QI Systems Inc. Developing Smart-Card ID and Payment System for Osage Nation

DALLAS & RICHMOND, British Columbia--(BUSINESS WIRE)--Sept. 7, 2005--QI Systems Inc. (OTCBB:QIIIF), a leading international developer and integrator of chip-based card payment and tracking solutions, today announced that the Company will provide the Osage Indian Nation with a smart-card identification and payment system for use by tribal employees.

The new, state-of-the-art system will initially be utilized at the Nation's headquarters in Pawhuska, Oklahoma. It is envisioned that following the test phase, the preliminary applications will be expanded to provide additional value to the Nation.

QI Systems is presently partnering with the Osage Tribe on several additional projects, including the pursuit of federal, state and local government contracts for smart-card applications. Representatives from QI Systems, the Osage Business Enterprise Corporation, and other project partners recently met to review and assess the status of the program.

As a project test, QI Systems has responded to requests for quotations from city governments in multiple locations. Since many of the contract proposals require a construction component, QI anticipates partnering with other tribal companies in addition to the Osage Nation as the Company pursues millions of dollars of contract opportunities throughout North America.

About the Osage Nation

The Osage Nation is a federally recognized Indian nation which occupies the Osage Reservation in Oklahoma. The Osage Nation consists of approximately 18,000 Osage citizens with an estimated 4,000 residing on the Reservation. Purchased by the Osage in 1870, the Reservation encompasses 1,469,240 acres, or 2,296 square miles, and is the only federally recognized Reservation remaining in Oklahoma. The capital of the Osage Nation is in Pawhuska, Oklahoma.

About QI Systems Inc.

QI Systems Inc. designs, develops and markets chip-based card payment and tracking solutions to a number of industries. Products and core competencies include smart-card payment and stored-value systems, security protocols, data communication software design and hardware manufacture.

Matters discussed in this announcement are "forward-looking statements" and are subject to certain risks and uncertainties. Consider all risk factors carefully when evaluating forward-looking statements as actual results may differ materially from current expectations. QI Systems undertakes no obligation to publicly update such forward-looking statements.