================================================================================


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549
                            ------------------------


                                    FORM 10-Q

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
       ------------------------------------------------------------------



For the Quarterly Period Ended:            Commission File Number:
       June 30, 2004                             000-21685


                       INTELIDATA TECHNOLOGIES CORPORATION
             (Exact name of registrant as specified in its charter)




       DELAWARE                                        54-1820617
  (State of Incorporation)               (I.R.S. Employer Identification Number)

             11600 Sunrise Valley Drive, Suite 100, Reston, VA 20191
                    (Address of Principal Executive Offices)

                                 (703) 259-3000
                         (Registrant's Telephone Number)



Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.
Yes      X        No
    ----------        --------

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes      X        No
    ----------        --------


The number of shares of the  registrant's  Common Stock  outstanding on June 30,
2004 was 51,344,349.

================================================================================


<PAGE>





                       INTELIDATA TECHNOLOGIES CORPORATION

                          QUARTERLY REPORT ON FORM 10-Q

                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
PART I -  FINANCIAL INFORMATION

 Item 1.  Financial Statements (unaudited)

          Condensed Consolidated Balance Sheets
          June 30, 2004 and December 31, 2003 ...............................  3

          Condensed Consolidated Statements of Operations
          Three and Six Months Ended June 30, 2004 and 2003 .................  4

          Condensed Consolidated Statement of Changes in Stockholders' Equity
          Six Months Ended June 30, 2004.....................................  5

          Condensed Consolidated Statements of Cash Flows
          Six Months Ended June 30, 2004 and 2003 ...........................  6

          Notes to Condensed Consolidated Financial Statements ..............  7

 Item 2.  Management's Discussion and Analysis of Financial Condition
          and Results of Operations ......................................... 12

 Item 3.  Quantitative and Qualitative Disclosures About Market Risk ........ 23

 Item 4.  Controls and Procedures ........................................... 23



PART II - OTHER INFORMATION

 Item 4.  Submission of Matters to a Vote of Security Holders................ 23

 Item 6.  Exhibits and Reports on Form 8-K .................................. 23

 SIGNATURE .................................................................. 25


<PAGE>


PART I:       FINANCIAL INFORMATION
-----------------------------------
ITEM 1.       FINANCIAL STATEMENTS
----------------------------------

                       INTELIDATA TECHNOLOGIES CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                       JUNE 30, 2004 AND DECEMBER 31, 2003
                  (in thousands, except share data; unaudited)
<TABLE>

                                                                                         2004            2003
                                                                                    -------------   ------------
<S>                                                                                  <C>            <C>

ASSETS
CURRENT ASSETS
     Cash and cash equivalents                                                      $      5,377    $      7,603
     Accounts receivable, net                                                              2,843           2,890
     Other receivables                                                                       126             180
     Prepaid expenses and other current assets                                               367             625
                                                                                    ------------    ------------
         Total current assets                                                              8,713          11,298

NONCURRENT ASSETS
     Property and equipment, net                                                           1,227           1,529
     Goodwill                                                                                 --          26,238
     Intangible asset, net                                                                 4,700           5,060
     Other assets                                                                            211             211
                                                                                    ------------    ------------

TOTAL ASSETS                                                                        $     14,851     $    44,336
                                                                                    ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
     Accounts payable                                                               $      1,509    $      1,531
     Accrued expenses                                                                      1,408           1,599
     Deferred revenues                                                                     1,373           1,351
     Accrued rent                                                                            281             364
     Net liabilities of discontinued operations                                              100              45
                                                                                    ------------    ------------
TOTAL CURRENT LIABILITIES                                                                  4,671           4,890
     Accrued rent                                                                            290             380
     Net liabilities of discontinued operations                                              113              75
                                                                                    ------------    ------------
TOTAL LIABILITIES                                                                          5,074           5,345
                                                                                    ------------    ------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
     Preferred stock, $0.001 par value; authorized 5,000,000 shares;
        no shares issued and outstanding                                                      --              --
     Common stock, $0.001 par value; authorized 100,000,000 shares;
        issued 52,180,000 shares in 2004 and 52,065,000 shares in 2003;
        outstanding 51,344,000 shares in 2004 and 51,231,000 shares in 2003                   52              52
     Additional paid-in capital                                                          307,032         306,963
     Treasury stock, at cost:  835,000 shares in 2004 and 834,000 shares in 2003          (2,548)         (2,546)
     Deferred compensation                                                                  (172)           (228)
     Accumulated deficit                                                                (294,587)       (265,250)
                                                                                    ------------    ------------
TOTAL STOCKHOLDERS' EQUITY                                                                 9,777          38,991
                                                                                    ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                          $     14,851    $     44,336
                                                                                    ============    ============
</TABLE>

     See accompanying notes to condensed consolidated financial statements.

<PAGE>

                    INTELIDATA TECHNOLOGIES CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                THREE AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                (in thousands, except per share data; unaudited)

<TABLE>
                                                                Three Months Ended                 Six Months Ended
                                                                     June 30,                           June 30,
                                                          ----------------------------       ----------------------------
                                                              2004              2003            2004               2003
                                                          -----------      -----------       -----------      -----------
<S>                                                       <C>              <C>               <C>             <C>

Revenues
     Software                                             $        --      $       295       $        --      $       638
     Consulting services, recurring and termination fees        3,746            5,656             7,338           10,938
                                                          -----------      -----------       -----------      -----------
         Total revenues                                         3,746            5,951             7,338           11,576
                                                          -----------      -----------       -----------      -----------

Cost of revenues
     Software                                                      --               --                --               --
     Consulting services, recurring and termination fees        1,775            1,948             3,555            3,882
                                                          -----------      -----------       -----------      -----------
         Total cost of revenues                                 1,775            1,948             3,555            3,882
                                                          -----------      -----------       -----------      -----------

Gross profit                                                    1,971            4,003             3,783            7,694

Operating expenses
     General and administrative                                 1,917            1,931             3,468            4,020
     Sales and marketing                                          397              485               712              878
     Research and development                                   1,120            1,430             2,426            2,577
     Goodwill impairment charge                                26,238               --            26,238               --
     Amortization of intangible asset                             180              180               360              360
                                                          -----------      -----------       -----------      -----------
         Total operating expenses                              29,852            4,026            33,204            7,835
                                                          -----------      -----------       -----------      -----------

Operating loss                                                (27,881)             (23)          (29,421)            (141)
Other income (expenses), net                                       40               12                84              (17)
                                                          -----------      -----------       -----------      -----------

Loss before income taxes                                      (27,841)             (11)          (29,337)            (158)
Provision for income taxes                                         --               --                --               --
                                                          -----------      -----------       -----------      -----------

Net loss                                                  $   (27,841)     $       (11)      $   (29,337)     $      (158)
                                                          ===========      ===========       ===========      ===========



Basic and diluted earnings (loss) per common shares       $     (0.54)     $     (0.00)      $     (0.57)      $    (0.00)
                                                          ===========      ===========       ===========      ===========

Basic and diluted weighted-average
     common shares outstanding                                 51,159           49,002            51,168           48,935
                                                          ===========      ===========       ===========      ===========
</table>

     See accompanying notes to condensed consolidated financial statements.


<PAGE>


5

                       INTELIDATA TECHNOLOGIES CORPORATION
       CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                         SIX MONTHS ENDED JUNE 30, 2004
                            (in thousands; unaudited)



<TABLE>



                                                   Common Stock         Additional
                                             -------------------------   Paid-in      Treasury     Deferred       Accumulated
                                               Shares       Amount        Capital       Stock     Compensation       Deficit
                                             ------------ ------------ -------------- ----------- -------------- ----------------
<S>                                          <C>          <C>          <C>            <C>         <C>            <C>

Balance at January 1, 2004                      52,065    $      52    $   306,963    $  (2,546)  $      (228)   $  (265,250)
    Issuances of common stock:
        Exercise of stock options                   56            -             43            -             -              -
        Employee Stock Purchase Plan                14            -              8            -             -              -
        Issuances of restricted stock               95            -             98            -           (98)             -
    Cancellations of restricted stock              (50)           -            (80)           -            80              -
    Purchase of treasury stock, at cost              -            -              -           (2)            -              -
    Amortization of deferred compensation            -            -              -            -            74              -
    Net loss                                         -            -              -            -             -        (29,337)

    Comprehensive loss

                                             ------------ ------------ -------------- ----------- -------------- ----------------

Balance at June 30, 2004                        52,180    $      52    $   307,032    $  (2,548)    $    (172)   $  (294,587)
                                             ============ ============ ============== =========== ============== ================



                                          Comprehensive
                                               Loss          Total
                                          ------------    ------------


Balance at January 1, 2004                                $  38,991
    Issuances of common stock:
        Exercise of stock options                                43
        Employee Stock Purchase Plan                              8
        Issuances of restricted stock                             -
    Cancellations of restricted stock                             -
    Purchase of treasury stock, at cost                          (2)
    Amortization of deferred compensation                        74
    Net loss                                $ (29,337)      (29,337)
                                             ---------
    Comprehensive loss                      $ (29,337)
                                            ==========
                                                          ------------

Balance at June 30, 2004                                  $   9,777
                                                          ============


</TABLE>


     See accompanying notes to condensed consolidated financial statements.


<PAGE>



                       ITELIDATA TECHNOLOGIES CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                     SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                            (in thousands; unaudited)

<TABLE>


                                                                               2004                   2003
                                                                           -----------             ----------
<S>                                                                        <C>                     <C>
Cash flows from operating activities
     Net loss from continuing operations                                   $   (29,337)            $     (158)
     Adjustments to reconcile net loss from continuing operations
         to net cash from operating activities of continuing operations:
         Goodwill impairment charge                                             26,238                     --
         Amortization of intangible asset                                          360                    360
         Depreciation and amortization                                             349                    666
         Deferred compensation expense                                              74                    133
         Net loss on disposal of property and equipment                             --                    137
         Changes in certain assets and liabilities:
              Accounts receivable                                                   47                   (298)
              Prepaid expenses and other current assets                            312                    265
              Accounts payable                                                     (22)                   120
              Accrued expenses and accrued rent                                   (364)                  (549)
              Deferred revenue                                                      22                   (516)
                                                                           -----------             ----------
                  Net cash (used in) provided by operating activities of
                  continuing operations                                         (2,321)                   160
                                                                           -----------             ----------

     Cash released from escrow account                                             224                     --
     Payments on liabilities of discontinued operations                           (131)                   (67)
                                                                           -----------             ----------
                  Net cash provided by (used in) discontinued operations            93                    (67)
                                                                           -----------             ----------

                  Net cash (used in) provided by operating activities           (2,228)                    93
                                                                           -----------             ----------

Cash flows from investing activities
     Purchases of property and equipment                                           (47)                   (82)
                                                                           -----------             ----------
                  Net cash used in investing activities                            (47)                   (82)
                                                                           -----------             ----------

Cash flows from financing activities
     Proceeds from issuance of common stock                                         51                    532
     Payments to acquire treasury stock                                             (2)                   (13)
                                                                           -----------             ----------
                  Net cash provided by financing activities                         49                    519
                                                                           -----------             ----------

(Decrease) increase in cash and cash equivalents                                (2,226)                   530

Cash and cash equivalents, beginning of period                                   7,603                  5,674
                                                                           -----------             ----------
Cash and cash equivalents, end of period                                   $     5,377             $    6,204
                                                                           ===========             ==========

</table>

     See accompanying notes to condensed consolidated financial statements.

<PAGE>


                       INTELIDATA TECHNOLOGIES CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                     SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                                   (Unaudited)

(1)  Basis of Presentation

     The  condensed  consolidated  balance  sheet  of  InteliData   Technologies
Corporation  ("InteliData"  or the  "Company") as of June 30, 2004,  the related
condensed consolidated statements of operations and cash flows for the six-month
periods  ended June 30, 2004 and 2003,  and the related  condensed  consolidated
statement of changes in stockholders' equity for the six-month period ended June
30,  2004  presented  in  this  Form  10-Q  are  unaudited.  In the  opinion  of
management,  all adjustments necessary for a fair presentation of such financial
statements have been included. Such adjustments consist only of normal recurring
items.  The  condensed  consolidated  balance  sheet as of December 31, 2003 was
derived from the  Company's  audited  December 31, 2003 balance  sheet.  Interim
results  are not  necessarily  indicative  of results  for a full year.  Certain
amounts in the prior  periods have been  reclassified  to conform to the current
period presentation.

     The condensed  consolidated financial statements and notes are presented as
required by Form 10-Q, and do not contain  certain  information  included in the
Company's  annual  audited  financial  statements  and  notes.  These  financial
statements  should be read in  conjunction  with the  annual  audited  financial
statements  of the Company and the notes  thereto,  together  with  management's
discussion  and  analysis of  financial  condition  and  results of  operations,
contained in the Form 10-K for the fiscal year ended December 31, 2003.

(2)  Summary of Significant Accounting Policies

(a)  Principles of Consolidation - The consolidated financial statements include
the accounts of the Company and its wholly owned  subsidiaries after elimination
of   all   material    intercompany    balances   and   transactions.    Certain
reclassifications  have been  made to the prior  year  financial  statements  to
conform to the 2004 financial statement presentation.

(b)  Accounting Estimates- The preparation of financial statements in conformity
with accounting  principles  generally  accepted in the United States of America
requires  management to make estimates and assumptions  that affect the reported
amounts  of assets and  liabilities  and  disclosure  of  contingent  assets and
liabilities at the date of the financial  statements and the reported amounts of
revenues and expenses during the period.  Estimates include, but are not limited
to, allowance for doubtful accounts, costs of environmental remediation for real
property previously sold, depreciation of fixed assets,  valuation of intangible
assets which  include  goodwill,  provision  for  discontinued  operations,  and
project  plans for the  completion  and  delivery  of certain  solutions.  These
accounting  estimates  are  based on  information  currently  available.  Actual
results could differ from those  estimates and in some cases the actual  results
could vary materially from the estimates.

(c)  Revenue Recognition - The Company  supplies online banking and bill payment
software to financial  institutions  ("FI's"). The Company's revenues associated
with  integrated  solutions that bundle  software  products with  customization,
installation  and  training  services are  recognized  using the  percentage  of
completion  method of accounting based on cost incurred as compared to estimated
costs at completion.

     The Company  enters into  contracts  where the  delivered  software may not
require significant customization.  Upon delivery, the Company either recognizes
revenue  ratably over the contract  period for contracts  where vendor  specific
objective  evidence  ("VSOE") of fair value for post contract  customer  support
("PCS")  does not exist or  recognizes  revenue in full where VSOE of fair value
for PCS does exist.

     The Company  also  enters  into  multiple  element  arrangements.  Elements
typically include software,  consulting,  implementation  and PCS. PCS contracts
generally  require the  Company to provide  technical  support and  unspecified,
readily available software updates and upgrades to customers. Revenue from these
multiple element arrangements is recognized when there is persuasive evidence of
an arrangement  and delivery to the customer has occurred,  the fee is fixed and
determinable,  and collectibility is considered  probable.  Advance
<page>

payments  are  recorded as deferred  revenue  until the  products  are  shipped,
services are delivered and all obligations are met. Currently,  the Company does
not have VSOE of fair value for some of the elements within its multiple element
arrangements.  Therefore,  all revenue  under such  arrangements  is  recognized
ratably over the term of the PCS contract.  Revenue from transactional services,
which includes hosting and application  services provider ("ASP")  services,  is
recognized as transactions are processed.

     Emerging  Issues Task Force Abstract  Issue No. 00-3,  Application of AICPA
Statement  of  Position  97-2 to  Arrangements  that  Include  the  Right to Use
Software Stored on Another Entity's Hardware ("EITF 00-3"), provides guidance in
determining  whether or not the  provisions  of  Statement of Position No. 97-2,
Software  Revenue  Recognition  ("SOP  97-2"),  should  be  applied  to  hosting
arrangements.  The  Company  has some  contracts  where  the  customers  operate
software in an ASP  environment.  The  customer may not take  possession  of the
software without incurring  significant  transition and infrastructure costs, as
well as potential  payments of fees to the Company for the  termination  of such
arrangements.  In cases  where  the  customer  has not  licensed  software  from
InteliData,  the customer must also purchase a license prior to having the right
to use the  software  in its  own  operating  environment,  in  addition  to the
aforementioned fees. In these situations, the Company applies the guidance under
EITF 00-3 and the Staff  Accounting  Bulletin No. 101,  Revenue  Recognition  in
Financial  Statements,  and recognizes the revenue  associated  with the license
and/or implementation fees ratably over the initial term of the contract.

     Additionally,  based on the EITF 00-3 guidance,  the Company concluded that
SOP 97-2  should not be applied to certain of its  software  hosting  contracts.
Accordingly,  the related  revenues for license and  professional  services were
recognized under the percentage of completion  method. In addition to developing
and  delivering  the solution,  the Company is entitled to use fees based on the
number of users and  transactions.  These use-based fees are earned based on the
monthly user counts and as transactions are processed.

(d)  Recent  Accounting Pronouncements  - In May 2003, the Financial  Accounting
Standards  Board ("FASB")  issued  Statement of Financial  Accounting  Standards
("SFAS")  No.  150,   Accounting   for  Certain   Financial   Instruments   with
Characteristics of both Liabilities and Equity ("SFAS 150"), which requires that
an issuer classify  financial  instruments that are within the scope of SFAS 150
as a liability. Under prior guidance, these same instruments would be classified
as equity.  SFAS 150 is effective for all financial  instruments entered into or
modified  after May 31, 2003.  Otherwise,  it is effective on July 1, 2003.  The
adoption of SFAS 150 did not have a material  effect on our financial  position,
results of operations, or cash flows.

     In May 2003,  the FASB issued SFAS No. 149,  Amendment of Statement  133 on
Derivative  Instruments and Hedging  Activities  ("SFAS 149"),  which amends and
clarifies  financial  accounting  and  reporting  for  derivative   instruments,
including   certain   derivative   instruments   embedded  in  other   contracts
(collectively  referred to as derivatives) and for hedging activities under SFAS
No. 133, Accounting for Derivative Instruments and Hedging Activities.  SFAS 149
is effective for contracts entered into or modified after June 30, 2003, and for
hedging  relationships  designated after June 30, 2003. The adoption of SFAS 149
did not have a material impact on our financial position, results of operations,
or cash flows.

     In December 2002, the FASB issued SFAS No. 148,  Accounting for Stock-Based
Compensation-Transition  and  Disclosure-an  amendment of FAS 123 ("SFAS  148").
SFAS 148 amends SFAS No. 123,  Accounting for  Stock-Based  Compensation  ("SFAS
123"),  to  provide  alternative  methods  of  transition  for  an  entity  that
voluntarily changes to the fair value based method of accounting for stock-based
employee  compensation.  It also amends the disclosure provisions of SFAS 123 to
require  prominent  disclosure  about the effects on  reported  net income of an
entity's  accounting  policy  decisions  with  respect to  stock-based  employee
compensation.  SFAS 148 also amends Accounting  Principles Board Opinion No. 28,
Interim  Financial  Reporting,  to require  disclosure  about  those  effects in
interim  financial  information.  SFAS 148 is  effective  for annual and interim
periods  beginning  after  December 15, 2002.  As the Company has elected not to
change to the fair value based method of  accounting  for  stock-based  employee
compensation,  SFAS 148 did not  have  any  impact  on our  financial  position,
results of operations, or cash flows.

     In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated
with  Exit  or  Disposal  Activities  (including  Certain  Costs  Incurred  in a
Restructuring)  ("SFAS 146"), which supersedes  Emerging Issues Task Force Issue
No. 94-3,  Liability  Recognition for Certain Employee  Termination Benefits and
Other Costs to Exit an Activity ("EITF 94-3"). SFAS 146 requires  recognition of
a liability  for costs  associated  with an exit or

<page>

disposal  activity when the  liability is incurred,  rather than when the entity
commits  to an exit  plan  under  EITF  94-3.  The  provisions  of SFAS  146 are
effective for exit or disposal activities that are initiated after September 30,
2002. As of March 31, 2003, the Company ceased using one of its leased spaces at
its offices in Reston,  Virginia.  The  remaining  obligation  on this lease was
approximately $1,080,000 through December 31, 2006. In accordance with SFAS 146,
the Company  estimated the fair value of net sublease  rent to be  approximately
$465,000 over the remaining term.  Accordingly,  the Company recorded an expense
of $625,000 and a  corresponding  liability  as of March 31, 2003.  As of May 1,
2003,  the  Company  has a  subtenant  for this  space for the  majority  of the
remaining  lease term and the actual  results of net sublease  rent could differ
from the above estimates. As of June 30, 2004, the estimated remaining liability
was approximately $393,000.

(e)  Valuation of Long-Lived Assets - The Company reviews its long-lived  assets
such as property,  plant and equipment and identifiable  intangibles with finite
useful lives for impairment whenever events or changes in circumstances indicate
that the carrying  amount may not be  recoverable.  If the total of the expected
undiscounted  future cash flows is less than the carrying amount of the asset, a
loss,  if any,  is  recognized  for the  difference  between  the fair value and
carrying value of the asset. Impairment analyses,  when performed,  are based on
the Company's  current business and technology  strategy,  views of growth rates
for  the  business,   anticipated  future  economic  conditions,   and  expected
technological availability.

(f)  Goodwill and Other Intangible Assets - SFAS No. 141, Business  Combinations
("SFAS 141") requires business combinations  initiated after June 30, 2001 to be
accounted for using the purchase method of accounting, and broadens the criteria
for recording  intangible assets separate from goodwill.  SFAS No. 142, Goodwill
and Other Intangible Assets ("SFAS 142") requires the use of an amortization and
non-amortization  approach  to account  for certain  intangibles  and  purchased
goodwill.  Under a non-amortization  approach,  goodwill and certain intangibles
are not to be  amortized  into  results  of  operations,  but  instead  would be
reviewed for  impairment  and written down and charged to results of  operations
only in the  periods  in which  the  recorded  value  of  goodwill  and  certain
intangibles  is more than its fair value.  These  reviews are to be performed at
least annually and tests for impairment  between annual tests may be required if
events occur or circumstances  change that would more likely than not reduce the
fair value of the net carrying amount.  The  amortization  and  non-amortization
provisions of SFAS 142 are to be applied to all goodwill and  intangible  assets
acquired  after June 30, 2001.  The  provisions of each  statement that apply to
goodwill and  intangible  assets  acquired prior to June 30, 2001 was adopted by
the Company on January 1, 2002. As of January 1, 2002,  in accordance  with SFAS
142,  the Company  ceased  recognizing  amortization  expense on  goodwill.  The
goodwill and intangible  asset (which is subject to  amortization)  consisted of
the following components (in thousands) as of:

                                             June 30, 2004     December 31, 2003
                                             -------------     -----------------
 Goodwill                                    $           -     $         26,238
                                             =============     =================
 Intangible asset, gross carrying amount     $       7,200     $          7,200
 Accumulated amortization                           (2,500)              (2,140)
                                             -------------     -----------------
    Net intangible asset                     $       4,700     $          5,060
                                             =============     =================


     As the  Company  disclosed  in  the  first  quarter,  the  required  annual
impairment  testing date is as of June 30th.  As of March 31, 2004,  the Company
was not aware of events or  circumstances  that  could  indicate  impairment  of
goodwill and its market  capitalization  indicated a fair value substantially in
excess of the Company's carrying amount,  including goodwill.  During the second
quarter of 2004, the Company experienced  unanticipated business challenges,  as
customer decisions on acquiring  InteliData's solutions were not completed for a
variety  of  reasons  (e.g.,  merger  and  acquisition   activities  that  shift
priorities,  merger  and  acquisition  activities  that  reduce  the  number  of
prospects,  and the  timing  of  requests  for  proposals  and  decision  making
processes).  Additionally,  competition  in the  marketplace  increased  pricing
pressures  (e.g.,  a competitor  lowered  pricing for some  customers to prevent
attrition).  These  marketplace  challenges  led the Company to  reevaluate  the
financial  projections  and  related  cash flows for the next three years and to
reconsider  longer-term  estimates.  In  addition,  the  Company  noted  a sharp
reduction in its market capitalization  subsequent to the first quarter of 2004,
which  reflected  its  marketplace   challenges  and  corroborated  its  revised
financial projections discussed above.
<page>

     As of June 30, 2004, the Company  performed the required annual  impairment
testing for goodwill in accordance  with SFAS 142.  These  reviews  utilized the
same  approaches  and similar  considerations  as previous  tests.  The goodwill
impairment test,  performed at the reporting unit level, is a two-step analysis.
First, the fair value of the reporting unit was compared to its carrying amount,
including goodwill. Fair value was determined using generally accepted valuation
methodologies (i.e.,  discounted cash flow model,  guideline company method, and
similar  transactions  method).  That is, the Company assessed the fair value of
its only  reporting unit by  considering  its projected  cash flows,  comparable
company  valuations,  and recent  purchase  prices paid for entities  within its
industry.  As the fair value of the  reporting  unit was less than its  carrying
amount,  the Company  compared the implied fair value of reporting unit goodwill
with the carrying  amount of that  goodwill to measure the amount of  impairment
loss.   Accordingly,   the  Company  performed  a  hypothetical  purchase  price
allocation  based on the reporting unit's fair value to determine the fair value
of the  reporting  unit's  goodwill in order to measure the goodwill  impairment
charge.  This hypothetical  purchase price allocation required the evaluation of
the fair values of unrecorded  assets,  such  developed  technologies,  customer
relationships  and  deferred  tax  assets,  in  addition  to the fair  values of
recorded net assets. The Company used accepted valuation  methodologies to value
these assets,  including but not limited to, the  replacement  cost approach and
relief from royalty  approach (i.e.,  what the Company would have to pay for the
use of its  technologies  in a hypothetical  licensing or royalty  arrangement).
Consideration  was given to the  unrecorded  net assets  only for the purpose of
measuring the amount of goodwill impairment loss.  Accordingly,  the Company did
not record such net assets on the balance sheet.

     Given  consideration  of these factors and the Company's  declining  market
capitalization,  the Company recorded a goodwill impairment charge in the amount
of  $26,238,000  in the second  quarter.  The analysis  discussed  above clearly
indicated that the goodwill balance was fully impaired.  As discussed above, the
analysis required the Company to make estimates of projected cash flows in order
to  determine  if  its  assets  are  impaired.   The  Company  made  significant
assumptions and estimates in this process  regarding matters that are inherently
uncertain,  such  as  forecasting  revenue  and  cost  projections,  calculating
remaining  useful lives,  assuming  discount  rates and costs of capital,  among
others.  Management believes that the judgments,  estimates and assumptions used
are reasonable and supportable.

(3)  Discontinued Operations

     As of June 30, 2004,  the net  liabilities  of  discontinued  operations of
$213,000 relate to the telecommunications divisions. These liabilities relate to
the  environmental  clean  up  associated  with  prior  tenants'  operations  at
InteliData's  former  New  Milford,   Connecticut  property.  In  January  2000,
InteliData sold the New Milford,  Connecticut  property and the building located
thereon,  its  only  remaining  asset  in  its  discontinued  operations  of the
telecommunications  division.  In the context of this sale, InteliData agreed to
undertake  limited  remediation of the site in accordance with applicable  state
and federal  law. The subject  site is not a listed  federal or state  Superfund
site and InteliData has not been named a "potentially  responsible party" at the
site. The remediation plan agreed to with the purchaser allows InteliData to use
engineering and institutional controls (e.g., deed restrictions) to minimize the
extent  and costs of the  remediation.  Further,  at the time of the sale of the
facility,  InteliData established a $200,000 escrow account from the proceeds of
the sale for certain  investigation/remediation  costs.  This escrow account was
interest bearing and would be paid out to InteliData.  In April 2004, the escrow
account balance of  approximately  $224,000 was released and paid to InteliData.
The net liability of  discontinued  operations was increased to reflect the cash
received  by  InteliData.   Moreover,   InteliData  has  obtained  environmental
insurance to pay for remediation  costs up to $6,600,000 in excess of a retained
exposure limit of $600,000. InteliData estimates its remaining liability at June
30, 2004 related to this matter, including the escrow amount received, and other
costs to be  approximately  $213,000.  This amount is recorded as a liability on
the balance sheet.

     The Company has engaged a legal firm and an  environmental  specialist firm
to represent it regarding this matter. The timing of the ultimate  resolution of
this  matter is  estimated  to be from two to four  years  under  the  Company's
proposed  compliance  plan,  which involves a natural  attenuation  and periodic
compliance monitoring approach.  Management does not believe that the resolution
of this  matter  will likely  have a material  adverse  effect on the  Company's
financial condition or results of operations.

<PAGE>

(4)  Stockholders' Equity

     During July 2003, the Company issued  1,431,364  shares of its common stock
pursuant to the exercise of warrants, as amended, by institutional investors who
participated in the Company's  private placement of common stock in November and
December, 2001. The warrant exercise resulted in gross proceeds of approximately
$3,335,000.  All of the  warrants  that were issued as part of the 2001  private
placement have been exercised.

(5)  Commitments and Contingencies

     Purchase  Obligations - The Company entered into multiple vendor agreements
for outsourced  services as part of its ASP solution offering for certain Online
Banking and Payment  Solutions  clients.  Some of these vendor agreements commit
the Company to  specified  minimum  charges  during the terms of the  contracts.
These purchase  obligations  are disclosed  below.  During 2003,  several of the
Company's  clients  migrated from this ASP  environment to an in-house  solution
utilizing  InteliData's licensed software. As a result, a possibility exists for
future  losses due to the  decrease in  estimated  future  revenue  streams when
compared with the Company's  current  contractual  cost structure for outsourced
services within this ASP environment.

     In assessing  potential  future  losses  associated  with the Company's ASP
business,  the Company may include the possibility of new clients that would add
incremental revenue to this ASP environment.  Additionally, the Company may have
the opportunity to restructure vendor contracts and decrease contractual charges
(e.g.,  renegotiate or extend the current contract with lower minimum charges or
migrate to different vendors). Management continues to assess both the potential
for new business  prospects and the  possibility of reducing the Company's costs
through  renegotiation  of  existing  agreements.  In  June  2004,  the  Company
restructured  one such  agreement  and  decreased  its overall  prospective  ASP
operations costs. Entering the third quarter of 2004, the projected revenues are
estimated to exceed projected costs by approximately  $85,000 on a monthly basis
based on the  June  2004  results;  this gap  will  fluctuate  based on  monthly
activity.  In accordance  with generally  accepted  accounting  principles,  the
Company is accounting for these contract costs as they are incurred.

     Based on the  restructured  vendor  contract,  the updated  future  minimum
payments under purchase  obligations for outsourced  services are as follows (in
thousands):


                                                                    Purchase
         Years Ending December 31,                                Obligations
         -------------------------                                -----------
              2004                                                $     2,410
              2005                                                        640
              2006                                                         --
              2007                                                         --
              2008 and thereafter                                          --
                                                                  -----------
                  Total minimum payments                          $     3,050
                                                                  ===========

(6)  Income Taxes

     At December 31, 2003, the Company had net operating loss  carryforwards for
federal income tax purposes of approximately $205 million,  which expire in 2008
through  2023.  The net loss for the  six-month  period ended June 30, 2004 will
contribute  to the  increase of total net  operating  loss  carrryforwards.  The
Company  continues  to  establish a full  valuation  allowance  for deferred tax
assets,  because  it is deemed,  based on  available  evidence,  that it is more
likely than not that all of the deferred tax assets will not be realized.

                                   * * * * * *

<PAGE>


ITEM 2:        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
----------------------------------------------------------------
               CONDITION AND RESULTS OF OPERATIONS
               -----------------------------------


Results of Operations

     The  following   represents   the  results  of  operations  for  InteliData
Technologies  Corporation.  Such information  should be read in conjunction with
the interim financial statements and the notes thereto in Part I, Item 1 of this
Quarterly Report.

     The Company  generates  revenues from each of its three product offerings -
Payment  Solutions,  Card  Services,  and Online  Banking.  Within these product
offerings,  the Company obtains revenues from various sources - software license
fees,  consulting  services fees,  use-based fees,  maintenance  fees, and other
fees.  Software  license fees include  revenues  generated  from license  sales.
Consulting  services fees include revenues generated from professional  services
rendered.   Use-based  fees  include  revenues  generated  from  user  accounts,
transactions, remittances and other related activities. Maintenance fees include
revenues generated from maintenance agreements for support services for licensed
software.  Other fees are  termination  charges levied for early  termination of
contracts.

     Within revenues generated from Payment Solutions,  consulting services will
fluctuate with the demand of services based on client internal  projects as well
as new  system  implementations.  Use-based  fees  will  fluctuate  based on the
addition of new clients and user adoption rates that  translate into  additional
users and additional transactions.  Additionally, use-based revenues may decline
with  departures of clients for other solutions  and/or  clients'  migrating the
InteliData  solution  in-house through a license  arrangement that may eliminate
user fees.

     Within  revenues  generated  from Card Services,  consulting  services will
fluctuate with the demand of services based on client internal  projects as well
as new  client  implementations.  Use-based  fees  will  fluctuate  based on the
addition of new clients and user adoption rates that  translate into  additional
users and additional transactions. Additionally, use-based revenues may increase
due to added functionalities or may decline with departures of clients for other
solutions.

     Within  revenues  generated from Online  Banking,  use-based  revenues will
fluctuate  based on the  addition of new clients  and user  adoption  rates that
translate into additional users and additional transactions.  However, use-based
revenues  may decline  with  departures  of clients for other  solutions  and/or
clients'   migrating  the  InteliData   solution   in-house  through  a  license
arrangement that may eliminate user fees.

     The following table sets forth the Company's sources of revenue for each of
the three-month and six-month periods ended June 30, 2004, and 2003:

<page>


                                Three Months Ended            Six Months Ended
                                     June 30,                     June 30,
                              ---------------------          -------------------
                               2004           2003             2004        2003
                              -------       --------         -------     -------
 Payment Solutions
   Software license           $     -       $    295         $     -     $   455
   Consulting services            359            844             625       1,485
   Use-based                    1,339          1,076           2,650       2,017
   Maintenance                    343            212             639         418
                              -------       --------         -------     -------
     Subtotal                   2,041          2,427           3,914       4,375
                              -------       --------         -------     -------
 Card Services
   Consulting services             33            100             126         188
   Use-based                    1,173          1,185           2,303       2,256
   Other                            -              -               -          13
                              -------       --------         -------     -------
     Subtotal                   1,206          1,285           2,429       2,457
                              -------       --------         -------     -------
 Online Banking
   Software license                 -              -               -         183
   Consulting services             55            490             112         879
   Use-based                      237          1,595             494       3,406
   Maintenance                    207            154             389         276
                              -------       --------         -------     -------
     Subtotal                     499          2,239             995       4,744
                              -------       --------         -------     -------

 Total
   Software license                 -            295               -         638
   Consulting services            447          1,434             863       2,552
   Use-based                    2,749          3,856           5,447       7,679
   Maintenance                    550            366           1,028         694
   Other                            -              -               -          13
                              -------       --------         -------     -------
     Total                    $ 3,746       $  5,951         $ 7,338     $11,576
                              =======       ========         =======     =======



Three Months Ended June 30, 2004 and 2003

Revenues

     The Company's  second quarter  revenues were $3,746,000 in 2004 compared to
$5,951,000 in 2003, a decrease of $2,205,000.

     The second quarter revenues from Payment  Solutions were $2,041,000 in 2004
compared to $2,427,000 in 2003, a decrease of $386,000.  These revenues included
items related to the Company's billpay warehouse, funds transfer and certain OFX
solutions,  as well as the  billpay  portions of the ASP  offerings.  Consulting
services fees  decreased  $485,000,  while  use-based  fees  increased  $263,000
quarter over quarter. The decrease in consulting services fees was primarily due
to the  completion  of projects in 2003 and limited new projects in 2004,  while
the  increase in  use-based  fees was due to the growth from  existing  clients.
Software license fees decreased  $295,000 because there were no software license
sales in 2004.

<page>
     The second  quarter  revenues from Card  Services  were  $1,206,000 in 2004
compared to $1,285,000 in 2003, a decrease of $79,000.  Consulting services fees
decreased  $67,000 and use-based fees decreased  $12,000,  quarter over quarter.
The  decrease  in  consulting  services  fees  was  due to the  decrease  in new
projects,  while the decrease in use-based fees was due to the  deconversion  of
several clients,  which was partially offset by growth in users and transactions
from continuing clients.

     The second  quarter  revenues  from Online  Banking  were  $499,000 in 2004
compared to $2,239,000 in 2003, a decrease of $1,740,000. These revenues include
items  related  to  the  Company's   Interpose(R)   Web  Banking,   Interpose(R)
Transaction  Engine,  and certain OFX  solutions,  as well as the online banking
portions of the ASP offerings.  The decrease was primarily  attributable  to the
$1,358,000  decrease in use-based fees. Three large customers who were operating
in the ASP  environment  during the first  quarter of 2003 did not pay recurring
fees during 2004. In one instance, a bank that used the Company's online banking
platform based on older Home Account Canopy(TM) Banking technology, converted to
a competitor's  product. Two other banks paid the Company a one-time license fee
in 2003 and moved the InteliData  software in-house in 2003, which resulted in a
decrease  to the  Company's  monthly  fees for  hosting  the  software in an ASP
arrangement.  The resulting decrease was partially offset by growth in user fees
from  existing  clients.   Additionally,   consulting  services  fees  decreased
$435,000.  The decrease was primarily due to the  completion of projects in 2003
and fewer new projects in 2004.

Cost of Revenues and Gross Profit

     The  Company's  cost of revenues  decreased  $173,000 to  $1,775,000 in the
second  quarter  of 2004 from  $1,948,000  in the second  quarter  of 2003.  The
decrease was  primarily  due to decreases  in cost of revenues  associated  with
decreased  professional  services.  The cost structures to generate the revenues
are  bundled  together  and  cannot  be  broken  out in the same  manner  as the
revenues.  Costs  of  revenues  include  vendors  for  outsourced  services  and
employees directly working to generate revenues.

     Overall  gross profit  margins  decreased to 53% for the second  quarter of
2004 from 67% for the  second  quarter of 2003.  The  decrease  in gross  profit
margin was attributable to decreases in software licenses,  consulting services,
and  use-based  revenues.  The  Company's  cost of  revenues  did not  fluctuate
proportionately  in relation to  revenues,  as there are certain  fixed costs to
maintain the current  infrastructure.  Accordingly,  while revenues  declined by
$2,205,000,  cost of revenues declined by only $173,000. The Company anticipates
that gross profit  margins may fluctuate in the future due to changes in product
mix and  distribution,  outsourcing  activities  associated with an ASP business
model,  competitive  pricing  pressure,  the  introduction of new products,  and
changes in volume.

     The Company entered into multiple vendor agreements for outsourced services
as part of its ASP  solution  offering  for certain  Online  Banking and Payment
Solutions  clients.  Some of these  vendor  agreements  commit  the  Company  to
specified  minimum  charges  during  the terms of the  contracts.  During  2003,
several  of the  Company's  clients  migrated  from this ASP  environment  to an
in-house  solution  utilizing  InteliData's  licensed  software.  As a result, a
possibility  exists for future  losses due to the decrease in  estimated  future
revenue  streams when  compared  with the  Company's  current  contractual  cost
structure for outsourced services within this ASP environment.

     In assessing  potential  future  losses  associated  with the Company's ASP
business,  the Company may include the possibility of new clients that would add
incremental revenue to this ASP environment.  Additionally, the Company may have
the opportunity to restructure vendor contracts and decrease contractual charges
(e.g.,  renegotiate or extend the current contract with lower minimum charges or
migrate to different vendors). Management continues to assess both the potential
for new business  prospects and the  possibility of reducing the Company's costs
through  renegotiation  of  existing  agreements.  In  June  2004,  the  Company
restructured  one such  agreement  and  decreased  its overall  prospective  ASP
operations costs. Entering the third quarter of 2004, the projected revenues are
estimated to exceed projected costs by approximately  $85,000 on a monthly basis
based on the  June  2004  results;  this gap  will  fluctuate  based on  monthly
activity.  In accordance  with generally  accepted  accounting  principles,  the
Company is accounting for these contract costs as they are incurred.

<PAGE>

General and Administrative

     General and administrative  expenses decreased $14,000 to $1,917,000 in the
second  quarter  of 2004 from  $1,931,000  in the second  quarter  of 2003.  The
decrease was primarily  attributable to the Company's reduction of corporate and
administrative   expenses  that  resulted  from  employee-related   actions  and
aggressive  expense  controls.  The  Company  plans to  continually  assess  its
operations to review its expenses and  infrastructures  in light of  anticipated
business levels.

Sales and Marketing

     Sales and marketing  expenses  decreased  $88,000 to $397,000 in the second
quarter of 2004 from $485,000 in the second quarter of 2003.  This was primarily
attributable to employee-related  actions, lower travel costs and a reduction in
tradeshow-related   expenses.  The  Company  plans  to  continually  assess  its
operations to review its expenses and  infrastructures  in light of  anticipated
business levels.

Research and Development

     Research and  development  costs  decreased  $310,000 to  $1,120,000 in the
second  quarter  of 2004 from  $1,430,000  in the second  quarter  of 2003.  The
Company's primary research and development  efforts are in Payment Solutions and
the  Company did not  decrease  research  and  development  investments  in this
product  line.  Rather,  the  decrease  is a result of certain  employee-related
actions in other product lines achieved through non-replacement of attrition and
the re-assignment to Payment Solutions.  The Company plans to continually assess
its  operations  to  review  its  expenses  and   infrastructures  in  light  of
anticipated business levels.

     For the  remainder of 2004,  the Company  expects to focus its research and
development efforts on its Payment Solutions product offerings.  The development
efforts for Online  Banking and Card  Services  products  will likely be focused
primarily on product upgrades and product maintenance.

Amortization of Goodwill and Intangibles

     Statement of Financial  Accounting  Standards  No. 142,  Goodwill and Other
Intangible  Assets ("SFAS 142"),  requires the Company to not amortize  goodwill
and certain  intangibles  into  results of  operations,  but instead the Company
would review these assets for impairment,  at least annually, that may result in
future periodic  write-downs.  Tests for impairment  between annual tests may be
required if events occur or circumstances change that would more likely than not
reduce the fair value of the net  carrying  amount.  The assets would be written
down and impairment losses would be charged to results of operations only in the
periods in which the recorded  values are  determined to be more than their fair
values. The amortization of certain intangibles  continued at an annualized rate
of $720,000.  As of January 1, 2002,  in  accordance  with SFAS 142, the Company
ceased recognizing amortization expense on goodwill.

     As of June 30, 2004,  the Company  performed the required  annual review in
accordance  with SFAS  142.  The  Company  assessed  the fair  value of its only
reporting  unit by  considering  its projected  cash flows,  comparable  company
valuations,  and recent  purchase  prices paid for entities within its industry.
This review  utilized the same  approaches  (i.e.,  discounted  cash flow model,
guideline  company  method,  and  similar   transactions   method)  and  similar
considerations as the initial and previous tests.  Given  consideration of these
factors and the Company's declining market capitalization,  the Company recorded
a goodwill impairment charge in the amount of $26,238,000. Other Income

     Other income  (expense),  primarily  rental  receipts,  interest income and
other expenses including state and local taxes,  increased $28,000 to $40,000 in
the second  quarter of 2004 from  $12,000  in the  second  quarter of 2003.  The
increase is primarily attributable to sub-lease rental receipts.



<PAGE>


Weighted-Average Common Shares Outstanding and Basic and Diluted Loss Per Common
Share

     The  basic  and  diluted   weighted-average   common  shares  increased  to
51,159,000  for the second quarter of 2004 compared to 49,002,000 for the second
quarter of 2003. The increase resulted primarily from stock awards to employees,
exercises of stock options,  stock  purchases  under the Employee Stock Purchase
Plan, and exercises of warrants.  During July 2003, the Company issued 1,431,364
shares of its common stock pursuant to the exercise of warrants,  as amended, by
institutional  investors who participated in the Company's  private placement of
common stock in November and December, 2001.

     Losses from  continuing  operations  were  $27,841,000  and $11,000 for the
three-month periods ended June 30, 2004 and 2003, respectively,  while there was
no gain or loss from discontinued  operations in either period.  Net losses were
$27,841,000  and  $11,000  for 2004 and 2003,  respectively.  As a result of the
foregoing,  basic and diluted net loss per common share was $0.54 for the second
quarter of 2004  compared to a basic and  diluted  net loss per common  share of
$0.00 for the second quarter of 2003.

Six Months Ended June 30, 2004 and 2003

Revenues

     The  Company's  revenues for the first six months were  $7,338,000  in 2004
compared to $11,576,000 in 2003, a decrease of $4,238,000.

     The  revenues  for  the  first  six  months  from  Payment  Solutions  were
$3,914,000 in 2004 compared to $4,375,000 in 2003, a decrease of $461,000. These
revenues  included  items  related to the  Company's  billpay  warehouse,  funds
transfer and certain OFX solutions,  as well as the billpay  portions of the ASP
offerings.  Consulting  services fees decreased  $860,000,  while use-based fees
increased  $633,000  quarter over quarter.  The decrease in consulting  services
fees was  primarily  due to the  completion  of projects in 2003 and limited new
projects in 2004,  while the  increase in  use-based  fees was due to the growth
from existing  clients.  Software license fees decreased  $455,000 because there
were no software license sales in 2004.

     The revenues for the first six months from Card Services were $2,429,000 in
2004 compared to $2,457,000 in 2003, a decrease of $28,000.  Consulting services
fees  decreased  $62,000,  use-based fees  increased  $47,000,  while other fees
decreased  $13,000 quarter over quarter.  The increase in use-based fees was due
to the growth in users and transactions  from existing  clients.  The $13,000 in
other fees in the first six months of 2004 related to one-time early termination
fees.

     The revenues for the first six months from Online  Banking were $995,000 in
2004 compared to $4,744,000 in 2003, a decrease of  $3,749,000.  These  revenues
include items related to the Company's  Interpose(R)  Web Banking,  Interpose(R)
Transaction  Engine,  and certain OFX  solutions,  as well as the online banking
portions of the ASP offerings.  The decrease was primarily  attributable  to the
$2,912,000  decrease in use-based fees. Three large customers who were operating
in the ASP environment during the first six months of 2003 did not pay recurring
fees during 2004. In one instance, a bank that used the Company's online banking
platform based on older Home Account Canopy(TM) Banking technology, converted to
a competitor's  product. Two other banks paid the Company a one-time license fee
in 2003 and moved the InteliData  software in-house in 2003, which resulted in a
decrease  to the  Company's  monthly  fees for  hosting  the  software in an ASP
arrangement.  The resulting decrease was partially offset by growth in user fees
from existing clients.  Additionally,  software license and consulting  services
fees decreased $183,000 and $767,000, respectively. The decreases were primarily
due to the completion of projects in 2003 and fewer new projects in 2004.

Cost of Revenues and Gross Profit

     The Company's  cost of revenues  decreased  $327,000 to $3,555,000  for the
first six months of 2004 from  $3,882,000  for the first six months of 2003. The
decrease was  primarily  due to decreases  in cost of revenues  associated  with
decreased  professional  services.  The cost structures to generate the revenues
are  bundled  together  and  cannot  be  broken  out in the same  manner  as the
revenues.  Costs  of  revenues  include  vendors  for  outsourced


<page>

services and employees directly working to generate revenues.

     Overall gross profit  margins  decreased to 52% for the first six months of
2004 from 66% for the first six months of 2003.  The  decrease  in gross  profit
margin was attributable to decreases in software licenses,  consulting services,
and  use-based  revenues.  The  Company's  cost of  revenues  did not  fluctuate
proportionately  in relation to  revenues,  as there are certain  fixed costs to
maintain the current  infrastructure.  Accordingly,  while revenues  declined by
$4,238,000,  cost of revenues declined by only $327,000. The Company anticipates
that gross profit  margins may fluctuate in the future due to changes in product
mix and  distribution,  outsourcing  activities  associated with an ASP business
model,  competitive  pricing  pressure,  the  introduction of new products,  and
changes in volume.

     The Company entered into multiple vendor agreements for outsourced services
as part of its ASP  solution  offering  for certain  Online  Banking and Payment
Solutions  clients.  Some of these  vendor  agreements  commit  the  Company  to
specified  minimum  charges  during  the terms of the  contracts.  During  2003,
several  of the  Company's  clients  migrated  from this ASP  environment  to an
in-house  solution  utilizing  InteliData's  licensed  software.  As a result, a
possibility  exists for future  losses due to the decrease in  estimated  future
revenue  streams when  compared  with the  Company's  current  contractual  cost
structure for outsourced services within this ASP environment.

     In assessing  potential  future  losses  associated  with the Company's ASP
business,  the Company may include the possibility of new clients that would add
incremental revenue to this ASP environment.  Additionally, the Company may have
the opportunity to restructure vendor contracts and decrease contractual charges
(e.g.,  renegotiate or extend the current contract with lower minimum charges or
migrate to different vendors). Management continues to assess both the potential
for new business  prospects and the  possibility of reducing the Company's costs
through  renegotiation  of  existing  agreements.  In  June  2004,  the  Company
restructured  one such  agreement  and  decreased  its overall  prospective  ASP
operations costs. Entering the third quarter of 2004, the projected revenues are
estimated to exceed projected costs by approximately  $85,000 on a monthly basis
based on the  June  2004  results;  this gap  will  fluctuate  based on  monthly
activity.  In accordance  with generally  accepted  accounting  principles,  the
Company is accounting for these contract costs as they are incurred.

General and Administrative

     General and  administrative  expenses  decreased $552,000 to $3,468,000 for
the first six months of 2004 from  $4,020,000  for the first six months of 2003.
The decrease was primarily  attributable to the Company's reduction of corporate
and  administrative  expenses that resulted  from  employee-related  actions and
aggressive  expense  controls.  The  Company  plans to  continually  assess  its
operations to review its expenses and  infrastructures  in light of  anticipated
business levels.

Sales and Marketing

     Sales and marketing  expenses  decreased $166,000 to $712,000 for the first
six  months of 2004 from  $878,000  for the first six  months of 2003.  This was
primarily  attributable to  employee-related  actions,  lower travel costs and a
reduction in tradeshow-related expenses. The Company plans to continually assess
its  operations  to  review  its  expenses  and   infrastructures  in  light  of
anticipated business levels.

Research and Development

     Research and  development  costs  decreased  $151,000 to $2,426,000 for the
first six months of 2004 from  $2,577,000  for the first six months of 2003. The
Company's primary research and development  efforts are in Payment Solutions and
the  Company did not  decrease  research  and  development  investments  in this
product  line.  Rather,  the  decrease  is a result of certain  employee-related
actions in other product lines primarily  achieved  through  non-replacement  of
attrition  and the  re-assignment  to Payment  Solutions.  The Company  plans to
continually assess its operations to review its expenses and  infrastructures in
light of anticipated business levels.

     For the  remainder of 2004,  the Company  expects to focus its research and
development efforts on its Payment Solutions product offerings.  The development
efforts for Online  Banking and Card  Services  products  will
<page>

likely be focused primarily on product upgrades and product maintenance.

Amortization of Goodwill and Intangibles

     Statement of Financial  Accounting  Standards  No. 142,  Goodwill and Other
Intangible  Assets ("SFAS 142"),  requires the Company to not amortize  goodwill
and certain  intangibles  into  results of  operations,  but instead the Company
would review these assets for impairment,  at least annually, that may result in
future periodic  write-downs.  Tests for impairment  between annual tests may be
required if events occur or circumstances change that would more likely than not
reduce the fair value of the net  carrying  amount.  The assets would be written
down and impairment losses would be charged to results of operations only in the
periods in which the recorded  values are  determined to be more than their fair
values. The amortization of certain intangibles  continued at an annualized rate
of $720,000.  As of January 1, 2002,  in  accordance  with SFAS 142, the Company
ceased recognizing amortization expense on goodwill.

     As of June 30, 2004,  the Company  performed the required  annual review in
accordance  with SFAS  142.  The  Company  assessed  the fair  value of its only
reporting  unit by  considering  its projected  cash flows,  comparable  company
valuations,  and recent  purchase  prices paid for entities within its industry.
This review  utilized the same  approaches  (i.e.,  discounted  cash flow model,
guideline  company  method,  and  similar   transactions   method)  and  similar
considerations as the initial and previous tests.  Given  consideration of these
factors and the Company's declining market capitalization,  the Company recorded
a goodwill impairment charge in the amount of $26,238,000. Other Income

     Other income  (expense),  primarily  rental  receipts,  interest income and
other expenses  including state and local taxes,  increased  $101,000 to $84,000
for the first six  months of 2004  from  ($17,000)  for the first six  months of
2003. The increase is primarily  attributable  to sub-lease  rental receipts and
the incurrence of state and local taxes.

Weighted-Average Common Shares Outstanding and Basic and Diluted Loss Per Common
Share

     The  basic  and  diluted   weighted-average   common  shares  increased  to
51,168,000 for the first six months of 2004 compared to 48,935,000 for the first
six  months of 2003.  The  increase  resulted  primarily  from  stock  awards to
employees,  exercises of stock options, stock purchases under the Employee Stock
Purchase Plan,  and exercises of warrants.  During July 2003, the Company issued
1,431,364  shares of its common stock  pursuant to the exercise of warrants,  as
amended,  by institutional  investors who participated in the Company's  private
placement of common stock in November and December, 2001.

     Losses from  continuing  operations  were  $29,337,000 and $158,000 for the
six-month periods ended June 30, 2004 and 2003, respectively, while there was no
gain or loss from  discontinued  operations  in either  period.  Net losses were
$29,337,000  and  $158,000 for 2004 and 2003,  respectively.  As a result of the
foregoing,  basic and diluted net loss per common  share was $0.57 for the first
six months of 2004  compared to a basic and diluted net loss per common share of
$0.00 for the first six months of 2003.

Liquidity and Capital Resources

     During  the  first  six  months  of  2004,  the  Company's  cash  and  cash
equivalents  decreased  by  $2,226,000.  At  June  30,  2004,  the  Company  had
$5,377,000 in cash and cash  equivalents,  $4,042,000 of working capital with no
long-term debt, and $9,777,000 in stockholders'  equity. The Company's principal
needs for cash in the first six months of 2004 were for funding operating losses
and changes in working capital. The Company had decreases in accounts receivable
of $47,000 and  accounts  payable of $22,000  for the six months  ended June 30,
2004.

     The Company's cash  requirements for operating  activities in the first six
months of 2004 were financed primarily by cash and cash equivalents on hand.

     Net cash used in investing  activities  in the first six months of 2004 was
$47,000 for the purchases of property and equipment.

<page>

     Net cash  provided by financing  activities in the first six months of 2004
was $49,000 and consisted of $51,000 from the issuance of the  company's  common
stock  through  stock option  exercises and the Employee  Stock  Purchase  Plan,
offset by $2,000 related to payments made to acquire treasury stock.

     The Company entered into multiple vendor agreements for outsourced services
as part of its ASP  solution  offering  for certain  Online  Banking and Payment
Solutions  clients.  Some of these  vendor  agreements  commit  the  Company  to
specified  minimum  charges  during the terms of the  contracts.  These purchase
obligations are disclosed below.  During 2003,  several of the Company's clients
migrated  from  this  ASP   environment  to  an  in-house   solution   utilizing
InteliData's  licensed  software.  As a result, a possibility  exists for future
losses due to the decrease in estimated  future  revenue  streams when  compared
with the Company's  current  contractual cost structure for outsourced  services
within this ASP environment.

     In assessing  potential  future  losses  associated  with the Company's ASP
business,  the Company may include the possibility of new clients that would add
incremental revenue to this ASP environment.  Additionally, the Company may have
the opportunity to restructure vendor contracts and decrease contractual charges
(e.g.,  renegotiate or extend the current contract with lower minimum charges or
migrate to different vendors). Management continues to assess both the potential
for new business  prospects and the  possibility of reducing the Company's costs
through  renegotiation  of  existing  agreements.  In  June  2004,  the  Company
restructured  one such  agreement  and  decreased  its overall  prospective  ASP
operations costs. Entering the third quarter of 2004, the projected revenues are
estimated to exceed projected costs by approximately $85,000 on a monthly basis;
this gap will fluctuate based on monthly activity.  In accordance with generally
accepted  accounting  principles,  the Company is accounting  for these contract
costs as they are incurred.  There can be no assurance  that the Company will be
successful in mitigating these factors. In the event that new client revenues do
not  materialize,  growth  rates do not meet  expected  projections  and/or  the
Company  is not  successful  in  its  renegotiation  efforts,  the  Company  may
experience  future period  losses from the  Company's ASP business,  which could
have a material adverse impact on the Company's financial position or results of
operations.

     Based on the  restructured  vendor  contract,  the updated  future  minimum
payments under purchase  obligations for outsourced  services are as follows (in
thousands) at January 1, 2004:
<table>

-------------------------------------- -------------------------------------------------------------------------------
                                                                   Payment due by period
-------------------------------------- -------------------------------------------------------------------------------
-------------------------------------- --------------- ----------------- --------------- --------------- -------------
                                                          Less than           1-3             3-5         More than
                                           Total            1 year           years           years         5 years
-------------------------------------- --------------- ----------------- --------------- --------------- -------------
<S>                                    <C>             <C>               <C>             <C>             <C>

-------------------------------------- --------------- ----------------- --------------- --------------- -------------
Purchase Obligations                     $   3,050        $   2,410        $   640          $   -          $    -
-------------------------------------- --------------- ----------------- --------------- --------------- -------------
</table>

     Based on the Company's  current  capital levels and its  assumptions  about
future  operating  results,  the Company  believes that it will have  sufficient
resources to fund existing  operating plans for at least the next twelve months.
The Company's  achievement  of its operating plan remains  predicated  upon both
existing and  prospective  customer  decisions to procure  certain  products and
services  in  a  timeframe  consistent  with  the  operating  plan  assumptions.
Historically,  these  decisions  have not evolved  timely for  varying  reasons,
including  slower  than  expected  market  demand,  budgetary  constraints,  and
internal product development and resource initiatives. In the event of continued
future  revenue  delays,  the  Company  would  seek to  adjust  certain  expense
structures to mitigate the potential  impact that these delays would have on its
capital levels.  These opportunities  include additional  reductions in selling,
general and administrative expenditures,  the potential of consolidating certain
operational activities, the ability to negotiate more favorable terms associated
with  existing  service  provider  contracts  and  the  elimination  of  certain
marketing  costs.  However,  if actual  results differ  materially  from current
assumptions,  the Company may not have sufficient capital resources and may have
to modify  operating  plans and/or seek  additional  capital  resources.  If the
Company  engages  in  efforts  to  obtain  additional  capital,  it can  make no
assurances  that  these  efforts  will be  successful  or that the terms of such
funding  would be  beneficial  to the  common  stockholders.  Additionally,  the
Company continues to assess a variety of strategic  alternatives,  which will be
focused on enhancing InteliData's position in the electronic banking marketplace
by exploring  strategic  opportunities  intended to enhance  stockholder  value.
There can be no assurance that any transaction will result from this effort.

<PAGE>

Critical Accounting Policies

     The  following  accounting  policies  are  either  ones  that  the  Company
considers  to be the most  important  to its  financial  position and results of
operations  or ones that require the  exercise of  significant  judgment  and/or
estimates.

     Revenue  Recognition - The Company considers its revenue recognition policy
critical  to the  understanding  of  its  business  operations  and  results  of
operations.  The Company  supplies  online banking and bill payment  software to
financial   institutions   ("FI's").  The  Company's  revenues  associated  with
integrated   solutions  that  bundle  software   products  with   customization,
installation  and  training  services are  recognized  using the  percentage  of
completion method of accounting.

     The Company  enters into  contracts  where the  delivered  software may not
require significant customization.  Upon delivery, the Company either recognizes
revenue  ratably over the contract  period for contracts  where vendor  specific
objective  evidence  ("VSOE") of fair value for post contract  customer  support
("PCS")  does not exist or  recognizes  revenue in full where VSOE of fair value
for PCS does exist.

     The Company enters into multiple element  arrangements.  Elements typically
include software,  consulting,  implementation and PCS. PCS contracts  generally
require  the  Company to  provide  technical  support  and  unspecified  readily
available  software  updates  and  upgrades  to  customers.  Revenue  from these
multiple element arrangements is recognized when there is persuasive evidence of
an arrangement  and delivery to the customer has occurred,  the fee is fixed and
determinable,  and collectibility is considered  probable.  Advance payments are
recorded as deferred  revenue  until the  products  are  shipped,  services  are
delivered and all obligations are met. Currently, the Company does not have VSOE
of fair value for some of the elements within its multiple element arrangements.
Therefore,  all revenue under such  arrangements is recognized  ratably over the
term of the PCS contract.  Revenue from transactional  services,  which includes
hosting and application  services  provider ("ASP")  services,  is recognized as
transactions are processed.

     Emerging  Issues Task Force Abstract  Issue No. 00-3,  Application of AICPA
Statement  of  Position  97-2 to  Arrangements  that  Include  the  Right to Use
Software Stored on Another Entity's Hardware ("EITF 00-3"), provides guidance in
determining  whether or not the  provisions  of  Statement of Position No. 97-2,
Software  Revenue  Recognition  ("SOP  97-2"),  should  be  applied  to  hosting
arrangements.  The  Company  has some  contracts  where  the  customers  operate
software in an ASP  environment.  The  customer may not take  possession  of the
software without incurring  significant  transition and infrastructure costs, as
well as potential  payments of fees to the Company for the  termination  of such
arrangements.  In cases  where  the  customer  has not  licensed  software  from
InteliData,  the customer must also purchase a license prior to having the right
to use the  software  in its  own  operating  environment,  in  addition  to the
aforementioned fees. In these situations, the Company applies the guidance under
EITF 00-3 and the Staff  Accounting  Bulletin No. 101,  Revenue  Recognition  in
Financial  Statements,  and recognizes the revenue  associated  with the license
and/or implementation fees ratably over the initial term of the contract.

     Additionally,  based on the EITF 00-3 guidance,  the Company concluded that
SOP 97-2  should not be applied to certain of its  software  hosting  contracts.
Accordingly,  the related  revenues for license and  professional  services were
recognized under the percentage of completion  method. In addition to developing
and  delivering  the solution,  the Company is entitled to use fees based on the
number of users and  transactions.  These use-based fees are earned based on the
monthly user counts and as transactions are processed.

     Estimates  at  Completion  -  Revenues  related  to some  of the  Company's
contracts  are  recognized   using  the  percentage  of  completion   method  of
accounting,   which  requires  that  we  make  estimates  and  judgments  as  to
anticipated  project  scope,  timing and costs to  complete  the  projects.  The
completion of certain development efforts is critical for the Company to perform
on  certain  contracts.   Delays  in  product   implementation  or  new  product
development  at customer  locations  and product  defects or errors could affect
estimates  and  judgments.   Additionally,   we  may   experience   delays  when
implementing our products at customer locations,  and customers may be unable to
implement our products in the time frames and with the functionalities that they
expect or require.  The accuracy of these  estimates and judgments  could affect
the Company's business, operations, cash flows and financial condition.

<page>

     Allowance  for  Doubtful  Accounts -  Determination  of our  allowance  for
doubtful accounts requires  significant  estimates.  Financial  instruments that
potentially  subject  the Company to credit risk  consist  principally  of trade
receivables.  The Company  sells its  products  primarily  to FI's in the United
States.  The Company believes that the concentration of credit risk in its trade
receivables  is  substantially   mitigated  by  the  Company's  on-going  credit
evaluation  process  and the  financial  position  of the FI's  that are  highly
regulated. The Company does not generally require collateral from customers. The
Company  establishes  an  allowance  for  doubtful  accounts  based upon factors
surrounding the credit risk of specific  customers,  historical trends and other
information.  As of June 30, 2004, the Company's top eight  customers  comprised
approximately 64% of the net accounts receivable balance.

     A number of factors are considered in establishing the allowance, including
historical collection experience, the macro-economic  environment,  estimates of
forecasted  write-offs,  the aging of the  accounts  receivable  portfolio,  and
others.  If  the  financial  condition  of  our  accounts  receivable  portfolio
deteriorates, additional allowances would be required.

     Valuation  of Goodwill  and  Intangible  Assets - On an annual basis (as of
June  30th),  the  Company  conducts a review of goodwill  for  impairment.  The
Company  assesses the fair value of its only  reporting unit for the purposes of
testing  goodwill by considering  its projected cash flows,  comparable  company
valuations,  and recent  purchase  prices paid for entities within our industry.
Given consideration of these factors, we determine whether the fair value of the
reporting  unit exceeds the carrying  amount of our net assets.  If the carrying
amount of our reporting unit exceeds its fair value, we compare the implied fair
value of reporting  unit  goodwill  with the carrying  amount of that  goodwill.
Since the carrying  amount of reporting unit goodwill  exceeded the implied fair
value as of June 30, 2004,  we  recognized  a  $26,238,000  goodwill  impairment
charge.  See  below  for  a  detailed   discussion   regarding  the  significant
assumptions  and estimates  employed in this process and Note 2 to the Condensed
Consolidated Financial Statements for additional details.

     We also review our  amortizing  intangible  asset for  impairment  whenever
events or changes in circumstances  indicate that the carrying amount may not be
recoverable.  Accordingly,  when appropriate, the Company reviews its long-lived
assets (including amortizing intangible assets) for impairment at the enterprise
level  initially  following an  undiscounted  cash flow  approach  following the
guidance in SFAS No. 144. If the sum of the  expected  future cash flows is less
than the carrying amount of the asset, the Company would recognize an impairment
loss equal to the  difference  between the fair value and the carrying  value of
the asset.  The fair value would be calculated  following a discounted cash flow
approach.

     These reviews require the Company to make estimates of projected cash flows
in  order  to  determine  if  its  assets  are  impaired.  We  make  significant
assumptions and estimates in this process  regarding matters that are inherently
uncertain,  such as making revenue and cost projections,  calculating  remaining
useful  lives,  assuming  discount  rates and costs of  capital,  among  others.
Reviews for impairment between annual reviews may be required if events occur or
circumstances  change  that would more  likely than not reduce the fair value of
the net carrying  amount.  While we believe that our estimates  are  reasonable,
different  assumptions  regarding such cash flows (for example,  either based on
varying costs of capital,  changes in underlying  economic  assumptions,  or any
resulting  transaction from strategic  initiatives)  could materially affect our
valuation.

     Depreciation  of  Fixed  Assets  -  The  Company's  business  requires  our
investment in office and computer  equipment to facilitate  certain research and
development  activities  and to support the operations in serving our customers.
We record these assets at cost and  depreciate  the assets over their  estimated
useful lives. We  periodically  reassess the economic life of these elements and
make  adjustments  to  these  useful  lives  using,  among  others,   historical
experience,  capacity  requirements,  and  assessments of new product and market
demands.  When these factors  indicate certain elements may not be useful for as
long as  anticipated,  we depreciate the remaining book value over the remaining
useful life.  Further,  the timing and deployment of any new technologies  could
affect the estimated lives of our assets,  which could have significant  impacts
on results of operations in the future.

     Recent  Accounting  Pronouncements - In May 2003, the Financial  Accounting
Standards  Board ("FASB")  issued  Statement of Financial  Accounting  Standards
("SFAS")  No.  150,   Accounting   for  Certain   Financial   Instruments   with
Characteristics of both Liabilities and Equity ("SFAS 150"), which requires that
an issuer classify  financial  instruments that are within the scope of SFAS 150
as a liability. Under prior guidance, these same instruments would be classified
as equity.  SFAS 150 is effective for all financial  instruments entered into or

<page>

modified  after May 31, 2003.  Otherwise,  it is effective on July 1, 2003.  The
adoption of SFAS 150 did not have a material  effect on our financial  position,
results of operations, or cash flows.

     In May 2003,  the FASB issued SFAS No. 149,  Amendment of Statement  133 on
Derivative  Instruments and Hedging  Activities  ("SFAS 149"),  which amends and
clarifies  financial  accounting  and  reporting  for  derivative   instruments,
including   certain   derivative   instruments   embedded  in  other   contracts
(collectively  referred to as derivatives) and for hedging activities under SFAS
No. 133, Accounting for Derivative Instruments and Hedging Activities.  SFAS 149
is effective for contracts entered into or modified after June 30, 2003, and for
hedging  relationships  designated after June 30, 2003. The adoption of SFAS 149
did not have a material impact on our financial position, results of operations,
or cash flows.


Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private
Securities Litigation Reform Act of 1995

     The  information   contained  in  this  report   includes   forward-looking
statements,  the  realization of which may be impacted by the factors  discussed
below.  The  forward-looking  statements  are made  pursuant  to the safe harbor
provisions of the Private Securities  Litigation Reform Act of 1995 (the "Act").
This report contains  forward  looking  statements that are subject to risks and
uncertainties,  including, but not limited to, the uncertainty as to whether the
Company  will  be  successful  in   consummating   any  financial  or  strategic
transaction,  our ability to continue funding  operating  losses,  the impact of
declines  in the  Company's  stock  price and its  ability to  maintain  minimum
listing standards of the NASDAQ stock markets,  different  assumptions regarding
cash flows (for example,  either based on varying  costs of capital,  changes in
underlying  economic  assumptions,  or  any  resulting  financial  or  strategic
transactions)  affecting  valuation  analyses,  our  ability to  develop,  sell,
deliver and implement our payment solution products and services,  some of which
are largely  unproven in a  production  environment,  to  financial  institution
customers,  our ability to manage our expenses in line with anticipated business
levels,  the  ability of the  Company to  complete  product  implementations  in
required  time  frames and the  Company's  ability  to  maintain  customers  and
increase its recurring  revenues and/or reduce  operating costs  associated with
its ASP  business  in order to make this  operation  profitable,  the  Company's
ability  to  retain  key  customers  and  to  increase  revenues  from  existing
customers,  the impact of  customers  deconverting  from use of our products and
services to the use of competitive products or in-house solutions, the effect of
planned customer migrations from outsourced solutions to in-house solutions with
a resulting  loss of  recurring  revenue,  the impact of  competitive  products,
pricing  pressure,  product demand and market acceptance risks, pace of consumer
acceptance  of home  banking  and  reliance  on the  Company's  bank  clients to
increase  usage of Internet  banking by their  customers,  the effect of general
economic   conditions  on  the   financial   services   industry,   mergers  and
acquisitions,  risk of integration of the Company's technology by large software
companies,   the  ability  of  financial   institution  customers  to  implement
applications  in the anticipated  time frames or with the anticipated  features,
functionality  or  benefits,  reliance  on key  strategic  alliances  and  newly
emerging  technologies,  the ability of the Company to leverage  its third party
relationships into new business opportunities in the electronic bill payment and
presentment ("EBPP") market, the on-going viability of the mainframe marketplace
and demand for traditional mainframe products, the ability to attract and retain
key  employees,   the  availability  of  cash  for  long-term  growth,   product
obsolescence,  ability  to  reduce  product  costs,  fluctuations  in  operating
results,  delays in  development  of highly  complex  products,  and other risks
detailed  from  time to time in  InteliData  filings  with  the  Securities  and
Exchange Commission,  including the risk factors disclosed in the Company's Form
10-K for the fiscal year ended  December 31,  2003.  These risks could cause the
Company's  actual  results for 2004 and beyond to differ  materially  from those
expressed  in  any  forward-looking   statements  made  by,  or  on  behalf  of,
InteliData.  The foregoing list of factors should not be construed as exhaustive
or as any admission  regarding the adequacy of  disclosures  made by the Company
prior to the date hereof or the  effectiveness  of said Act.  InteliData  is not
under any obligation (and expressly  disclaims an obligation) to update or alter
its  forward-looking  statements,  whether  as a result  of new  information  or
otherwise.


<PAGE>


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
-------------------------------------------------------------------

     The Company currently has no long-term debt and is not currently engaged in
any transactions that involve foreign  currency.  The Company does not engage in
hedging activities.


ITEM 4.  CONTROLS AND PROCEDURES
--------------------------------

(a)  EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

     Pursuant to Rule 13a-15(b)  under the Securities  Exchange Act of 1934, the
Company  carried out an  evaluation,  with the  participation  of the  Company's
management,  including the Company's Chief Executive Officer and Chief Financial
Officer,  of  the  effectiveness  of  the  Company's   disclosure  controls  and
procedures (as defined under Rule 13a-15(e) under the Securities Exchange Act of
1934  as of the end of the  period  covered  by this  report.  Based  upon  that
evaluation,  the Company's Chief Executive  Officer and Chief Financial  Officer
concluded that the Company's disclosure controls and procedures are effective in
timely alerting them to material  information relating to the Company (including
its consolidated subsidiaries) required to be included in the Company's periodic
SEC filings.

(b)  CHANGE IN INTERNAL CONTROLS

     There has been no change in the Company's  internal  control over financial
reporting  during the quarter ended June 30, 2004 that has materially  affected,
or is reasonably  likely to materially  affect,  the Company's  internal control
over financial reporting.


PART II: OTHER INFORMATION
--------------------------
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
------------------------------------------------------------

     The  Company's  Annual  Meeting of  Stockholders  was held on May 21, 2004.
Matters  submitted  at the  meeting  for  vote  by  the  Stockholders  were  the
following:

     1)   Election of Directors

          The Stockholders elected one Class II member of the Board of Directors
          with the following  votes:  Neal F. Finnegan with 44,229,108 votes for
          and 511,910 votes withheld.

     2)   Ratification of Independent Auditors

          The  Stockholders  ratified the  selection of Deloitte & Touche LLP as
          independent  auditors for InteliData for the year ending  December 31,
          2004 with the following votes:  44,183,527 for,  454,708 against,  and
          102,783 abstain.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
-----------------------------------------

(a)  EXHIBITS


     31.1   Certification of Chief Executive Officer  pursuant to Section 302 of
            the Sarbanes-Oxley Act of 2002.


     31.2   Certification of Chief Financial Officer  pursuant to Section 302 of
            the Sarbanes-Oxley Act of 2002.
<page>

     32.1   Certification of Chief Executive Officer  pursuant to Section 906 of
            the Sarbanes-Oxley Act of 2002.

     32.2   Certification of Chief Financial Officer  pursuant to Section 906 of
            the Sarbanes-Oxley Act of 2002.


(b)  REPORTS ON FORM 8-K

     The Company filed a Current Report on Form 8-K (Item 5) with the Securities
and Exchange  Commission  on June 18, 2004,  relating to the receipt of a notice
from Nasdaq dated June 16, 2004,  indicating  the Company was not in  compliance
with Nasdaq's  Marketplace Rule  4450(a)(5),  because the Company's common stock
failed to  maintain  the  minimum  bid  price of $1.00  during  the past  thirty
consecutive  trading days.  The Company has been granted until December 13, 2004
to regain compliance with Marketplace Rule 4450(a)(5).  Compliance with the rule
will be determined by the Nasdaq staff, but generally  requires that the closing
bid price of the  Company's  common stock be at least $1.00 for a minimum of ten
consecutive trading days.

     The  Company  furnished  a  Current  Report  on Form 8-K  (Item  12) to the
Securities  and Exchange  Commission on May 5, 2004,  to report that  InteliData
issued a press release announcing results of operations and financial  condition
for the quarter ended March 31, 2004 (not incorporated by reference).

                                   * * * * * *


<PAGE>



                                    SIGNATURE

     Pursuant to the  requirements of the Securities Act of 1934, the registrant
has duly  caused  this  report to be signed  on its  behalf by the  undersigned,
thereunto duly authorized on August 6, 2004.


                                INTELIDATA TECHNOLOGIES CORPORATION



                                By: /s/ Alfred S. Dominick, Jr.
                                    ----------------------------------
                                    Alfred S. Dominick, Jr.
                                    Chairman, Chief Executive Officer,
                                    and Acting Chief Financial Officer