SOURCE: Smart Card Marketing Systems Inc.

August 21, 2006 16:05 ET

Smart Card Marketing Systems, Inc. to Launch Distribution Network in Quebec City

SAN ANTONIO, TX -- (MARKET WIRE) -- August 21, 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 will launch a distribution network, through MD Multimedia, Inc., an affiliate partner, in Quebec City.

The distribution agreement states that MD Multimedia and their group of resellers will establish a marketing base from their existing sales network to market Smart Card's GoSmartCard platform directly to their retailers. MD Multimedia and its resellers have established a website that will allow them to create a base and then build the network of retailers integrating the GoSmartCard platform. This will allow all of the merchants to eventually participate in the joint marketing platforms offered by Smart Card. According to the distribution agreement, Smart Card will supply the technology as well as provide the back end office management of the program. The expected date of the launch for the distribution network as well as the website is the second week of September.

This distribution agreement will allow Smart Card to build its existing distribution network, while at the same time integrating new retailers who will have the ability to become co-brand licensees of Smart Card's technology. Smart Card CEO, Massimo Barone, stated, "We believe that developing distribution networks and establishing partnerships will create a future value to the size of Smart Card's infrastructure and capture an important part of the market share that we are seeking."

About Smart Card Marketing Systems, Inc.

Smart Card Marketing Systems, Inc. was established in 2003 and is a leading provider of prepaid cards, value smart storage cards, loyalty programs and payment processing services. Smart Card offers a powerful sales organization and merchant reseller marketing program that incorporates cutting edge technology and delivers a viable cost-effective solution. Smart Card is looking to revolutionize the prepaid and loyalty card market by presenting their proprietary solution offering, the GoSmartCard platform. For more information, go to http://www.gosmartcard.com.

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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