Catuity Broadens Business Plan to Serve the Point of Sale Needs of Retailers.

Business Editors

SYDNEY, Australia & DETROIT--(BUSINESS WIRE)--May 13, 2004

Shareholders Told of Plans to Broaden IT Services and Its Plans to

Merge with Profitable IT and Loyalty Firms

Catuity, Inc. (NASDAQ: CTTY; ASX: CAT), a U.S. and Australian developer of loyalty software for retailers and their partners, detailed plans for its growth strategy at its annual shareholders meeting. Catuity plans to diversify its products and services for the retail point-of-sale.

During remarks to shareholders, President and CEO Michael V. Howe told shareholders that Catuity intends to leverage its experience in developing POS-focused applications to tap into existing budgets of retailers for loyalty and other applications which are managed from the point of sale.

"Our performance has been typical of a company focused on a narrow emerging market, which is what smart card loyalty remains," said Howe. "The reality is that our customers - the retailers - are spending significant sums of dollars to maintain and develop applications for many functions at the POS. Our strategy is driven by our desire to leverage our technology skills while serving the existing needs of retailers in a market where application providers are merging to achieve critical mass."

Howe told shareholders that the company expects to achieve profitability by 2006 and could do so sooner through strategic mergers. Howe's full shareholder presentation is available at the Catuity website: www.catuity.com. During his remarks Howe noted that Catuity will:

-- Introduce an advanced online loyalty platform this July. The

platform will support the real-time accumulation and

redemption of loyalty points at the point of sale. It will

also provide retailers with a migration path from existing

batch or paper based rewards and incentive programs. The

system is designed to serve retailers who have moved to online

POS systems. The new platform is expected to greatly reduce

integration and maintenance costs for merchants.

-- Expand Catuity's business beyond licensing their proprietary

loyalty software to include custom development, consulting,

project management services and hosting solutions. These are

services that retailers often buy as an alternative to

licensing loyalty and POS management software.

-- Accelerate its growth strategy through mergers with other

retail POS application and loyalty providers. Subject to

market conditions, Catuity hopes to merge with high quality

companies during the next two years.

-- Continue to prudently manage expenses to provide profitability

and improve share value for investors.

"With more than five million points of sale in North America, experts say that retailers spend more than $400 million a year on building, installing and maintaining mission critical applications at the point of sale," he said. "We believe that by expanding our focus beyond loyalty software licensing to include custom development, consulting and project management, we will have diverse and robust software and services offering that will maximize our revenue."

Howe said Catuity is evaluating the need to raise new capital for its core business and growth through mergers as well as the specific actions that may be necessary to fully comply with all NASDAQ listing requirements.

Howe told shareholders that Catuity has already implemented over $1,000,000 in expense reductions that will reduce the company's expense structure by approximately 18 percent from 2003. "As we expand our offerings from licensed software to include custom built software and related services additional expenses will only be incurred as required to accommodate our growth plans."

Most importantly, Howe stressed the fact that the company's product offerings will be directed specifically to the "always connected" -- or online -- retailers, where the system can most cost-effectively be deployed.

Catuity, Inc. is a provider of POS-focused applications, including real-time loyalty management, for retailers and their partners across North America. Catuity's technology is used on nearly 40,000 points of sale throughout the U.S. More information on Catuity is available at its website: http://www.catuity.com.

In conjunction with the provisions of the "Safe Harbor" section to the Private Securities Litigation Reform Act of 1995, this release may contain forward-looking statements pertaining to future anticipated projected plans, performance and developments, as well as other statements relating to future operations. All such forward-looking statements are necessarily only estimates of future results and there can be no assurance that actual results will not materially differ from expectations. Further information on potential factors that could affect Catuity, Inc. is included in the Company's Form 10-K, which is filed with the US Securities & Exchange Commission.