First Virtual Holdings Inc., known to bankers mostly as an Internet payment system developer, is redefining itself.

"We're a lot more than a payment system," said Lee Stein, the San Diego company's chairman and chief executive officer. "We have built a complete commercial application" around the notion of Internet messaging.

It is building its business around the Interactive Messaging Platform, which it engineered at a cost of $15 million.

Last week First Virtual secured an additional $5 million through a private placement of 1,000 shares with a New York investment group.

And it promoted Keith S. Kendrick, formerly of AT&T Universal Card Services Corp., to president, from vice president of marketing.

"This promotion recognizes the leadership role Keith has taken in defining the company's Interactive Messaging Platform strategy," said Mr. Stein.

The platform, which can be used for personalized, interactive E-mail marketing, includes intelligent messaging, transactional advertisements, and virtual identities to let secure financial transactions take place over the Internet.

It is an enhancement of VirtualPIN, a secure mechanism for on-line credit card payments, and to VirtualTag, an interactive advertising technology.

"The platform gives the issuer a proprietary advertising channel and a distribution for cross-selling," said Mr. Kendrick. He said the system is aimed at banks because they are the ones that "own" customers and are looking for recurring revenue.

Payments for cross-sales can be by credit or debit card, checking account, or an electronic cash account.

Because the system is server-based, a bank would retain control of the funds and settle interbank payments via the automated clearing house network.

First Virtual can bundle a customer's E-mail address, credit card information, invoices for presentment, and direct deposit account information.

First Virtual executives said they plan to market the new services to credit card issuers, airline and car rental companies, direct marketers of computers, and catalog sales companies.

It is holding discussions with several financial institutions that may consider using the Interactive Messaging Platform.

In mid-October, First Virtual signed its first contract for the design of platform applications with computer maker Gateway 2000. Gateway aims to communicate directly with its customers about special offers and order information using E-mail.

For the quarter ended Sept. 30, First Virtual reported revenues of $326,000, compared with revenues of $97,000 a year earlier. Core revenues from its Internet payment application and VirtualPIN sales totaled $285,000 during the quarter, compared with $60,000 a year earlier.

Net loss for the third quarter was $4.5 million, compared with a $3.5 million loss a year earlier. Total operating expenses in the third quarter were $4.6 million, up from $4.1 million in the second quarter.

First Virtual has recorded 350,000 VirtualPIN transactions and has signed up 3,000 merchants.

Of its 240,000 enrollees, one-third are international; they're from 166 countries. Interest has been especially high in Japan.

Some analysts contend, though, that VirtualPIN has been made obsolete by the introduction of the Secure Electronic Transaction protocol to safeguard credit card payments over the Internet.

But First Virtual focuses less on payments and more on what Mr. Stein calls "a cross-platform, cross-protocol direct marketing architecture."

"It only works with people you want to have a relationship with," said Mr. Kendrick.

He said the interactive platform will succeed because "messaging is still king."

First Virtual's largest equity owners are First Data Corp.; First USA Paymentech, which is a Banc One Corp. subsidiary; and GE Capital Corp.

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