SOURCE: Catuity Inc.

August 30, 2006 09:48 ET

Catuity Taps Largest Merchant Base in Australia

Company Integrates to Commonwealth Bank's 163,000 Merchants

DETROIT, MI and MELBOURNE, AUSTRALIA -- (MARKET WIRE) -- August 30, 2006 -- Catuity Inc. (NASDAQ: CTTY) (ASX: CAT) (ASX: CATN), a loyalty and gift card processor, today said that it had completed integration to the merchant services platform of Commonwealth Bank of Australia, the nation's largest merchant processor.

The completion of the integration means that Catuity, through its Melbourne-based division Loyalty Magic, is ready to service any of the 163,000 merchants already on the Commonwealth Bank's XPOS platform. The bank provides credit and debit card processing services and a growing list of value-added services through the EFTPOS facility that create revenue-generating opportunities for merchants. Loyalty Magic's diverse range of loyalty programs is now available on the platform.

An EFTPOS facility is the same as a POS terminal in the U.S. market.

"This eliminates two key hurdles in our sales process because our client will not have to buy a new terminal or manage the risk of a technology deployment. This is an important strategic development for Catuity," said John Racine, President and CEO of Catuity Inc. "In both Australia and the U.S. we are positioned to see the gains from pro-actively integrating to leading point-of-sale and EFTPOS devices. In partnering with Commonwealth Bank, which is widely recognized as a market leader, we are again working with partners to accelerate our growth by delivering turnkey programs to merchants."

Chris Leach, CEO of Loyalty Magic, added: "CommBank's X-POS strategy gives us access to the leading network of merchants who can literally be ready to start making money from our loyalty solution at the push of a button. By eliminating these barriers to doing business with us, it greatly enhances our ability to grow our marketshare across Australia."

About Commonwealth Bank of Australia.

Founded in 1911, Commonwealth Bank has the largest financial services distribution network in Australia. With more than 1,000 branches; 3,800 agencies; 832 Ezy Banking stores and 3,200 ATMs, Commonwealth Bank has accumulated the country's largest banking customer base. In the business of providing merchant services to all sized businesses, the Commonwealth Bank has the No. 1 marketshare in terms of locations served and transactions processed. To learn more about the company visit their website at www.commbank.com.au.

About Catuity Inc.

Catuity Inc. makes the point of sale more profitable for its customers by delivering products and services which reduce costs and generate new revenues. Our retailer clients have more than four million cardholders participating in Catuity-powered loyalty and gift card programs. For more information on Catuity, please visit our website at www.catuity.com.

This press release may include statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding market share growth, market acceptance of services, sales, revenues and profits. These forward-looking statements are based on management's current expectations and beliefs and are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. In particular, factors that could cause actual results to differ materially from those in forward-looking statements include the ability to win new customers and new businesses; industry, competitive and technological changes; the loss of, and failure to replace any significant customers; market acceptance of new services; the performance of suppliers and subcontractors; risks associated with international operations and foreign currency fluctuations; the state of the U.S. and global economies in general and other risks detailed in our filings with the Securities and Exchange Commission, including the Company's most recent 10-KSB and subsequent 10-QSBs. Forward-looking statements speak only as of the date made and are not guarantees of future performance. We undertake no obligation to publicly update or revise any forward-looking statements.

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