Catuity Names New CEO, Strengthens Board To Execute Strategy; Payments Industry Veteran John Racine Replaces Mike Howe as CEO.

DETROIT, Mich. & SYDNEY, Australia -- Cliff Chapman Brings Technology Turnaround, Merger Experience To Role As Independent Director in U.S.

Catuity Inc. (NASDAQ: CTTY; ASX: CAT), a provider of POS-focused solutions, including loyalty, today named payments industry executive John Racine as CEO and added a new director with a strong track record in technology turnarounds.

The Board of Directors has named Mr. Racine, the founder and managing principal of Altamont Partners, as President, Chief Executive Officer and Director of Catuity Inc. to replace Michael V. Howe. Altamont Partners was retained in May to advise the board on merger alternatives. The board also announced that Clifford Chapman has been appointed an independent director. Both appointments bolster the depth of the company's team as it executes a turnaround of Catuity and brings the total number of Catuity directors to five.

"In the past six months John Racine has demonstrated a unique ability and understanding of Catuity's challenges and opportunities," said Mike Howe, who has resigned effective immediately. "John is aware of the task and, as a shareholder, I endorse his appointment."

"Both of these executives have well established reputations for, success and the kind of roll-up-their-sleeves work ethic it will take to execute a turnaround for Catuity," said Duncan Mount, the non-executive chairman of Catuity Inc. "Our fellow shareholders can expect to see very specific actions in the next few months as John Racine moves from being the external architect of our new strategy to the leader of our team with the goal of executing our growth plan through focused product and sales strategy, selective mergers and by positioning Catuity to raise growth capital."

The board also affirmed its confidence in Jack Lowry, the chief financial officer and Company Secretary since 2000. "Jack's insights, experience and skills make him an invaluable member of this team," said Mr. Mount.

The new team will provide a detailed briefing for all investors at the specially called shareholders meeting set for 9:30 a.m. in Sydney on Monday, November 1, 2004. The meeting will be hosted at the Wesley Conference Centre, 220 Pitt Street, Sydney NSW Australia 2000.

"Catuity has many opportunities to leverage its history of delivering POS-focused solutions for clients. Our first task is to clearly tell our prospective customers how we will make the point of sale more profitable for them," said Mr. Racine. "Catuity has an excellent Australian-born technology tradition that we intend to leverage. We want to be clear that Catuity will become a new company and that loyalty is the starting point for our strategy."

Mr. Racine, 40, founded Altamont Partners in Charlottesville, Va. in 1997 and the firm has advised many of the leading payments organizations in North America and Europe about strategic and merger related issues. Prior to Altamont Partners, he was a principal at SNL Financial, also in Charlottesville, Va., the highly regarded merger and financial analytics provider for the financial services industry. From 1995-1997, Mr. Racine played a key role in SNL's emergence as a market leader in the face of larger, established competitors. Prior to that, he spent five years in a variety of operational and strategic roles in the financial services division at Thomson Financial.

Before spending the last 14 years working in the financial services and payments industries, Mr. Racine worked in the media industry at leading companies including Ingersoll Publishing Co. and Capital Cities-ABC. He attended Southern Illinois University at Carbondale.

"John clearly knows the payments business as many of Altamont's clients are potential partners and investors that will help Catuity grow," said Mr. Mount. "These changes are vital parts of re-establishing the confidence of investors in the future of Catuity. This announcement is progress toward our goal of turning Catuity around, but we again caution that we do not expect these efforts to yield material results until late 2005."

The Board of Directors also announced the appointment today of Mr. Clifford Chapman, 35, to the board. Mr. Chapman is well regarded as a private investor who has solid credentials in technology-focused markets. In addition to working with Andersen Consulting and Booz Allen & Hamilton, Mr. Chapman has also played key leadership roles in two high profile successes.

Most recently, he was the CEO and investor in the turnaround of mindSHIFT Technologies, a managed services provider focused on IT outsourcing for small and medium enterprises. From June 2002 through October 2003, he restructured the sales process, cut costs and acquired three companies to take mindSHIFT to profitability. He then raised $11 million in fresh capital from two highly respected U.S. venture capitalists before recruiting a new management team to drive the next stage of the company's growth.

Prior to MindSHIFT, Mr. Chapman was the VP of Business Integration for AppNet, a full-service Internet professional service and managed hosting company that he helped take public in 1999 before being sold in a $2 billion transaction in late 2000. During his tenure, he was responsible for the integration of a dozen mergers. Prior to AppNet, Mr. Chapman co-founded NMP, a full-service consulting business and managed hosting company. He has also worked with numerous start-up businesses. He holds an MBA from Columbia Business School and a BS in Computer Engineering from Lehigh University.

"Catuity sits on the edge of an exciting market in the payments industry, which is one of the most dynamic and profitable businesses around," said Mr. Chapman. "In the three years that I've known John Racine, he has repeatedly demonstrated that he knows the payments business, understands how to make money and has an unquestioned work ethic that gets results. I look forward to playing a direct role, on behalf of the board, in assisting with the execution of the new strategy."

With Mr. Chapman's addition, the Board of Directors will have five seats filled, including two independent directors in both Australia and North America. "From the beginning, I've been impressed with the focus of the board on getting the best result for shareholders. I am honored to join them as we create the new Catuity," said Mr. Racine. "Some investors have been discouraged with the company's performance and for this reason the board has committed to the changes necessary to build a company that will either be profitably independent or will become part of a larger competitor. Either strategy requires Catuity to first demonstrate that it can compete and win."

Catuity, Inc. makes the point of sale more profitable for its clients by delivering products and services that reduce costs and generate new revenue. 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.