SOURCE: Smart Card Marketing Systems Inc.

May 03, 2006 16:00 ET

Smart Card Marketing Systems Inc. Signs Major Agreements With Industry Leading Companies

SAN ANTONIO, TX -- (MARKET WIRE) -- May 3, 2006 -- Smart Card Marketing Systems Inc. (OTC: SMKG), a leading provider of prepaid cards, value smart storage cards and Payment transaction management services, announced today that they have signed KL Financial to a distribution co-brand secured Mastercard® deal.

KL Financial is a Quebec-based company with over four locations in the Montreal area that service the cheque cashing, money remittance, second chance financing and foreign exchange currency retail business. The co-brand contract secures a commitment of five thousand initial cards for the 2nd tier financial market prospects. Smart Card will benefit from the sale of the cards with a royalty on transactional-based revenue generated by active cards. The estimated value of the revenues generated by each card, according to industry standards, will be up to $45 to $75 per year, which translates into between $225,000 and $375,000 annually for Smart Card. This figure does not even include the revenue from the initial purchase.

The secured credit card market is very new in the Canadian marketplace, as many of the major financial institutions have not yet targeted this niche opportunity. This important new solution will allow credit challenged consumers and immigrants the opportunity to re-establish or create a better credit score to improve their chances for future financing.

Mr. Lim Tec of KL Financial stated, “We are very pleased with the agreement and we believe that the secured cards will make a profitable addition to our product offerings.”

Smart Card Marketing Systems also announced today that they have signed an agreement with a leading Canadian provider of electronic funds transfer services, to allow the Velocitymoney™ loading network (consumer site for activating, loading and reloading of charge cards) to add the new services of debiting or crediting funds from Canadian consumers or merchants bank accounts.

This added option will also allow Velocitymerchant.com, the merchant site of Smart Card Marketing, to broaden its range of services for international e-merchants requiring acquisition of financial transactions in Canada. These transactions could include but are not limited to payroll, bill payments, leases and prepaid charge cards. Many US companies do not have the accessibility of acquiring transactions for the Canadian marketplace as easily as they do in the US market.

Smart Card Marketing’s CEO Massimo Barone stated, “Our position is to market this integrated offering to payment service providers to extend their captive market and offerings in the payment sector.”

About Us

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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