UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                  FORM 10-QSB
                                   (Mark One)


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


                 For the quarterly period ended March 31, 2003

                                       OR

        [ ]  TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15 (d)
             OF THE SECURITIES EXCHANGE ACT OF 1934


                For the transition period from ______ to ______

                         Commission File No. 0-20660


                              DIRECT INSITE CORP.
        (Exact name of Small Business Issuer as specified in its Charter)


            Delaware                                  11-2895590
  (State or other jurisdiction of                 (I.R.S. Employer
   incorporation or organization)                  Identification No.)


    80 Orville Drive, Bohemia, N.Y.                      11716
 (Address of principal executive offices)              (Zip Code)


Registrant's telephone number, including area code      (631) 244-1500

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 [ ]


The number of shares of $.0001 par value  stock  outstanding  as of May 15, 2003
was: 3,957,013.

Transitional Small Business Disclosure Format (check one):    Yes [ ]  No [X]

<PAGE>

                      DIRECT INSTE CORP. AND SUBSIDIARIES

                                     INDEX


PART I - FINANCIAL INFORMATION                                             Page
                                                                           ----

Item 1
    Condensed Consolidated Balance Sheets as of March 31, 2003 and
    December 31, 2002                                                         3

    Condensed Consolidated Statements of Operations and Comprehensive
    Loss For the Three Months Ended March 31, 2003 and 2002                   4

    Condensed Consolidated Statements of Cash Flows
    For the Three Months Ended March 31, 2003 and 2002                        5

    Notes to Condensed Consolidated Financial Statements                 6 - 11

Item 2

    Management's Discussion and Analysis or Plan of Operations          12 - 14

Item 3

    Controls and Procedures                                                  14

PART II - OTHER INFORMATION

    Item 1. Legal Proceedings                                                15

    Item 2. Changes in Securities                                            15

    Item 3. Defaults Upon Senior Securities                                  15

    Item 4.  Submission of Matters to a Vote of Security Holders             15

    Item 5. Other Information                                                15

    Item 6. Exhibits and Reports on Form 8-K                                 15

    Signatures                                                               16


CERTIFICATIONS                                                          17 - 20

<PAGE>


                      DIRECT INSITE CORP. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                   AS OF MARCH 31, 2003 AND DECEMBER 31, 2002

<TABLE>
<CAPTION>
                                                                    March 31,        December 31,
                                                                      2003               2002
                                                                    ---------       -------------
                                                                   (Unaudited)         (Audited)
ASSETS
<S>                                                                 <C>                <C>
Current assets
  Cash and cash equivalents                                         $    121           $    700
  Accounts receivable, net of allowance for doubtful accounts of
   $57 and $42 in 2003 and 2002, respectively                          1,859              1,350
  Stock subscription receivable                                            -                500
  Prepaid expenses and other current assets                              263                239
                                                                    --------           --------
Total current assets                                                   2,243              2,789

Software costs, net                                                      411                444
Property and equipment, net                                            1,118              1,166
Other assets                                                             468                492
                                                                    --------           --------
                                                                    $  4,240           $  4,891
                                                                    ========           ========
LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
  Accounts payable and accrued expenses                             $  1,753           $  1,669
  Due to bank                                                            521                690
  Deferred revenue                                                       249                252
  Current portion of long-term debt                                      381                396
                                                                    --------           --------
    Total current liabilities                                          2,904              3,007

Long term debt, net of current portion                                 1,027                556
Dividends payable                                                        119                 56
Restructuring costs payable, long-term                                    60                 60
                                                                    --------           --------
Total liabilities                                                      4,110              3,679
                                                                    --------           --------

Commitments and contingencies

Shareholders' equity
  Preferred stock, $0.0001 par value; 2,000,000 shares authorized;
   116,823 issued and outstanding, liquidation preference of
   $2,500,000                                                              -                  -
  Common stock, $0.0001 par value; 150,000,000 shares authorized;
   3,985,748 and 3,966,055 shares issued in 2003 and 2002,
   respectively; and 3,945,821 and 3,926,128 shares outstanding
   in 2003 and 2002, respectively                                          -                  -
  Additional paid-in capital                                         108,746            108,708
  Accumulated deficit                                               (108,214)          (107,081)
  Subscriptions receivable                                               (49)               (62)
  Accumulated other comprehensive loss                                   (25)               (25)
                                                                    --------           --------
                                                                         458              1,540
  Common stock in treasury, at cost  - 24,371 shares                    (328)              (328)
                                                                    --------           --------
Total shareholders' equity                                               130              1,212
                                                                    --------           --------
                                                                    $  4,240           $  4,891
                                                                    ========           ========
</TABLE>

See notes to condensed consolidated financial statements.

                                       3
<PAGE>

                      DIRECT INSITE CORP. AND SUBSIDIARIES

     CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
                                  (Unaudited)

               FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002
                     (in thousands, except per share data)


<TABLE>
<CAPTION>
                                                                 Three Months Ended
                                                                      March 31,
                                                                 2003           2002
                                                                 ----           ----
<S>                                                           <C>            <C>
Revenue                                                       $  2,199       $  1,514
Costs and expenses
  Operations, research and development                           1,238          1,058
  Sales and marketing                                              831            535
  General and administrative                                       877            945
  Amortization and depreciation                                    249            254
                                                              --------       --------
                                                                 3,195          2,792
                                                              --------       --------
Operating loss                                                    (996)        (1,278)

Other expenses
  Loss on sales of NetWolves common stock                            -           (250)
  Equity in loss of Voyant                                           -            (63)
  Interest expense, net                                            (74)           (37)
                                                              --------       --------
Net loss                                                        (1,070)        (1,628)
Preferred stock dividends                                          (63)             -
                                                              --------       --------
Net loss attributable to common shareholders                  $ (1,133)      $ (1,628)
                                                              ========       ========
Other comprehensive loss
  Reclassification adjustment and unrealized
  loss on marketable securities                                      -           (303)
                                                              --------       --------

Comprehensive loss                                            $ (1,070)      $ (1,931)
                                                              ========       ========

Basic and diluted net loss attributable to common
   shareholders per share                                     $  (0.29)      $  (0.53)
                                                              ========       ========

Basic and diluted weighted average common shares outstanding     3,935          3,069
                                                              ========       ========

</TABLE>

           See notes to condensed consolidated financial statements.

                                       4
<PAGE>

                      DIRECT INSITE CORP. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                              For the three months ended
                                                                      March 31,
                                                              --------------------------
                                                                   2003         2002
                                                              --------------------------
                                                                    (In thousands)
<S>                                                            <C>           <C>
Cash flows from operating activities
 Net loss                                                      $  (1,070)    $  (1,628)
 Adjustments to reconcile net loss to net cash used
 in operating activities
   Depreciation and amortization

    Property and equipment                                           198           224
    Software costs                                                    33            30
    Other                                                             18             -

   Provision for doubtful accounts                                    18            32
   Loss on sales of NetWolves common stock                             -           250
   Equity in loss of Voyant                                            -            63
   Common stock and options issued for services                       33           186
 Changes in operating assets and liabilities
   Accounts receivable                                              (527)         (602)
   Prepaid expenses and other current assets                         (41)           81
   Other assets                                                       23           (72)
   Accounts payable and accrued expenses                              98          (278)
   Deferred revenue                                                   (3)            -
                                                                ---------     ---------
        Net cash used in operating activities                     (1,220)       (1,714)
                                                                ---------     ---------
Cash flows from investing activities
   Proceeds from the sale of NetWolves common stock                    -           236
   Capital expenditures                                             (112)         (131)
                                                                ---------     ---------
        Net cash (used in) provided by investing activities         (112)          105
                                                                ---------     ---------
Cash flows from financing activities
   Repayments of Bank advances, net                                 (169)            -
   Proceeds from the sale of preferred stock                         500             -
   Proceeds from common stock and subscription receivable             13           334
   Costs related to the sale of preferred stock                       (8)            -
   Proceeds from long term debt, net of fees                         496           217
   Repayments of long-term debt                                      (79)          (37)
                                                                ---------     ---------
Net cash provided by financing activities                            753           514
                                                                ---------     ---------
Net decrease in cash and cash equivalents                           (579)       (1,095)

Cash and cash equivalents, beginning of period                       700         1,359
                                                                ---------     ---------
Cash and cash equivalents, end of period                        $    121      $    264
                                                                =========     =========
</TABLE>

            See notes to condensed consolidated financial statements

                                       5
<PAGE>
                         DIRECT INSITE AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

               FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002



1.   Interim Financial Information

     The  condensed  consolidated  balance  sheet as of March 31, 2003,  and the
     condensed consolidated  statements of operations and comprehensive loss and
     cash flows for the  three-month  period  ended  March 31,  2003,  have been
     prepared by the Company without audit.  These interim financial  statements
     include all  adjustments,  consisting  only of normal  recurring  accruals,
     which  management  considers  necessary  for a  fair  presentation  of  the
     financial statements.  The results of operations for the three months ended
     March 31,  2003,  are not  necessarily  indicative  of results  that may be
     expected for any other interim periods or for the full year.

     These  condensed  consolidated  financial  statements  should  be  read  in
     conjunction  with the consolidated  financial  statements and notes thereto
     for the year ended  December  31, 2002.  The  accounting  policies  used in
     preparing the condensed  consolidated  financial  statements are consistent
     with those  described  in the  December  31,  2002  consolidated  financial
     statements.


2.   The Company

     Direct Insite Corp. and subsidiaries (the "Company")  primarily operates as
     an application  service provider ("ASP") and markets an integrated "fee for
     services"  offering  providing high volume processing of transactional data
     for billing purposes, electronic bill presentation and payment ("EBP&P") as
     well as visual data analysis and reporting tools delivered via the Internet
     for our customers.  The Company's core technology is  d.b.Express(TM),  the
     proprietary  and  patented  management  information  tool,  which  provides
     targeted access through the mining of large volumes of  transactional  data
     via the Internet.  In 2001 the Company  acquired  Platinum  Communications,
     Inc.  ("Platinum"),  a Dallas,  Texas  based  company,  which  markets  its
     integrated  proprietary back office software solutions,  Account Management
     Systems   ("AMS"   or   sometimes   referred   to   as   "TAMS")   to   the
     telecommunications  industry either as a license or as an ASP. Further,  as
     an added  source of revenue,  the Company  began in 2001 to provide  custom
     engineering services to its customers.

     This newly  assembled  suite of  services  enables the Company to provide a
     comprehensive  Internet  delivered service from the raw transaction  record
     through all of the  internal  workflow  management  processes  including an
     electronically   delivered   invoice   with   customer   analytics.    This
     comprehensive service offering provides back office operations,  cuts costs
     and provides for improved  customer  service by providing  the end customer
     with easy access to all of the detailed  information  about their bill. The
     Company operates fully redundant data centers located at its main office in
     Bohemia, N.Y. and in Newark, NJ. The facility in New Jersey is leased at an
     International Business Machines ("IBM"), e-business Hosting Center.

     Management's  liquidity plans are discussed in Note 8. As described in Note
     7, the Company has one major  customer that  accounted for more than 87% of
     the  Company's  revenue for the three months ended March 31, 2003.  Loss of
     this customer would have a material adverse effect on the Company.

     New Accounting Pronouncements
     -----------------------------
     Statement of Financial  Accounting  Standards ("SFAS") No.146,  "Accounting
     for Costs Associated with Exit or Disposal  Activities",  provides guidance
     on the  recognition and measurement of liabilities for cost associated with
     exit or disposal activities. The provisions of this statement are effective
     for exit or disposal activities that are initiated after December 31, 2002.
     The adoption of SFAS No.146 did not have a material effect on the Company's
     consolidated financial statements.

                                       6
<PAGE>
                         DIRECT INSITE AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

               FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002



     In November 2002, the Financial  Accounting Standards Board ("FASB") issued
     Interpretation  No. 45, ("FIN 45")  "Guarantor's  Accounting and Disclosure
     Requirements for Guarantees,  Including Indirect Guarantees of Indebtedness
     of Others."  FIN 45 requires a company,  at the time it issues a guarantee,
     to recognize an initial liability for the fair value of obligations assumed
     under the guarantee  and  elaborates  on existing  disclosure  requirements
     related to guarantees and warranties.  The initial recognition requirements
     of FIN 45 are effective for  guarantees  issued or modified  after December
     31, 2002 and adoption of the disclosure  requirements are effective for the
     Company as of  December  31,  2002.  The  adoption of FIN 45 did not have a
     material effect on the Company's consolidated financial statements.

     In  January  2003,  the FASB  issued  Interpretation  No.  46  ("FIN  46"),
     "Consolidation of Variable Interest Entities,  an Interpretation of ARB No.
     51." FIN 46 requires certain variable  interest entities to be consolidated
     by the primary  beneficiary  of the entity if the equity  investors  in the
     entity do not have the characteristics of a controlling  financial interest
     or do not have  sufficient  equity at risk for the  entity to  finance  its
     activities without additional  financial support from other parties. FIN 46
     is effective  for all new variable  interest  entities  created or acquired
     after January 31, 2003. For variable  interest entities created or acquired
     prior to February 1, 2003, the provisions of FIN 46 must be applied for the
     first interim or annual period  beginning  after June 15, 2003. The Company
     does not expect the  adoption of FIN 46 will have a material  effect on its
     consolidated financial statements.

     Stock Options and Similar Equity Instruments
     --------------------------------------------

     As permitted under SFAS No. 148, "Accounting for Stock-Based Compensation -
     Transition and  Disclosure",  which amended SFAS No. 123,  "Accounting  for
     Stock-Based  Compensation",  the  Company has elected to continue to follow
     the  intrinsic  value method in  accounting  for its stock- based  employee
     compensation arrangements as defined by Accounting Principles Board Opinion
     ("APB") No. 25,  "Accounting  for Stock Issued to  Employees",  and related
     interpretations  including  FASB  Interpretation  No. 44,  "Accounting  for
     Certain Transactions  Involving Stock  Compensation",  an interpretation of
     APB No. 25. No  stock-based  employee  compensation  cost is  reflected  in
     operations, as all options granted under those plans have an exercise price
     equal to or above the market  value of the  underlying  common stock on the
     date of grant.  The following table  illustrates the effect on net loss and
     net loss per share if the Company  had  applied the fair value  recognition
     provisions of SFAS 123 to stock-based employee  compensation (in thousands,
     except per share data):

<TABLE>
<CAPTION>

                                                         Three Months Ended
                                                              March 31,
                                                          2003         2002
                                                        --------------------
<S>                                                     <C>          <C>
Net loss attributable to common shareholders
 As reported                                            $(1,133)     $(1,628)
 Less:  Stock-based employee compensation
  expense determined under fair value-based
  method for all awards                                    (321)        (404)
                                                        --------     --------
 Pro forma                                              $(1,454)     $(2,032)
                                                        ========     ========

Basic and diluted net loss per share
 As reported                                             $(0.29)      $(0.53)
                                                        ========     ========
 Pro forma                                               $(0.37)      $(0.66)
                                                        ========     ========
</TABLE>

     The fair value of Company  common stock  options  granted to employees  are
     estimated on the date of grant using the Black-Scholes option-pricing model
     with the following  assumptions:  (1) expected  volatility of 70.9% in 2003
     and 67.7% in 2002, (2) risk-free  interest rates of 4.25% in 2003 and 4.80%
     in 2002 and (3)  expected  lives of 1.9  years to 4.5 years in 2003 and 5.0
     years in 2002.

                                       7
<PAGE>
                         DIRECT INSITE AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

               FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002



3.   Accounts Receivable and Due To Bank

     During  October  2001,  the Company  entered  into an  Accounts  Receivable
     Purchase  Agreement with a Bank,  whereby the Company from time to time may
     assign some of their  accounts  receivable  to the Bank on a full  recourse
     basis. Upon specific invoice approval,  an advance of 80% of the underlying
     receivable is provided to the Company. The remaining balance (20%), less an
     administrative  fee of  approximately  0.5%  plus  interest  at the rate of
     1-1/2% per month,  is paid to the Company once the  customer has paid.  The
     maximum  amount of all assigned  receivables  outstanding at any time shall
     not exceed $1.5 million. The primary term of the agreement was for one year
     beginning  October 2001,  and continues  until due notice of termination is
     given at any time by either party to the agreement.

     At March 31,  2003,  the Company  had  assigned  approximately  $642,000 of
     accounts  receivable to the Bank and received advances of $521,000 from the
     Bank.

4.   Long Term Debt

     Long-term debt consists of the following (in thousands):

<TABLE>
<CAPTION>
                                                        March 31,      December 31,
                                                          2003             2002
                                                        ---------------------------
<S>                                                     <C>               <C>
Lines of credit (a)                                     $   124         $   133
Capitalized lease obligations (b)                           308             319
Term Loan  - Chief Executive Officer (c)                    250             250
Installment Note - Markus & Associates (d)                  226             250
Term Loan - Tall Oaks (e)                                   500              -0-
                                                        -------         -------
                                                          1,408             952
Less current portion                                       (381)           (396)
                                                        -------         -------
Long-term debt, net of current portion                   $1,027           $ 556
                                                        =======         =======
</TABLE>


(a)  The Company has three lines of credit with various  expiration  dates.  One
     line has no expiration date and bears an interest rate of prime rate (4.25%
     at March 31,  2003) plus 1%, is  collateralized  by  substantially  all the
     assets of Platinum,  is personally guaranteed by one of the former officers
     of Platinum and has an unused balance of approximately $23,000 at March 31,
     2003.  The second line expires in May 2003,  bears an interest  rate of 10%
     and has no available  balance.  The third line contains no expiration date,
     bears an interest rate of 16.25% and has no available balance.

(b)  The Company has  equipment  under  capital  lease  obligations  expiring at
     various times through 2006. The assets and liabilities under capital leases
     are  recorded  at the  lower of the  present  values of the  minimum  lease
     payments  or the fair  values of the  assets.  The assets are  included  in
     property and equipment.

(c)  In January 2002, the Company's Chairman and current Chief Executive Officer
     loaned the Company  $250,000.  The loan has a term of three years and bears
     interest at 5%, payable quarterly in arrears.

(d)  In December 2002, the Company  executed a $250,000 note payable to Markus &
     Associates (an affiliate of S.J. & Associates,  Inc.). This note is payable
     in 28 equal monthly installments of principal plus interest at 9-1/2%.

                                       8
<PAGE>
                         DIRECT INSITE AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

               FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002



(e)  In January 2003,  Tall Oaks Group,  LLC ("Tall Oaks")  provided the Company
     with an unsecured  $500,000  loan.  The loan matures March 31, 2005,  bears
     interest at 9 1/2%, with the entire unpaid principal amount and all accrued
     interest payable on the maturity date.

5.   Shareholders' equity

     Preferred Stock
     ---------------

     In  September  2002,  the  Company  sold  93,458  shares  of its  Series  A
     Convertible  Preferred  Stock,  ("Preferred  Stock") in  consideration  for
     $2,000,000  less fees and expenses of  $178,000,  to  Metropolitan  Venture
     Partners II, L.P.  ("Metropolitan"),  a private equity  investment firm. In
     December  2002,  the Company sold 23,365 shares of its  Preferred  Stock in
     consideration   for  $500,000  less  fees  and  expenses  of  $61,000,   to
     Metropolitan.  The proceeds from this  transaction were received January 3,
     2003,  and, as of December 31, 2002,  the  principal  sum was  reflected as
     stock  subscription  receivable.  The  holders  of  Preferred  Stock  ("the
     holders") are entitled to dividends,  on a cumulative basis, at the rate of
     9-1/2% per annum,  compounded  quarterly  and payable on September 25, 2004
     and  September  25,  2005.  Dividends  are  payable,  at the  option of the
     holders, in cash or in the Company's common stock. The holders have certain
     demand and piggyback  registration  rights, have preference in the event of
     liquidation,  and are  entitled  to ten votes for each  share of  Preferred
     Stock on all matters as to which  holders of common  stock are  entitled to
     vote.  As of March 31,  2003,  $119,000  in  dividends  are  payable to the
     holders.

     The  managing  partner of  Metropolitan  was  appointed  as a member of the
     Company's Board of Directors in September 2002.

     Earnings Per share
     ------------------
     The Company  displays  earnings per share in accordance  with SFAS No. 128,
     "Earnings Per Share".  SFAS No. 128 requires dual presentation of basic and
     diluted  earnings per share ("EPS").  Basic EPS includes no dilution and is
     computed by dividing net income (loss) available to common  shareholders by
     the weighted  average number of common shares  outstanding  for the period.
     Diluted EPS includes the potential  dilution that could occur if securities
     or other  contracts to issue common stock were  exercised or converted into
     common stock. Outstanding stock options, warrants and other potential stock
     issuances  have not been  considered  in the  computation  of  diluted  EPS
     amounts since the effect of their inclusion would be anti-dilutive.

     Securities that could potentially dilute basic EPS in the future, that were
     not included in the  computation  of the diluted EPS because to do so would
     have been anti-dilutive for the periods presented, consist of the following
     (in thousands):

<TABLE>
<CAPTION>
<S>                                                                <C>
     Options to purchase common stock                              2,529
     Redeemable convertible preferred stock                        1,168
                                                                   -----
           Total potential common shares as of March 31, 2003      3,697
                                                                   =====
     Issuances after March 31, 2003 through May 15, 2003
        Common stock issued                                            8
        Options to purchase common stock granted                     180
                                                                   -----
                                                                     188
                                                                   =====
</TABLE>

                                       9
<PAGE>

                         DIRECT INSITE AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

               FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002



     Common Stock and Options Issuances
     ----------------------------------
     During the quarter ended March 31, 2003,  the Company  issued 19,693 shares
     of its common  stock and options to purchase  272,500  shares of its common
     stock as detailed below:

     --   Issued  9,693  shares  of its  common  stock  as  payment  of  certain
          consulting expenses, valued at $20,000.

     --   In December 2002, the Company's  Chairman  became the Company's  Chief
          Executive  Officer.  In January  2003,  the  Company  entered  into an
          employment  agreement with its Chief Executive Officer,  which expires
          in January  2005.  As part of the  compensation,  the Chief  Executive
          Officer will receive 60,000 shares of the Company's common stock which
          vest  ratably  over  the  first  twelve   months  of  the   agreement.
          Accordingly,  during the  quarter  ended March 31,  2003,  the Company
          issued   10,000   shares  of  its  common  stock  valued  at  $18,000.
          Additionally,  as  part of his  compensation  he was  granted  240,000
          options to  purchase  common  stock of the Company at $2.02 per share,
          which was above the market price on the date of  issuance.  50% of the
          options vested upon execution of the agreement;  the balance will vest
          ratably during the term of the agreement.

     --   The Company  granted 30,000  options to purchase  shares of its common
          stock to  certain  members  of its  Board of  Directors  for  services
          rendered in their  capacity  as Board  members.  The  options  vest on
          December 31, 2003 and have an exercise price of $2.00 per share.

     --   The Company  granted  2,500  options to purchase  shares of its common
          stock to an employee of the Company.  The options,  having an exercise
          price of $1.85,  vest in  one-third  increments  on February 28, 2003,
          June 30, 2003 and June 30, 2004.

6.   Reclassifications

     Certain  reclassifications  have  been made to the  condensed  consolidated
     financial statements shown for the prior period in order to have it conform
     to the current period's classifications.

7.   Products and Services

     The Company and its subsidiaries  currently operate in one business segment
     and provide  three  separate  products:  ASP services,  custom  engineering
     services and AMS services.

<TABLE>
<CAPTION>
                                        Three Months Ended March 31,
                                           2003            2002
                                        ----------------------------
<S>                                      <C>             <C>
          ASP fees                       $ 1,126         $   822
          Custom engineering fees            810             578
          AMS fees                           263             114
                                         -------         -------
                Total Revenue            $ 2,199         $ 1,514
                                         =======         =======
</TABLE>

     Major customer
     --------------

     For the three  months  ended March 31,  2003 and 2002,  the Company had one
     major  customer that  accounted for 87.1% and 90.9% of the Company's  total
     revenue,  respectively.  Accounts receivable from this customer amounted to
     $1,703,000 at March 31, 2003.

                                       10

<PAGE>

                         DIRECT INSITE AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

               FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002



8.   Management's Liquidity Plans

     The Company's  management has and will continue to take numerous steps that
     it believes will create positive  operating cash flow for the Company.  Key
     measures are as follows:

     --   Continue to expand the Company's products and services;

     --   Materially  improve its sales efforts through  expanding its marketing
          staff;

     --   Continue to expand customer engineering fees. The Company generated in
          excess of $2,500,000 in custom  engineering fees in 2002 and in excess
          of $800,000 for the first three months of 2003, and believes that this
          revenue should continue throughout 2003;

     --   Increase  revenue as a result of the  agreement  entered  into in 2002
          between  the  Company  and  IBM,  which  allows  IBM  the  ability  to
          electronically  attach  supporting   documentation  to  an  electronic
          invoice, all submitted via the Internet to their customers;

     --   Capitalize  on the growing  trend for  outsource  services  within the
          communications  sector.  The  acquisition  of Platinum  broadened  the
          Company's  product  offerings  in  this  market  sector.  The  Company
          believes the  increase in revenue  during 2002 and for the first three
          months of 2003  generated  from Platinum  should  continue  throughout
          2003;

     --   A  reduction  of  the  Company's   overhead  costs,   including  staff
          reductions, as deemed necessary.

     --   In January 2003, the Company raised an additional $500,000 through the
          issuance of long- term debt to Tall Oaks Group, LLC (Note 4e).

     --   We have  obtained a firm  commitment  from  Metropolitan  to  purchase
          $250,000 of our preferred stock,  with terms similar to their previous
          transactions.

     --   Further,  the Company has firm commitments totaling $750,000 ($500,000
          from Tall Oaks and $250,000  from its chairman) to guarantee a line of
          credit  expected to be obtained from a major bank.  Additionally,  the
          senior  executives  have pledged an aggregate of $250,000 in the event
          we require capital in excess of the $1,000,000  described above. These
          commitments and pledges extend through at least March 31, 2004.

     Management  believes  that its plan will  ultimately  enable the Company to
     generate positive cash flows from operations.  Until such time, the Company
     believes that its present cash on hand as well as obtaining additional debt
     and/or equity  financing  should provide  adequate funding through at least
     March 31, 2004.  However,  there can be no assurances that the Company will
     have sufficient  funds to implement its current plan. In such an event, the
     Company  could be forced to  significantly  alter its plan and  reduce  its
     operating  expenses,   which  could  have  an  adverse  effect  on  revenue
     generation and operations in the near term.

9.   Subsequent Event

     On April 16, 2003, the Company  received  notification  from Nasdaq that it
     did not comply with Marketplace Rule 4310(c)(2)(B),  to the extent that the
     Company did not have a minimum of $2,500,000 in  shareholders'  equity.  On
     May 1, 2003 the Company submitted a plan which specifically outlined how it
     believed it would achieve and sustain compliance with this requirement.  In
     the  event  Nasdaq  reviews  the plan  submitted  and  determines  that the
     Company's plan does not adequately  address the issues, the Company will be
     notified that its securities  will be delisted.  Should the Company receive
     an unfavorable decision from Nasdaq, it may elect to appeal the decision to
     a Nasdaq Listing  Qualification Panel (the "Panel").  The Panel's denial of
     the  Company's  request  will result in the  Company's  common  stock being
     delisted from the Nasdaq SmallCap Market.

                                       11
<PAGE>
                         DIRECT INSITE AND SUBSIDIARIES



Item 2 - Managements Discussion and Analysis or Plan of Operations

     Forward looking statements

     All statements  other than  statements of historical  fact included in this
     Form 10-Q including,  without limitation,  statements under,  "Management's
     Discussion  and Analysis of Financial  Condition and Results of Operations"
     regarding the Company's financial position, business strategy and the plans
     and objectives of management  for future  operations,  are  forward-looking
     statements.  When  used in this  Form  10-Q,  words  such as  "anticipate,"
     "believe," "estimate," "expect," "intend" and similar expressions,  as they
     relate  to  the  Company  or  its  management,   identify   forward-looking
     statements.  Such  forward-looking  statements  are based on the beliefs of
     management,  as well as  assumptions  made by,  and  information  currently
     available  to,  the  Company's  management.  Actual  results  could  differ
     materially from those contemplated by the  forward-looking  statements as a
     result of certain  factors  including but not limited to,  fluctuations  in
     future operating results, technological changes or difficulties, management
     of future growth,  the risk of errors or failures in the Company's software
     products, dependence on proprietary technology,  competitive factors, risks
     associated with potential  acquisitions,  the ability to recruit  personnel
     and the dependence on key personnel.  Such  statements  reflect the current
     views of management  with respect to future events and are subject to these
     and other risks,  uncertainties and assumptions relating to the operations,
     results of operations,  growth  strategy and liquidity of the Company.  All
     subsequent written and oral forward- looking statements attributable to the
     Company or persons  acting on its behalf are  expressly  qualified in their
     entirety by this paragraph.

     Overview

     We primarily operate as an application service provider ("ASP") and, market
     an integrated "fee for services"  offering providing high volume processing
     of transactional  data for billing  purposes,  electronic bill presentation
     and payment  ("EBP&P") as well as visual data analysis and reporting  tools
     delivered  via the  Internet  for our  customers.  Our core  technology  is
     d.b.Express(TM),  the proprietary and patented management information tool,
     which  provides  targeted  access  through  the mining of large  volumes of
     transactional  data  via  the  Internet.  In  2001  we  acquired,  Platinum
     Communications,  Inc.  ("Platinum"),  a Dallas, Texas based company,  which
     markets its integrated proprietary back office software solutions,  Account
     Management  Systems  ("AMS" or  sometimes  referred  to as  "TAMS")  to the
     telecommunications  industry either as a license or as an ASP. We completed
     a merger  with  Platinum  under an  Agreement  and Plan of Merger  ("Merger
     Agreement").  Under the Merger  Agreement,  our newly  formed  wholly owned
     subsidiary  acquired  all of the  outstanding  common  stock  of  Platinum.
     Further,  as an added source of revenue, we began in 2001 to provide custom
     engineering  services  for our  customers.  This newly  assembled  suite of
     services enables us to provide a comprehensive  Internet  delivered service
     from  the raw  transaction  record  through  all of the  internal  workflow
     management  processes  including an  electronically  delivered invoice with
     customer  analytics.  This  comprehensive  service  offering  provides back
     office operations, cuts costs and provides for improved customer service by
     providing  the  end  customer  with  easy  access  to all  of the  detailed
     information  about their bill.  We operate  fully  redundant  data  centers
     located at our main office in Bohemia, N.Y. and in Newark, NJ. Our facility
     in  New  Jersey  is  leased  at  an  IBM,e-business  Hosting  Center.  This
     co-location / redundancy  feature  enables us to offer  virtually down time
     free service.

     Results of operations

     For the  three  months  ended  March  31,  2003,  total  revenue  increased
     $685,000, or 45%, from $1,514,000 for the three months ended March 31, 2002
     to $2,199,000  for the three months ended March 31, 2003.  When compared to
     2002, the current year reflected the following  growth in its three product
     offerings:  ASP fees  increased  37% to $1,126,000 in 2003 from $821,000 in
     2002;  engineering  fees increased by 40% to $810,000 in 2003 from $578,000
     in 2002;  and AMS fees  increased 131% to $263,000 in 2003 from $114,000 in
     2002.  Significant  factors  contributing  to the  overall  growth  include
     expansion  of our product  offerings  as well as  increases in our customer
     base.

                                       12
<PAGE>

                         DIRECT INSITE AND SUBSIDIARIES



     IBM  continues  to be our  largest  customer  accounting  for 87% of  total
     revenue for the three-month period ended March 31, 2003, as compared to 91%
     for the three month period ended March 31, 2002. We derive revenue from IBM
     from the sale of  managed  services  (ASP) as well as  custom  engineering.
     During  the second  half of 2001,  we entered  into an  agreement  with IBM
     wherein for a per transaction  fee, we enable IBM to present  invoices to a
     portion of its customers via the Internet. This Electronic Bill Presentment
     & Payment ("EBP&P")  offering has since been expanded to include additional
     functionality.  In March 2002, the parties  signed a new  agreement,  which
     allows IBM to expand  this EBP&P  offering to more of its  customers,  both
     domestic and international.  In addition,  the Company continues to provide
     data   analysis  and  reporting   services  for  IBM's   telecommunications
     customers.  We are  actively  pursuing new sales  opportunities  to further
     reduce sales concentration.

     Custom engineering fees increased by $232,000 or 40% to $810,000 during the
     three month  period  ended March 31, 2003  compared to $578,000  during the
     same  period  in 2002.  We  believe  that  revenue  generated  from  custom
     engineering  services  should  continue into 2003. We further  believe that
     revenue  generated  from  engineering  services is the  precursor  to added
     recurring revenue sources.

     Revenue growth  continued for our AMS offering  during our first quarter of
     2003,  increasing  $149,000  during the three month  period ended March 31,
     2003 to $263,000 from $114,000 reported for the same period last year. This
     increase is due primarily as a result of the addition of a new customer. We
     believe this trend should continue for 2003.

     Operations, research and development expenses consist primarily of salaries
     and related costs (benefits, travel, training) for developers, programmers,
     custom engineers, network services, quality control / quality assurance and
     documentation  personnel,  applicable  overhead  allocations,  as  well  as
     co-location  facilities expenses and all costs directly associated with the
     production and or development of the Company's services. When comparing the
     three  months  ended March 31, 2003 and 2002,  the  Company  increased  its
     operations,  research  and  development  expenses  by  $180,000  or  26% of
     incremental  revenue growth of $685,000  achieved during the same period. A
     primary factor contributing to the overall increase is additional labor and
     other professional  costs associated with our custom  engineering  revenue.
     Further, the Company continues to upgrade,  improve and enhance its current
     products and services.  Additionally,  operations, research and development
     expenses incurred by Platinum increased.  We believe that it is critical to
     maintain a qualified personnel staff and, further to continue to enhance as
     well as develop new and  innovative  services and products.  As such, it is
     likely that costs directly related could increase in future periods.

     Sales  and  marketing   expenses   include   salaries  and  related  costs,
     commissions,  travel,  facilities,  communications  costs  and  promotional
     expenses for the Company's  direct sales  organization and marketing staff.
     Sales and marketing  expenses  increased $296,000 to $831,000 for the three
     months ended March 31, 2003, when compared to $535,000 for the three months
     ended March 31, 2002. Wages and consulting fees increased $51,000. Expenses
     incurred which directly relate to our AMS offering increased $151,000.  All
     other items,  such as travel,  entertainment,  commissions and rent, in the
     aggregate, increased $111,000.

     General and  administrative  expenses include  administrative and executive
     salaries and related  benefits,  legal,  accounting and other  professional
     fees as well as general corporate  overhead.  Expenses decreased $68,000 to
     $877,000 for three months ended March 31, 2003,  when  compared to $945,000
     reported  for  the  three  months  ended  March  31,  2002.  Major  factors
     contributing to this decrease include reductions in expenses related to our
     AMS offering of $36,000 and  reductions  in  professional  fees of $99,000.
     Offsetting these decreases,  among other things, were increases in salaries
     and  employee  benefits  of $75,000.  All other  items,  in the  aggregate,
     decreased $8,000.

     Amortization and depreciation expenses varied slightly, down $5,000.

     Financial Condition and Liquidity

     For the three  months  ended  March 31,  2003,  the  Company  incurred  net
     operating  losses  thereby  requiring  cash from sources  other than normal
     operations to fund its operating activities. In order to fund its operating
     losses,  the Company:

                                       13
<PAGE>

                         DIRECT INSITE AND SUBSIDIARIES

     --   as  described  in Note 4e, in  January  2003,  received  an  unsecured
          $500,000 loan from Tall Oaks.

     --   as described in Note 4, in December  2002,  sold 23,365  shares of its
          Preferred Stock in  consideration  for $500,000 less fees and expenses
          of $61,000,  to Metropolitan.  The proceeds from this transaction were
          received January 3, 2003.

     --   continues to make use of its financing arrangement with an asset based
          lending institution.

     As detailed in the Condensed  Consolidated  Statement of Cash Flows, during
     the  three  month  period  ended  March  31,  2003,  the  Company  utilized
     $1,220,000 in operating  activities,  which includes,  among other items, a
     net loss of  $1,070,000,  increases  in  accounts  receivable  and  prepaid
     expenses and other current assets of $527,000 and $41,000,  respectively, a
     decrease  in  deferred  revenue  of  $3,000,  and  $2,000  paid  toward the
     restructuring, partially offset by non-cash expenses totaling $338,000, and
     increases  in accounts  payable and accrued  expenses of $98,000.  Further,
     during  the  three  months  ended  March 31,  2003,  the  Company  expended
     approximately $112,000 for capital expenditures.

     The Company's management has and will continue to take numerous steps which
     it believes will create positive  operating cash flow for the Company.  Key
     measures are as follows:

     --   Continue to expand the Company's products and services;
     --   Materially  improve its sales efforts through  expanding its marketing
          staff;
     --   Continue to expand customer engineering fees. The Company generated in
          excess of $2,500,000 in custom  engineering fees in 2002 and in excess
          of $800,000 for the first three months of 2003, and believes that this
          revenue  should  continue  throughout  2003;
     --   Increase  revenue as a result of the  agreement  entered  into in 2002
          between  the  Company  and  IBM,  which  allows  IBM  the  ability  to
          electronically  attach  supporting   documentation  to  an  electronic
          invoice, all submitted via the Internet to their customers;
     --   Capitalize  on the growing  trend for  outsource  services  within the
          communications  sector.  The  acquisition  of Platinum  broadened  the
          Company's  product  offerings  in  this  market  sector.  The  Company
          believes the  increase in revenue  during 2002 and for the first three
          months of 2003  generated  from Platinum  should  continue  throughout
          2003;
     --   Reduce the Company's  overhead costs,  including staff reductions,  as
          deemed necessary.
     --   Additionally,  we have obtained a firm commitment from Metropolitan to
          purchase  $250,000 of our preferred stock, with terms similar to their
          previous  transactions.  Further,  we have firm  commitments  totaling
          $750,000  ($500,000  from Tall Oaks and $250,000 from our chairman) to
          guarantee a line of credit  expected to be obtained from a major bank.
          Further,  the senior  executives have pledged an aggregate of $250,000
          in the event we require capital in excess of the $1,000,000  described
          above. These commitments and pledges extend through at least March 31,
          2004.

     Management  believes  that its plan will  ultimately  enable the Company to
     generate positive cash flows from operations.  Until such time, the Company
     believes that its present cash on hand as well as obtaining additional debt
     and/or equity  financing  should provide  adequate funding through at least
     March 31, 2004.  However,  there can be no assurances that the Company will
     have sufficient  funds to implement its current plan. In such an event, the
     Company  could be forced to  significantly  alter its plan and  reduce  its
     operating  expenses,   which  could  have  an  adverse  effect  on  revenue
     generation and operations in the near term.

Item 3- Controls and Procedures

     Our chief executive officer and chief financial officer have supervised and
     participated  in an  evaluation  of the  effectiveness  of  our  disclosure
     controls  and  procedures  as of a date  within 90 days of the date of this
     report,  and, based on their evaluations,  they believe that our disclosure
     controls and  procedures  (as defined in Rule  13a-14(c) of the  Securities
     Exchange Act of 1934,  as amended) are designed to ensure that  information
     required to be  disclosed by us in the reports that we file or submit under
     the Securities Exchange Act of 1934 is recorded, processed,  summarized and
     reported,  within the time periods specified in the Commission's  rules and
     forms. As a result of the evaluation,  there were no significant changes in
     our internal controls or in other factors that could  significantly  affect
     these controls subsequent to the date of their evaluation.


                                       14
<PAGE>

                      DIRECT INSITE CORP. AND SUBSIDIARIES

                          PART II - OTHER INFORMATION




Item 1. Legal Proceedings
        None

Item 2. Changes in Securities
        None

Item 3. Defaults Upon Senior Securities
        None.

Item 4. Submission of Matters to a Vote of Security Holders
        None

Item 5. Other Information
        None.

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

        (a)     Exhibits

                99.1    Certification of Chief Executive Officer
                99.2    Certification of Chief Financial Officer

        (b)     Reports on Form 8-K

                Current Report on Form 8-K dated December 24, 2002

                                       15
<PAGE>


                      DIRECT INSITE CORP. AND SUBSIDIARIES

                                   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.



DIRECT INSITE CORP.

/s/ James Cannavino
________________________________________
James Cannavino, Chief Executive Officer        May 19, 2003


/s/ George Aronson
________________________________________
George Aronson, Chief Financial Officer        May 19, 2003




                                       16
<PAGE>

                      DIRECT INSITE CORP. AND SUBSIDIARIES

                                 CERTIFICATIONS


I, James Cannavino certify that:

1.   I have reviewed this quarterly report on Form 10-QSB of Direct Insite Corp;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

                                      /s/ James Cannavino
May 19, 2003                          _______________________________
                                      James Cannavino
                                      Chief Executive Officer

                                       17
<PAGE>

                      DIRECT INSITE CORP. AND SUBSIDIARIES

                                 CERTIFICATIONS


I, George Aronson, certify that:

1.   I have reviewed this quarterly report on Form 10-QSB of Direct Insite Corp;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

                                 /s/ George Aronson
May 19, 2003                     _______________________________________
                                 George Aronson
                                 Secretary and Chief Financial Officer

                                       19