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                                  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: June 30, 2003   Commission File Number 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) (Zip Code)

                                 (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             No   X
---------         --------

The number of shares of the  registrant's  Common Stock  outstanding on June 30,
2003 was approximately 49,618,000.

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<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, 2003 and December 31, 2002  .............................  3

           Condensed Consolidated Statements of Operations
           Three and Six Months Ended June 30, 2003 and 2002 ................  4

           Condensed Consolidated Statement of Changes in Stockholders' Equity
           Six Months Ended June 30, 2003 .................................... 5

           Condensed Consolidated Statements of Cash Flows
           Six Months Ended June 30, 2003 and 2002 ........................... 6

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

  Item 2.  Management's Discussion and Analysis of Financial Condition
           and Results of Operations .........................................11

  Item 3.  Quantitative and Qualitative Disclosures About Market Risk ........19

  Item 4.  Controls and Procedures ...........................................19


PART II - OTHER INFORMATION

  Item 4.  Submission of Matters to a Vote of Security Holders ...............19

  Item 6.  Exhibits and Reports on Form 8-K...................................20

  SIGNATURES..................................................................21

<PAGE>


PART I:       FINANCIAL INFORMATION
----------------------------------
ITEM 1.       FINANCIAL STATEMENTS
----------------------------------
<TABLE>

                       INTELIDATA TECHNOLOGIES CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                       JUNE 30, 2003 AND DECEMBER 31, 2002
                  (in thousands, except share data; unaudited)

                                                                                         2003            2002
                                                                                    ------------    ------------
<S>                                                                                 <C>              <C>    <C>    <C>    <C>    <C>

ASSETS
CURRENT ASSETS

     Cash and cash equivalents                                                      $      6,204    $      5,674
     Accounts receivable, net                                                              3,272           2,974
     Other receivables                                                                       139             309
     Prepaid expenses and other current assets                                               669             802
                                                                                    ------------    ------------
         Total current assets                                                             10,284           9,759

NONCURRENT ASSETS
     Property and equipment, net                                                           1,833           2,554
     Goodwill, net                                                                        26,238          26,238
     Intangibles, net                                                                      5,420           5,780
     Other assets                                                                            213             175
                                                                                    ------------    ------------

TOTAL ASSETS                                                                        $     43,988    $     44,506
                                                                                    ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
     Accounts payable                                                               $      2,201    $      2,081
     Accrued expenses                                                                      2,425           3,458
     Deferred revenues                                                                     1,157           1,673
     Other liabilities                                                                       256             252
     Net liabilities of discontinued operations                                               45              51
                                                                                    ------------    ------------
TOTAL CURRENT LIABILITIES                                                                  6,084           7,515
     Net liabilities of discontinued operations                                              139             200
     Other liabilities                                                                       817             337
                                                                                    ------------    ------------
TOTAL LIABILITIES                                                                          7,040           8,052
                                                                                    ------------    ------------

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 50,431,000 shares in 2003 and 49,797,000 shares in 2002;
        outstanding 49,618,000 shares in 2003 and 48,991,000 shares in 2002                   50              50
     Additional paid-in capital                                                          303,572         302,833
     Treasury stock, at cost:  813,000 shares in 2003 and 806,000 shares in 2002          (2,486)         (2,473)
     Deferred compensation                                                                  (378)           (304)
     Accumulated deficit                                                                (263,810)       (263,652)
                                                                                    -------------   ------------
TOTAL STOCKHOLDERS' EQUITY                                                                36,948          36,454
                                                                                    ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                          $     43,988    $     44,506
                                                                                    ============    ============

     See accompanying notes to condensed consolidated financial statements.

</TABLE>

<PAGE>

                      INTELIDATA TECHNOLOGIES CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                THREE AND SIX MONTHS ENDED JUNE 30, 2003 AND 2002
                (in thousands, except per share data; unaudited)

<TABLE>


                                                               Three Months Ended                 Six Months Ended
                                                                    June 30,                          June 30,
                                                          -----------------------------   -------------------------------
                                                              2003              2002            2003               2002
                                                          -----------      -----------       -----------      -----------
<S>                                                       <C>              <C>               <C>              <C>

Revenues
  Software                                                $    295          $    393         $    638        $      521
  Professional services, recurring and termination fees      5,656             5,068           10,938             9,648
                                                          ---------         ---------        ---------       -----------
         Total revenues                                      5,951             5,461           11,576            10,169
                                                          ---------         ---------        ---------       -----------

Cost of revenues
  Software                                                    --                --               --                --
  Professional services, recurring and termination fees      1,948             2,079            3,882             4,038
                                                          ---------         ---------        ---------       -----------
         Total cost of revenues                              1,948             2,079            3,882             4,038
                                                          ---------         ---------        ---------       -----------

         Gross profit                                        4,003             3,382            7,694             6,131

Operating expenses
  General and administrative                                 1,931             2,436            4,020             4,930
  Sales and marketing                                          485               904              878             1,754
  Research and development                                   1,430             2,631            2,577             5,173
  Amortization of intangibles                                  180               180              360               360
                                                          -----------       ----------       ---------       -----------
         Total operating expenses                            4,026             6,151            7,835            12,217
                                                          -----------       ----------       ---------       -----------

Operating loss                                                 (23)           (2,769)            (141)           (6,086)
Realized loss on sales of investments                           --              (748)              --              (748)
Unrealized loss on Sybase warrants                              --              (377)              --                --
Other income (expenses), net                                    12                41              (17)               55
                                                          -----------       ----------       ---------       -----------

Loss before income taxes                                       (11)           (3,853)            (158)           (6,779)
Provision for income taxes                                      --                --               --                --
                                                          -----------       ----------       ---------       -----------

Loss from continuing operations                                (11)           (3,853)            (158)           (6,779)
Discontinued operations, net of income taxes                    --                --               --                --
                                                          -----------       ----------       ---------       -----------

Net loss                                                  $    (11)         $  (3,853)        $  (158)        $  (6,779)
                                                          ===========       ==========       =========       ===========



Basic and diluted loss per common share
     Loss from continuing operations                      $  (0.00)         $   (0.08)        $ (0.00)           $(0.14)
     Income (loss) from discontinued operations               0.00              0.00             0.00              0.00
                                                          -----------       ----------       ---------       -----------
     Net loss                                             $  (0.00)         $   (0.08)        $ (0.00)        $   (0.14)
                                                          ===========       ==========       =========       ===========

Basic and diluted weighted-average
     common shares outstanding                              49,002            48,501           48,935            48,513
                                                          ===========       ==========       =========       ===========

</TABLE>

     See accompanying notes to condensed consolidated financial statements.

<PAGE>


                       INTELIDATA TECHNOLOGIES CORPORATION
       CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                         SIX MONTHS ENDED JUNE 30, 2003
                            (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, 2003                 49,797   $      50     $   302,833   $  (2,473)  $      (304)    $  (263,652)
Issuances of common stock:
   Exercises of stock options                 452           -             525           -             -               -
   Employee stock purchase plan                10           -               7           -             -               -
   Exercises of stock warrants                 23           -               -           -             -               -
   Issuances of restricted stock              155           -             225           -          (225)              -
Cancellations of restricted stock              (6)          -             (18)          -            18               -
Treasury Stock                                  -           -               -         (13)            -               -
Amortization of deferred compensation           -           -               -           -           133               -
Net loss                                        -           -               -           -             -            (158)
Comprehensive loss

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

Balance at June 30, 2003                   50,431   $      50     $   303,572   $  (2,486)    $    (378)    $  (263,810)
                                        =========== ============= ============= =========== =============== =============


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

Balance at January 1, 2003                               $  36,454
Issuances of common stock:
   Exercises of stock options                                  525
   Employee stock purchase plan                                  7
   Exercises of stock warrants                                   -
   Issuances of restricted stock                                 -
Cancellations of restricted stock                                -
Treasury Stock                                                 (13)
Amortization of deferred compensation                          133
Net loss                                       (158)          (158)
                                          ----------
Comprehensive loss                        $    (158)
                                          ==========
                                                         ------------

Balance at June 30, 2003                                 $  36,948
                                                         ============
</TABLE>


     See accompanying notes to condensed consolidated financial statements.

<PAGE>


                       INTELIDATA TECHNOLOGIES CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                     SIX MONTHS ENDED JUNE 30, 2003 AND 2002
                            (in thousands; unaudited)
<TABLE>


                                                                               2003                   2002
                                                                           -------------           -----------
<S>                                                                        <C>                      <C>

Cash flows from operating activities
     Loss from continuing operations                                       $      (158)            $   (6,779)
     Adjustments to reconcile loss from continuing operations
         to net cash used in operating activities of continuing operations:
         Realized loss on sales of investments                                      --                    748
         Amortization of intangibles                                               360                    360
         Depreciation and amortization                                             666                    745
         Deferred compensation expense                                             133                    536
         Loss on disposal of property and equipment                                137                      2
         Changes in certain assets and liabilities:
              Accounts receivable                                                 (298)                 1,444
              Other receivables                                                    170                    355
              Prepaid expenses and other current assets                             95                    105
              Accounts payable                                                     120                 (1,076)
              Accrued expenses                                                    (549)                (1,546)
              Deferred revenues                                                   (516)                  (672)
                                                                           -----------             ----------
                  Net cash provided by (used in) operating
                  activities of continuing operations                              160                 (5,778)
                                                                           -----------             ----------
     Income (loss) from discontinued operations                                     --                     --
     Change in net liabilities of discontinued operations                          (67)                  (196)
                                                                           -----------             ----------
                  Net cash used in operating activities of
                  discontinued operations                                          (67)                  (196)
                                                                           -----------             ----------
                  Net cash provided by (used in) operating activities               93                 (5,974)
                                                                           -----------             ----------

Cash flows from investing activities
     Net proceeds from warrant exercise and sales of investments                    --                  1,718
     Purchases of property and equipment                                           (82)                  (311)
     Payments for acquisition costs for Home Account                                --                    (50)
                                                                           -----------             ----------
                  Net cash (used in) provided by investing activities              (82)                 1,357
                                                                           -----------             ----------

Cash flows from financing activities
     Proceeds from issuance of common stock                                        532                     38
     Payments to acquire treasury stock                                            (13)                    --
                                                                           -----------             ----------
                  Net cash provided by financing activities                        519                     38
                                                                           -----------             ----------
                  Increase (decrease) in cash and cash equivalents                 530                 (4,579)

                  Cash and cash equivalents, beginning of period                 5,674                 12,026
                                                                           -----------             ----------
                  Cash and cash equivalents, end of period                 $     6,204             $    7,447
                                                                           ===========             ==========

</TABLE>

     See accompanying notes to condensed consolidated financial statements.


<PAGE>


                       INTELIDATA TECHNOLOGIES CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                     SIX MONTHS ENDED JUNE 30, 2003 AND 2002
                                   (Unaudited)

(1)  Basis of Presentation

     The  condensed  consolidated  balance  sheet  of  InteliData   Technologies
Corporation  ("InteliData"  or the  "Company") as of June 30, 2003,  the related
condensed consolidated statements of operations and cash flows for the six-month
periods  ended June 30, 2003 and 2002,  and the related  condensed  consolidated
statement of changes in stockholders' equity for the six-month period ended June
30,  2003  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, 2002 was
derived from the  Company's  audited  December 31, 2002 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, 2002.

(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 2003 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, an allowance for doubtful  accounts,  an estimated fair value of net
sublease rent, a provision for forward loss and project plans for the completion
and  delivery  of certain  solutions.  Actual  results  could  differ from those
estimates.

(c)  Revenue Recognition - The Company supplies  Internet banking and electronic
bill presentment and 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 for its bill payment technology software.
This software does 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 for 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

<page>

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 being 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 our
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  contracts  and their  related
revenues  for  license  and  professional  services  were  recognized  under the
percentage of completion  method.  In addition to our  developing and delivering
the solution, the Company is entitled to transaction fees based on the number of
users and  transactions.  These transaction 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 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
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 Company  does not believe  that the adoption of
SFAS 150 will have a material  effect on our  financial  position  or results of
operations.

     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 Company  does not
believe  that the  adoption  of SFAS  149 will  have a  material  impact  on our
financial position or results of operations.

     In  December  2002,  the FASB  issued  Statement  of  Financial  Accounting
Standard  ("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  APB  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 does 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
<page>

Exit an Activity ("EITF 94-3"). SFAS 146 requires recognition of a liability for
costs  associated  with an exit or  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
use of certain office space in its corporate  offices in Reston,  Virginia.  The
remaining obligation on this lease was approximately $1,090,000 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, 2003, the liability was $534,000.

(e)  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  purchased  goodwill  and  certain
intangibles. 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. 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  assets  consisted  of the  following  components  (in
thousands):

    As of June 30, 2003:                Goodwill      Intangible        Total
                                      ----------      ----------        -------
        Gross carrying amount         $   29,793      $    7,200       $ 36,993
        Accumulated amortization          (3,555)         (1,780)        (5,335)
                                      ----------      ----------       --------
        Net                           $   26,238      $    5,420       $ 31,658
                                      ==========      ==========       ========


    As of December 31, 2002:            Goodwill      Intangible        Total
                                      ----------      ----------        -----
        Gross carrying amount         $   29,793      $    7,200       $ 36,993
        Accumulated amortization          (3,555)         (1,420)        (4,975)
                                      ----------      ----------       --------
        Net                           $   26,238      $    5,780       $ 32,018
                                      ==========      ==========       ========

     In  accordance  with SFAS 142, the Company had six months from adoption (up
until June 30, 2002) to complete the initial test for  impairment  as of January
1, 2002,  the  adoption  date of SFAS 142.  In  accordance  with the  transition
provisions  of SFAS  No.  142,  the  Company  conducted  the  first  step of the
impairment  tests as described above. 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 our industry.
Given consideration of these factors,  the Company concluded that the fair value
of the  reporting  unit  exceeded  the  carrying  amount of its net assets.  The
Company is required to perform  reviews for  impairment  in future  periods,  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.  As of June 30, 2003, the Company  performed the required  annual review
for impairment using the same approach and similar considerations as the initial
test. As a result,  the Company  concluded  that the fair value of the reporting
unit exceeds the carrying amount of its net assets.

     The   estimated   aggregate    amortization    expense   related   to   the
contracts/relationships  intangible  asset for each of the next five years is as
follows (in thousands):

              Year ending December 31:            Expense
                                                  -------
                  2003                            $   720
                  2004                                720
                  2005                                720
                  2006                                720
                  2007                                720
<page>

     The amortization of certain intangibles  continued at an annualized rate of
$720,000 for the six-month periods ended June 30, 2003 and 2002.

(3)  Discontinued Operations

     As of June 30, 2003,  the net  liabilities  of  discontinued  operations of
$184,000 relate to the telecommunications divisions. These liabilities relate to
the potential  environmental  clean up associated with  InteliData's  former New
Milford, Connecticut property. In January 2000, InteliData sold the New Milford,
Connecticut building, its only remaining asset in 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
law. The subject site is not a 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  for  certain
investigation/remediation  costs.  As of June  30,  2003,  this  escrow  account
balance remained at $200,000.  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 related
to this matter and other costs to be  approximately  $184,000 and has recorded a
liability for this amount.

     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.

(4)  Subsequent Event

     On July 8, 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.  The  placement  agent  in the  transaction  received  approximately
$200,000 in  commissions.  All of the  warrants  that were issued as part of the
2001 private placement have now been exercised.

                                   * * * * * *

<PAGE>


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

Critical Accounting Policies

     We consider the following  accounting  policies to be the most important to
our  financial  position and results of  operations or are policies that require
the exercise of significant judgment and/or estimates.

     Revenue  Recognition - We consider our revenue  recognition policy critical
to the understanding of our business  operations and results of operations.  The
Company  supplies  Internet  banking and electronic bill presentment and 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's bill payment technology software does 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 for 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 being 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 our
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  contracts  and their  related
revenue  for  license  and  professional  services  were  recognized  under  the
percentage of completion  method.  In addition to our  developing and delivering
the solution, the Company is entitled to transaction fees based on the number of
users and  transactions.  These transaction 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  are  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 our
estimates  and  judgments.   Additionally,   we  may   experience   delays  when
implementing our products at customer locations,  and customers may
<page>

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 our business, operations and financial condition.

     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.

     A number of factors are considered in establishing the allowance including,
but  not  limited  to,  historical  collection  experience,  the  macro-economic
environment,  estimates of forecasted write-offs,  and the aging of the accounts
receivable  portfolio.  If the  financial  condition of our accounts  receivable
portfolio deteriorates, additional allowances would be required.

     Valuation of Long-Lived  Assets - On an annual basis, we review  long-lived
assets such as  identifiable  intangibles  and goodwill for impairment  whenever
events or changes in circumstances  indicate that the carrying amount may not be
recoverable.  This review  requires  us to make  estimates  of our  undiscounted
future cash flows in order to determine if our  long-lived  assets are impaired.
If the total of the  expected  undiscounted  future  cash flows is less than the
carrying  amount  of the  assets,  we are  required  to  make  estimates  of our
discounted  future cash flows in order to  calculate  a loss for the  difference
between the fair value and  carrying  value of the assets.  We make  significant
assumptions and estimates in this process  regarding matters that are inherently
uncertain,  such as  calculating  remaining  useful lives and assuming  discount
rates.  The resulting  cash flows are computed over an extended  period of time,
which  subjects  those  assumptions  and  estimates to an even larger  degree of
uncertainty.  When known and available, we also use comparable values of similar
businesses in corroborating the results from the discounted cash flows approach.
This  process  involves  making  estimates  about  matters  that are  inherently
uncertain.  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 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,  which in management's opinion extend the useful life of
the underlying  asset,  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 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
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 Company  does not believe  that the adoption of
SFAS 150 will have a material  effect on our  financial  position  or results of
operations.

     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 Company  does not
believe  that the  adoption  of SFAS  149 will  have a  material  impact  on our
financial position or results of operations.

<page>
     In  December  2002,  the FASB  issued  Statement  of  Financial  Accounting
Standard  ("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  APB  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 does 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 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 use of certain  office  space in its  corporate  offices in
Reston,  Virginia.  The  remaining  obligation  on this lease was  approximately
$1,090,000  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, 2003, the liability was $534,000.

Results of Operations for the Three Months Ended June 30, 2003 and 2002

     The  following   represents   the  results  of  operations  for  InteliData
Technologies Corporation for the three months ended June 30, 2003 and 2002. 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.

Revenues

     The Company's  second quarter  revenues were $5,951,000 in 2003 compared to
$5,461,000  in 2002,  an increase of  $490,000.  The increase was a result of an
increase in professional  services,  recurring and termination  fees of $588,000
and a decrease in software  revenues  of $98,000.  During the second  quarter of
2003,  the Company  generated  $295,000 of software  revenues and  $5,656,000 of
professional services, recurring and termination fees. During the second quarter
of 2002,  software revenues were $393,000 and professional  services,  recurring
and termination fees were $5,068,000.

     The increase in professional services,  recurring and termination fees from
the second  quarter of 2002 to the second  quarter of 2003 was  primarily due to
increases  in the  Company's  recurring  revenue from fees  associated  with its
application   services   provider  ("ASP")   operations  and  increases  in  the
professional  services billing rates. The decrease in software revenues from the
second  quarter of 2002 to the second  quarter of 2003 was  primarily due to the
timing of system deliveries.

Cost of Revenues and Gross Profit

     The Company's  cost of revenues  decreased  $131,000 to $1,948,000  for the
second  quarter  of 2003 from  $2,079,000  for the second  quarter of 2002.  The
decrease was primarily  due to a decrease in service  provider  costs  resulting
from contract renegotiations.

     Overall  gross profit  margins  increased to 67% for the second  quarter of
2003 from 62% for the  second  quarter of 2002.  The  increase  in gross  profit
margin was  attributable  to  increases in  recurring  revenue and

<page>

professional  services  revenue from legacy clients coupled with the decrease in
cost of revenues as discussed above.  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.

General and Administrative

     General and  administrative  expenses  decreased $505,000 to $1,931,000 for
the second  quarter of 2003 from  $2,436,000 for the second quarter of 2002. The
decrease was primarily  attributable to the Company's reduction of corporate and
administrative  expenses that resulted from the continued evaluation of on-going
cost  structures.  The Company  plans to  continually  assess its  operations to
manage its expenses and infrastructures in light of anticipated business levels.

Sales and Marketing

     Sales and marketing  expenses decreased $419,000 to $485,000 for the second
quarter of 2003 from $904,000 for the second quarter of 2002. This was primarily
attributable to decreases in the number of selling and marketing employees,  and
travel and outside  professional  consulting  expenses  that  resulted  from the
continued  evaluation  of  on-going  cost  structures.   The  Company  plans  to
continually assess its operations to manage its expenses and  infrastructures in
light of anticipated business levels.

Research and Development

     Research and development  costs decreased  $1,201,000 to $1,430,000 for the
second  quarter  of 2003 from  $2,631,000  for the second  quarter of 2002.  The
decrease was primarily  attributable to the Company's  reduction of research and
development  expenses that  resulted  from the continued  evaluation of on-going
cost structures.  The Company incurs research and development expenses primarily
in  developing  the  next  generation,   open  standards-based   InteliWorks(TM)
Enterprise  Payment  Solution.  The  Company  plans to  continually  assess  its
operations to manage its expenses and  infrastructures  in light of  anticipated
business levels.

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.  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.
As of  January  1,  2002,  in  accordance  with SFAS  142,  the  Company  ceased
recognizing  amortization  expense  on  goodwill.  The  amortization  of certain
intangibles continues at an annualized rate of $720,000 for 2003 and 2002.

     In  accordance  with SFAS 142, the Company had six months from adoption (up
until June 30, 2002) to complete the initial test for  impairment  as of January
1, 2002,  the  adoption  date of SFAS 142.  In  accordance  with the  transition
provisions  of SFAS  No.  142,  the  Company  conducted  the  first  step of the
impairment tests. 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  our  industry.   Given
consideration of these factors, the Company concluded that the fair value of the
reporting  unit exceeded the carrying  amount of its net assets.  The Company is
required to perform reviews for impairment in future periods, 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.  As of
June 30, 2003, the Company  performed the required  annual review for impairment
using the same  approach and similar  consideration  as the initial  test.  As a
result,  the Company concluded that the fair value of the reporting unit exceeds
the carrying amount of its net assets.

<page>

Realized and Unrealized Gains on Investments

     As part of the January 20, 2000 merger between Home Financial Network, Inc.
("HFN") and Sybase, Inc. ("Sybase"),  InteliData received certain  consideration
in exchange for its approximate  25% ownership  interest in HFN. As part of this
consideration,  the Company  received  640,000  "warrant units" with an exercise
price of $2.60 per warrant unit. Upon exercise of each warrant unit, the Company
was  entitled to receive  $1.153448 in cash and 0.34794  share of Sybase  common
stock.

     Statement  of  Financial  Accounting  Standards  No.  133,  Accounting  for
Derivative   Instruments  and  Hedging  Activities  ("SFAS  133"),   establishes
accounting and reporting  standards for derivative  instruments  and for hedging
activities by requiring that  derivatives be recognized in the balance sheet and
measured at fair value. The Company accounted for its investment in the warrants
to purchase Sybase common stock under SFAS 133.

     SFAS 133 requires that derivative  financial  instruments,  such as forward
currency exchange  contracts,  interest rate swaps and the Company's warrants to
purchase Sybase stock, be recognized in the financial statements and measured at
fair value regardless of the purpose or intent for holding them.  Changes in the
fair  value  of  derivative   financial   instruments   are  either   recognized
periodically in income or shareholders'  equity (as a component of comprehensive
income),  depending on whether the  derivative is being used to hedge changes in
fair value or cash flows. In accordance  with SFAS 133, the Company  recorded an
unrealized  loss on investment of $377,000 in the  statements of operations  for
the three months ended June 30, 2002.  During June 2002,  the Company  exercised
all of its 640,000  warrants units to purchase  Sybase common stock and sold the
resulting  223,000 shares of Sybase common stock. The Company recorded a loss of
$748,000 as a result of the sales of investments.

Other Income

     Other  income  (expense),  primarily  interest  income  and other  expenses
including  state and local  taxes,  decreased  $29,000 to $12,000 for the second
quarter of 2003 from  $41,000 for the second  quarter of 2002.  The  decrease is
primarily associated with decreased levels of cash and cash equivalents in 2003,
as compared to 2002, which resulted in lower interest income.

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

     The basic and diluted  weighted-average common shares outstanding increased
to 49,002,000  for the second  quarter of 2003  compared to  48,501,000  for the
second  quarter of 2002.  The increase  resulted  primarily from the issuance of
stock  pursuant  to the  exercises  of stock  options,  stock  awards  and stock
purchases under the Employee Stock Purchase Plan.

     Losses from  continuing  operations  were  $11,000 and  $3,853,000  for the
three-month periods ended June 30, 2003 and 2002, respectively,  while there was
no gain or loss from discontinued  operations in either period.  Net losses were
$11,000  and  $3,853,000  for 2003 and  2002,  respectively.  As a result of the
foregoing,  basic and diluted net loss per common share was $0.00 for the second
quarter of 2003  compared to a basic and  diluted  net loss per common  share of
$0.08 for the second quarter of 2002.

Results of Operations for the Six Months Ended June 30, 2003 and 2002

     The  following   represents   the  results  of  operations  for  InteliData
Technologies  Corporation  for the six months ended June 30, 2003 and 2002. 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.

Revenues

     The Company's  revenues for the first six months were  $11,576,000  in 2003
compared to $10,169,000 for 2002, an increase of $1,407,000.  The increase was a
result of an increase in professional  services,  recurring and termination fees
of $1,290,000 and an increase in software revenues of $117,000. During the first
six months of

<page>

2003, the Company  generated  $638,000 of software  revenues and  $10,938,000 of
professional  services,  recurring and  termination  fees.  During the first six
months of 2002,  software  revenues  were  $521,000 and  professional  services,
recurring and termination fees were $9,648,000.

     The increase in professional services,  recurring and termination fees from
the first six months of 2002 to the first six months of 2003 was  primarily  due
to increases in the Company's  recurring  revenue from fees  associated with its
application   services   provider  ("ASP")   operations  and  increases  in  the
professional  services billing rates. The increase in software revenues from the
first six  months of 2002 to the first six months of 2003 was  primarily  due to
the timing of system deliveries and an increase in software license sales.

Cost of Revenues and Gross Profit

     The Company's  cost of revenues  decreased  $156,000 to $3,882,000  for the
first six months of 2003 from  $4,038,000  for the first six months in 2002. The
decrease was primarily  due to a decrease in service  provider  costs  resulting
from contract renegotiations.

     Overall gross profit  margins  increased to 66% for the first six months of
2003 from 60% for the first six months of 2002.  The  increase  in gross  profit
margin was attributable to increases in recurring revenue, software revenue, and
professional  services  revenue from legacy clients coupled with the decrease in
cost of revenues as discussed above.  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.

General and Administrative

     General and  administrative  expenses  decreased $910,000 to $4,020,000 for
the first six months of 2003 from  $4,930,000  for the first six months of 2002.
The decrease was primarily  attributable to the Company's reduction of corporate
and  administrative  expenses that  resulted  from the  continued  evaluation of
on-going cost structures. The Company plans to continually assess its operations
to manage its  expenses and  infrastructures  in light of  anticipated  business
levels.

Sales and Marketing

     Sales and marketing  expenses  decreased $876,000 to $878,000 for the first
six months of 2003 from  $1,754,000  for the first six months of 2002.  This was
primarily  attributable  to  decreases  in the number of selling  and  marketing
employees, and travel and outside professional consulting expenses that resulted
from the continued evaluation of on-going cost structures.  The Company plans to
continually assess its operations to manage its expenses and  infrastructures in
light of anticipated business levels.

Research and Development

     Research and development  costs decreased  $2,596,000 to $2,577,000 for the
first six months of 2003 from  $5,173,000  for the first six months of 2002. The
decrease was primarily  attributable to the Company's  reduction of research and
development  expenses that  resulted  from the continued  evaluation of on-going
cost structures.  The Company incurs research and development expenses primarily
in  developing  the  next  generation,   open  standards-based   InteliWorks(TM)
Enterprise  Payment  Solution.  The  Company  plans to  continually  assess  its
operations to manage its expenses and  infrastructures  in light of  anticipated
business levels.

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.  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.
As of  January  1,  2002,  in  accordance  with SFAS  142,  the  Company  ceased
recognizing
<page>

amortization  expense on  goodwill.  The  amortization  of  certain  intangibles
continues at an annualized rate of $720,000 for 2003 and 2002.

     In  accordance  with SFAS 142, the Company had six months from adoption (up
until June 30, 2002) to complete the initial test for  impairment  as of January
1, 2002,  the  adoption  date of SFAS 142.  In  accordance  with the  transition
provisions  of SFAS  No.  142,  the  Company  conducted  the  first  step of the
impairment tests. 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  our  industry.   Given
consideration of these factors, the Company concluded that the fair value of the
reporting  unit exceeded the carrying  amount of its net assets.  The Company is
required to perform reviews for impairment in future periods, 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.  As of
June 30, 2003, the Company  performed the required  annual review for impairment
using the same  approach and similar  consideration  as the initial  test.  As a
result,  the Company concluded that the fair value of the reporting unit exceeds
the carrying amount of its net assets.

Realized and Unrealized Gains on Investments

     As part of the January 20, 2000 merger between Home Financial Network, Inc.
("HFN") and Sybase, Inc. ("Sybase"),  InteliData received certain  consideration
in exchange for its approximate  25% ownership  interest in HFN. As part of this
consideration,  the Company  received  640,000  "warrant units" with an exercise
price of $2.60 per warrant unit. Upon exercise of each warrant unit, the Company
was  entitled to receive  $1.153448 in cash and 0.34794  share of Sybase  common
stock.

     Statement  of  Financial  Accounting  Standards  No.  133,  Accounting  for
Derivative   Instruments  and  Hedging  Activities  ("SFAS  133"),   establishes
accounting and reporting  standards for derivative  instruments  and for hedging
activities by requiring that  derivatives be recognized in the balance sheet and
measured at fair value. The Company accounted for its investment in the warrants
to purchase Sybase common stock under SFAS 133.

     SFAS 133 requires that derivative  financial  instruments,  such as forward
currency exchange  contracts,  interest rate swaps and the Company's warrants to
purchase Sybase stock, be recognized in the financial statements and measured at
fair value regardless of the purpose or intent for holding them.  Changes in the
fair  value  of  derivative   financial   instruments   are  either   recognized
periodically in income or shareholders'  equity (as a component of comprehensive
income),  depending on whether the  derivative is being used to hedge changes in
fair value or cash flows.  During June 2002,  the Company  exercised  all of its
640,000  warrants  units to purchase  Sybase common stock and sold the resulting
223,000 shares of Sybase common stock. Accordingly, the Company did not have any
unrealized  gain or loss on investment  for the reporting  periods.  The Company
recorded a loss of $748,000 as a result of the sales of investments.

Other Income

     Other  income  (expense),  primarily  interest  income  and other  expenses
including  state and local taxes,  decreased  $72,000 to ($17,000) for the first
six months of 2003 from  $55,000 for the first six months of 2002.  The decrease
is primarily  associated with decreased  levels of cash and cash  equivalents in
2003, as compared to 2002, which resulted in lower interest income.

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

     The basic and diluted  weighted-average common shares outstanding increased
to 48,935,000  for the first six months of 2003  compared to 48,513,000  for the
first six months of 2002. The increase  resulted  primarily from the issuance of
stock  pursuant  to the  exercises  of stock  options,  stock  awards  and stock
purchases under the Employee Stock Purchase Plan.

     Losses from  continuing  operations  were $158,000 and  $6,779,000  for the
six-month periods ended June 30, 2003 and 2002, respectively, while there was no
gain or loss from  discontinued  operations  in either  period.  Net losses were
$158,000  and  $6,779,000  for 2003 and 2002,  respectively.  As a result of the
foregoing,  basic and

<page>

diluted  net loss per  common  share was $0.00 for the first six  months of 2003
compared to a basic and diluted net loss per common share of $0.14 for the first
six months of 2002.

Liquidity and Capital Resources

     During  the  first  six  months  of  2003,  the  Company's  cash  and  cash
equivalents  increased by $530,000. At June 30, 2003, the Company had $6,204,000
in cash and cash  equivalents,  $4,200,000 of working  capital with no long-term
debt, and $36,948,000 in stockholders' equity. The Company's principal needs for
cash in the first  six  months of 2003 were for  funding  operating  losses  and
changes in working capital.

     The Company's cash  requirements for operating  activities in the first six
months of 2003 were financed primarily by cash and cash equivalents on hand.

     Net cash used in investing  activities  in the first six months of 2003 was
$82,000 for the purchases of property and equipment.

     Financing  activities provided net cash of $519,000 in the first six months
of 2003 and  consisted  of $532,000  from the issuance of the  Company's  common
stock  through  stock option  exercises and the Employee  Stock  Purchase  Plan,
offset by $13,000 related to payments made to acquire treasury stock.

     On July 8, 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.  The  placement  agent  in the  transaction  received  approximately
$200,000 in  commissions.  All of the  warrants  that were issued as part of the
2001 private placement have now been exercised.

     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.  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.

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, our ability to continue  funding
operating  losses,  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 increase  its  recurring
revenues and profits  through its ASP business model,  the Company's  ability to
retain key customers and to increase revenue from existing customers, 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
relationships  with third  parties into new business  opportunities  in the 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

<page>

Exchange Commission,  including the risk factors disclosed in the Company's Form
10-K for the fiscal year ended  December 31,  2002.  These risks could cause the
Company's  actual  results for 2003 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.

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

     The Company's chief executive  officer and chief financial  officer,  after
evaluating  the  effectiveness  of  the  Company's   "disclosure   controls  and
procedures"  (as defined in the Securities  Exchange Act of 1934 Rules 13a-14(c)
and  15-d-14(c))  as of a date  ("Evaluation  Date")  within 90 days  before the
filing of this quarterly report,  have concluded that as of the Evaluation Date,
the Company's  disclosure  controls and procedures were adequate and designed to
ensure that material  information  relating to the Company and its  consolidated
subsidiaries would be made known to them by others within those entities.

(b) CHANGE IN INTERNAL CONTROLS

     There were no  significant  changes in our  internal  controls  or in other
factors that could  significantly  affect our disclosure controls and procedures
subsequent to the Evaluation Date.

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 29, 2003.
Matters  submitted  at the  meeting  for  vote  by  the  Stockholders  were  the
following:

1)   Election of Directors

     The Stockholders elected two Class I members of the Board of Directors with
     the  following  votes:  L. William  Seidman with  44,613,401  votes for and
     440,232  withheld and Norman J. Tice with 44,616,151  votes for and 437,482
     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, 2003
     with the following  votes:  44,461,457  for,  539,806  against,  and 52,370
     abstain.


<PAGE>


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.


     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  furnished a Current Report on Form 8-K with the Securities and
Exchange  Commission  on May 14, 2003,  relating to  Regulation FD Disclosure to
furnish  a  copy  of the  press  release  dated  May  14,  2003,  that  reported
InteliData's results of operations and financial condition for the quarter ended
March 31, 2003.

                                   * * * * * *

<PAGE>


                                 SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized on July 31, 2003.

                                 INTELIDATA TECHNOLOGIES CORPORATION

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


                                        /s/ John R. Polchin
                                       -----------------------------------------
                                       John R. Polchin
                                       Vice President, Chief Financial Officer,
                                       and Treasurer