PAYNOVA RESTRUCTURES ACCORDING TO PLAN – DECISION ON FIRST NEW SHARE ISSUE TO INDIAN XPONSE

(NGM: PAY)

· The rationalization and restructuring efforts that Paynova scheduled with Indian Xponse IT Services in August are running according to plan. As payment for the services provided thus far, Paynova’s board has decided to issue 3,173,728 shares to Xponse.

· By the second quarter of 2007, the company expects to see the full effects of a considerable 40 percent decrease in operating costs.

· For the fourth quarter of 2006, the transaction volumes are estimated to reach a new all time high, with an increase of over 40 percent compared to the previous quarter.

· Paynova’s still has the same goal for the restructuring work with Xponse – to have a positive monthly cash flow by June 2007.

RESTRUCTURING EFFORTS PROGRESS ACCORDING TO PLAN

About thirty Xponse consultants are involved in developing Paynova’s capacity and functionality as well as implementing the restructuring plans. So far, Xponse has worked with Software Development, Operational Management Services, Strategic Advice, Marketing Management Services, Cost Contribution, Credit Facility, and Execution of Restructuring Plan.

On the whole, this provides a great increase in capacity, functionality and resources in order to meet the demands, needs and deadlines of the existing and potential partners and customers in the prioritized target groups.

STRONG POSITIVE VOLUME INCREASES DURING THE FOURTH QUARTER AND LARGE COST REDUCTIONS DURING IMPLEMENTATION

Due to these great rationalization efforts, Paynova estimates that the company’s operative costs will be reduced by about 40 percent before one-time restructuring costs. The full effect of the cost reductions should be seen in the second quarter of 2007. These cost reductions are an important part of Paynova’s and Xponse’s common goal – to make Paynova cash flow positive on a monthly basis by June 2007.

To reach that goal, Paynova’s transaction volumes will need to continue developing positively. For the fourth quarter 2006, the transaction volumes are expected to increase by more than 40 percent compared to the third quarter, which in turn increased by 26 percent from the second quarter.

Ultimately, this means that the company can sustain profits with a much lower transaction volume than before.

OFFSET ISSUE TO XPONSE

At the extraordinary annual general meeting on September 14, 2006, the board of Paynova authorized to arrange a series of offset issues to Xponse IT Services, or to a corporation or other associated company that Xponse designates. As reported at the annual general meeting, the newly issued shares should function as compensation for services that Xponse or companies associated with Xponse have provided for Paynova, in accordance with the contract between Paynova and Xponse that was approved by the annual general meeting.

As of December 13, Xponse had provided services to Paynova worth an invoice value of SEK 37,450,000.

On December 20, 2006, Paynova’s board came to a decision on the first of these offset issues.

The board’s decision regarding the offset issues means that at most 3,173,728 shares should be issued to the companies designated by Xponse – Global Business Management (“Global”) and Redwood Business Services Ltd. (“Redwood”). The first issue will increase Paynova’s share capital by at most SEK 317,372.80. For the shares, payment will be made by an offset of Global and Redwood’s joint claim on Paynova of SEK 37,450,000, which means that the issue price per share is SEK 11.80, as stated in the authorization of the extraordinary annual general meeting.

Upon entering the agreement, Paynova and Xponse have agreed that the services shall be provided directly to the parent company Paynova, and not to a newly formed subsidiary, as was initially decided.

For more information about the cooperation agreement between Paynova and Xponse, see the press releases dated August 25 and September 15, 2006.

FOR MORE INFORMATION PLEASE CONTACT:

Per Sunnemark, president and CEO

Mobile: +46 (0)701-476 755

ABOUT PAYNOVA

Paynova offers an international, account-based payment service via the Internet. With Paynova as the only counterpart, e-retailers get a payment guarantee for around twenty payment options in 10 languages with 8 currencies in a security-certified interface (PCI). Consumers can open an account, a Paynova wallet, for free on the Internet to make purchases simpler and more secure, and to manage transfers between family members, friends and acquaintances.

Paynova has agreements with around 1,000 e-retailers. Most are found in the following prioritized segments: travel, retailing and media/network games. The company has been listed on NGM Equity since February 2004. For more information: www.paynova.com