purchase price of $1,000. The consideration for this
purchase was a promissory note with a principal amount of $1,000 and an
interest rate of 6% per annum.

In December 1997, we sold 60,000 additional shares of common stock, of
which an additional 30,000 shares were sold to Mr. Greenberg and 30,000 shares
were sold to Mrs. Hubbard-Walker, in each instance for an aggregate purchase
price of $1,000. The consideration for each of these purchases was a promissory
note with a principal amount of $1,000 and 6% per annum. Each of these
promissory notes was satisfied in March 1999. These sales of securities were
made under the exemption of (S)4(2) under the Securities Act of 1933.

On September 4, 1998, the Company sold 2,493,870 shares of common stock to
Billing Concepts Corp. for an aggregate purchase price of $10,000,000 in cash.
This sale of securities was made under the exemption of (S)4(2) and Rule 506 of
Regulation D under the Securities Act of 1933.

On March 30, 1999, the Company sold an additional 134,376 shares of common
stock to Billing Concepts Corp. for an aggregate purchase price of $538,848.
These shares were sold to Billing Concepts Corp. under the terms of an option
granted to Billing Concepts Corp. in connection with their September 1998
purchase, which option permitted the purchase of additional shares if the
Company's working capital deficit, as of June 30, 1998, exceeded $8.5 million.
These shares were sold to Billing Concepts Corp. under the exemptions of
(S)4(2) and Rule 506 of Regulation D under the Securities Act of 1933.

Item 16. Exhibits and Consolidated Financial Statement Schedules

(a) Exhibits

<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
**1.1 Form of Underwriting Agreement between Princeton eCom Corporation
and the Underwriters.
*3(i)(1) Certificate of Incorporation, as amended, of Princeton eCom
Corporation.
*3(i)(2) Amended and Restated Certificate of Incorporation of Princeton
eCom Corporation.
*3(ii)(1) Amended and Restated Bylaws of Princeton eCom Corporation.
3(ii)(2) Second Amended and Restated Bylaws of Princeton eCom Corporation.
*4.1 Specimen Stock Certificate.
**5.1 Opinion of Kelley Drye & Warren LLP (including the consent of such
firm) as to the validity of the securities being offered.
*10.1 Employment Agreement between Princeton eCom and Ronald W. Averett.
*10.2 Employment Agreement between Princeton eCom and Christopher S.
Sugden.
*10.3 Amended 1996 Stock Option Plan.
*10.4 1998 Non-Employee Director Plan.
10.5 Form of Indemnification Agreement.
*10.6 Lease Agreement relating to 165 Wall Street, Princeton, New
Jersey.
*10.7 Voting Agreement between Billings Concepts Corp., Princeton eCom
Corporation, Donald C. Licciardello and the Licciardello Family
Limited Partnership.
*10.8 Stock Purchase Agreement between Princeton eCom Corporation and
Billing Concepts Corp.
10.9 Registration Rights Agreement between Princeton eCom Corporation
and Billing Concepts Corp.
**23.1 Consent of Kelley Drye & Warren LLP (included in Exhibit 5.1).*
23.2 Consent of Arthur Andersen LLP.
*23.3 Consent of William Jennings.
*23.4 Consent of Killen & Associates.
*24.1 Power of Attorney (on the signature page).
*27.1 Financial Data Schedule.
</TABLE>
- --------

* Previously filed.

** To be filed by amendment.

II-3
<PAGE>

(b) Financial Statement Schedules

Schedule II--Valuation and Qualifying Accounts

All other schedules are omitted because they are inapplicable or the
requested information is shown in the consolidated financial statements or
related notes.

Item 17. Undertakings

The undersigned registrant hereby undertakes to provide to the underwriters
at the closing specified in the underwriting agreements certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer, or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.

II-4
<PAGE>

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, as
amended, the Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of New York, State of New York, on the 22nd day of July, 1999.

PRINCETON ECOM CORPORATION

By: Donald C. Licciardello*
------------------------------
Donald C. Licciardello
Chairman and Chief Executive
Officer

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----

<S> <C> <C>
Donald C. Licciardello* Chairman and Chief Executive July 22, 1999
______________________________________ Officer
Donald C. Licciardello (Principal Executive Officer)

/s/ Christopher S. Sugden Senior Vice President and Chief July 22, 1999
______________________________________ Financial
Christopher S. Sugden Officer (Principal Financial and
Accounting Officer)

C. Richard Corl* Executive Vice President, July 22, 1999
______________________________________ Secretary
C. Richard Corl and Director

Parris H. Holmes, Jr.* Director July 22, 1999
______________________________________
Parris H. Holmes, Jr.

Director July 22, 1999
______________________________________
William C. Jennings

Director July 22, 1999
______________________________________
Robert S. McClane
</TABLE>

By: /s/ Christopher S. Sugden
-------------------------------
Christopher S. Sugden
Attorney-in-fact

II-5
<PAGE>

Exhibit List

<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
**1.1 Form of Underwriting Agreement between Princeton eCom and the
Underwriters.
*3(i)(1) Certificate of Incorporation, as amended, of Princeton eCom
Corporation.
*3(i)(2) Amended and Restated Certificate of Incorporation of Princeton
eCom Corporation.
*3(ii)(1) Amended and Restated Bylaws of Princeton eCom Corporation.
3(ii)(2) Second Amended and Restated Bylaws of Princeton eCom Corporation.
*4.1 Specimen Stock Certificate.
**5.1 Opinion of Kelley Drye & Warren LLP (including the consent of such
firm) as to the validity of the securities being offered.
*10.1 Employment Agreement between Princeton eCom and Ronald W. Averett.
*10.2 Employment Agreement between Princeton eCom and Christopher S.
Sugden.
*10.3 Amended 1996 Stock Option Plan.
*10.4 1998 Non-Employee Director Plan.
10.5 Form of Indemnification Agreement.
*10.6 Lease relating to 165 Wall Street, Princeton, New Jersey.
*10.7 Voting Agreement between Billing Concepts Corp., Princeton eCom
Corporation, Donald C. Licciardello and the Licciardello Family
Limited Partnership.
*10.8 Stock Purchase Agreement between Princeton eCom Corporation and
Billing Concepts Corp.
10.9 Registration Rights Agreement between Princeton eCom Corporation
and Billing Concepts Corp.
**23.1 Consent of Kelley Drye & Warren LLP (included in Exhibit 5.1).
23.2 Consent of Arthur Andersen LLP.
*23.3 Consent of William Jennings.
*23.4 Consent of Killen & Associates.
*24.1 Power of Attorney (on the signature page).
*27.1 Financial Data Schedule.
</TABLE>
- --------

* Previously filed.

** To be filed by amendment.

<PAGE>

Exhibit 3(ii)(2)

PRINCETON ECOM CORPORATION
__________________________

SECOND AMENDED & RESTATED BY-LAWS
_________________________

ARTICLE I
Offices
-------

1.01. Registered Office. The registered office shall be established
-----------------
and maintained in the City of Wilmington, County of New Castle, State of
Delaware.

1.02. Other Offices. The Corporation may have other offices at such
-------------
other places within and without the State of Delaware as the Board of Directors
may from time to time appoint or as the business of the Corporation may require.

ARTICLE II
Meetings of Shareholders
------------------------

2.01. Place of Meetings. All meetings of the shareholders shall be
-----------------
held at such place, within or without the State of Delaware, as the directors
may, from time to time fix. Whenever the directors shall fail to fix such
place, the meeting shall be held at the Corporation's principal place of
business.

2.02. Annual Meeting. An annual meeting of the shareholders of the
--------------
Corporation shall be held on the date and at the time fixed, from time to time,
by the directors, provided that each annual meeting shall be held on a date
within thirteen months after the date of the preceding annual meeting.

2.03. Special Meetings. Except as otherwise required by law, special
----------------
meetings of shareholders may only be called by the Chairman of the Board or the
Chief Executive Officer whenever they deem it necessary or advisable, or shall
be called by the Chief Executive Officer or the Secretary upon the written
request of a majority of the entire Board of Directors or a majority of the
holders of the shares of the Corporation entitled to vote at such meeting.

2.04. Notice of Meetings. Written notice of all meetings shall be
------------------
given, stating the place, date and hour of the meeting and stating the place
within the city or other municipality or community at which the list of
shareholders of the Corporation may be examined. The notice of an annual
meeting shall state that the meeting is called for the election of directors and
for the transaction of other business that may properly come before the meeting
and shall, if any other action
<PAGE>

which could be taken at a special meeting is to be taken at such annual meeting,
state the purpose or purposes. The notice of a special meeting shall in all
instances state the purpose or purposes for which the meeting is called. The
notice of any meeting shall also include, or be accompanied by, any additional
statements, information or documents prescribed by the Delaware General
Corporation Law. Except as otherwise provided by the Delaware General
Corporation Law, a copy of the notice of any meeting shall be given, personally
or by mail, not less than ten days nor more than sixty days before the date of
the meeting, unless the lapse of the prescribed period of time shall have been
waived, and directed to each shareholder at his record address or at such other
address that he may have furnished by request in writing to the Secretary of the
Corporation. Notice by mail shall be deemed to be given when deposited, with
postage thereon prepaid, in the United States mail. If a meeting is adjourned to
another time, not more than thirty days hence, and/or to another place, and if
an announcement of the adjourned time and/or place is made at the meeting, it
shall not be necessary to give notice of the adjourned meeting unless the
directors, after adjournment, fix a new record date for the adjourned meeting.
Notice need not be given to any shareholder who submits a written waiver signed
by him or her before or after the time stated therein. Attendance of a
shareholder at a meeting of shareholders shall constitute a waiver of notice of
such meeting, except when the shareholder attends the meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the shareholders need be specified in any written waiver of notice.

2.05. Record Date for Shareholders. For the purpose of determining
----------------------------
the shareholders entitled to notice of or to vote at any meeting of shareholders
or any adjournment thereof, or to express consent to or dissent from any
proposal without a meeting, or for the purpose of determining shareholders
entitled to receive payment of any dividend or the allotment of any rights or
for the purpose of any other action, the Board of Directors may fix, in advance,
a record date, which shall not be more than sixty nor less than ten days before
the date of such meeting, nor more than sixty days prior to any other action.
If no record date is fixed, the record date for determining shareholders
entitled to notice of or to vote at a meeting of shareholders shall be at the
close of business on the day next preceding the day on which notice is given,
or, if no notice is given, the day on which the meeting is held; the record date
for determining shareholders entitled to express consent to or dissent from any
proposal without a meeting, when no prior action by the Board of Directors is
necessary, shall be the day on which the first written consent or dissent, as
the case may be, is expressed; and the record date for determining shareholders
for any other purpose shall be at the close of business on the day on which the
Board of Directors adopts the resolution relating thereto. A determination of
shareholders of record entitled to notice of or to vote at any meeting of
shareholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.

2
<PAGE>

2.06. Proxy Representation. Every shareholder may authorize another
--------------------
person or persons to act for him by proxy in all matters in which a shareholder
is entitled to participate, whether by waiving notice of any meeting, voting or
participating at a meeting or expressing consent or dissent without a meeting.
Every proxy must be signed by the shareholder or by his attorney-in-fact. No
proxy shall be valid after the expiration of three years from the date thereof
unless such proxy provides for a longer period. Every proxy shall be revocable
at the pleasure of the shareholder executing it, except as may be otherwise
provided by law.

2.07. Voting at Shareholders' Meetings. Each outstanding share of
--------------------------------
common stock shall be entitled to one vote on each matter submitted to a vote at
a meeting of shareholders and each holder of shares of preferred stock shall be
entitled to such voting rights, if any, as provided in the terms of the
particular series of preferred stock. Directors shall be elected by the vote of
the holders of a plurality of the shares present at a meeting and entitled to
vote in the election. Unless otherwise provided by statute or the Certificate of
Incorporation, any other corporate action shall be authorized by the vote of the
holders of majority of the shares present in person or represented by proxy at
a meeting of shareholders and entitled to vote thereon. Unless otherwise
required by statute, voting need not be by ballot.

2.08. Quorum and Adjournment. Unless otherwise provided by
----------------------
statute, the holders of a majority of the outstanding shares of the Corporation
entitled to vote at the meeting, present in person or represented by proxy,
shall constitute a quorum for the transaction of any business. When a quorum is
once present to organize a meeting, it shall not be broken by the subsequent
withdrawal of any shareholders. If a quorum is not present or represented at
any meeting of the shareholders, the shareholders present in person or
represented by proxy shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall be
present or represented. At such adjourned meeting at which a quorum shall be
present or represented, any business may be transacted which might have been
transacted at the meeting as originally notified.

2.09. List of Shareholders. The officer who has charge of the record
--------------------
of shareholders of the Corporation shall prepare, make and certify, at least ten
days before every meeting of shareholders, a complete list of the shareholders,
as of the record date fixed for such meeting, arranged in alphabetical order,
and showing the address of each shareholder and the number of shares registered
in each shareholder's name. Such list shall be open to the examination of any
shareholder, for any purpose germane to the meeting, during ordinary business
hours, for a period of at least ten days prior to the meeting, at the principal
office of the Corporation or at a place within the city, municipality or
community where the meeting is to be held, and shall be available for the
examination of any share holder at the place and during the time of the
meeting. Such list shall be the only evidence as to who are the shareholders
entitled to examine such list, the record of shareholders or the books of the
Corporation, or to vote at any meeting of shareholders.

3
<PAGE>

2.10. Action Without Meeting. Any action required or permitted to be
----------------------
taken by the stockholders of the Corporation must be effected at a duly called
annual or special meeting of such holders and may not be effected by any consent
in writing by such holders, except that an amendment to the Certificate of
Incorporation of the Corporation in order to change the name of the Corporation
may be approved without a meeting, by consent in writing of the holders of the
outstanding stock of the Corporation having not less than the minimum number of
votes that would be necessary to approve such amendment at a meeting at which
all shares entitled to vote thereon were present and voted pursuant to the
provisions of Section 228 of the Delaware General Corporation Law. Except as
otherwise required by law and subject to the rights of the holders of any class
or series of stock having a preference over the Common Stock as to dividends or
upon liquidation, special meetings of stockholders of the Corporation may be
called only by the board of directors pursuant to a resolution approved by a
majority of the entire board of directors.

2.11. Shareholder Proposal Any shareholder entitled to vote at a
--------------------
meeting of shareholders and who/which meets the requirements of the proxy rules
under the Securities Exchange Act of 1934, as amended, may submit to the Board
proposals to be considered for submission to the shareholders of the Corporation
for their vote. The introduction of any shareholder proposal that the Board
decides is a proper matter for shareholder action shall be made by notice in
writing delivered or mailed by first-class United States mail, postage prepaid,
to the Secretary of the Corporation, and received by the Secretary not less than
(i) with respect to any proposal to be introduced at an annual meeting of
shareholders, one hundred and twenty days in advance of the date of the
Corporation's proxy statement released to shareholders in connection with the
previous year's annual meeting and (ii) with respect to any proposal to be
introduced at a special meeting of shareholders, the close of business on the
seventh day following the date on which notice of such meeting is first given to
shareholders. Each such notice shall set forth: (a) the name and address of the
shareholder who intends to make the proposal and the text of the proposal to be
introduced; (b) the class and number of shares of stock held of record, owned
beneficially and represented by proxy by such shareholder as of the record date
for the meeting (if such date shall then have been made publicly available) and
as of the date of such notice; (c) a representation that the shareholder intends
to appear in person or by proxy at the meeting to introduce the proposal or
proposals, specified in the notice; and (d) such other information regarding the
proposal proposed by such shareholder as would be required for inclusion of such
proposal in a proxy statement filed pursuant to the rules of the Securities and
Exchange Commission. The presiding officer of the meeting may refuse to
acknowledge the introduction of any shareholder proposal not made in compliance
with the foregoing procedure.

2.12. Officers of Meeting. The Chairman of the Board shall preside at
-------------------
all meetings of shareholders. In the absence of the Chairman of the Board, the
Chief Executive Officer shall preside. In absence of both, unless the Board of
Directors has provided for someone else to preside at the meeting, the meeting
shall be presided over by one of the following officers in the order of
seniority and if present and acting: the President or a Vice President. The
Secretary shall act as the secretary of all meetings of shareholders. In the
absence of the Secretary , any assistant secretary who is present shall act as
the secretary for the meeting. If no assistant secretary is present, the
presiding officer shall designate the secretary.

4
<PAGE>

2.13. Inspectors. The Board of Directors, in advance of any meeting,
-----------
may, but need not, appoint one or more inspectors of election to act at the
meeting or any adjournment thereof. If an inspector or inspectors are not
appointed, the person presiding at the meeting may, but need not, appoint one or
more inspectors. In case any person who may be appointed as an inspector fails
to appear or act, the vacancy may be filled by appointment made by the Directors
in advance of the meeting or at the meeting by the person presiding thereat.
Each inspector, if any, before entering upon the discharge of his duties, shall
take and sign an oath faithfully to execute the duties of inspectors at such
meeting with strict impartiality and according to the best of his ability. The
inspectors, if any, shall determine the number of shares of stock outstanding
and the voting power of each, the shares of stock represented at the meeting,
the existence of a quorum, the validity and effect of proxies, and shall receive
votes, ballots or consents, hear and determine all challenges and questions
arising in connection with the right to vote, count and tabulate all votes,
ballots or consents, determine the result, and do such acts as are proper to
conduct the election or vote with fairness to all shareholders. On request of
the person presiding at the meeting, the inspector or inspectors, if any, shall
make a report in writing of any challenge, question or matter determined by him,
her or them and execute a certificate of any fact so found.

ARTICLE III
Directors
---------

3.01. Number of Directors. The number of directors may be fixed
-------------------
from time to time by the affirmative vote of a majority of the entire Board of
Directors or of the shareholders at an annual or special meeting. The Board of
Directors shall consist of at least one person. No decrease in the number of
directors shall shorten the term of any incumbent director.

3.02. Election and Term. Each director shall be classified, with
-----------------
respect to the time for which they severally hold office, into three classes, as
nearly equal as possible, as determined by the Board of Directors, one class to
be originally elected in 1998 for a term expiring at the annual meeting of
shareholders to be held in 2002, another class to be originally elected in 1998
for a term expiring at the annual meeting of shareholders to be held in 2001,
and another class to be originally elected in 1998 for a term expiring at the
annual meeting of shareholders to be held in 2000, with each class to hold
office until its successors is elected and qualified. At each annual meeting of
the shareholders of the Corporation, the successors of the class of directors
whose term expires at that annual meeting of shareholders shall be elected to
hold office for a term expiring at the annual meeting of shareholders held in
the third year following the year of their election. Advance notice of
shareholder nominations for the election of directors shall be given in the
manner provided in Section 3.10 of this Article III of these By-Laws. Any
directors elected to fill a vacancy on the Board of Directors or any newly
created directorships resulting from any increase in the number of directors
shall hold office for the remainder of the full term of the class of directors
in which the new directorship was created or the vacancy occurred and until such
director's successor shall have been duly elected and qualified.

5
<PAGE>

3.03. Filling Vacancies, Resignation and Removal. Any director may be
------------------------------ -----------
removed, for cause, by vote of the holders of a majority of the shares entitled
to vote at the election of directors. In the interim between annual meetings of
shareholders or special meetings of shareholders called for the election or
removal of one or more directors, newly created directorships and any vacancies
in the Board of Directors, including vacancies resulting from the resignation or
removal of directors, may be filled by the vote of a majority of the remaining
directors then in office, although less than a quorum, or by the sole remaining
director.

3.04. Qualifications and Powers. Each director shall be at least
-------------------------
eighteen years of age. A director need not be a shareholder, a citizen of the
United States or a resident of the State of Delaware. The business of the
Corporation shall be managed by the Board of Directors, subject to the
provisions of the Certificate of Incorporation. In addition to the powers and
authorities expressly conferred upon it by these By-laws, the Board may exercise
all such powers of the Corporation and do all such lawful acts and things as are
not by statute or by the Certificate of Incorporation or by these By-laws
directed or required to be exercised or done exclusively by the shareholders.

3.05. Regular and Special Meetings of the Board of Directors. The
------------------------------- ----------------------
Board of Directors may hold its meetings, regular or special, within or without
the State of Delaware.

The newly elected Board may meet at such place and time as shall be fixed
by the vote of the shareholders at the annual meeting or by the consent in
writing of all the directors for the purpose of organization or otherwise. No
notice of such meeting shall be necessary to the newly elected directors in
order legally to constitute the meeting provided a majority of the entire Board
shall be present.

Regular meetings of the Board may be held with or without notice at such
time and place as shall from time to time be determined by resolution of the
Board. Whenever the time or place of regular meetings of the Board shall have
been determined by resolution of the Board, no regular meetings shall be held
pursuant to any resolution of the Board altering or modifying its previous
resolution relating to the time or place of the holding of regular meetings,
without first giving at least three days written notice to each director, either
personally or by telegraph or at least five days written notice to each director
by mail, of the substance and effect of such new resolution relating to the time
and place at which regular meetings of the Board may thereafter be held without
notice.

Special meetings of the Board shall be held whenever called by the Chairman
of the Board, the Chief Executive Officer, or the Secretary on the written
request of any director. Notice of each special meeting of the Board shall be
delivered personally to each director or sent by telephone or telegraph to his
residence or usual place of business at least three days before the meeting, or
mailed to him in his residence or usual place of business at least five days
before the meeting.

6
<PAGE>

Meetings of the Board, whether regular or special, may be held at any time
and place, and for any purpose, without notice, when all the directors are
present or when all directors not present shall, in writing, waive notice of
such meeting and such waiver may be given after the holding of such meeting. All
or any of the directors may waive notice of any meeting and the presence of a
director at any meeting of the Board shall be deemed a waiver of notice thereof
by him. A notice, or waiver of notice, need not specify the purpose or purposes
of any regular or special meeting of the Board.

3.06. Quorum and Action. A majority of the entire Board of Directors
-----------------
shall constitute a quorum except that when a vacancy or vacancies prevents such
majority, a majority of the directors in office shall constitute a quorum,
provided, that such majority shall constitute at least one-third of the entire
Board. A majority of the directors present, whether or not they constitute a
quorum, may adjourn a meeting to another time and place. Except as may be
otherwise provided by these By-laws or by law, the vote of the majority of the
directors present at a meeting at which a quorum is present shall be the act of
the Board.

3.07. Telephonic Meetings. Any member or members of the Board of
-------------------
Directors, or of any committee designated by the Board, may participate in a
meeting of the Board, or any such committee, as the case may be, by means of
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time, and
participation in a meeting by such means shall constitute presence in person at
such meeting.

3.08. Action Without a Meeting. Any action required or permitted to
------------------------
be taken by the Board of Directors, or any committee thereof, may be taken
without a meeting if all members of the Board or committee, as the case may be,
consent in writing to the adoption of a resolution authorizing the action. The
resolution and the written consents thereto by the members of the Board or
committee shall be filed with the minutes of proceedings of the Board or
committee.

3.09. Compensation of Directors. By resolution of the Board of
-------------------------
Directors, the directors may be paid their expenses, if any, for attendance at
each regular or special meeting of the Board or of any committee designated by
the Board and may be paid a fixed sum for attendance at such meeting. In
addition, directors may be paid an annual fee as may be fixed from time to time
by the Board of Directors. Nothing herein contained shall be construed to
preclude any director from serving the Corporation in any other capacity and
receiving compensation therefor; provided, however, that directors who are also
salaried officers shall not receive fees as directors.

3.10. Nomination. Nominations for the election of directors may be
-----------
made by the Board of Directors or a proxy committee appointed by the Board of
Directors or by any shareholder entitled to vote in the election of directors.
However, any shareholder entitled to vote in the election of directors at a
meeting may nominate a director only if written notice of such shareholder's
intent to make such nomination or nominations has been given, either by personal
delivery or by United States mail, postage prepaid, to the Secretary of the
Corporation not later than (i) with respect to an election to be held at an
annual meeting of shareholders, one hundred and twenty (120) days in advance of

7
<PAGE>

the date established by the By-Laws for the holding of such meeting, and (ii)
with respect to an election to be held at a special meeting of shareholders for
the election of directors, the close of business on the seventh day following
the date on which notice of such meeting is first given to shareholders. Each
such notice shall set forth (a) the name and address of the shareholder who
intends to make the nomination and of the person or persons to be nominated; (b)
a representation that the shareholder is a holder of record of stock of the
Corporation entitled to a vote at each meeting and intends to appear in person
or by proxy at the meeting to nominate the person or persons specified in the
notice; (c) a description of all arrangements or understandings between the
shareholder and each nominee and any other person or person (naming such person
or persons) pursuant to which the nomination or nominations are to be made by
the shareholder; (d) such other information regarding each nominee proposed by
such shareholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange Commission, had the
nominee been nominated or intended to be nominated, by the Board of Directors;
and (e) the consent of each nominee to serve as a director of the Corporation if
so elected. The presiding officer of the meeting may refuse to acknowledge the
nomination of any person not made in compliance with the foregoing procedure.

3.11. Presiding Officer. The Chairman of the Board shall preside at
------------------
all meetings of the Board of Directors. In the absence of the Chairman of the
Board, the then present members of the Board shall select a Board member or
officer to preside at the meeting.

3.12 Chairman of the Board. The Chairman of the Board shall be chosen
----------------------
among the members of the Board by resolution passed by a majority of the entire
Board. Unless otherwise provided in the resolution choosing him, the Chairman of
the Board shall be chosen for a term equal to the term he is elected to hold
office as a director and until his successor shall have been chosen and
qualified. Unless the entire Board determines otherwise, the Chairman of the
Board shall be the Chief Executive Officer.

ARTICLE IV
Committees
----------

4.01. In General. The Board of Directors may, by resolution or
----------
resolutions passed by the affirmative vote of a majority of the entire Board,
which majority must include the Chairman of the Board, designate an Executive
Committee and such other committees as the Board may from time to time
determine, each to consist of one or more directors, and each of which, to the
extent provided in the resolution or in the Certificate of Incorporation or in
the By-laws, shall have and may exercise the powers and authority of the Board,
with the exception of any authority the delegation of which is prohibited by the
General Corporation Law of the State of Delaware. Each committee shall serve at
the pleasure of the Board. The Board may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee. In the absence or disqualification of a
member of a committee, the member or members thereof present at any meeting and
not disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member.

8
<PAGE>

ARTICLE V
Officers
--------

5.01. Designation, Term, Removal and Vacancies. The officers of the
----------------------------------------
Corporation shall be a Chief Executive Officer, a President, one or more Vice
Presidents, including Executive Vice Presidents and Senior Vice Presidents, a
Secretary, a Treasurer, and such other officers and agents as the Board of
Directors or the Chief Executive Officer may from time to time deem necessary or
desirable for the conduct of the business of the Corporation . Such officers
may have and perform the powers and duties usually pertaining to their
respective offices, the powers and duties respectively prescribed by law and by
these By-Laws, and such additional powers and duties as may from time to time be
prescribed by the Board. Any number of offices may be held by the same person.

The officers of the Corporation shall be appointed by the Board as soon as
practicable after the election of the Board at the annual meeting of
shareholders, and shall hold office until the meeting of the Board of Directors
following the next annual meeting of shareholders and until their successors
have been appointed and qualified; provided, however, that the Board of
Directors or the Chief Executive Officer may remove any officer at any time,
with or without cause. Vacancies occurring among the officers of the Corporation
shall be filled by the Board of Directors or the Chief Executive Officer.
Election or appointment of an officer or agent shall not of itself create
contract rights. The compensation of the Chief Executive Officer, the President
and senior officers shall be fixed by the Board of Directors, or a committee
thereof. The Chief Executive Officer shall have the power to fix the
compensation of all other officers and agents of the Corporation.

5.02. Chief Executive Officer. Subject only to the direction of the
-----------------------
Board of Directors, the Chief Executive Officer shall have general charge of the
entire business and affairs of the Corporation and the authority to instruct,
direct and control its officers, employees and agents. He may sign certificates
of stock and sign and seal bonds, debentures, contracts or other obligations
authorized by the Board, and may, without previous authority of the Board, make
such contracts as the ordinary conduct of the Corporation's business requires.
He shall have the usual powers and duties vested in the chief executive officer
of a corporation. He shall have power to select, appoint and remove all
necessary officers and employees of the Corporation, make new appointments to
fill vacancies and to prescribe the powers and duties of such officers and
employees. He may delegate any of his powers to the President or Vice
Presidents of the Corporation.

5.03. President. The President shall be the Chief Operating Officer
-----------
of the Corporation and shall have such powers and duties as the Chief Executive
Officer may from time to time delegate to him. The President, in the absence, or
inability to act, of the Chief Executive Officer, shall assume and carry out all
responsibilities set forth with respect to such Chief Executive Officer.

5.04. Vice Presidents. Executive Vice Presidents, Senior Vice
---------------
Presidents and Vice Presidents shall have such powers and duties as the Chief
Executive Officer or the President may from time to time delegate to them, and
shall have such other powers and perform such other duties as may be assigned to
them by the Board of Directors.

9
<PAGE>

5.05. Treasurer. The Treasurer shall have custody of such funds and
---------
securities of the Corporation as may come to his hands or be committed to his
care by the Board of Directors. Whenever necessary or proper, he shall endorse
on behalf of the Corporation\\, \\for collection, checks, notes, or other
obligations, and shall deposit the same to the credit of the Corporation in such
bank or banks or depositories, approved by the Board of Directors, as the Board
of Directors or Chief Executive Officer or President may designate. He may sign
receipts or vouchers for payments made to the Corporation, and the Board of
Directors may require that such receipts or vouchers shall also be signed by
some other officer to be designated by them. Whenever required by the Board of
Directors, he shall render a statement of his cash accounts and such other
statements respecting the affairs of the Corporation as may be required. He
shall keep proper and accurate books of account. He shall perform all acts
incident to the office of Treasurer, subject to the control of the Board.

5.06. Secretary. The Secretary shall have custody of the seal of the
---------
Corporation and when required by the Board of Directors, or when any instrument
shall have been signed by the Chief Executive Officer, the President or by any
other officer duly authorized to sign the same, or when necessary to attest any
proceedings of the shareholders or directors, shall affix it to any instrument
requiring the same and shall attest the same with his signature, provided that
the seal may be affixed by the Chief Executive Officer, the President or any
Vice President or other officer of the Corporation to any document executed by
either of them respectively on behalf of the Corporation which does not require
the attestation of the Secretary. He shall attend to the giving and serving of
notices of meetings. He shall have charge of such books and papers as properly
belong to his office or as may be committed to his care by the Board of
Directors. He shall perform such other duties as appertain to his office or as
may be required by the Board of Directors.

5.07. Delegation. In case of the absence of any officer of the
----------
Corporation, or for any other reason that the Board of Directors may deem
sufficient, the Board may temporarily delegate the powers or duties, or any of
them, of such officer to any other officer or to any director.

ARTICLE VI
Shares
------

6.01. Certificates Representing Shares. All certificates representing
--------------------------------
shares of the Corporation shall be signed by the Chief Executive Officer, the
President or a Vice President and by the Secretary or an Assistant Secretary or
the Treasurer or an Assistant Treasurer, shall bear the seal of the Corporation
and shall not be valid unless so signed and sealed. Certificates countersigned
by a duly appointed transfer agent or registered by a duly appointed registrar
shall be deemed to be so signed and sealed whether the signatures be manual or
facsimile signatures and whether the seal be a facsimile seal or any other form
of seal. All certificates shall be consecutively numbered and the name of the
person owning the shares represented thereby, his residence, with the number of
such shares and the date of issue, shall be entered on the Corporation/'/s
books. All certificates surrendered shall be canceled and no new certificates
issued until the former certificates for the same number of shares shall have
been surrendered and canceled, except as provided for herein.

10
<PAGE>

In case any officer who signed or whose facsimile signature was affixed
to any certificate shall have ceased to be such officer before such certificate
is issued, it nevertheless may be issued by the Corporation as if he were such
officer at the date of its issuance.

Any restrictions on the transfer or registration of transfer of any
shares of any class or series shall be noted conspicuously on the certificate
representing such shares.

6.02. Stolen, Lost or Destroyed Certificates. The Board of Directors
--------------------------------------
may in its sole discretion direct that a new certificate for shares be issued in
place of any certificate for shares issued by the Corporation alleged to have
been stolen, lost or destroyed. When authorizing such issuance of a new
certificate, the Board of Directors may, in its discretion, and as a condition
precedent thereto, require the owner of such stolen, lost or destroyed
certificate or his legal representatives to give the Corporation a bond in such
sum as the Corporation may direct not exceeding double the value of the shares
represented by the certificate alleged to have been stolen, lost or destroyed.

6.03. Transfers of Shares. Upon compliance with all provisions
-------------------
restricting the transferability of shares, if any, transfers of shares shall be
made upon the books of the Corporation only by the holder in person or by his
attorney thereunto authorized by power of attorney duly filed with the Secretary
of the Corporation or with a transfer agent or registrar, if any, and upon the
surrender and cancellation of the certificate or certificates for such shares
properly endorsed and the payment of all taxes due thereon. The Board of
Directors may appoint one or more suitable banks or trust companies as transfer
agents or registrars of transfers, for facilitating transfers of any class or
series of shares of the Corporation by the holders thereof under such
regulations as the Board of Directors may from time to time prescribe. Upon
such appointment being made, all certificates of shares of such class or series
thereafter issued shall be countersigned by one of such transfer agents or one
of such registrars of transfers, and shall not be valid unless so countersigned.

ARTICLE VII
Dividends and Finance
---------------------

7.01. Dividends. The Board of Directors shall have power to fix and
---------
determine and to vary, from time to time, the amount of the working capital of
the Corporation before declaring any dividends among its shareholders, to
determine the date or dates for the declaration and payment of dividends and the
amount of any dividend, and the amount of any reserves necessary in their
judgment before declaring any dividends among its shareholders, and to determine
the amount of surplus of the Corporation from time to time available for
dividends.

7.02. Fiscal Year. The fiscal year of the Corporation shall be the
-----------
calendar year.

11
<PAGE>

ARTICLE VIII
Indemnification
---------------

8.01. The Corporation shall indemnify any officer or director who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the Corporation) by
reason of the fact that such person is or was a director or officer, or is or
was serving at the request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, and unless otherwise determined by the Board of Directors, the
Corporation shall indemnify persons by reason of the fact that such person is or
was an employee or agent of the Corporation, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably believed to be in or not opposed to the best interests of the
Corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe such person's conduct was unlawful. The termination
of any action, suit or proceeding by judgment, order, settlement, conviction or
upon a plea of nolo contendere or its equivalent shall not, of itself, create a
presumption that the person did not act in good faith and in a manner that such
person reasonably believed to be in or not opposed to the best interests of the
Corporation, and with respect to any criminal action or proceeding, had
reasonable cause to believe that such person's conduct was unlawful.

8.02. The Corporation shall indemnify any officer or director who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that such person is or was a
director or officer of the Corporation, or is or was serving at the request of
the Corporation as director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, and unless otherwise
determined by the Board of Directors, the Corporation shall indemnify persons by
reason of the fact that such person is or was an employee or agent of the
Corporation, against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection with the defense or settlement
of such action or suit if such person acted in good faith and in a manner such
person reasonably believed to be in or not opposed to the best interests of the
Corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the Corporation unless and only to the extent that the Court of
Chancery of the State of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability, but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court of
Chancery or such other court shall deem proper.

8.03. To the extent that a director, officer, employee or agent of the
Corporation, who is entitled to indemnification under Section 8.01 or 8.02, has
been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in Sections 8.01 and 8.02 of this Article VIII, or in
defense of any claim, issue or matter therein, such person shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
such person in connection therewith. For purposes of determining the
reasonableness of any such expenses, a certification to such effect by any
member of the Bar of the State of Delaware, which member of the Bar may have
acted as counsel to any such director, officer or employee, shall be binding
upon the Corporation unless the Corporation establishes that the certification
was made in bad faith.

12
<PAGE>

8.04. Any indemnification under Sections 8.01 and 8.02 of this Article
VIII (unless ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances because any
such person has met the applicable standard of conduct set forth in Sections
8.01 and 8.02 of this Article VIII. Such determination shall be made (1) by the
Board of Directors, by a majority vote of a quorum consisting of directors who
were not parties to such action, suit or proceeding, or (2) if such a quorum is
not obtainable, or even if obtainable, a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (3) by the
shareholders.

8.05. In any indemnification under Section 8.01 and 8.02 of this
Article VIII, expenses (including attorneys' fees) incurred by an officer,
director, employee or agent of the Corporation in defending any civil, criminal,
administrative or investigative action, suit or proceeding, which shall be paid
by the Corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director,
officer, employee or agent to repay such amount if it shall ultimately be
determined that any such person is not entitled to be indemnified by the
Corporation as authorized by this Article VIII.

8.06. The indemnification and advancement of expenses provided by, or
granted pursuant to, the other sections of this Article VIII shall not be deemed
exclusive of any other rights to which any person seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
shareholders or disinterested directors or otherwise, both as to action in such
person's official capacity and as to action in another capacity while holding
such office.

8.07. The Corporation may but shall not be required to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against any liability
asserted against such person and incurred by such person in any capacity, or
arising out of such person's status as such, whether or not the Corporation
would have the power to indemnify such person against such liability under this
Article VIII.

8.08. For purposes of this Article VIII, references to "the
Corporation" shall include, in addition to the resulting corporation, any
constituent corporation (including any constituent of a constituent) absorbed in
a consolidation or merger, which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers and employees
or agents, so that any person who is or was a director, officer, employee or
agent of such constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
shall stand in the same position under this Article VIII with respect to the
resulting or surviving corporation as such person would have with respect to
such constituent corporation if its separate existence had continued.

13
<PAGE>

8.09. For purposes of this Article VIII, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on a person with respect to any employee
benefit plan; and references to "serving at the request of the Corporation"
shall include any service as a director, officer, employee or agent of the
Corporation which imposes duties on, or involves services by, such director,
officer, employee or agent with respect to an employee benefit plan, its
participants or beneficiaries, and a person who acted in good faith and in a
manner such person reasonably believed to be in the interest of the participants
and beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the Corporation" as referred to in
this Article VIII.

8.10. The indemnification and advancement of expenses provided by, or
granted pursuant to, this Article VIII shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.

8.11. This Article VIII shall be interpreted and construed to accord,
as a matter or right, to the directors and officers of the Corporation, to
directors and officers who are or were serving at the request of the Corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, and to employees and agents of the
Corporation who are entitled to indemnification under Section 8.01 or 8.02 , the
full measure of indemnification and advancement of expenses permitted by
Delaware General Corporation Law.

8.12. Any person seeking indemnification or advancement of expenses by
virtue of such person being or having been a director or officer of the
Corporation may seek to enforce the provisions of this Article VIII by an action
in law or equity in any court of the United States or any state or political
subdivision thereof having jurisdiction of the parties. Without limitation of
the foregoing, it is specifically recognized that remedies available at law may
not be adequate if the effect thereof is to impose delay on the immediate
realization by any such person of the rights conferred by this Article VIII.
Any costs incurred by any person in enforcing the provisions of this Article
VIII shall be an indemnifiable expense in the same manner and to the same extent
as other indemnifiable expenses under this Article VIII.

8.13. No amendment, modification or repeal of this Article VIII shall
have the effect of or be construed to limit or adversely affect any claim to
indemnification or advancement of expenses made by any person who is or was a
director or officer of the Corporation, or an employee or agent of the
Corporation, who is entitled to indemnification under Sections 8.01 and 8.02,
with respect to any statement of facts that existed prior to the date of such
amendment, modification or repeal. Accordingly, any amendment, modification or
repeal of this Article VIII shall be deemed to have prospective application only
and shall not be applied retroactively.

14
<PAGE>

ARTICLE IX

9.01. Notices. Whenever any notice is required by these By-Laws to be
-------
given, personal notice is required only if it is expressly so stated, and when
not so expressly stated notice shall be deemed sufficient if given by depositing
the same in a post office box in a sealed postage prepaid wrapper, addressed to
the person entitled thereto at his last known post office address, and such
notice shall be deemed to have been given on the day of such mailing.

Whenever any notice is required to be given under the provisions of
the statutes or of the Certificate of Incorporation or of these By-Laws, a
waiver thereof in writing, signed by the person or persons entitled to said
notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.

9.02. Amendments. Except as otherwise provided herein, these By-Laws
----------
may only be altered, amended or repealed and new By-Laws may only be adopted by
the shareholders or by a resolution passed by the affirmative vote of a majority
of the entire Board of Directors, which majority must include the Chairman of
the Board.

9.03. Seal. The corporate seal shall have inscribed thereon the name
----
of the Corporation, the year of its organization and the words "Corporate Seal,
Delaware." One or more duplicate dies for impressing such seal may be kept and
used.

9.04. Registered Shareholders. The Corporation shall be entitled
------------------------
to recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends, and to vote as such owner, and to hold
liable for calls and assessments a person registered on its books as the owner
of shares, and shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as otherwise provided
by the laws of the State of Delaware.

<PAGE>

EXHIBIT 10.5

FORM OF INDEMNIFICATION AGREEMENT
---------------------------------

INDEMNIFICATION AGREEMENT, dated as of June , 1999, by and between
PRINCETON ECOM CORPORATION, a Delaware corporation (the "Company"), and the
director and/or officer of the Company whose name appears on the signature page
of this Agreement (the "Indemnitee").

WHEREAS, highly competent persons are becoming more reluctant to serve
publicly-held corporations as directors, officers, or in similar capacities
unless they are provided with reasonable protection through insurance or
indemnification against risks of claims and actions against them arising out of
their service to and activities on behalf of the corporations; and

WHEREAS, the current impracticability of obtaining adequate insurance
and the uncertainties related to indemnification have increased the difficulty
of attracting and retaining such persons; and

WHEREAS, the Board of Directors of the Company (the "Board") has
determined that the ability to attract and retain such persons is in the best
interests of the Company's stockholders and that the Company should act to
assure such persons that there will be increased certainty of such protection in
the future; and

WHEREAS, it is reasonable, prudent and necessary for the Company to
oblige itself contractually to indemnify such persons to the fullest extent
permitted by applicable law so that they will serve or continue to serve the
Company free from undue concern that they will not be so indemnified; and

WHEREAS, this Agreement is a supplement to and in furtherance of the
indemnification contemplated by the Company's Certificate of Incorporation, as
amended, and rights granted under the Certificate of Incorporation, as amended,
and any resolutions adopted pursuant thereto, and shall not be deemed to be a
substitute therefor nor to diminish or abrogate any rights of Indemnitee
thereunder; and

WHEREAS, Indemnitee is willing to serve, continue to serve, and to
take on additional service for or on behalf of the Company on the condition that
Indemnitee be so indemnified.

NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:

1. Definitions. For purposes of this Agreement:
-----------

(a) "Corporate Status" means the status of a person who is or was a
director, officer, employee, agent or fiduciary of the Company or any majority
owned subsidiary or of any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise which such person is or was serving at
the request of the Company.
<PAGE>

(b) "Disinterested Director" means a director of the Company who is
not or was not a party to the Proceeding in respect of which indemnification is
sought by Indemnitee.

(c) "Expenses" means all reasonable attorneys' fees and costs,
retainers, court costs, transcript costs, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees and all other disbursements or expenses of the
types customarily incurred in connection with prosecuting, defending, preparing
to prosecute or defend, investigating, or being or preparing to be a witness in
a Proceeding.

(d) "Independent Counsel" means a law firm or a member of a law firm
that is experienced in matters of corporate law and neither is presently nor in
the past five years has been retained to represent: (i) the Company or
Indemnitee in any matter material to either such party or (ii) any other party
to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any firm or person who, under the applicable standards of professional conduct
then prevailing, would have a conflict of interest in representing either the
Company or Indemnitee in an action to determine Indemnitee's right to
indemnification under this Agreement. All fees and expenses of the Independent
Counsel incurred in connection with acting pursuant to this Agreement shall be
borne by the Company.

(e) "Proceeding" means any action, suit, arbitration, alternate
dispute resolution mechanism, investigation, administrative hearing or any other
proceeding, whether civil, criminal, administrative or investigative; provided,
--------
however, that the term "Proceeding" shall include any action instituted by an
- -------
Indemnitee (other than an action to enforce indemnification rights under this
Agreement) only if such action is authorized by the Board of Directors.

2. Services by Indemnitee. Indemnitee agrees to begin or continue
----------------------
to serve the Company or other corporation, partnership, joint venture, employee
benefit plan, trust or other enterprise affiliated with the Company (all of
which are collectively referred to as an "Affiliate") as a director or officer.
Notwithstanding anything contained herein, this Agreement shall not create a
contract of employment between the Company and Indemnitee and the termination of
Indemnitee's relationship with the Company or an Affiliate by either party
hereto shall not be restricted by this Agreement.

3. Indemnification. The Company shall indemnify, and advance
---------------
Expenses to, Indemnitee to the fullest extent permitted by applicable law in
effect on the date hereof or as such laws may from time to time hereafter be
amended to increase the scope of such permitted indemnification. Without
diminishing the scope of the indemnification provided by this Section 3, the
rights of indemnification of Indemnitee provided hereunder shall include, but
shall not be limited to, the rights set forth in other sections of this
Agreement.

4. Action or Proceeding Other Than an Action by or in the Right of
---------------------------------------------------------------
the Company. Indemnitee shall be entitled to the indemnification rights
- -----------
provided in this Section 4 if, by reason of his or her Corporate Status,
Indemnitee is, or is threatened to be made, a party to any pending, completed or
threatened Proceeding, other than a Proceeding by or in the right of

2
<PAGE>

the Company. Pursuant to this Section 4, Indemnitee shall be indemnified against
Expenses, judgments, penalties, fines and amounts paid in settlement actually
and reasonably incurred by Indemnitee or on Indemnitee's behalf in connection
with any such Proceeding, if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Company, and, with respect to any criminal Proceeding, had no reasonable
cause to believe his conduct was unlawful.

5. Proceedings by or in the Right of the Company. Indemnitee shall
---------------------------------------------
be entitled to the indemnification rights provided in this Section 5 if, by
reason of his or her Corporate Status, Indemnitee is, or is threatened to be
made, a party to any pending, completed or threatened Proceeding brought by or
in the right of the Company to procure a judgment in its favor. Pursuant to
this Section 5, Indemnitee shall be indemnified against Expenses, judgments,
penalties, fines and amounts paid in settlement incurred by Indemnitee or on
Indemnitee's behalf in connection with any such Proceeding if Indemnitee acted
in good faith and in a manner Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company. Notwithstanding the foregoing
provisions of this Section 5, no such indemnification against such Expenses,
judgments, penalties, fines and amounts paid in settlement shall be made in
respect of any claim, issue or matter in any such Proceeding as to which
Indemnitee shall have been adjudged to be liable for misconduct of his duty to
the Company; provided, however, that in such event such indemnification shall
-------- -------
nevertheless be made by the Company to the extent that the court in which such
action or suit was brought (or any other court of competent jurisdiction) shall
determine equitable under the circumstances.

6. Indemnification for Costs, Charges and Expenses of Party Who is
---------------------------------------------------------------
Wholly or Partly Successful. Notwithstanding any other provision of this
- ---------------------------
Agreement, to the extent that Indemnitee is, by reason of his or her Corporate
Status, a party to and is successful, on the merits or otherwise, in any
Proceeding, Indemnitee shall be indemnified against all Expenses actually and
reasonably incurred by Indemnitee or on Indemnitee's behalf in connection
therewith. If Indemnitee is not wholly successful in such Proceeding but is
successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in such Proceeding, the Company shall indemnify
Indemnitee, to the maximum extent permitted by law, against all Expenses
actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in
connection with each successfully resolved claim, issue or matter. For purposes
of this Section 6 and without limiting the foregoing, the termination of any
such claim, issue or matter in any such Proceeding by dismissal, with or without
prejudice, shall be deemed to be a successful resolution as to such claim, issue
or matter.

7. Indemnification for Expenses of a Witness. Notwithstanding any
-----------------------------------------
other provision of this Agreement, to the extent that Indemnitee is, by reason
of his or her Corporate Status, a witness in any Proceeding, Indemnitee shall be
indemnified by the Company against all Expenses actually and reasonably incurred
by Indemnitee or on Indemnitee's behalf in connection therewith.

8. Advancement of Expenses. All Expenses incurred by or on behalf
-----------------------
of Indemnitee in connection with any Proceeding shall be paid by the Company
within twenty days after the receipt by the Company of a statement or statements
from Indemnitee requesting from time to time such advance or advances, whether
prior to or after the final disposition of such

3
<PAGE>

Proceeding. Indemnitee's entitlement to such advancement of Expenses shall
include those incurred in connection with any Proceeding by Indemnitee seeking
an adjudication or award in arbitration pursuant to this Agreement. Such
statement or statements shall reasonably evidence the Expenses incurred by
Indemnitee in connection therewith and shall include or be preceded or
accompanied by a written undertaking by or on behalf of Indemnitee, in form and
substance reasonably acceptable to the Company, to repay any Expenses advanced
if it shall ultimately be determined that Indemnitee is not entitled to be
indemnified against such Expenses pursuant to the terms of this Agreement.

9. Procedure for Determination of Entitlement to Indemnification.
-------------------------------------------------------------

(a) To obtain indemnification under this Agreement in connection with
any Proceeding, Indemnitee shall submit a written request for indemnification to
the Company. Such request shall include documentation and information which is
reasonably available to Indemnitee and is reasonably necessary for the Company
to determine whether and to what extent Indemnity is entitled to
indemnification. Determination of Indemnitee's entitlement to indemnification
shall be made not later than 30 days after receipt by the Company of
Indemnitee's written request for indemnification. The Secretary of the Company
shall, promptly upon receipt of Indemnitee's request for indemnification, advise
the Board that Indemnitee has requested indemnification.

(b) Upon written request by Indemnitee for indemnification pursuant to
Section 9(a) hereof, a determination, if required by applicable law, with
respect to Indemnitee's entitlement thereto shall be made in such case: (i) (A)
by the Board by a majority vote of a quorum consisting of Disinterested
Directors, or (B) if a quorum of the Board consisting of Disinterested Directors
is not obtainable, or even if such quorum is obtainable, if such quorum of
Disinterested Directors so directs, either (x) by Independent Counsel in a
written opinion to the Board, a copy of which shall be delivered to Indemnitee,
or (y) by the stockholders of the Company, as determined by such quorum of
Disinterested Directors, or a quorum of the Board, as the case may be, or (ii)
as provided in Section 10(b) of this Agreement. If it is so determined that
Indemnitee is entitled to indemnification, payment to Indemnitee shall be made
within 20 days after such determination. Indemnitee shall cooperate with the
person, persons or entity making such determination with respect to Indemnitee's
entitlement to indemnification, including providing to such person, persons or
entity upon reasonable advance request any documentation or information which is
not privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
costs or expenses (including attorneys' fees and disbursements) incurred by
Indemnitee in so cooperating with the person, persons or entity making such
determination shall be borne by the Company (irrespective of the determination
as to Indemnitee's entitlement to indemnification) and the Company hereby
indemnifies and agrees to hold Indemnitee harmless therefrom.

(c) If required, Independent Counsel shall be selected by the Board,
and the Company shall give written notice to Indemnitee advising him or her of
the identity of Independent Counsel so selected. Indemnitee may, within seven
days after such written notice of selection shall have been given, deliver to
the Company a written objection to such selection. Such objection may be
asserted only on the grounds that Independent Counsel so selected does

4
<PAGE>

not meet the requirements of "Independent Counsel" as defined in Section 1 of
this Agreement and the objection shall set forth with particularity the factual
basis of such assertion. If such written objection is made, Independent Counsel
so selected may not serve as Independent Counsel unless and until a court has
determined that such objection is without merit. If, within 20 days after
submission by Indemnitee of a written request for indemnification pursuant to
Section 9(a) hereof, no Independent Counsel shall have been selected and not
objected to, either the Company or Indemnitee may petition a court of competent
jurisdiction for resolution of any objection which shall have been made by the
Company or Indemnitee to the other's selection of Independent Counsel and/or for
the appointment as Independent Counsel of a person selected by such court or by
such other person as such court shall designate, and the person with respect to
whom an objection is so resolved or the person so appointed shall act as
Independent Counsel under Section 9(b) hereof. The Company shall pay any and all
reasonable fees and expenses incurred by such Independent Counsel in connection
with its actions pursuant to this Agreement, and the Company shall pay all
reasonable fees and expenses incident to the procedures of this Section 9(c),
regardless of the manner in which such Independent Counsel was selected or
appointed. Upon the due commencement date of any judicial proceeding or
arbitration pursuant to Section 11(a)(iii) of this Agreement, Independent
Counsel shall be discharged and relieved of any further responsibility in such
capacity (subject to the applicable standards of professional conduct then
prevailing).

10. Presumption and Effects of Certain Proceedings
----------------------------------------------

(a) In making a determination with respect to entitlement to
indemnification hereunder, the person or persons or entity making such
determination shall presume that Indemnitee is entitled to indemnification under
this Agreement if Indemnitee has submitted a request for indemnification in
accordance with Section 9(a) of this Agreement, and the Company shall have the
burden of proof to overcome that presumption in connection with the making by
any person, persons or entity of any determination contrary to that presumption.

(b) If the person, persons or entity empowered or selected under
Section 9 of this Agreement to determine whether Indemnitee is entitled to
indemnification shall not have made a determination within 60 days after receipt
by the Company of the request therefor, the requisite determination of
entitlement to indemnification shall be deemed to have been made and Indemnitee
shall be entitled to such indemnification, absent (i) a misstatement by
Indemnitee of a material fact, or an omission of a material fact necessary to
make Indemnitee's statement not materially misleading, in connection with the
request for indemnification, or (ii) prohibition of such indemnification under
applicable law; provided, however, that such 60-day period may be extended for a
-------- -------
reasonable time, not to exceed an additional 30 days, if the person, persons or
entity making the determination with respect to entitlement to indemnification
in good faith require(s) such additional time for the obtaining or evaluating of
documentation and/or information relating thereto; and provided, further, that
-------- -------
the foregoing provisions of this Section 10(b) shall not apply (i) if the
determination of entitlement to indemnification is to be made by the
stockholders pursuant to Section 9(b) of this Agreement and if (A) within 15
days after receipt by the Company of the request for such determination the
Board has resolved to submit such determination to the stockholders for their
consideration at an annual meeting thereof to be held within 75 days after such
receipt and such determination is made thereat, or (B) a special meeting of
stockholders is called within 15 days after such receipt for the purpose of
making

5
<PAGE>

such determination, such meeting is held for such purpose within 60 days after
having been so called and such determination is made thereat, or (ii) if the
determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 9(b) of this Agreement.

11. Remedies in Cases of Determination not to Indemnify or to Advance
-----------------------------------------------------------------
Expenses.
- --------

(a) In the event that (i) a determination is made pursuant to Section
9 of this Agreement, (ii) advances are not made pursuant to Section 8 hereof in
a timely fashion, or (iii) the determination of entitlement to indemnification
is to be made by Independent Counsel pursuant to Section 9(b) of this Agreement
and such determination shall not have been made and delivered in a written
opinion within 90 days after receipt by the Company of the request for
indemnification, (iv) payment of indemnification is not made pursuant to Section
7 of this Agreement within 10 days after receipt by the Company of a written
request therefor, or (v) payment of indemnification is not made within 10 days
after a determination has been made that Indemnitee is entitled to
indemnification or such determination is deemed to have been made pursuant to
Section 9 or 10 of this Agreement, Indemnitee shall be entitled to an
adjudication in a court of competent jurisdiction, of his or her entitlement to
such indemnification or advancement of Expenses. Alternatively, Indemnitee, at
his or her option, may seek an award in arbitration to be conducted by a single
arbitrator in the State of Delaware. Indemnitee shall commence such proceeding
seeking an adjudication or an award in arbitration within 180 days following the
date on which Indemnitee first has the right to commence such proceeding
pursuant to this Section 11(a). The Company shall not oppose Indemnitee's right
to seek any such adjudication or award in arbitration.

(b) In the event a determination has been made in accordance with the
procedures set forth in Section 9 hereof, in whole or in part, that Indemnitee
is not entitled to indemnification, any such judicial proceeding or arbitration
shall be made de novo and Indemnitee shall not be prejudiced by reason of that
-- ----
adverse prior determination.

(c) If a determination is made or deemed to have been made pursuant to
Section 9 or 10 hereof that Indemnitee is entitled to indemnification, the
Company shall be bound by such determination in any judicial proceeding or
arbitration commenced pursuant to this Section 11, absent (i) a
misrepresentation of a material fact by Indemnitee or an omission of a material
fact necessary to make Indemnitee's statement not materially misleading, in
connection with the request for indemnification, or (ii) a final judicial
determination that all or any part of such indemnification is expressly
prohibited by law.

(d) In the event that Indemnitee, pursuant to this Section 11, seeks a
judicial adjudication of, or an award in arbitration to enforce, his or her
rights under, or to recover damages for breach of, this Agreement, Indemnitee
shall be entitled to recover from the Company, and shall be indemnified by the
Company against, any and all expenses (of the kinds described in the definition
of Expenses) actually and reasonably incurred by Indemnitee in such judicial
adjudication or arbitration, but only if Indemnitee prevails therein. If it
shall be determined in such judicial adjudication or arbitration that Indemnitee
is entitled to receive part but not all of the indemnification or advancement of
expenses sought, the expenses incurred by

6
<PAGE>

Indemnitee in connection with such judicial adjudication or arbitration shall be
appropriately prorated.

12. Non-Exclusivity.
---------------

(a) The rights of indemnification and to receive advancement of
Expenses as provided by this Agreement shall not be deemed exclusive of any
other rights to which Indemnitee may at any time be entitled under applicable
law, an article of incorporation or By-Laws of the Company, any agreement, a
vote of stockholders or a resolution of directors, or otherwise. No amendment,
alteration, rescission or replacement of this Agreement or any provision hereof
shall be effective as to Indemnitee with respect to any action taken or omitted
by such Indemnitee in Indemnitee's Corporate Status prior to such amendment,
alteration, rescission or replacement, except to the extent expressly provided
therein.

(b) In the event of any payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who shall execute all papers required and take all
action necessary to secure such rights, including execution of such documents as
are necessary to enable the Company to bring suit to enforce such rights.

13. Duration of Agreement. This Agreement shall apply to any claim
---------------------
asserted and any Expenses incurred in connection with any claim asserted on or
after the effective date of this Agreement and shall continue until and
terminate upon the later of: (a) 10 years after Indemnitee has ceased to occupy
any of the positions or have any of the relationships described in Sections 3, 4
or 5 of this Agreement; or (b) the final termination of all pending or
threatened Proceedings in respect of which Indemnitee is granted rights of
indemnification or advancement of Expenses hereunder and any Proceedings
commenced by Indemnitee pursuant to Section 11 hereof (but only in respect of
such Proceedings). This Agreement shall be binding upon the Company and its
successors and assigns and shall inure to the benefit of Indemnitee and
Indemnitee's spouse, assigns, heirs, devises, executors, administrators or other
legal representatives.

14. Severability. Should any part, term or condition hereof be
------------
declared illegal or unenforceable or in conflict with any other law, the
validity of the remaining portions or provisions of this Agreement shall not be
affected thereby, and the illegal or unenforceable portions of the Agreement
shall be and hereby are redrafted to conform with applicable law, while leaving
the remaining portions of this Agreement intact.

15. Counterparts. This Agreement may be executed in several
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.

16. Headings. Section headings are for convenience only and do not
--------
control or affect meaning or interpretation of any terms or provisions of this
Agreement.

17. Modification and Waiver. No supplement, modification or
-----------------------
amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto.

7
<PAGE>

18. Notice by Indemnitee. Indemnitee agrees promptly to notify the
--------------------
Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter which may be subject to indemnification or advancement of Expenses
covered hereunder.

19. No Duplicative Payment. The Company shall not be liable under
----------------------
this Agreement to make any payment of amounts otherwise indemnifiable hereunder
if and to the extent that Indemnitee has otherwise actually received such
payment under any insurance policy, contract, agreement or otherwise.

20. Nondisclosure of Payments. Except as expressly required by
-------------------------
Federal securities laws or Florida corporation law, neither party shall disclose
any payments under this Agreement unless prior approval of the other party is
obtained. Any payments to the Indemnitee that must be disclosed shall, unless
otherwise required by law, be described only in Company proxy or information
statements relating to special and/or annual meetings of the Company's
stockholders, and the Company shall afford the Indemnitee the reasonable
opportunity to review all such disclosures and, if requested, to explain in such
statement any mitigating circumstances regarding the events reported.

21. Indemnification of Director Indemnitee's Estate. Notwithstanding
-----------------------------------------------
any other provision of this Agreement, and regardless whether indemnification of
an Indemnitee, in his capacity as a Director, would be permitted and/or required
under this Agreement, if such Director Indemnitee is deceased, the Company shall
indemnify and hold harmless such Director Indemnitee's estate, spouse, heirs,
administrators, personal representatives and executors (collectively, the
"Director Indemnitee's Estate") against, and the Company shall assume, any and
all claims, damages, Expenses, judgments, penalties, fines and amounts paid in
settlement actually incurred by the Director Indemnitee or the Director
Indemnitee's Estate in connection with the investigation, defense, settlement or
appeal of any action contemplated by this Agreement. Indemnification of the
Director Indemnitee's Estate pursuant to this Section 21 shall be mandatory and
not require a determination or any other finding that the Director Indemnitee's
conduct, as a Director of the Company, satisfied a particular standard of
conduct.

22. Notices. All notices, requests, demands and other communications
-------
provided for by this Agreement shall be in writing (including telecopier or
similar writing) and shall be deemed to have been given at the time when mailed
in any general or branch office of the United States Postal Service, enclosed in
a registered or certified postpaid envelope, or sent by Federal Express or other
similar overnight courier service, addressed to the address of the parties
stated below or to such changed address as such party may have fixed by notice
or, if given by telecopier, when such telecopy is transmitted and the
appropriate answerback is received.

(a) If to Indemnitee, to the address appearing on the signature page
hereof.

8
<PAGE>

(b) If to the Company to:

Princeton eCom Corporation
165 Wall Street
Princeton, New Jersey 08540
Attention: Corporate Secretary

23. Governing Law. The parties agree that this Agreement shall be
-------------
governed by, and construed and enforced in accordance with, the laws of the
State of Delaware.

24. Entire Agreement. This Agreement constitutes the entire
----------------
understanding between the parties and supersedes all proposals, commitments,
writings, negotiations and understandings, oral and written, and all other
communications between the parties relating to the subject matter of this
Agreement. This Agreement may not be amended or otherwise modified except in
writing duly executed by all of the parties. A waiver by any party of any
breach or violation of this Agreement shall not be deemed or construed as a
waiver or any subsequent breach or violation thereof.

9
<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

PRINCETON ECOM CORPORATION

Name: Donald C. Licciardello
Title: Chairman and Chief
Executive Officer

INDEMNITEE

Signature

Print Name

Address

City and State

Telecopier Number

<PAGE>

Exhibit 10.9

Parris H. Holmes , Jr., Chairman and CEO
Billing Concepts Corp.
7411 John Smith Drive, Suite 2000
San Antonio, Texas 78229-4898

Re: Registration Rights in connection with Shares of Princeton eCom Corporation
Common Stock, which may be purchased by Billing Concepts Corp.
pursuant to Call Option Agreements, of even date, with Donald C.
Licciardello and C. Richard Corl.

Dear Mr. Holmes:

Set forth below are limited registration rights which Princeton eCom
Corporation (hereinafter referred to as "Company") agrees to provide to Billing
Concepts Corp. ("BCC") in connection with BCC's possible purchase from Donald C.
Licciardello ("Licciardello") and C. Richard Corl, ("Corl"), principal
shareholders, officers and directors of the Company, of up to 450,000 shares ("
Shares") of the Company's, common stock, $.01 par value, ("Common Stock") (
after giving effect to a 3 for 1 stock split declared by the Board of Directors
of the Company on June 10, 1999) pursuant to certain call option agreements
("Call Option Agreements") entered into between BCC and Licciardello and BCC and
Corl on this date.

The registration rights granted herein only apply to the Shares, or that
portion of the Shares that BCC purchases pursuant to the terms of the Call
Option Agreements (hereinafter "BCC Shares"), and applies to no other shares
of Common Stock which BCC owns on the date of this Agreement or may acquire at
anytime in the future. Except as provided under Paragraph (2), below, the
registration rights granted herein may only be exercised by BCC during the
period commencing 181 days after the effective date ("Effective Date") of the
Company's Registration Statement on Form S-1 (SEC Reg. No. 333-75385)
("Registration Statement") and ending on the first anniversary of the Effective
Date (the "Exercise Period").

(1) Piggy Back Registration Rights. During the Exercise Period, and provided
------------------------------
that the Company has closed on its initial public offering (as contemplated by
the Registration Statement), the Company shall advise BCC by written notice (the
"Company Notice") at least twenty (20) days prior to the filing of any
registration statement under the Securities Act of 1933, as amended (the "Act")
(other than a registration statement on Form S-4, Form S-8 or any similar forms,
which may be adopted by the Securities and Exchange Commission ), covering the
Common Stock, and will upon the written request of BCC within ten (10) days
after receipt of the Company Notice to include among the Common Stock covered by
such registration statement all of the BCC Shares, include in any such
registration statement such information as may be required so as to permit a
public offering of the BCC Shares. The delivery of notice by the Company shall
not in any way obligate the Company to file such registration statement, and
notwithstanding the filing of such registration statement, the Company, for
valid corporate reasons, may at any time prior to the effective date thereof,
determine not to offer the Common Stock to which the registration statement
relates without
<PAGE>

liability to BCC. The Company shall supply a reasonable quantity
of prospectuses, use its best reasonable efforts to qualify the BCC Shares for
sale in New York, Texas and those states where the Company is qualifying the
securities covered in such registration and furnish indemnification in the
manner as set forth in Paragraph (3)(C), below. The Company shall use its best
reasonable efforts to qualify the BCC Shares in other states, which permit the
sale of the BCC Shares, as BCC may reasonably designate; provided, however, that
BCC shall bear the expense of blue sky registration (including counsel fees) for
the BCC Shares in states designated by BCC in addition to New York, Texas and
those other states where the Company is qualifying the securities covered in
such registration statement. BCC shall timely furnish information required to
register the BCC Shares pursuant to this Paragraph (1) and provide
indemnification as set forth in Paragraph (3)(C) below. The piggy-back
registration rights set forth in this Paragraph (1) shall expire at the end of
the Exercise Period and shall not apply to any registration statement filed by
the Company before the beginning of, or after the end of, the Exercise Period.

(2) Demand Registration Rights. At one time, during the period commencing
--------------------------
one hundred and eighty one (181) days after the Effective Date and ending thirty
(30) days prior to the end of second anniversary of the Effective Date, the
Company, after receipt of written notice from BCC ("BCC Notice") requesting
that the Company register the BCC Shares, take the necessary steps required to
file a registration statement pursuant to the Act, and the Company will use its
best reasonable efforts to cause such registration statement to become
effective, to the end that the BCC Shares may be sold under said Act as promptly
as practicable thereafter; provided that BCC shall timely furnish the Company
with appropriate information required for the registration statement as the
Company shall reasonably request in writing. The Company shall keep such
registration statement current for such time until all the BCC Shares are sold,
but not to exceed six (6) months. The Company shall supply a reasonable quantity
of prospectuses, use its best reasonable efforts to qualify the BCC Shares for
sale in New York , Texas, and such other states as reasonably requested by BCC
in writing and furnish indemnification in the manner as set forth in Paragraph
(3)(C), below. BCC shall timely furnish information required for the
registration of the BCC Shares and provide indemnification as set forth in
Paragraph (3)(C) below. The registration rights in this Paragraph (2)shall
expire and be void and of no further effect, unless the Company has received the
BCC Notice on or before 30 days prior to the end of the second anniversary of
the Effective Date.

(3) The following provision shall also be applicable to the registration
rights described above:
(A) The Company shall bear the entire cost and expense of any
registration of Common Stock initiated under Paragraph (1), above, except as set
forth above. BCC shall, however, bear the fees of its own counsel and
accountants and any transfer taxes or underwriting discounts or commissions
applicable to the BCC Shares proposed to be sold or sold by BCC pursuant
thereto.

(B) BCC shall bear the entire cost and expense of any registration of
Common Stock initiated under Paragraph (2), above, including without limitation,
the reasonable fees and expenses of the Company's counsel and any associated
fees of the Company's accountants, BCC's counsel fees and expenses, blue sky
fees, printing costs, filing fees, and any transfer taxes or underwriting
discounts or commissions applicable to the BCC Shares proposed to be sold or
sold by BCC pursuant thereto.
<PAGE>

(C) The Company shall indemnify and hold harmless BCC from and
against any and all losses, claims, damages and liabilities arising out of, or
based upon, any untrue statement or alleged untrue statement of a material fact
contained in any registration statement or any post-effective amendment thereto
under the Act or any prospectus included in such registration statement relating
to the BCC Shares, or arising out of, or based upon, any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading to which BCC may become subject under the Act,
the Securities Exchange Act of 1934, as amended, or other Federal or state
statutory law or regulation, at common law or otherwise, except insofar as such
losses, claims, damages or liabilities arise out of, or are based upon, any
untrue statement or alleged untrue statement or omission or alleged omission
based upon information furnished or required to be furnished to the Company by
BCC expressly for use therein; provided, however, that BCC at the same time
-----------------
indemnify the Company, its directors, each officer signing the related
registration statement, each person, if any (other than BCC), who controls the
Company within the meaning of such Act and any other selling security holder,
from and against and all losses, claims, damages and liabilities arising out of,
or based upon, any untrue statement or alleged untrue statement of a material
fact contained in any registration statement or any post-effective amendment
thereto under the Act or any prospectus included in such registration statement
relating to the BCC Shares, or arising out of, or based upon, any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading, insofar as such losses, claims, damages or
liabilities arise out of, or are based upon, any untrue statement or alleged
untrue statement or omission or alleged omission based upon written information
furnished to the Company by BCC expressly for use therein.

(D) The registration rights granted to BCC may not be assigned, sold or
transferred, in any manner whatsoever and apply only the BCC Shares.

Very truly yours,
Princeton eCom Corporation

By: /s/ PRINCETON ECOM CORPORATION
-------------------------------

Agreed to and Accepted by
Billing Concepts Corp.

By: /s/ BILLING CONCEPTS CORP.
--------------------------

Dated: 6/16/99
-------------------------

<PAGE>

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our
reports (and to all references to our Firm) included in or made a part of this
registration statement.

/s/ Arthur Andersen LLP

Philadelphia, Pa.,

July 15, 1999