Lipman Electronic Engineering Receives Order from China Union Pay Merchant Service; Leading Payment and Transaction Processor to Deploy 20,000 Point-of-Sale Terminals

ROSH HAAYIN, Israel--(BUSINESS WIRE)--Aug. 21, 2006--Lipman Electronic Engineering Ltd. (Nasdaq:LPMA) (TASE:LPMA) today announced that its subsidiary, Lipman China, has received an order for 20,000 point-of-sales units from China Union Pay ("CUP"), one of the leading financial institutions in China, to facilitate CUP's migration to EMV-compliant payment systems. The order is for Lipman's NURIT 8320 POS terminal and the NURIT 222 PIN Pad, and is expected to be supplied through out 2006.

Lazy Yanay, Executive VP of Sales and Marketing of Lipman, said, "We believe this order from China Union Pay, one of the leading payment and transaction processors in China, speaks to the quality and security that our products bring to customers. We are delighted to continuously work with CUP, and to remain its only international vendor chosen during its rollout of electronic payment systems. As the leading POS supplier in the Chinese market, Lipman will continue to support its customers with the latest payment technology and solutions. We look forward to further expanding our business in China as the market continues to grow."

“Lipman's equipment is already compliant with the latest EMV standards for chip-based credit and debit card transactions. This fact, coupled with Lipman's reputation for reliability and security, make its products the best possible choice for CUP in it's its transition to EMV compliant transactions.”

Xiao Yong, GM of Lipman China, stated "Lipman's equipment is already compliant with the latest EMV standards for chip-based credit and debit card transactions. This fact, coupled with Lipman's reputation for reliability and security, make its products the best possible choice for CUP in it's its transition to EMV compliant transactions."

About Lipman

Lipman is a leading worldwide provider of electronic payment systems. Lipman develops, manufactures and markets a variety of handheld, wireless and landline POS terminals, electronic cash registers, retail ATM units, PIN pads and smart card readers, as well as integrated PIN and smart card ("Chip & PIN") solutions. In addition, Lipman develops technologically advanced software platforms that offer comprehensive and customized transaction processing solutions for its customers, as well as managed professional services such as on-site and call-center support with remote terminal management.

Lipman's corporate headquarters and R&D facilities are located in Israel. Lipman also maintains offices in the US, United Kingdom, Turkey, China, Spain, Finland, Russia, Italy, Canada, Germany, Brazil, Argentina, Mexico, Australia and India. For more information visit www.lipman.biz

Statements concerning Lipman's business outlook or future economic performance; product introductions and plans and objectives related thereto; and statements concerning assumptions made or expectations as to any future events, conditions, performance or other matters, are "forward-looking statements" as that term is defined under U.S. Federal securities laws. Forward-looking statements are subject to various risks, uncertainties and other factors that could cause actual results to differ materially from those stated in such statements. These risks, uncertainties and factors include, but are not limited to: our dependence on distributors and customers; the competitive market for our products; market acceptance of new products and continuing products; timely product and technology development/upgrades and the ability to manage changing market conditions; manufacturing in Israel; compliance with industry and government standards and regulations; dependence on key personnel; possible business disruption from acquisitions; and other factors detailed in Lipman's filings with the U.S. Securities and Exchange Commission. Lipman assumes no obligation to update the information in this release.