Catuity Introduces New Real Time Loyalty Software Suite; Electronic Loyalty Points, e-Couponing, Gift Card and Punch Card Frequency Programs Services Offered Through One Software System.

DETROIT -- Significantly Reduces System Integration Requirements; Company Announces Management Changes

Catuity, Inc. (NASDAQ: CTTY; ASX: CAT) today announced the first release of a new real-time loyalty software suite that supports most major loyalty schemes and enables coalition marketing programs for retailers. Called Advanced Loyalty System, the software has been in development for the past year and replaces the company's CAT X package.

The new loyalty system significantly reduces systems integration concerns for retailers, which can help cut those costs and remove much of the uncertainty in deploying a real time loyalty program. "After having installed loyalty applications at thousands of points of sale, we have gained much insight and experience from retailers and processors that has driven the development of this new technology," said Michael V. Howe, president and CEO of Catuity.

The release of this product marks a new era for Catuity and customer loyalty management. The real-time, centralized transaction based architecture is a departure for Catuity from its previous batch, distributed offline smart card architecture and more closely matches the growing loyalty market.

This software has been specifically designed for North American retailers who have integrated points of sale and require customized incentive and reward offerings to customers based on their behavior. Catuity's new system can be easily integrated to any platform used by a retailer.

Entirely developed using the latest Java 2 Enterprise Edition (J2EE) related technology, Catuity's Advanced Loyalty System incorporates best-of-breed components to ensure maximum scalability, flexibility, reliability, compatibility and performance. The J2EE architecture also supports multiple platforms. Clients deploying the Catuity system may choose the operating system, database and application server that best suits their needs and preferences. (Visit http://www.catuity.com for more information).

With the initial release of the software, loyalty points can be accumulated and redeemed in real-time at the most crucial time in the customer/merchant relationship - at the time of making a purchase. If the program is points based, customers can see their total points available at checkout - either on the screen or printed on the receipt - and can also utilize those points as part of payment toward a purchase.

Additional releases of this software are under development. New features that allow reward programs to be specifically designed by location, customer demographics, time, method of payment and products purchased are in development and will be released over the next few months. Catuity will also develop interfaces for customer and merchant web-based support.

Advanced Loyalty System is ready to be deployed and supports the major loyalty and incentive programs currently offered. Each retailer can customize programs to best meet their customers' needs.

Catuity Announces Management Changes to Support Company's New Direction

Howe also announced that Ben Garton, vice president of product development and implementation and Doug Kilgour, vice president of marketing, will be leaving the company, effective in August. "With the completion of this project, the timing provides a natural opportunity for Ben to return to his native Australia. All of us at Catuity appreciate Ben and Doug's leadership in bringing this technology to the market," said Howe. Garton resigned his position to return to Australia.

James Gordon, Development Manager in the company's Sydney office and a nine-year veteran of the company, will act as interim head of product management.

Ron Elmore, who has been serving as a marketing consultant to the company, will serve as interim head of sales and marketing.

About Catuity

Catuity, Inc. is a full-service IT provider of POS-focused applications for retailers, processors, financial institutions and their partners across North America. Catuity's loyalty software is currently used on thousands of 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 U.S. Securities & Exchange Commission.