SOURCE: Smart Card Marketing Systems Inc.

August 03, 2006 08:37 ET

Smart Card Marketing Systems Inc. Enters Into Discussions to Obtain a Minority Interest in a Canadian Financial Services Company

SAN ANTONIO, TX -- (MARKET WIRE) -- August 3, 2006 -- Smart Card Marketing Systems Inc. (PINKSHEETS: SMKG) (FRANKFURT: QYH), a leading provider of prepaid cards, value smart storage cards and payment transaction management services announced today that they have entered into discussions to acquire a minority interest in a Canadian Financial Services company in Eastern Canada.

Smart Card has commenced discussions with a group of Canadian business equity owners in the Financial Services Company, which has specialized financial capabilities competitive to the major banks in Canada, in order to obtain a minority interest. The benefits of this undertaking are that it would improve the capabilities of VelocityMoney™ and VelocityMerchant™ and it would put Smart Card in a position to be able to provide direct offerings to the retail services sector without having the higher costs of third party merchants.

Furthermore, subject to the agreement, the Financial Services Company would use the technology offerings provided by Smart Card exclusively in their day to day operations. Smart Card CEO, Massimo Barone, stated, "By entering into these discussions, Smart Card is paving the way to becoming the leading provider of prepaid card solutions and payment transaction management in Canada. The company is setting the wheels in motion to be able to provide offerings that the competition will not be able to match, both in terms of cost effectiveness and efficiency."

About Smart Card Marketing Systems, Inc.

Smart Card Marketing Systems Inc. has taken a mainstream position in the smart and prepaid charge card market to develop, integrate and to jointly deploy turnkey co-branded solutions for loyalty and payment management transactions. Smart Card Marketing Systems Inc. seeks industry suppliers and creates channel partners to better the availability of APIs (automated protocol interfaces) that respectively are only available to preferred corporations/clients and manages the required protocol in-place by the offering institution for the merchant.

Forward-Looking Statements. This news release contains "forward-looking statements," as that term is defined in Section 27A of the United States Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements about the expected future prospects of our business and all other statements in this release other than historical facts, constitute forward-looking statements. You can identify forward-looking statements because they contain words such as "believes," "expects," "may," "will," "would," "should," "seeks," "approximately," "intends," "plans," "estimates," or "anticipates" or similar expressions which concern our strategy, plans or intentions. All statements we make relating to estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates and financial results are forward-looking statements. In addition, we, through our senior management, from time to time make forward-looking public statements concerning our expected future operations and performance and other developments. All of these forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those we expected. We derive most of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and, of course, it is impossible for us to anticipate all factors that could affect our actual results. Some of the factors that we believe could affect our results include: general economic and market conditions, including the lingering effects of the economic slowdown and services revenue; the overall condition of the bank card industry, including the effect of any further consolidation among financial services firms; the regulatory, credit and market risks associated with our operations; the integration of acquired businesses, the performance of our businesses; the effect of war, terrorism or catastrophic events; the timing and magnitude of sales; the timing and scope of technological advances; the ability to retain and attract customers and key personnel; and the ability to obtain patent protection and avoid patent-related liabilities in the context of a rapidly developing legal framework for software and business-method patents. The factors described in this paragraph and other factors that may affect our business or future financial results and when applicable, will be discussed in our filings with the Securities and Exchange Commission. We assume no obligation to update any written or oral forward-looking statement made by us or on our behalf as a result of new information, future events or other factors.

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