CardSystems AND BatesWhite ANNOUNCE STRATEGIC VENTURE

CardSystems Inc announced that it has formed a strategic alliance with a premier business and data analytics firm, BatesWhite, to develop a new breed of electronic payment processing solutions and to leverage the massive amounts of data inherent in the payment processing business. The collaboration has produced the first in a series of solutions enabling CardSystems to more accurately use data to identify fraudulent activity, reduce risk, and predict chargebacks.

The alliance formalizes a long-standing relationship between the two companies, and will continue a focus on developing predictive models to create useful products and applications for the electronic payments industry. CardSystems' customers -- acquirers and Independent Sales Organizations (ISO's) -- can expect more comprehensive management tools to handle the dispute process, and improve the overall quality of service they can provide their merchants.

"Our alliance with BatesWhite culminates a relationship that was initiated over seven years ago when we began working with Hal White to develop the intelligent applications used today in our eCardSMART Exceptions Management System [EMS]," said John S. Cramp, chairman and chief executive officer of CardSystems. "Our newest versions of EMS will allow our customers to forecast the likelihood of chargebacks, which, in the e-commerce world, are a huge problem related to the growing number of disputes and customer service. Working with the BatesWhite team, our vision is to create a broad range of intelligent processing solutions using predictive models to enable the electronic payments industry to better manage the challenges of risk, fraud, and disputes."

"The electronic payments environment, particularly non-face-to-face activity, is an ideal platform for the use of Artificial Neural Networks and automated decisioning," said Halbert White, Ph.D., senior partner with BatesWhite. "The collaboration between BatesWhite and CardSystems promises to fulfill the business objectives of data analytics by leveraging the availability of large amounts of data with intelligent tools to produce uniquely effective processing solutions."

CardSystems will offer acquirers and ISO's a choice of delivery options for these next generation processing solutions, including an outsourced service from the CardSystems data center, as software "rental" using the Application Service Provider (ASP) model, or as licensed software that may be implemented in the customer's own data center.

About BatesWhite

BatesWhite is a team of business analytics experts focused on helping clients achieve competitive advantage by integrating leading-edge data analytics with innovative decision-support, strategy consulting, and expert litigation services. BatesWhite excels at working with clients to understand their business challenges and to develop and implement practical, creative solutions. The BatesWhite approach combines a unique focus on data analytics with extensive industry experience to provide clients with enhanced decision-making and insight from sophisticated quantitative analyses. Based in Washington, D.C. and founded by Charles E. Bates, Ph.D. and Halbert White, Ph.D., BatesWhite has satellite offices in San Diego and San Francisco.

About CardSystems

CardSystems is a leading provider of applications and processing services to the global electronic payments industry, offering solutions to financial institutions and other transaction-oriented companies. CardSystems has evolved its proprietary eCardSMART card processing applications to meet the varying delivery needs of clients. eCardSMART solutions are available to the card industry as licensed software, software rental (via an Application Service Provider-ASP) or as a complete outsourced service. Additionally, CardSystems has developed intelligent enabling technologies that include an expert system, neural network and software applications optimized for the card processing industry. The eCardSMART suite of intelligent products and Internet solutions gives clients control of risk, dispute resolution and their proprietary customer data while dramatically improving productivity gains and providing compelling return on investment. CardSystems has deployed payment solutions in more than 30 countries. For more information on CardSystems, visit the company's Web site at www.cardsystems.com.

Contact Ginny Martin of CardSystems Inc, 972-980-8717 x2152, ginny.martin@cardsystems.com or David Bertoncini of BatesWhite, 202-216-1157, david.bertoncini@bateswhite.com.