Datawave Signs Point of Sale Activation Agreement With Petro-Canada Chain.

VANCOUVER, British Columbia -- DataWave Systems Inc. (OTCBB:DWVSF) (TSX VENTURE:DTV) is pleased to announce that it is the exclusive supplier of Point of Sale Activation (POSA) technology of prepaid phone time to Petro-Canada convenience stores across Canada. This technology will be used to sell prepaid long distance and cellular PINs as well as other prepaid products.

"After discussions and site testing, we are really excited to finally have Petro-Canada on board" said Kelly Smith, DataWave's National Director of Sales. "Feedback from the 14 Petro-Canada test sites was so positive that now DataWave is rolling out a terminal solution to more than 650 sites." This program will enable Petro-Canada sites to rapidly grow their sales and product offerings of prepaid products, without concerns about up front inventory costs or shrinkage.

"Petro-Canada is the latest major national retail chain to select the DataWave System as the Point of Sale Activation solution for their stores" said Smith. "This means that over 4,000 retail locations are now linked to the DataWave electronic distribution network, which strengthens our position as the leading provider of POSA technology in Canada."

The proprietary POSA technology of the DataWave System gives retailers the capability for instantaneous electronic delivery of prepaid PIN products. Long distance phone card and cellular PINS from all major cellular service providers can be delivered - on demand - directly to the point of purchase, through small free-standing terminals or by a host-to-host infrastructure that can be incorporated into the retailers' already existing cash register system.

About Petro-Canada (http://www.petro-canada.ca)

Petro-Canada is one of Canada's largest oil and gas companies, operating in both the upstream and the downstream sectors of the industry. Its common shares trade on The Toronto Stock Exchange under the symbol PCA, and on the New York Stock Exchange under the symbol PCZ.

About DataWave (http://www.datawave.com)

DataWave has been an innovator and developer of prepaid and stored-value programs and merchandising solutions since it was founded in 1994. DataWave pioneered systems that allow for point-of-sale activation of high value, high shrinkage products, such as cash cards, prepaid phone cards and prepaid wireless time. These systems work equally well over the Internet, through intelligent freestanding vending machines and POSA terminals, or with various card activation devices, including cash registers.

DataWave Systems Inc.

John Gunn, General Manager, CFO 

Legal Notice Regarding Forward-Looking Statements:

Statements in this news release which are not purely historical are forward-looking statements, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Forward-looking statements in this release include, but are not limited, references to: Petro Canada rolling out the POSA program to more than 650 sites, Petro Canada growing sales of prepaid products in their convenience stores, and DataWave's system allowing long distance phone cards to be activated and PINs from all major cellular service providers to be delivered on demand directly to the point of purchase at most major retail chains.

It is important to note that the company's actual results and outcomes may differ materially from those contained in the forward-looking statements contained in this release. Factors that could cause actual results to differ materially include, but are not limited to, risks and uncertainties such as: continued market acceptance of our existing products and whether Petro Canada will achieve broad acceptance of our new products - particularly our Point of Sale Activation (POSA) systems - in the new markets that we have identified; competition that may provide cheaper or technologically superior products; reliability of our products and their operating trouble free as intended; or determination by Petro Canada that our products are not profitable enough to sell.

Although we believe that the beliefs, plans, expectations and intentions contained in this letter are reasonable, there can be no assurance that such beliefs, plans, expectations or intentions will prove to be accurate. Readers should also refer to the risk disclosures outlined in our annual report on Form 10-KSB for the year ended March 31, 2003, filed with the United States Securities and Exchange Commission.

"DataWave" is a registered trademark of the Company. All other trademarks and trade names referred to are the property of their respective owners.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.