Catuity Strengthens Loyalty Patent Portfolio; European Patent Office Awards EMV-Focused Loyalty Patent.

DETROIT & SYDNEY, Australia -- Catuity Inc., (NASDAQ: CTTY)(ASX: CAT) a provider of POS-focused solutions, including loyalty and gift cards, today said that the European Patent Office has granted the company a patent covering the use of its EMV-compatible loyalty solution at the point of sale and over the Internet to a wide range of popular devices.

It is the first patent grant for the company in Europe, which is the epicenter for the adoption of smart card-based payment and loyalty solutions under the Europay-MasterCard-Visa (EMV) compliance mandates. Catuity may now seek registration of the patent in up to 19 specific European countries that comply with the EPO decisions.

"This patent award builds our position as a leading innovator of solutions for the EMV-compliant markets in Europe and around the world," said John Racine, President and CEO of Catuity Inc. "Bankcard issuers, retailers and processors are investing millions to comply with EMV requirements and looking for a payback on their capital outlays. Value-added applications like loyalty significantly increase their return on investment."

"We continue to explore licensing and partnership opportunities with established partners in the European markets where our patents have long-term value," he said. "While Catuity has held discussions about selling its off-line smart loyalty software, the company has no plans at this time to sell its patent portfolio. We would also note that, while our new platform, the Catuity Advanced Loyalty System (CALS), enables loyalty on mag stripe, contactless, bar code-based and other leading identifiers, it can also use chip cards as a consumer I.D. device."

The technology covered by the new patent expands on the company's existing intellectual property portfolio by adding, optimizing and refining the methods used to manage loyalty data stored on a smart card. By increasing the efficiency of data storage more loyalty programs can be added to the chip, further enhancing the appeal of smart cards to retailers, issuers and consumers. Importantly, the patents cover the use of loyalty on widely used devices including PCs, PDAs or handheld computers, mobile phones and electronic kiosks.

The grant by the European Patent Office (EPO) brings to 11 the total number of EMV-compliant patents pending or granted to Catuity in markets around the world. Prior to the announcement, Catuity held EMV-compliant patents in the United States, Australia, New Zealand, Canada, Brazil and Japan. The patents were granted to Catuity's wholly owned subsidiary, Chip Application Technologies Pty Ltd in Australia.

Outside the United States, EMV compliance continues to gain traction as credit card portfolios, point of sale terminals and ATMs are fitted with chip-reading technologies. For more information about the current status of EMV adoption in European markets, please see the following independent website: http://www.cartes-bancaires.com/EN/europe/carte_200404.html.

"Regardless of the technology used by a consumer to pay, Catuity is well positioned to enable loyalty programs that fit a retailers specific strategy," said Mr. Racine. "While our tradition goes back to the birth of the multi-application chip, our future is in providing our customers with the flexibility to run their value-added programs on any platform."

About Catuity Inc.

Catuity Inc. delivers profits at the point of sale for its retailer clients and their partners, including payments processors. The company provides loyalty processing services through a hosted solution that enables membership based loyalty programs and gift card programs to chain retailers in the U.S. and Canada. More information is available at the company's website at 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.