SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                 --------------

                                    FORM 10-K

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

  For the fiscal year ended: December 31, 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)
                                 (703) 259-3000
              (Registrant's telephone number, including area code)

            Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class                   Name of Each Exchange on Which Registered
-------------------                   -----------------------------------------
    None                                                    None

           Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock par value $0.001 per share

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 if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [ X ].

The  aggregate  market value of the Common Stock held by  non-affiliates  of the
registrant on June 30, 2003, was  approximately  $136,936,000  based on the last
sales price reported that date on the Nasdaq Stock Market of $3.02 per share. In
determining  this figure,  the  Registrant has assumed that all of its directors
and  executive  officers and each person who owns 5% or more of the  outstanding
common  stock  are  affiliates.  Such  assumptions  should  not be  deemed to be
conclusive for any other purpose.

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

The number of shares of the  registrant's  Common Stock  outstanding on March 9,
2004 was 51,291,734.


                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of InteliData  Technologies  Corporation's Proxy Statement for its 2004
Annual  Stockholder  Meeting are incorporated by reference into Part III of this
Report.

<PAGE>


                       INTELIDATA TECHNOLOGIES CORPORATION

                         2003 ANNUAL REPORT ON FORM 10-K

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----
PART I
------

Item 1.  Business..............................................................3

Item 2.  Properties............................................................8

Item 3.  Legal Proceedings.....................................................9

Item 4.  Submission of Matters to a Vote of Security Holders...................9


PART II
-------

Item 5.  Market for Registrant's Common Stock and Related Stockholder
         Matters..............................................................10

Item 6.  Selected Financial Data..............................................11

Item 7.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations................................................12

Item 7a. Quantitative and Qualitative Disclosures about Market Risk...........31

Item 8.  Financial Statements and Supplementary Data..........................32

Item 9.  Changes in and Disagreements with Accountants on Accounting
         and Financial Disclosure.............................................52

Item 9A. Controls and Procedures..............................................52

PART III
--------

Item 10. Directors and Executive Officers of the Registrant...................52

Item 11. Executive Compensation...............................................52

Item 12. Security Ownership of Certain Beneficial Owners and Management.......52

Item 13. Certain Relationships and Related Transactions.......................53

Item 14. Principal Accounting Fees and Services ..............................53

Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.....53

SIGNATURES ...................................................................56

<PAGE>


PART I
======

ITEM 1.  BUSINESS
-----------------

COMPANY OVERVIEW

     InteliData Technologies  Corporation and subsidiaries  ("InteliData" or the
"Company") provides electronic bill payment and presentment  ("EBPP") and online
banking solutions to the financial  services  industry.  The Company's  products
provide financial  institutions ("FI's") with the real-time financial processing
infrastructure  needed to provide their  customers with payment and  presentment
services and online banking via the Internet and other online delivery channels.
The Company markets its products and services to banks, credit unions, brokerage
firms, financial institution processors and credit card issuers.

     InteliData's   product  suite  consists  of  three  complementary   product
offerings:

     Payment and Presentment
     -----------------------

     o    Payment Solutions - providing payment  warehousing,  payment matching,
          biller directory management,  and least cost routing functionality for
          EBPP transactions;

     o    Card  Services - providing  Internet-based  account  activation,  bill
          presentment, balance consolidation, and e-Statement capabilities; and

     Online Banking
     --------------

     o    Online Banking - providing  Internet-based access to real-time account
          information,  as well as interfaces to personal  financial  management
          software such as Intuit's Quicken(R) and Microsoft Money(R).

     These product offerings are described in more detail below.

     The Company has invested in developing  products and capabilities  designed
to  establish  a  leadership  position in the online bill  payment  market.  The
Company believes this market opportunity is significant based on the billions of
recurring bills that consumers and businesses pay each year, primarily via paper
check. FI's should be able to realize  significant cost and efficiency  benefits
from  initiating  these  payments  online and  processing  them  electronically.
Migrating to online electronic payments will require  significant  investment in
online bill payment  infrastructure,  which is where the Company's  products are
focused.

     In January 2001,  InteliData  acquired Home Account Holdings,  Inc. and its
operating subsidiary,  Home Account Network, Inc., by means of the merger of one
of the Company's wholly owned  subsidiaries with and into Home Account Holdings,
with Home Account  Holdings  surviving  the merger.  Home Account  Holdings is a
wholly owned  subsidiary of InteliData.  This acquisition was accounted for as a
purchase.  Through  this  transaction,  InteliData  acquired  the  products  and
customer  base of Home Account  Holdings,  Inc.,  including i) the Card Services
sector,  ii) the Online Banking  platform,  Canopy(TM)  Banking,  for commercial
banks, and iii) an OFX solution that provides Payment Solutions capabilities.

     The  Company's  principal  executive  offices are located at 11600  Sunrise
Valley Drive,  Suite 100,  Reston,  Virginia 20191,  and its telephone number is
(703) 259-3000.

INDUSTRY BACKGROUND

     The market for online  banking and bill  payment  infrastructure  has grown
considerably  over the last two to three years,  and the Company  believes  that
significant  growth  opportunities  remain. As Internet  financial services have
become  more  mainstream,  FI's  have  focused  less on  innovation  and more on
broadening  existing  operations  - adding  functionality,  improving  operating
efficiencies,  and migrating  significant  portions of their online  banking and
bill payment operations in-house.  The Company's product suite consists of three
complementary  product offerings serving the core infrastructure  needs of three
distinct,  but related markets:  Payment  Solutions,  Card Services,  and Online
Banking.

     The market for Payment Solutions has been the primary focus of InteliData's
development and marketing efforts during the past three years. The Company views
this as the  market  sector  with  the  greatest  growth  potential.

<page>

While the  Company's  revenue  from this sector has not achieved the growth rate
that the Company anticipated during the past year, industry reports from sources
such as The Tower Group confirm that the market has grown and is still emerging.
The Company believes that future growth opportunities in this market segment are
significant based on FI's increasing  recognition of financial  benefits related
to the bill payment customer base,  increasing  consumer adoption rates, and the
increasing  competitive  pressure to provide "free bill payment" services to all
consumers.  The  resulting  growth,  both in  number  of  users  and  number  of
transactions,  has caused larger FI's to rethink their  approach to bill payment
processing.  Until  recently,  most large FI's elected to  outsource  their bill
payment  processing to a third-party  processor  such as CheckFree or Metavante.
Increasingly however, FI's are migrating "front end" bill payment processing and
data  warehousing to an in-house  platform,  offering the FI's greater  control,
while also developing "least cost routing"  strategies aimed at reducing overall
processing costs.

     The market for Card Services has matured considerably in recent years. Most
of the Company's  current and potential  card issuer  customers have deployed an
online  solution  and  are  now  seeking  to  add  subscribers  and  incremental
functionality.  Consequently,  InteliData  expects limited growth  opportunities
across this market sector,  primarily driven by anticipated subscriber increases
from within the Company's current outsourced services customer base.

     The market for Online  Banking is the most mature of the markets  served by
the  Company.  Most  larger  FI's are  deploying  second  and  third  generation
solutions.   The  goal  of  these  initiatives   typically  includes  increasing
processing  capacity and  performance,  adding  incremental  new user  features,
improving overall user experience,  improving  back-office  processes,  reducing
processing   costs,  and  migrating  certain  core  components  from  outsourced
solutions to in-house solutions.  While InteliData has developed and maintains a
customer base within this market sector that is significant  to our  operations,
the  opportunity  for  significant  new business in this market has  diminished.
Therefore,  the  Company  expects to limit its future  activities  in the Online
Banking sector to providing certain  enhancements and upgrades for the Company's
established customer base.

PRODUCTS AND SERVICES

     InteliData's  suite  of  software  products  and  services  provide  our FI
customers  with the  infrastructure  to implement and support online banking and
bill  payment.  The  Company's  products  and  services  are  designed to enable
consumers  to  transact  with their FI's  electronically  and to assist  FI's in
connecting  to  third-party  processors  to  complete  these  transactions.  The
Company's  product  suite  consists  of three  complementary  product  offerings
serving the core  infrastructure  needs of three distinct,  but related markets:
Payment Solutions, Card Services, and Online Banking.

     Each  product  offering  is  available  on a  stand-alone  basis  or may be
integrated with other InteliData  offerings.  InteliData's products are designed
to  be  highly  modular,   customizable,   reliable,  and  scalable  transaction
processing  applications,  making them well suited to the large bank market. The
Company's  products may also be integrated with other  technology that a  FI may
be using or will add.

     The Company offers its solutions  through several business models. A FI can
i)  directly  license the  software  and  operate it  in-house,  ii) license the
software but have the software  hosted in an  outsourced  environment  (with the
opportunity  to bring the  software  in-house  in the  future),  or iii) use the
software in an outsourced  environment  through an application  service provider
("ASP")  arrangement.  Each of these models gives the customer an opportunity to
make  decisions  based on the  customer's  individual  economics  and  marketing
strategy.  The Company also offers its customers software  upgrades,  consulting
expertise  to  assist  with  implementation,  training  and  customization,  and
maintenance  and support  services  pursuant to contractual  agreements that are
typically renewable on an annual basis.

Payment Solutions
-----------------

     InteliData's  Payment  Solutions have been designed to meet the current and
emerging online bill payment market  opportunities.  These  solutions  include a
broad set of capabilities to support  "pay-anyone"  online bill payment, as well
as an expanding range of online transfers and internal payments.  In contrast to
current third-party  outsourced solutions,  the Company's bill payment solutions
are designed to give the FI more control over the bill payment  warehousing  and
routing  functions,  making  bill  payment  processing  more like other forms of
electronic payment processing (such as ACH and ATM transactions), while reducing
the overall expense of offering bill payment.

     The Payment  Solutions  consist of several  key  components  to  facilitate
deployment in a variety of environments and to allow the incremental  deployment
of a subset of the overall capabilities. These components include the following:
<page>

     o    Payment Warehouse
     o    Transfer Warehouse
     o    Payment Matching and Routing
     o    Merchant Directory Management
     o    Web Billpay Interface
     o    OFX Interface

     Each component of the overall solution can be delivered independently or as
part of a larger integration that may include a FI's existing technology.

     Payment  Warehouse - The central feature of the Company's Payment Solutions
is the Payment  Warehouse.  The Payment  Warehouse is designed to provide  banks
with increased  control over valuable customer payment  information,  as well as
the ability to reduce bill payment processing costs.

     Using the Payment  Warehouse,  FI's can capture and  warehouse all customer
payment  and payee  information  prior to  processing,  giving  them  control of
customer  payment data and transaction  routing to various  payment  processors.
This provides the FI greater  control over service  quality of the  increasingly
important bill payment service. It also provides FI's greater control of payment
processing costs,  which is becoming critical as FI's have recognized that "free
billpay" promotions drive customer and transaction  volumes.  The warehouse also
allows FI's to capture  "on-us"  transactions,  which are payments within an FI,
and  route  these  internally  rather  than  through a more  costly  third-party
service.

     Transfer  Warehouse  - The  Transfer  Warehouse  is  designed to extend the
payment  capabilities of the InteliData  Payment  Solution  offering to meet the
growing  need for a broader  range of  online  payment  capabilities.  Expanding
online  payments  beyond basic  electronic  bill payment allows FI's to become a
central "payment hub" for their consumers, with a resulting increase in customer
retention, cross-selling, and fees for the FI's.

     By using  the  Transfer  Warehouse,  the FI's  can add  additional  payment
capabilities:

     o    Allow loan, credit card, and mortgage customers to make a payment from
          another FI's checking account.
     o    Transfer  funds on a scheduled  and recurring  basis between  multiple
          accounts inside the FI.
     o    Pay internal bills from multiple internal accounts.
     o    Transfer  funds  into  the FI  from  another  deposit  account  (e.g.,
          brokerage account, credit union, and bank).
     o    Transfer funds to another FI into an account held by the customer.

     Payment  Matching and Routing -  InteliData's  Payment  Decisioning  Engine
permits  FI's to manage and control  "Least Cost  Routing"  of  electronic  bill
payments  to  multiple  remittance   processors,   including   MasterCard  RPPS,
CheckFree, Metavante, Princeton eCom, Online Resources Corporation, and numerous
in-house systems.  While the solution has been tailored for InteliData's Payment
Warehouse,  the  technology  is designed to work with other  payment  warehouses
currently on the market.

     Merchant  Directory  Management  - The  central  feature of the  InteliData
Payment  Decisioning  Engine is the Merchant  Directory.  The Merchant Directory
manages detailed information about merchants from multiple processors, including
information  needed for electronic payment routing.  Directory  Management Tools
automate and support the management of the Merchant Directory and the management
of payee matching and payment routing.

     Web Billpay Interface - InteliData's Web Billpay Interface is a turnkey Web
front-end,  designed to let  consumers  and small  business  users manage online
transactions quickly and easily. This solution includes:

     o    Screens to support payment, funds transfer, and bill presentment.
     o    Flexible payment scheduling,  including single, recurring, and express
          transactions.
     o    Transaction  search  capability,  allowing  searches by date,  status,
          account, merchant, and other options.
     o    A set of branding and  configuration  options for controlling the look
          and feel of the screens.
<page>
     OFX Interface - The OFX Interface provides direct connectivity  between the
FI and users of Intuit Quicken(R) and Microsoft Money(R) client software through
the industry standard Open Financial Exchange ("OFX") protocol. It also provides
synchronization with Quicken(R) or Money(R).

Card Services
-------------

     InteliData's  Card Services  provide credit card issuers with an end-to-end
solution for serving customers via the Internet. The solution provides consumers
with  online  account  access,  customer  self-service,   and  bill  presentment
capabilities.  By  providing  these  online  services,  the credit  card  issuer
benefits through reduced customer service expenditures and lower billing costs.

     The Card  Services  offering  provides  cardholders  a wide range of online
features,  including the ability to view credit card account information,  apply
for credit increases,  change mailing addresses,  and perform a variety of other
account management activities.  Additionally,  consumers are able to apply for a
card, view and pay their bill, consolidate their balances and receive electronic
statements.  InteliData  offers a  modular  approach  for Card  Services,  which
enables an issuer to deploy a total  solution or to augment an  existing  online
offering  by  deploying  individual  components  of the overall  solution.  Card
Services offer several modular components:

     Account Management Module is the base module for Card Services. This module
provides  cardholders the ability to view their credit card account information,
such as  balance,  payment  status,  next  payment due date,  and  cycle-to-date
transactions.  Additional  functions allow  cardholders to view previous months'
statement  activity and download the data to a Personal  Finance  Manager (PFM),
pay their credit card bills,  utilize a secure messaging  process for submitting
customer service inquiries,  request a credit line increase,  and update address
and other account information online.

     Acquisition  Module lets card  issuers  enroll and  authorize  new accounts
online. The Acquisition Module supports a wide range of deployment  options.  It
can  perform  fraud  screening,  provide  application  decisioning,  provide  an
applicable response, and book approved applicants.

     Activation Module lets consumers  activate new accounts online.  This helps
issuers reduce costs and provides an opportunity to promote  additional  revenue
generating products and services such as balance transfers.

     Balance Transfer Module gives consumers the ability to transfer credit card
balances  from other credit cards  online.  This module  provides  online credit
approval,  available balance decisioning, and movement of funds. When integrated
with a credit  decision  engine,  this module enables  issuers to utilize a lead
generation  tool that can determine  appropriate  credit  limits and  percentage
rates, and effect balance transfers for new and existing customers.

     e-Statement  Module enables card issuers to realize  savings by suppressing
the printing  and mailing of paper credit card  statements  to  customers.  This
module allows either the cardholder or a customer service representative ("CSR")
to initiate e-Statement  delivery,  and allows the card issuers to eliminate the
paper statement.  A number of Web-based CSR management tools are provided to the
card issuers to help manage the  e-Statement  process,  including the ability to
manage  disclosures  and  statement  backer  documentation,  display  and manage
statement  messages for both printed and online only messages,  manage "bounced"
email  notifications,  and provide  reporting  tools to ensure  that  registered
e-Statement cardholders are receiving a compliant e-Statement.

Online Banking
---------------

     InteliData's  Online  Banking  solution  provides  FI's a highly  scalable,
end-to-end  solution  for  providing  their  consumers  with  real-time  account
information  online via the Web, Intuit Quicken(R) and Microsoft  Money(R).  The
software allows consumers access to account  information  online,  including the
ability to review  transaction  history,  initiate funds transfers,  and perform
various account management functions in real-time.

     InteliData's  Online  Banking  solution  consists  of  three  complementary
components:  i) Interpose(R)  Transaction  Engine ("ITE"),  ii) Interpose(R) Web
Banking  ("IWB")  front-end  interface,   and  iii)  Interpose(R)  OFX  Gateway.
Together,  these  products  provide a solution that supports  real-time  account
access to user-accessible  accounts from multiple online delivery channels.  The
solution also provides synchronized access from the Internet, Intuit Quicken(R),
and  Microsoft  Money(R) and offers an optional  turnkey Web  interface for both
consumers  and CSR's.  Each  component of the overall  solution can be delivered
independently or may be combined as part of a larger implementation.

<page>

     Interpose(R)  Transaction  Engine  - The  Interpose(R)  Transaction  Engine
("ITE")  is the core  processing  component  of the  InteliData  Online  Banking
solution.  It provides  transaction  processing,  logging,  and  warehousing for
online  banking  transactions.  ITE  includes i) a Profile  System for  managing
online  account  permissions  and  profiles,   ii)  an  Account  Repository  for
warehousing  extended  account  history as well as transaction  data from remote
systems,  and  iii) a CSR  system  to  allow  CSR's to  manage  consumer  online
profiles.  ITE provides  real-time  connectivity to the FI's legacy data, and is
designed to allow capacity to be added without increased complexity.

     Interpose(R) Web Banking - The  Interpose(R) Web Banking ("IWB")  interface
provides a Web user interface for the InteliData  Online Banking  solution.  IWB
provides a range of Internet-accessible banking capabilities,  including account
access, transfers, payments, and account management. IWB features a turnkey user
interface, but may also be customized to meet an FI's requirements.

     Interpose(R)  OFX Gateway - The  Interpose(R)  OFX Gateway  provides direct
connectivity  between  the FI and  users  of  Intuit  Quicken(R)  and  Microsoft
Money(R) client software through the industry  standard Open Financial  Exchange
("OFX")  protocol.  The OFX Gateway provides  consumers with access to real-time
account information  directly from the FI, as well as access to information that
is synchronized between the Web and Quicken(R) or Money(R).

     Additionally,  the Company acquired an Online Banking platform,  Canopy(TM)
Banking,  as  part of the  Home  Account  acquisition.  The  Canopy(TM)  Banking
solution  serves the community  banking and brokerage  markets to provide online
banking and bill  payment  services.  This  solution was a  significant  revenue
contributor  in 2002,  but less so in 2003.  Because the  Company's  focus going
forward is expected to be on the large FI's, the Company  expects the Canopy(TM)
Banking's revenue contribution to be even less significant in the future.

MARKETING AND DISTRIBUTION

     The Company concentrates its marketing efforts through a direct sales model
targeting FI's in the United States,  including banks, credit unions,  brokerage
firms,  financial  institution  processors and credit card issuers.  The Company
markets its solutions  primarily to large FI's,  generally  those with assets in
excess of $3 billion.  In addition,  the Company  markets its Card  Solutions to
credit card issuers through a processing  arrangement with First Data Resources,
a  subsidiary  of  First  Data  Corp.  In  2003,  three  customers   represented
appoximately 13.7%, 11.4%, and 10.9% of our revenue, respectively.

     The Company maintains  alliance  relationships  with a number of processing
partners,  including  First  Data  and  Fidelity  National  Information  Systems
("Fidelity") for data center  operations,  and MasterCard RPPS,  Princeton eCom,
and  Online  Resources   Corporation  for  payment  processing.   The  Company's
relationship with Fidelity also includes a joint-marketing  agreement;  however,
to date,  this joint  marketing  agreement  has not resulted in any  significant
revenue contributions from sales made by Fidelity.

COMPETITION

     The Company competes with several different types of competitors. Some FI's
have  elected  to  develop  internally  their own  online  banking  and  payment
solutions, instead of purchasing products and services from the Company or other
vendors,  making internal development a competitor to the Company. FI's may also
obtain similar technology products from other software  providers,  including S1
Corporation,  Corillian Corporation,  and Financial Fusion, Inc. FI's may obtain
similar  services on an  outsourced  basis from  CheckFree  Corporation,  Online
Resources Corporation,  Princeton eCom Corporation, Digital Insight Corporation,
and  Metavante   Corporation.   For  Card  Services,   the  Company's  principal
competitors  are  Incurrent  Solutions,  Inc.,  First  Data  Resources,  and our
customers' own in-house solutions.

     The  Company  expects  that  competition  in these  areas will  continue to
increase.  Most of our competitors have substantially greater resources than us,
which could impact our ability to compete. Competition will be based upon price,
performance,  product  functionality,  customer service and the effectiveness of
marketing  and sales  efforts.  The Company  competes  in its target  markets by
leveraging its market experience and current customer base to develop innovative
technology solutions and market them effectively.

<PAGE>
PRODUCT DEVELOPMENT

     The Company  operates in industries that are evolving and  characterized by
technology  innovation.  In an effort to improve  the  Company's  position  with
respect  to  its  competition,   the  Company  has  continued  its  new  product
development and focused its efforts in the area of product development primarily
for the  Payment  Solutions  market.  In 2003,  2002,  and 2001,  the  Company's
research  and  development   expenditures  were  $5,020,000,   $8,807,000,   and
$15,729,000,  respectively.  At December 31, 2003 and 2002, approximately 27 and
26 employees were engaged in product  development,  respectively.  The Company's
ability to attract and retain highly skilled research and development  personnel
is important to the Company's continued success.

GOVERNMENT REGULATION

     The Company  markets its products and  services to the  financial  services
market,  which  is  highly  regulated  at both the  federal  and  state  levels.
Interpretation, implementation or revision of banking regulations can accelerate
or hinder the ultimate success of the Company and its products.

PATENTS, PROPRIETARY RIGHTS AND LICENSES

     The Company  holds limited  registered  intellectual  property  rights with
respect to its products.  The Company  relies on trade secret laws and licensing
agreements  to establish  and maintain its  proprietary  rights to its products.
Although  the  Company  has  obtained  confidentiality  agreements  from its key
executives  and  engineers  in its product  development  group,  there can be no
assurance that third parties will not independently  develop the same or similar
alternative technology,  obtain unauthorized access to the Company's proprietary
technology or misuse the technology to which the Company has granted access.

     The Company does not believe that its products and services infringe on the
rights  of third  parties.  It is  possible  that  third  parties  could  assert
infringement claims against the Company. There can be no assurance that any such
assertion  will not result in costly  litigation or require the Company to cease
using, or obtain a license to use, intellectual property of such parties.

EMPLOYEES

     At December  31, 2003 and 2002,  the  Company had  approximately  83 and 89
employees,  respectively.  The Company has no collective  bargaining  agreements
with its employees.

AVAILABLE INFORMATION

     The Company files annual, quarterly, and current reports, proxy statements,
and other  documents  with the Securities  and Exchange  Commission  (the "SEC")
under the  Securities  Exchange  Act. The public may read and copy any materials
that the Company  files with the SEC at the SEC's Public  Reference  Room at 450
Fifth Street, NW, Washington, DC 20549. The public may obtain information on the
operation  of the Public  Reference  Room by calling the SEC at (800)  SEC-0330.
Also,  the SEC maintains an Internet  website that contains  reports,  proxy and
information statements,  and other information regarding issuers,  including the
Company,  that file  electronically  with the SEC.  The  public  can  obtain any
documents that the Company files with the SEC at http://www.sec.gov.
                                                 ------------------

     The Company also makes  available free of charge on or through our Internet
website  (http://www.intelidata.com)  our Annual Report on Form 10-K,  Quarterly
          -------------------------
Reports  on  Form  10-Q,  Current  Reports  on Form  8-K,  and,  if  applicable,
amendments to those reports filed or furnished  pursuant to Section 13(a) of the
Securities  Exchange  Act as well as  Section  16 reports on Forms 3, 4 and 5 as
soon as  reasonably  practicable  after the  Company  electronically  files such
material with, or furnishes it to, the SEC.

ITEM 2.  PROPERTIES
-------------------

     The Company's headquarters are located in Reston, Virginia, where it leases
25,200 square feet of office space;  this lease expires in December 2006. During
2003, the Company ceased using 8,200 square feet of the Reston,  Virginia leased
space and subleased  the office space to a third party.  The Company also leases
8,800 square feet of office  space for its product  development  and  operations
facilities in Toledo, Ohio; this lease expires in April 2006.

<page>

     In January 2001, the Company  acquired Home Account  Holdings,  Inc., which
had  leased  facilities  in  Emeryville,   California,   Omaha,   Nebraska,  and
Charleston,  South Carolina. In February 2001, the facility in California, which
served as the  headquarters for the pre-merger Home Account  Holdings,  was shut
down.  In August 2002 the Company  subleased  the 7,200 square feet of space for
the remainder of the lease term, ending in February 2005. The Nebraska lease for
9,200 square feet of office  space,  used for product  development  and customer
service,  expires in March 2006.  The South Carolina lease for 5,300 square feet
of office  space,  used for  product  development  and  customer  service,  will
terminate in April 2006.

     All of the  lease and  sublease  arrangements  were made with  unaffiliated
parties.  The Company believes that its leased properties are sufficient for its
current operations and for the foreseeable future.

ITEM 3.  LEGAL PROCEEDINGS
--------------------------

     The Company is not currently a party to any material litigation.  From time
to  time,  the  Company  is a party  to  routine  litigation  incidental  to its
business.  Management  does not believe that the  resolution  of any or all such
routine  litigation  will be likely  to have a  material  adverse  effect on the
Company's financial condition, cash flows, or results of operations.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
------------------------------------------------------------

     None.

EXECUTIVE OFFICERS OF THE REGISTRANT

     The following table sets forth the names and ages of all executive officers
of the Company and all positions and offices  within the Company  presently held
by such executive officers:

  Name                    Age  Position Held
  ----                    ---  -------------
  Alfred S. Dominick, Jr. 58   Chairman and Chief Executive Officer
  Michael E. Jennings     58   President and Chief Operating Officer
  John R. Polchin         40   Vice President, Chief Financial Officer
                                and Treasurer
  Albert N. Wergley       56   Vice President, General Counsel and Secretary

     Alfred S. Dominick,  Jr. has served as the Chief  Executive  Officer of the
Company  since August 1998 and  Chairman of the Board of Directors  since August
2002. Mr. Dominick was also the President of the Company from August 1998 to May
2003.  Prior to joining  InteliData,  Mr.  Dominick  served as  President of the
Retail Products  Delivery Group at M&I Data Services.  Prior to joining M&I Data
Services in July 1995, he was Executive  Vice  President of Retail Banking and a
member of the Executive Committee for Boatmen's Bancshares Corporation for three
years.  Prior to that Mr. Dominick was an Executive Vice President with Bank One
Texas, since 1989. Prior to his employment with Bank One Texas, Mr. Dominick was
a Senior Vice President with Fleet National Bank.

     Michael E. Jennings was promoted to President and Chief  Operating  Officer
in May 2003. Mr. Jennings  oversees product  development  efforts,  engineering,
operations,  ASP  initiatives  and  customer  care  for all  InteliData  product
offerings.  Prior to this, he served as the Executive  Vice President of Product
Management and Payment  Solutions since joining  InteliData in June 2000. He was
in charge of overall business planning and business  development  activities for
electronic bill presentment and payment, Internet banking, and operations. Prior
to joining  InteliData,  Mr. Jennings served at Bank of America as a Senior Vice
President  of Self  Service  Delivery.  During the eight  years prior to joining
InteliData,  he worked on alternative  delivery  strategies and managing several
different areas of electronic  banking  including:  Debit Cards,  ATMs,  ATM/POS
Operations,  PC and Internet Banking, and EFT switches. Mr. Jennings is a former
director  of CIRRUS,  Money  Transfer  Systems,  Credit  Systems  Inc.,  and was
chairman of the American Banking Association's Retail Payment Systems Committee.

     John R. Polchin has served as Vice President,  Chief Financial  Officer and
Treasurer since April 2002. Prior to joining  InteliData,  Mr. Polchin served as
Vice President and Chief Financial  Officer of Orblynx,  Incorporated,  a global
Internet  infrastructure  firm. Prior to that, Mr. Polchin held the positions of
Vice President and Treasurer and Senior Vice President,  Chief Financial Officer
for  e.Spire  Communications,  a  publicly  traded  Competitive  Local  Exchange
Carrier. Additionally, he has served as Vice President of Finance and Controller
for Appworx Corporation,  an enterprise software concern.  From 1987 to 1994, he
held various financial positions within UNC Incorporated

<PAGE>
(subsequently  acquired by General  Electric).  Mr.  Polchin began his career at
NCNB Corporation, now Bank of America.

     Albert N.  Wergley  has  served as Vice  President,  General  Counsel,  and
Secretary of the Company since 1996,  and of its  predecessor,  US Order,  since
1995.  From 1986 to 1994, Mr. Wergley was Vice President and General  Counsel of
Verdix  Corporation  (subsequently  Rational  Software  Corporation,  which  was
acquired by IBM), a  manufacturer  of software  development  tools.  Previous to
that, he was associated with the McLean, Virginia office of the law firm of Reed
Smith Shaw & McClay and with the law firm of Howrey & Simon in Washington, D.C.


PART II
=======

ITEM 5.        MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED
---------------------------------------------------------------
               STOCKHOLDER MATTERS
               -------------------

     The Company's  common stock is traded on the Nasdaq  National  Market under
the symbol  INTD.  The table below sets forth the high and low  quarterly  sales
prices for the common  stock of the Company as reported in  published  financial
sources for each quarter during the last two years:

                                                High                 Low
                                           --------------       --------------
2003     Fourth Quarter                      $  2.62              $  1.40
         Third Quarter                          3.60                 2.15
         Second Quarter                         3.24                 1.19
         First Quarter                          1.84                 0.84

2002     Fourth Quarter                      $  1.03              $  0.57
         Third Quarter                          1.50                 0.66
         Second Quarter                         2.74                 1.13
         First Quarter                          3.00                 1.50

     On March 9, 2004,  the last reported  sales price for the Company's  common
stock was $1.27.  The number of  stockholders of record at March 9, 2004 was 671
and does not include those stockholders who hold shares in street name accounts.

     The Company has never  declared  or paid any cash  dividends  on its common
stock. The Company currently  intends to retain its future earnings,  if any, to
fund the  development  and  growth  of its  business  and,  therefore,  does not
anticipate  paying any cash  dividends  in the  foreseeable  future.  Any future
decision  concerning the payment of dividends on the Company's common stock will
depend  upon  the  results  of  operations,   financial  condition  and  capital
expenditure plans of the Company,  as well as such other factors as the Board of
Directors, in its sole discretion, may consider relevant.

     Information   regarding  securities   authorized  for  issuance  under  the
Company's equity compensation plans as of December 31, 2003 is set forth in Item
12 "Security Ownership of Certain Beneficial Owners and Management."

<PAGE>


ITEM 6.   SELECTED FINANCIAL DATA (in thousands, except per share data)
-----------------------------------------------------------------------
<TABLE>

                                                                  Years Ended December 31,
                                             --------------------------------------------------------------------
RESULTS OF OPERATIONS:                           2003          2002           2001           2000          1999
----------------------                       -----------   -----------   ------------   -----------    ----------
<S>                                          <C>           <C>           <C>            <C>            <C>


Revenues                                     $    20,630    $    21,495    $   18,296    $    5,101     $    6,493
Cost of revenues                                   7,549          8,474         9,010         2,720          1,743
Operating expenses                                15,146         21,103        39,624        27,699         12,800
                                             -----------    -----------    ----------    ----------     ----------

Operating loss                                    (2,065)        (8,082)      (30,338)      (25,318)       (8,050)
Other income, net                                    179           (649)          137        49,726            350
Provision (benefit) for income taxes                (288)          (137)         (160)          488            --
                                             -----------    -----------    ----------    ----------     ----------


Income (loss) from continuing operations          (1,598)        (8,594)      (30,041)       23,920         (7,700)
Income (loss) from discontinued operations           --             --            --           (262)(1)      5,805
                                             -----------    -----------    ----------    ----------     ----------

Net income (loss)                                 (1,598)        (8,594)      (30,041)       23,658         (1,895)
Preferred stock dividend requirement                 --             --            --            --          (1,936)(2)
                                             -----------    -----------    ----------    ----------     ----------

Net income (loss) attributable to
  common stockholders                        $    (1,598)   $    (8,594)   $  (30,041)   $   23,658     $   (3,831)
                                             ===========    ===========    ==========    ==========     ==========

Basic earnings per common share
  Income (loss) from continuing operations   $     (0.03)   $    (0.18)    $    (0.65)   $     0.63     $    (0.29)
  Income (loss) from discontinued operations        0.00          0.00           0.00         (0.01)          0.18
                                             -----------    ----------     ----------    ----------     ----------

  Net income (loss)                          $     (0.03)   $    (0.18)    $    (0.65)   $     0.62     $    (0.11)
                                             ===========    ==========     ==========    ==========     ==========

Diluted earnings per common share
  Income (loss) from continuing operations   $     (0.03)   $    (0.18)    $    (0.65)   $     0.59     $    (0.29)
  Income (loss) from discontinued operations        0.00          0.00           0.00         (0.01)          0.18
                                             -----------    ----------     ----------    ----------     ----------

  Net income (loss)                          $     (0.03)   $    (0.18)    $    (0.65)   $     0.58     $    (0.11)
                                             ===========    ==========     ==========    ==========     ==========

Weighted-average common shares outstanding
  Basic                                           50,028         48,869        45,897        38,237         33,367
                                             ===========    ===========    ==========    ==========     ==========
  Diluted                                         50,028         48,869        45,897        40,843         33,367
                                             ===========    ===========    ==========    ==========     ==========


                                                                        December 31,
                                             --------------------------------------------------------------------
FINANCIAL POSITION:                              2003          2002           2001           2000          1999
-------------------                          -----------   -----------   ------------   -----------    ----------

Cash and cash equivalents                    $     7,603    $     5,674    $   12,026    $   27,255    $    8,496
Total assets                                      44,336         44,506        57,710        43,278        11,212
Long-term debt                                        --             --            --            --            --
Stockholders' equity                              38,991         36,454        44,475        33,570         7,087
</TABLE>


(1)  During the fiscal  year ended  December  31,  2000,  the  leasing  business
     segment  was   discontinued,   and   accordingly,   has  been  reported  as
     discontinued operations.

(2)  Preferred  stock  dividends  for 1999  include the effects of  accretion of
     discounts  arising  from  the  allocation  of  proceeds  from  issuance  of
     preferred  stock to warrants  and a  beneficial  conversion  feature.  Such
     preferred stock was converted to common stock in late 1999.

<PAGE>

ITEM 7.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------       -------------------------------------------------
              CONDITION AND RESULTS OF OPERATIONS
              -----------------------------------

Overview

     InteliData Technologies  Corporation and subsidiaries  ("InteliData" or the
"Company") provides electronic bill payment and presentment  ("EBPP") and online
banking solutions to the financial  services  industry.  The Company's  products
provide financial  institutions ("FI's") with the real-time financial processing
infrastructure  needed to provide their  customers with payment and  presentment
services and online banking via the Internet and other online delivery channels.
The Company markets its products and services to banks, credit unions, brokerage
firms, financial institution processors and credit card issuers.

     Products -  InteliData's  product  suite  consists  of three  complementary
product offerings:

     Payment and Presentment
     -----------------------
     o    Payment Solutions - providing payment  warehousing,  payment matching,
          biller directory management,  and least cost routing functionality for
          EBPP transactions;

     o    Card  Services - providing  Internet-based  account  activation,  bill
          presentment, balance consolidation, and e-Statement capabilities; and

     Online Banking
     --------------
     o    Online Banking - providing  Internet-based access to real-time account
          information,  as well as interfaces to personal  financial  management
          software such as Intuit's Quicken(R) and Microsoft Money(R).

     The market for online  banking and bill  payment  infrastructure  has grown
considerably  over the last two to three years,  and the Company  believes  that
significant  growth  opportunities  remain. As Internet  financial services have
become  more  mainstream,  FI's  have  focused  less on  innovation  and more on
broadening  existing  operations  - adding  functionality,  improving  operating
efficiencies,  and migrating  significant  portions of their online  banking and
bill payment operations in-house.  The Company's product suite consists of three
complementary  product offerings serving the core infrastructure  needs of three
distinct,  but related markets:  Payment  Solutions,  Card Services,  and Online
Banking.

     The market for Payment Solutions has been the primary focus of InteliData's
development and marketing efforts during the past three years. The Company views
this as the  market  sector  with  the  greatest  growth  potential.  While  the
Company's  revenue  from this sector has not  achieved  the growth rate that the
Company  anticipated during the past year, industry reports from sources such as
The Tower Group  confirm  that the market has grown and is still  emerging.  The
Company  believes that future growth  opportunities  in this market  segment are
significant  based  on  FI's  increasing  recognition  of  measurable  financial
benefits related to the bill payment customer base, increasing consumer adoption
rates,  and the increasing  competitive  pressure to provide "free bill payment"
services to all  consumers.  The resulting  growth,  both in number of users and
number of transactions, has caused larger FI's to rethink their approach to bill
payment processing.  Until recently,  most large FI's elected to outsource their
bill  payment  processing  to a  third-party  processor  such  as  CheckFree  or
Metavante.  Increasingly  however,  FI's are migrating  "front end" bill payment
processing  and data  warehousing  to an in-house  platform,  offering  the FI's
greater control while also developing  "least cost routing"  strategies aimed at
reducing overall processing costs.

     The market for Card Services has matured considerably in recent years. Most
of the Company's  current and potential  card issuer  customers have deployed an
online  solution  and  are  now  seeking  to  add  subscribers  and  incremental
functionality.  Consequently,  InteliData  expects limited growth  opportunities
across this market sector,  primarily driven by anticipated subscriber increases
from within the Company's current outsourced services customer base.

     The market for Online  Banking is the most mature of the markets  served by
the  Company.  Most  larger  FI's are  deploying  second  and  third  generation
solutions.   The  goal  of  these  initiatives   typically  includes  increasing
processing  capacity and  performance,  adding  incremental  new user  features,
improving overall user experience,  improving  back-office  processes,  reducing
processing   costs,  and  migrating  certain  core  components  from  outsourced

<page>

solutions to in-house solutions.  While InteliData has developed and maintains a
customer base within this market sector that is significant  to our  operations,
the  opportunity  for  significant  new business in this market has  diminished.
Therefore,  the  Company  expects to limit its future  activities  in the Online
Banking sector to providing certain  enhancements and upgrades for the Company's
established customer base.

Acquisition

     In January 2001,  InteliData  acquired Home Account Holdings,  Inc. and its
operating subsidiary,  Home Account Network, Inc., by means of the merger of one
of the Company's wholly owned  subsidiaries with and into Home Account Holdings,
with Home Account  Holdings  surviving  the merger.  Home Account  Holdings is a
wholly owned  subsidiary of InteliData.  This acquisition was accounted for as a
purchase.  Through  this  transaction,  InteliData  acquired  the  products  and
customer  base of Home Account  Holdings,  Inc.,  including i) the Card Services
sector,  ii) the Online Banking  platform,  Canopy(TM)  Banking,  for commercial
banks and iii) an OFX solution that provides Payment Solutions capabilities.

Results of Operations

     The following  represents  the results of operations for  InteliData.  Such
information should be read in conjunction with the financial  statements and the
notes  thereto in Part II, Item 8 of this Annual Report on Form 10-K, as well as
the cautionary statements and risk factors in this section.

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

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

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

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

     The following table sets forth the Company's sources of revenue for each of
the three fiscal years ended December 31, 2003, 2002 and 2001:
<page>
                                             2003            2002          2001
                                           --------       ----------     -------

Payment Solutions
  Software license                         $   759        $   771        $ 1,010
  Consulting services                        2,192          3,406          2,754
  Use-based                                  4,179          3,151          1,903
  Maintenance                                  892            796            348
                                           --------       ----------     -------
  Subtotal                                   8,022          8,124          6,015
                                           --------       ----------     -------

Card Services
  Consulting services                          332            894            596
  Use-based                                  4,595          3,054          2,142
  Other                                         13             --             --
                                           --------       ----------     -------
  Subtotal                                   4,940          3,948          2,738
                                           --------       ----------     -------

Online Banking
  Software license                             476            518            780
  Consulting services                        1,440          1,485          1,867
  Use-based                                  5,100          6,697          5,717
  Maintenance                                  652            470            573
  Other                                         --            253            606
                                           --------       ----------     -------
  Subtotal                                   7,668          9,423          9,543
                                           --------       ----------     -------

Total
  Software license                           1,235          1,289          1,790
  Consulting service                         3,964          5,785          5,217
  Use-based                                 13,874         12,902          9,762
  Maintenance                                1,544          1,266            921
  Other                                         13            253            606
                                           --------       ----------     -------
  Total                                    $20,630        $21,495        $18,296
                                           ========       ==========     =======


Years Ended December 31, 2003 and 2002

Revenues

     The  Company's  total  revenues  were   $20,630,000  in  2003  compared  to
$21,495,000 in 2002, a decrease of $865,000.

     The revenues  from Payment  Solutions  were  $8,022,000 in 2003 compared to
$8,124,000 in 2002, a decrease of $102,000. These revenues include items related
to the Company's billpay warehouse, funds transfer and certain OFX solutions, as
well as the billpay portions of the ASP offerings. Consulting services decreased
$1,214,000,  while  use-based  fees  increased  $1,028,000  year over year.  The
decrease in consulting  services was primarily due to the completion of projects
in 2002 that did not  carryover to 2003 and limited new projects in 2003,  while
the increase in use-based fees was due to the growth from existing clients.

     The  revenues  from Card  Services  were  $4,940,000  in 2003  compared  to
$3,948,000  in 2002,  an increase of  $992,000.  Consulting  services  decreased
$562,000, while use-based fees increased $1,541,000 year over year. The decrease
in consulting  services was primarily due to the  completion of projects in 2002
and limited new projects in 2003,  while the increase in use-based  fees was due
to the growth from existing clients.

     The  revenues  from Online  Banking  were  $7,668,000  in 2003  compared to
$9,423,000  in 2002, a decrease of  $1,755,000.  These  revenues  include  items
related to the  Company's  Interpose(R)  Web Banking,  Interpose(R)  Transaction
Engine, and certain OFX solutions, as well as the online banking portions of the
ASP  offerings.  The  decrease  was  primarily  attributable  to the  $1,597,000
decrease in use-based fees.  Three large customers who were


<page>

operating in the ASP  environment  during 2002 and a part of 2003 ceased  paying
recurring  fees during 2003.  In one  instance,  a bank that used the  Company's
online  banking  platform  based  on  older  Home  Account   Canopy(TM)  Banking
technology,  converted  to a  competitor's  product.  Two other  banks  paid the
Company  a  one-time  license  fee in 2003 and  moved  the  InteliData  software
in-house in 2003, which resulted in a decrease to the Company's monthly fees for
hosting the software in an ASP arrangement. The resulting decrease was partially
offset by growth in user fees from existing clients.

Cost of Revenues and Gross Profit

         The Company's cost of revenues decreased $925,000 to $7,549,000 in 2003
from $8,474,000 in 2002. The decrease was primarily due to decreases in cost of
revenues associated with decreased professional services. The cost structures to
generate the revenues are bundled together and cannot be broken out in the same
manner as the revenues. Costs of revenues include vendors for outsourced
services and employees directly working to generate revenues.

     Overall  gross profit  margin  increased to 63% for 2003 from 61% for 2002.
The increase in gross profit  margin was  attributable  to a 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, and the introduction of new products and changes in volume.

     The Company entered into multiple vendor agreements for outsourced services
as part of its ASP  solution  offering  for certain  Online  Banking and Payment
Solutions clients.  Some of these vendor agreements are long-term (i.e.,  expire
in April and May 2005) and  commit  the  Company to  specified  minimum  charges
during the terms of the contracts. During 2003, several of the Company's clients
migrated  from  this  ASP   environment  to  an  in-house   solution   utilizing
InteliData's  licensed  software.  As a result, a possibility  exists for future
losses due to the decrease in estimated  future  revenue  streams when  compared
with the Company's  current  contractual cost structure for outsourced  services
within this ASP environment. Entering 2004, the projected costs are estimated to
exceed projected revenues by approximately  $79,000 on a monthly basis; this gap
will fluctuate based on monthly activity.

     In assessing  potential  future  losses  associated  with the Company's ASP
business,  the Company may include the possibility of new clients that would add
incremental revenue to this ASP environment.  Additionally, the Company may have
the opportunity to restructure vendor contracts and decrease contractual charges
(i.e.,  extend the current  contract  with lower  minimum  charges or migrate to
different  vendors).  Management  continues to assess both the potential for new
business  prospects and the  possibility of reducing the Company's costs through
renegotiation  of existing  agreements.  In accordance  with generally  accepted
accounting  principles,  the Company is accounting  for these  contract costs as
they are incurred. There can be no assurance that the Company will be successful
in  mitigating  these  factors.  In the event  that new client  revenues  do not
materialize,  user  growth  rates from  existing  clients  do not meet  expected
projections  and/or the Company is not successful in its renegotiation  efforts,
the Company may experience future period losses from the Company's ASP business,
which could have a material adverse impact on the Company's  financial position,
results of operations, and cash flows.

General and Administrative

     General and administrative  expenses decreased  $1,133,000 to $7,496,000 in
2003 from  $8,629,000 in 2002.  The decrease was primarily  attributable  to the
Company's reduction of corporate and administrative  expenses that resulted from
employee-related  actions and  aggressive  expense  controls.  This included the
reversal in the first  quarter of  approximately  $630,000 in estimated  accrued
bonuses that were not paid, but were previusly provided for during 2002, and the
Company  did not  accrue for  bonuses in fiscal  year 2003 as none will be paid.
Additionally, during the year, the Company ceased using one of its leased spaces
at its  Reston,  Virginia  facility  and  recorded  an expense of  $625,000  and
corresponding  liability  for the  estimated  remaining  lease  payments  net of
estimated  fair value of any  sublease.  This charge was offset by savings  from
telecommunication  expenses  and a one-time,  favorable  settlement  of a matter
related to tax payments made in 1996.  The Company plans to  continually  assess
its  operations  to  manage  its  expenses  and   infrastructures  in  light  of
anticipated business levels.

<page>

Selling and Marketing

     Selling and marketing expenses  decreased  $1,037,000 to $1,910,000 in 2003
from  $2,947,000 in 2002. This was primarily  attributable  to  employee-related
actions,  lower travel costs and a reduction in tradeshow-related  expenses. The
Company plans to  continually  assess its  operations to manage its expenses and
infrastructures in light of anticipated business levels.

Research and Development

     Research and development  costs decreased  $3,787,000 to $5,020,000 in 2003
from  $8,807,000  in  2002.  The  decrease  was  primarily  attributable  to the
Company's  reduction of research and  development  expenses  that  resulted from
employee-related  actions and  reductions  in consultant  expenses.  The Company
plans  to  continually   assess  its  operations  to  manage  its  expenses  and
infrastructures in light of anticipated business levels.

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

Amortization of Goodwill and Intangibles

     Statement of Financial  Accounting  Standards  No. 142,  Goodwill and Other
Intangible  Assets ("SFAS 142"),  requires the Company to not amortize  goodwill
and certain  intangibles  into  results of  operations,  but instead the Company
would review these assets for  impairment.  The assets would be written down and
impairment  losses would be charged to results of operations only in the periods
in which the recorded  values are  determined to be more than their fair values.
The  amortization  of certain  intangibles  continued at an  annualized  rate of
$720,000. As of January 1, 2002, in accordance with SFAS 142, the Company ceased
recognizing  amortization  expense  on  goodwill  and  the  assembled  workforce
intangible asset, and the assembled workforce intangible asset was combined with
goodwill for financial accounting and reporting.

     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.  As of December 31, 2003, the Company is
not  aware  of such  events  or  circumstances  that  could  indicate  potential
impairment.

Realized Gains on Sales of Investments

     At December 31, 2001,  the Company owned 640,000  warrant units to purchase
Sybase,  Inc. common stock.  During June 2002, the Company  exercised all of its
640,000  warrants  units and sold the resulting  223,000 shares of Sybase common
stock.  The Company  received  net  proceeds  of  approximately  $1,718,000  and
recognized a realized loss from sales of investments of approximately  $748,000.
The Company had no such liquidating events in 2003.

Other Income

     Other income,  primarily sublease rent receipts,  interest income and other
expenses, including state and local taxes, increased $80,000 to $179,000 in 2003
from  $99,000 in 2002.  The  increase is  primarily  due to the  recognition  of
approximately  $158,000  of  sublease  rent  receipts  in  2003,  offset  by the
decreased  interest income  resulting from lower levels of average cash and cash
equivalents in 2003 as compared to 2002.
<page>
Income Taxes

     The  provisions  (benefit) for income taxes were  $(288,000) and $(137,000)
for the years ended  December  31, 2003 and 2002,  respectively.  The benefit in
2003  represents  the reversal of a prior year accrual for exposure that did not
materialize  and no longer  exists at  December  31,  2003.  The benefit in 2002
represents a refund of taxes paid in 2000 as a result of tax legislation enacted
during  2002.  At  December  31,  2003,  the  Company  had  net  operating  loss
carryforwards  for federal  income tax purposes of  approximately  $205 million,
which  expire in 2005  through  2010,  and an  alternative  minimum  tax  credit
carryforward of approximately $60,000, which may be carried forward indefinitely
and used to offset future regular taxable income.  Approximately  $45 million of
the net operating  losses were incurred by Home Account prior to its acquisition
by the  Company  and are  subject to annual  limitations  pursuant  to  Internal
Revenue Code Section 382 as a result of cumulative  changes in ownership of more
than 50% in 2001. A valuation  allowance was established for deferred tax assets
as of December  31,  2003 and 2002  because it was  deemed,  based on  available
evidence,  that it is more  likely than not that all of the  deferred  tax asset
will not be realized.

Discontinued Operations

     Under various  disposal plans adopted in 1997,  1998, and 2000, the Company
completed the divestiture of all of its telecommunications, interactive services
businesses and the Caller ID adjunct leasing activities, respectively.

     In 2003 and 2002, the Company did not have any income statement activity in
discontinued operations.

     As of  December  31, 2003 and 2002,  the net  liabilities  of  discontinued
operations   of   $120,000   and   $251,000,  respectively,    relate   to   the
telecommunications  divisions.  These  liabilities  relate to the  environmental
clean up associated with prior tenants'  operations at  InteliData's  former New
Milford, Connecticut property. In January 2000, InteliData sold the New Milford,
Connecticut  property and the building located thereon, its only remaining asset
in its  discontinued  operations  of  the  telecommunications  division.  In the
context of this sale,  InteliData agreed to undertake limited remediation of the
site in accordance  with  applicable  state and federal law. The subject site is
not a listed federal or state Superfund site and InteliData has not been named a
"potentially responsible party" at the site. The remediation plan agreed to with
the purchaser allows  InteliData to use engineering and  institutional  controls
(e.g.,  deed  restrictions) to minimize the extent and costs of the remediation.
Further,  at the  time of the sale of the  facility,  InteliData  established  a
$200,000   escrow   account   from  the   proceeds   of  the  sale  for  certain
investigation/remediation  costs.  As of December 31, 2003,  this escrow account
balance  was  $223,000,  which  is to  be  paid  out  to  InteliData.  Moreover,
InteliData has obtained environmental  insurance to pay for remediation costs up
to $6,600,000  in excess of a retained  exposure  limit of $600,000.  InteliData
estimates  its  remaining  liability at December 31, 2003 related to this matter
and other costs to be  approximately  $120,000 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.

Income (Loss) from  Continuing  and  Discontinued  Operations,  Weighted-Average
Common Shares Outstanding and Basic and Diluted Earnings (Loss) Per Common Share

     The basic and diluted  weighted-average  common shares  outstanding for the
year ended  December  31, 2003 was  50,028,000,  compared to a basic and diluted
weighted-average  common shares  outstanding  of  48,869,000  for the year ended
December 31, 2002.  The increase  resulted  primarily from the issuance of stock
awards to  employees,  issuance  of stock  pursuant  to the  exercises  of stock
warrants  and stock  options,  and stock  purchases  under  the  Employee  Stock
Purchase Plan.

     Losses from continuing  operations were  $(1,598,000)  and $(8,594,000) for
the years ended  December  31, 2003 and 2002,  respectively,  while there was no
gain or loss from  discontinued  operations  in either  period.  Net

<page>

losses were $(1,598,000) and $(8,594,000) for 2003 and 2002, respectively.  As a
result of the foregoing, basic and diluted net loss per common share was ($0.03)
for the year ended  December  31, 2003  compared to a basic and diluted net loss
per common share of ($0.18) for the year ended December 31, 2002.


Years Ended December 31, 2002 and 2001

Revenues

     The  Company's  total  revenues  were   $21,495,000  in  2002  compared  to
$18,296,000 in 2001, an increase of $3,199,000.

     The revenues  from Payment  Solutions  were  $8,124,000 in 2002 compared to
$6,015,000  in 2001, an increase of  $2,109,000.  These  revenues  include items
related to the Company's bill payment warehouse,  funds transfer and certain OFX
solutions,  as well as the bill payment portions of the ASP offerings.  Software
license  fees  decreased  $239,000,   consulting  services  increased  $652,000,
use-based fees increased $1,248,000 and maintenance increased $448,000 year over
year.  The decrease in software  license fees is primarily  due to the timing of
system  deliveries  and fewer  software  license  sales,  while the  increase in
consulting  services  was  primarily  due to the increase in demand for customer
projects and the increase in the hourly rates.  Use-based revenues increased due
to growth from existing clients,  while  maintenance  increased due to new rates
and additional software licenses sold.

     The  revenues  from Card  Services  were  $3,948,000  in 2002  compared  to
$2,738,000 in 2001, an increase of  $1,210,000.  Consulting  services  increased
$298,000,  while use-based fees increased  $912,000 year over year. The increase
in consulting  services was primarily due to the  completion of projects in 2002
as compared to 2001,  while the increase in use-based fees was due to the growth
from existing clients.

     The  revenues  from Online  Banking  were  $9,423,000  in 2002  compared to
$9,543,000 in 2001, a decrease of $120,000. These revenues include items related
to the Company's Interpose(R) Web Banking,  Interpose(R) Transaction Engine, and
certain  OFX  solutions,  as  well as the  online  banking  portions  of the ASP
offerings.  The  decrease was  primarily  attributable  to software  fees due to
timing of  system  deliveries  and  fewer  software  license  sales,  consulting
services due to fewer system  implementations,  and  maintenance due to contract
terminations that occurred in 2001. These decreases were substantially offset by
an increase of $980,000 in use-based fees from growth in users and transactions.

Cost of Revenues and Gross Profit

     The  Company's  cost of revenues  decreased  $536,000 to $8,474,000 in 2002
from $9,010,000 in 2001. The decrease was due to the offsetting of approximately
$254,000 of costs  against a forward  loss accrual that was expensed in previous
periods,  a decrease in  professional  services  costs and a decrease in service
provider costs due to contract renegotiations.

     Overall  gross profit  margin  increased to 61% for 2002 from 51% for 2001.
The increase in gross profit margin was attributable to an increase in recurring
revenue coupled with the decrease in cost of revenues as discussed above.

General and Administrative

     General and administrative  expenses decreased  $1,436,000 to $8,629,000 in
2002 from  $10,065,000 in 2001. The decrease was primarily  attributable  to the
Company's reduction of corporate and administrative  expenses that resulted from
continued evaluation of on-going cost structures and synergies achieved from the
purchase of Home Account.

Selling and Marketing

     Selling and marketing expenses  decreased  $6,628,000 to $2,947,000 in 2002
from  $9,575,000 in 2001.  This was primarily  attributable  to decreases in the
number  of sales  and  marketing  employees,  travel  and  outside  professional
consulting  expenses  related to both  continued  evaluation  of  on-going  cost
structure and synergies achieved from the purchase of Home Account.
<page>

Research and Development

     Research and development  costs decreased  $6,922,000 to $8,807,000 in 2002
from  $15,729,000  in 2001.

The decrease was  primarily  attributable  to the  Company's  expense  reduction
efforts and the  reduction  of  employees  after  combining  the  operations  of
InteliData and Home Account and finding efficiencies and synergies.

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.
The adoption of this  accounting  standard,  as of January 1, 2002,  reduced the
amortization  expense  associated with goodwill by $3,555,000 to $0 in 2002 from
$3,555,000 in 2001.  The  amortization  of certain  intangibles  continued at an
annualized rate of $720,000. As of January 1, 2002, in accordance with SFAS 142,
the  Company  ceased  recognizing  amortization  expense  on  goodwill  and  the
assembled  workforce  intangible asset, and the assembled  workforce  intangible
asset was combined with goodwill for financial accounting and reporting.

     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
December  31,  2002,  the Company was not aware of such events or  circumstances
that could indicate potential impairment.

Realized Gains on Sales of Investments

     On January 20, 2000, Home Financial  Network,  Inc.  ("HFN"),  a company in
which  InteliData  held  approximately  a 25%  ownership  interest,  merged with
Sybase, Inc.  ("Sybase").  InteliData  accounted for its investment in HFN using
the equity method. As of the merger date, such  investment's  carrying value was
zero.  In exchange  for its portion of  ownership  in HFN,  InteliData  received
approximately  $5,867,000 in cash and  approximately  1,770,000 shares of Sybase
stock.  The Company also held warrants to purchase HFN common stock.  As part of
the merger  agreement,  such warrants were  converted  into warrants to purchase
Sybase  common  stock.  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.

     As part of this merger  transaction,  an escrow account was  established to
provide Sybase  indemnity  protection  against  possible claims that might arise
against  HFN.  Approximately  133,000  shares of Sybase  common  stock  owned by
InteliData  were put in escrow,  along with  approximately  $440,000 of cash. In
March 2001, the Company received the escrow payments less approximately $129,000
for  miscellaneous  claims under the escrow provision.  During 2000,  InteliData
recognized a gain of approximately $42,604,000 on this transaction and a gain of
$5,998,000 on the subsequent disposition of some of the Sybase common stock. The
remaining  holdings of Sybase  common stock were sold during 2001 for a net gain
of $507,000.  This net gain  combined  with the loss of $129,000 from the escrow
claims  represent the $378,000  realized gains on sales of  investments  for the
year ended  December 31,  2001.  At December  31,  2001,  the Company  owned all
640,000 warrant units described above.  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  received  net
proceeds of  approximately  $1,718,000 and recognized a realized loss from sales
of investments of approximately $748,000.
<page>
     Prior to January 1, 2001,  the Company  considered its investment in Sybase
common   stock  and   warrants   to   purchase   Sybase   common   stock  to  be
available-for-sale  under the  provisions  of Statement of Financial  Accounting
Standards  No.  115,  Accounting  for  Certain  Investments  in Debt and  Equity
Securities  ("SFAS  115").  Effective  January  1,  2001,  the  Company  adopted
Statement of Financial  Accounting  Standards No. 133, Accounting for Derivative
Instruments and Hedging  Activities ("SFAS 133"),  which establishes  accounting
and reporting standards for derivative instruments and for hedging activities by
requiring  that all  derivatives be recognized in the balance sheet and measured
at fair value.

     In  accordance  with SFAS 115,  the  balance  sheet  included  $210,000  of
unrealized gain on investments (net of taxes), within stockholders' equity as of
December 31, 2001. As of December 31, 2001, the accumulated other  comprehensive
loss  balance  represents  the  changes in the fair  market  value of the Sybase
common stock.  In accordance  with SFAS 133, the change in the fair market value
of the Sybase warrants was recorded in the statement of operations (see below).

     SFAS  133  requires  that all  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.  The  Company's  adoption  of this
pronouncement,  effective  January 1, 2001,  did not result in an adjustment for
the  cumulative  effect of an  accounting  change,  because the  carrying  value
reflected the fair value under the previous accounting  guidance.  In accordance
with SFAS 133, the Company recorded an unrealized loss on investment of $866,000
in the statement of operations for the year ended December 31, 2001.

Other Income

     Other income,  primarily investment and interest income, decreased $526,000
to $99,000 in 2002 from  $625,000  in 2001.  The  decrease  is  associated  with
decreased levels of cash and cash equivalents in 2002 as compared to 2001.

Income Taxes

     The  provisions  (benefit) for income taxes were  $(137,000) and $(160,000)
for the years ended  December  31, 2002 and 2001,  respectively.  The benefit in
2002  represents  a refund of taxes paid in 2000 as a result of tax  legislation
enacted  during 2002.  The benefit in 2001 also  represented a refund related to
2000.

Discontinued Operations

     In 2002 and 2001, the Company did not have any income statement activity in
discontinued operations.

     As of  December  31, 2002 and 2001,  the net  liabilities  of  discontinued
operations   of   $251,000   and   $504,000,   respectively,   relate   to   the
telecommunications  divisions. This relates to the potential environmental clean
up associated  with the prior  tenants'  operations at  InteliData's  former New
Milford, Connecticut property. In January 2000, InteliData sold the New Milford,
Connecticut  property and the building located thereon, its only remaining asset
in its  discontinued  operations  of  the  telecommunications  division.  In the
context of this sale,  InteliData agreed to undertake limited remediation of the
site in accordance  with  applicable  state and federal law. The subject site is
not a  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
December 31, 2002, this escrow account balance remained at $200,000 plus accrued
interest,  which  is to be paid  out to  InteliData.  Moreover,  InteliData  has
obtained  environmental  insurance to pay for remediation costs up to $6,600,000
in excess of a retained exposure limit of $600,000.  InteliData has recorded its
estimated  liability  related  to this  matter  and other  costs  related to the
discontinued operations.

     The Company has engaged a legal firm and an  environmental  specialist firm
to  represent  InteliData  regarding  this  matter.  The timing of the  ultimate
resolution  of this matter is  estimated  to be from two to four years
<page>

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 be likely to have a material
adverse effect on the Company's financial condition or results of operations.

Income (Loss) from  Continuing  and  Discontinued  Operations,  Weighted-Average
Common Shares Outstanding and Basic and Diluted Income (Loss) Per Common Share

     The basic and diluted  weighted-average  common shares  outstanding for the
year ended  December  31, 2002 was  48,869,000,  compared to a basic and diluted
weighted-average  common shares  outstanding  of  45,897,000  for the year ended
December  31,  2001.  The  increase  resulted  primarily  from  stock  awards to
employees,  the exercise of stock options,  stock  purchases  under the Employee
Stock  Purchase  Plan,  and the  issuance  of  2,863,000  shares for the private
placements of the Company's common stock that closed in November and December of
2001.

     Losses from continuing  operations were  $(8,594,000) and $(30,041,000) for
the years ended  December  31, 2002 and 2001,  respectively,  while there was no
gain or loss from  discontinued  operations  in either  period.  Net losses were
$(8,594,000) and $(30,041,000) for 2002 and 2001,  respectively.  As a result of
the  foregoing,  basic and diluted net loss per common share was ($0.18) for the
year ended December 31, 2002 compared to a basic and diluted net loss per common
share of ($0.65) for the year ended December 31, 2001.

Liquidity and Capital Resources

     During  2003,  the  Company's  cash  and  cash  equivalents   increased  by
$1,929,000.  At December 31, 2003,  the Company had  $7,603,000 in cash and cash
equivalents,  $6,408,000 of working capital,  no long-term debt, and $38,991,000
in stockholders' equity.

     The Company's  principal needs for cash in 2003 were for funding  operating
losses and balance sheet items, which included a decrease in accounts payable of
$550,000,  a decrease in accrued  expenses and other  liabilities of $1,704,000,
and a decrease in deferred revenue of $322,000.

     The  Company's  cash  requirements  for  operating  activities in 2003 were
financed  primarily by cash and cash  equivalents  on hand and the proceeds from
the issuance of common  stock.  Total cash  proceeds from the issuance of common
stock were approximately $3,951,000.

     Net  cash  used in  investing  activities  in  2003  was  $150,000  for the
purchases of property and equipment.

     Financing  activities  provided  net cash of  $3,878,000  in 2003  from the
issuance of the Company's common stock through stock option exercises,  sales of
stock to  employees  pursuant  to the  Employee  Stock  Purchase  Plan,  and the
exercise of the  warrants  from the 2001  private  placement,  offset by $73,000
related to  payments  made to acquire  treasury  stock.  During  July 2003,  the
Company issued  1,431,364 shares of its common stock pursuant to the exercise of
warrants,  as  amended,  by  institutional  investors  who  participated  in the
Company's private placement of common stock in November and December,  2001. The
warrant  exercise  resulted in gross proceeds of approximately  $3,335,000.  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.

     Off-Balance Sheet  Arrangements and Contractual  Obligations - The decision
by the  Company  to divest  itself of its  telecommunications  business  segment
created certain  financial  obligations and  uncertainties  for the future.  The
Company is required to satisfy  certain  obligations  of the  telecommunications
business  that will carry on beyond  December 31, 2003. As of December 31, 2003,
the Company had $120,000 in remaining  liabilities  related to the  discontinued
operations. During 2000, the Company sold the only remaining asset it had in the
discontinued  operations - the property and the building  located thereon in New
Milford,  Connecticut.  Liabilities  remaining  in the  discontinued  operations
represent the Company's  estimated  liability related to the environmental clean
up associated  with prior  tenants'  operations at the New Milford  location and
other costs. The Company is working with its  professional  advisors and insurer
to manage its exposure to liability  for the potential  environmental  clean up.
The Company has hired an environmental specialist firm to perform a study of the
damages, to prepare a project plan, to work with the state and federal agencies,
and to remediate the property.  Additionally, the Company has acquired insurance
to cap the potential costs and losses at a reasonable  amount.  Such amounts and
insurance  costs have been  accrued  for as of  December  31,  2003.  Management
believes that the combination of the project plan and the

<page>
insurance  arrangements  will cause the  resolution of this matter to not have a
material  adverse  effect on the  Company's  financial  condition  or results of
operations.

     The Company entered into multiple vendor agreements for outsourced services
as part of its ASP  solution  offering  for certain  Online  Banking and Payment
Solutions clients.  Some of these vendor agreements are long-term (i.e.,  expire
in April and May 2005) and  commit  the  Company to  specified  minimum  charges
during the terms of the contracts.  These  long-term  obligations  are disclosed
below.  During 2003,  several of the  Company's  clients  migrated from this ASP
environment to an in-house solution utilizing InteliData's licensed software. As
a result,  a  possibility  exists  for  future  losses  due to the  decrease  in
estimated  future  revenue  streams when  compared  with the  Company's  current
contractual cost structure for outsourced  services within this ASP environment.
Entering 2004, the projected costs are estimated to exceed projected revenues by
approximately  $79,000  on a monthly  basis;  this gap will  fluctuate  based on
monthly activity.

     In assessing  potential  future  losses  associated  with the Company's ASP
business,  the Company may include the possibility of new clients that would add
incremental revenue to this ASP environment.  Additionally, the Company may have
the opportunity to restructure vendor contracts and decrease contractual charges
(i.e.,  extend the current  contract  with lower  minimum  charges or migrate to
different  vendors).  Management  continues to assess both the potential for new
business  prospects and the  possibility of reducing the Company's costs through
renegotiation  of existing  agreements.  In accordance  with generally  accepted
accounting  principles,  the Company is accounting  for these  contract costs as
they are incurred. There can be no assurance that the Company will be successful
in  mitigating  these  factors.  In the event  that new client  revenues  do not
materialize, growth rates do not meet expected projections and/or the Company is
not successful in its renegotiation  efforts,  the Company may experience future
period  losses  from the  Company's  ASP  business,  which could have a material
adverse impact on the Company's financial position or results of operations.

     The  Company  leases   facilities  and  equipment   under   cancelable  and
noncancelable  operating lease  agreements.  Future minimum lease payments under
noncancelable  operating  leases  and future  minimum  payments  under  purchase
obligations  for outsourced  services were as follows (in thousands) at December
31, 2003:
<TABLE>

-------------------------------------- -------------------------------------------------------------------------------
                                                                   Payment due by period

       Contractual Obligations
-------------------------------------- -------------------------------------------------------------------------------
<S>                                    <C>             <C>               <C>              <C>            <C>
                                                          Less than           1-3             3-5         More than
                                           Total            1 year           years           years         5 years
-------------------------------------- --------------- ----------------- --------------- --------------- -------------
-------------------------------------- --------------- ----------------- --------------- --------------- -------------
Operating Lease Obligations              $   3,291        $    1,317        $    1,974      $      -        $     -
-------------------------------------- --------------- ----------------- --------------- --------------- -------------
-------------------------------------- --------------- ----------------- --------------- --------------- -------------
Purchase Obligations                         4,260             3,180             1,080             -              -
-------------------------------------- --------------- ----------------- --------------- --------------- -------------
-------------------------------------- --------------- ----------------- --------------- --------------- -------------
Total                                    $   7,551        $    4,497        $    3,054      $      -        $     -
-------------------------------------- --------------- ----------------- --------------- --------------- -------------
</TABLE>

     The future minimum lease  obligations  do not include  $560,000 of expected
receipts from subleases.

     Litigation  - The  Company  is  not  currently  a  party  to  any  material
litigation.  From time to time, the Company may be a party to routine litigation
incidental to its business.  Management  does not believe that the resolution of
any or all of such routine  litigation will be likely to have a material adverse
effect on the Company's financial condition or results of operations.

     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.  The Company's  achievement of its
operating plan remains  predicated upon both existing and  prospective  customer
decisions to procure  certain  products  and services in a timeframe  consistent
with the operating  plan  assumptions.  Historically,  these  decisions have not
evolved  timely for  varying  reasons,  including  slower than  expected  market
demand,  budgetary  constraints,  and internal product  development and resource
initiatives.  As such,  the Company  believes it would be able to adjust certain
expense structures, if necessary, to mitigate the potential impact that customer
delays would have on its capital levels. These opportunities  include additional
reductions in selling, general and administrative expenditures, the potential of
consolidating  certain  operational  activities,  the ability to negotiate  more
favorable terms  associated  with existing  service  provider  contracts and the
elimination  of certain  marketing  costs.  However,  if actual  results  differ
materially from current assumptions, the Company may not have sufficient capital
resources and may have to modify operating plans and/or seek additional  capital
resources.  If the Company engages in efforts to obtain additional  capital,  it
can make no  assurances  that these efforts will be successful or that the terms
of such funding would be beneficial to the common stockholders.

<PAGE>

Critical Accounting Policies

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

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

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

     The Company enters into multiple element  arrangements.  Elements typically
include software,  consulting,  implementation and PCS. PCS contracts  generally
require  the  Company to  provide  technical  support  and  unspecified  readily
available software updates and upgrades to customers. Revenue 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
software in an ASP  environment.  The  customer may not take  possession  of the
software without incurring  significant  transition and infrastructure costs, as
well as potential  payments of fees to the Company for the  termination  of such
arrangements.  In cases  where  the  customer  has not  licensed  software  from
InteliData,  the customer must also purchase a license prior to having the right
to use the  software  in its  own  operating  environment,  in  addition  to the
aforementioned fees. In these situations, the Company applies the guidance under
EITF 00-3 and the Staff  Accounting  Bulletin No. 101,  Revenue  Recognition  in
Financial  Statements,  and recognizes the revenue  associated  with the license
and/or implementation fees ratably over the initial term of the contract.

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

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

     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

<page>

the  concentration  of credit  risk in its trade  receivables  is  substantially
mitigated by the Company's  on-going credit evaluation process and the financial
position of the FI's that are highly  regulated.  The Company does not generally
require  collateral  from  customers.  The Company  establishes an allowance for
doubtful  accounts  based upon factors  surrounding  the credit risk of specific
customers, historical trends and other information. As of December 31, 2003, the
Company's top eight customers  comprised  approximately  58% of the net accounts
receivable balance.

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

     As part of the Home  Account  acquisition  in 2001,  the  Company  acquired
certain accounts  receivables that were outstanding as of the acquisition  date.
The Company pursued collection efforts,  but ultimately  determined that some of
these  accounts  were  uncollectible.  Such doubtful  accounts  related to these
acquired assets could not be adjusted as part of the purchase price  allocation,
so the bad debt expense was  recognized in operations in 2001.  During 2001, the
Company recorded costs associated with these particular  uncollectible  accounts
and began to write off certain accounts. Additionally in 2002, the Company wrote
off some previously reserved legacy InteliData  accounts.  During 2003 and 2002,
the Company  experienced  improved cash collections on some previously  reserved
accounts  and an  account  that  had been  written  off.  As a  result  of these
collection efforts and the resulting cash receipts,  the Company reduced its bad
debt  expense  in  2003  and  2002  by   approximately   $70,000  and  $340,000,
respectively, to reflect the positive developments.

     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 at cost and  depreciate  the assets over their  estimated
useful lives. We  periodically  reassess the economic life of these elements and
make  adjustments  to  these  useful  lives  using,  among  others,   historical
experience,  capacity  requirements,  and  assessments of new product and market
demands.  When these factors  indicate certain elements may not be useful for as
long as  anticipated,  we depreciate the remaining book value over the remaining
useful life.  Further,  the timing and deployment of any new technologies  could
affect the estimated lives of our assets,  which could have significant  impacts
on results of operations in the future.

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

     In May 2003,  the FASB issued SFAS No. 149,  Amendment of Statement  133 on
Derivative  Instruments and Hedging  Activities  ("SFAS 149"),  which amends and
clarifies  financial  accounting  and  reporting  for  derivative   instruments,
including   certain   derivative   instruments   embedded  in  other   contracts
(collectively  referred to as

<page>

derivatives)  and for  hedging  activities  under SFAS No. 133,  Accounting  for
Derivative  Instruments  and  Hedging  Activities.  SFAS  149 is  effective  for
contracts  entered  into or  modified  after  June  30,  2003,  and for  hedging
relationships  designated  after June 30, 2003. The adoption of SFAS 149 did not
have a material impact on our financial position, results of operations, or cash
flows.

     In 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  using one of its leased  spaces at its office  space in its
corporate offices in Reston,  Virginia.  The remaining  obligation on this lease
was approximately  $1,080,000 through December 31, 2006. In accordance with SFAS
146,  the  Company  estimated  the  fair  value  of  net  sublease  rent  to  be
approximately  $465,000  over  the  remaining  term.  Accordingly,  the  Company
recorded an expense of $625,000  and a  corresponding  liability as of March 31,
2003.  As of May 1, 2003,  the Company  has a  subtenant  for this space for the
majority of the remaining lease term and the actual results of net sublease rent
could differ from the above  estimates.  As of December 31, 2003,  the estimated
remaining liability was approximately $435,000.

     In November 2002, the Emerging  Issues Task Force issued a final  consensus
on Issue No. 00-21,  "Revenue  Arrangements with Multiple  Deliverables"  ("EITF
00-21").  In an  arrangement  with multiple  deliverables,  EITF 00-21  provides
guidance on how the arrangement  consideration  should be measured,  whether the
arrangement  should be divided into  separate  units of  accounting  and how the
arrangement  consideration  should  be  allocated  among the  separate  units of
accounting.  To  the  extent  that  a  multiple-deliverable   arrangement  or  a
deliverable  in a  multiple-deliverable  arrangement  is  within  the  scope  of
higher-level  authoritative literature,  EITF 00-21 does not apply. The guidance
in this Issue is  effective  for  revenue  arrangements  entered  into in fiscal
periods beginning after June 15, 2003. The adoption of EITF 00-21 did not have a
significant effect on our operations, financial position, or cash flows.


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

     This Form 10-K filing and the documents  incorporated  by reference  herein
contain  forward-looking  statements  within the  meaning of Section  27A of the
Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the
Securities   Exchange  Act  of  1934,  as  amended  (the  "Exchange  Act"),  the
realization  of which may be  impacted  by the factors  discussed  below.  These
forward-looking  statements  are made pursuant to the safe harbor  provisions of
the Private  Securities  Litigation Reform Act of 1995 (the "Act").  The Company
cautions readers that the following  important  factors,  among others,  in some
cases have affected the Company's actual results,  and could cause the Company's
actual results to differ materially from those expressed in any  forward-looking
statements made by, or on behalf of, the Company.  The following 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.  Additionally,  the  Company  is not  under  any  obligation  (and
expressly  disclaims an  obligation  to) to update or alter its  forward-looking
statements,  whether as a result of new  information  or  otherwise.  We wish to
caution you that such risks and uncertainties include, but are not limited to:

     o    our ability to continue funding operating losses;
     o    our  ability to  develop,  sell,  deliver  and  implement  our payment
          solution products and services,  some of which are largely unproven in
          a production environment, to financial institution customers;
     o    our ability to manage our expenses in line with  anticipated  business
          levels;
     o    our  ability to complete  product  implementations  in  required  time
          frames;
     o    our  ability to increase  our ASP  customer  base and to increase  our
          recurring  revenues  and/or  lower  fixed costs of  operating  our ASP
          business in order to make this operation profitable;
     o    the impact of  customers  deconverting  from use of our  products  and
          services to the use of competitive products or in-house solutions;
     o    the effect of planned customer migrations from outsourced solutions to
          in-house solutions with a resulting loss of recurring revenue;
     o    the impact of competitive products,  pricing pressure,  product demand
          and market acceptance risks;

<page>
     o    the  pace of  consumer  acceptance  of  home  banking  and  electronic
          payments  and  reliance  on our  bank  clients  to  increase  usage of
          Internet banking and electronic payments by their customers;
     o    the effect of general  economic  conditions on the financial  services
          industries;
     o    mergers and acquisitions;
     o    the risk of integration of our technology;
     o    the  ability of our FI  customers  to  implement  applications  in the
          anticipated   time   frames   or  with   the   anticipated   features,
          functionality or benefits;
     o    our  reliance  on  key   strategic   alliances   and  newly   emerging
          technologies;
     o    our ability to leverage our third-party relationships;
     o    the on-going  viability of the  mainframe  marketplace  and demand for
          traditional mainframe products and our ability to expand our offerings
          to other platforms;
     o    our ability to attract and retain key employees;
     o    the availability of cash for long-term growth;
     o    product obsolescence;
     o    our ability to reduce product costs;
     o    fluctuations in our operating results;
     o    delays in development of highly complex products; and
     o    other  risks  detailed  from  time  to time in our  filings  with  the
          Securities and Exchange Commission.

     In some cases, you can identify forward-looking statements by terms such as
"may,"  "will,"  "should,"  "could,"  "would,"  "expects,"  "intends,"  "plans,"
"anticipates," "believes," "estimates," "projects," "predicts," "potential," and
similar  expressions  intended to  identify  forward-looking  statements.  These
statements reflect our current views with respect to future events and are based
on   assumptions   and   subject  to  risks  and   uncertainties.   Given  these
uncertainties,  you should not place  undue  reliance  on these  forward-looking
statements.  We discuss many of these risks in this prospectus in greater detail
under the heading "Risk Factors." In connection with forward-looking  statements
that appear in these  disclosures,  readers hereby should carefully consider the
factors set forth under "Risk Factors."


RISK FACTORS

Risk Factors Particular to Our Company


     We may require additional  capital,  which we may not be able to obtain, to
be able to fund  future  operating  losses,  working  capital  needs and capital
expenditures.

     The  continuation,  development,  and growth of our  business  may  require
additional  capital in the future to fund our operating losses,  working capital
needs and capital expenditures. The capital markets are very volatile and we may
not be able  to  obtain  future  equity  or  debt  financing  in the  future  on
satisfactory terms or at all. Our failure to generate sufficient cash flows from
sales of products  and services or to raise  sufficient  funds may require us to
delay or abandon some or all of our development and expansion plans or otherwise
forego  market  opportunities.  Our  inability to obtain  additional  capital on
satisfactory  terms may impact our ability to continue  our  business at current
levels or expand our  business  in the future,  which could cause our  business,
operating results and financial condition to suffer.

     The Company's future success is highly dependent on our ability to develop,
sell,  implement and deliver Payment  Solutions  products and services,  some of
which are new and unproven in a financial institution's production environment.

     The Company has invested heavily in its Payment Solutions  products for the
EBPP market and believes  that the success of our  offerings  for this market is
critical to our long-term  success.  Because some of the Company's  products for
this  market are  relatively  new and have not been fully  deployed  either at a
customer's  site  or for a  customer  in an  ASP  environment,  there  can be no
assurance that the products will perform with the capabilities  expected or that
the  products  will  be  competitive  without  further  significant  development
efforts.

     We may not be able to manage our expenses in line with anticipated business
levels.

     We continually seek to control our general and administrative  expenses and
assess our operations in managing the continued development of infrastructure to
handle anticipated business levels. Our inability to control
<page>

expenses  and manage our  infrastructure  could  cause our  business,  operating
results and  financial  condition  to suffer.  The  Company has imposed  expense
controls  in an attempt to  conserve  available  cash.  However,  at our current
revenue  levels,  it is  unlikely  that  the  Company  will be  able to  achieve
profitability  through  expense  controls  alone and expense  controls  may also
impact our ability to increase revenues.

     Rapidly changing  technologies could make our products obsolete,  which may
adversely affect our business, operations and financial condition.

     Our business  activities are concentrated in fields  characterized by rapid
and  significant  technological  advances.  It is possible that our products and
services  will not  remain  competitive  technologically  or that our  products,
processes or services will not continue to be reflective of such  advances.  The
following,  among  other  factors,  may  adversely  affect  our  ability  to  be
technologically competitive:

     o    our competitors may develop other  technologies  that could render our
          products and services noncompetitive or obsolete;
     o    we may be unable to locate,  hire and retain  management and other key
          personnel  with the skills and abilities  required to further  advance
          and develop our  software  products  and  services and to maintain our
          technological competitiveness;
     o    we may be unable to  introduce  new  products or product  enhancements
          that achieve timely market acceptance and meet financial institutions'
          or Internet banking or EBPP customers' needs;
     o    we may encounter unanticipated technical,  marketing or other problems
          or delays  relating to new  products,  features  or  services  that we
          recently introduced or that we may introduce in the future;
     o    we may be  unable  to keep  pace  with our  competitors'  spending  on
          research  and  development  of  new  products   because  most  of  our
          competitors  and  potential  competitors  have  significantly  greater
          financial,  technological and research and development  resources than
          we have;
     o    we may be unable to  develop,  produce  and  market  new  products  as
          cheaply  as our  competitors  and we may  not be  able  to  offer  new
          products to customers at a competitive price; and
     o    we may be unable to leverage our relationships with third parties.

     An inability to compete  successfully  in an  increasingly  competitive and
crowded  marketplace  could  adversely  affect  our  business,   operations  and
financial condition.

     The market for Internet banking and other  interactive  financial  products
and  services  is  highly  competitive  and  subject  to  rapid  innovation  and
technological  change,  shifting  consumer  preferences and frequent new product
introductions.  A number of corporations,  including S-1 Corporation,  Corillian
Corporation,  Financial Fusion,  Inc., CheckFree  Corporation,  Online Resources
Corporation,  Digital Insight Corporation,  Metavante Corporation, and Incurrent
Solutions,  Inc.,  most of which have greater  resources than us, offer products
and services that compete  directly with the products and services we offer.  We
expect the number of competitors  in the Internet  banking and EBPP products and
services  industry  to  expand  greatly  as a result  of the  popularity  of the
Internet and widespread  ownership of personal computers.  We foresee our future
competitors as including:

     o    banks  that  have  already  developed  (or plan to  develop)  Internet
          banking  and  EBPP  products  for  their  own   customers,   with  the
          possibility  of offering  the products to other banks and other banks'
          customers;
     o    non-banks that may develop Internet banking and EBPP products to offer
          to banks; and
     o    computer software and data processing  companies that currently offer,
          or will offer, Internet  banking and EBPP services  through the use of
          their broad distribution channels that may be used to bundle competing
          products directly to end-users or purchasers.

     Our operating results fluctuate,  which could have an adverse effect on our
business, operations and financial condition.

     Our quarterly operating results have varied  significantly in the past, and
it is likely that they will vary greatly in the future. Some of the factors that
will likely cause our operating results to fluctuate are:

     o    the size and timing of customer orders;
     o    changes in our pricing policies or those of our competitors;
     o    new product introductions or enhancements by our competitors or by us;
     o    delays in the introduction of new products or product  enhancements by
          our competitors or by us;
     o    customer order  deferrals by our customers in anticipation of upgrades
          and new products;
<page>
     o    the loss of revenue from  customers  either  converting to an in-house
          solution or to a competitor's solution;
     o    the reduction in recurring revenue from a customer  converting from an
          outsourced  solution to an in-house  solution using our products after
          paying a one-time license fee;
     o    the  possibility  of future  losses due to the  decrease in  estimated
          future ASP revenue streams when compared with our current  contractual
          costs for outsourced services in our ASP operations;
     o    market acceptance of new products;
     o    the  timing  and  nature  of  sales,   marketing,   and  research  and
          development expenses by our competitors or by us; and
     o    other  changes in operating  expenses,  personnel  changes and general
          economic conditions.

     Additionally,  certain banks and other financial institutions recently have
combined or are  proposing  to  combine,  and we are unable to assess the future
effect that those combinations and other possible  consolidations in the banking
industry will have upon us. Merger and acquisition activity almost always causes
delays  in  procurement  decisions  by banks  and also  reduces  the  number  of
potential  customers  in our market.  No assurance  can be given that  quarterly
variations  in  our  operating  results  will  not  occur  in  the  future,  and
accordingly,  the  results  of any  one  quarter  may not be  indicative  of the
operating results for future quarters.


     Our stock price  fluctuates  significantly  and could adversely  affect our
business, operations and financial condition.

     It is  likely  that  in the  future  our  common  stock  will  continue  to
experience the significant volatility it has experienced in the past. Our common
stock is traded on the Nasdaq National Market. The stock market, particularly in
recent years,  has experienced  volatility  that has been especially  acute with
respect  to  high  technology-based  stocks  such as  ours.  The  volatility  of
technology-based  and  development  stage stocks has often been unrelated to the
operating performance of the companies represented by the stock. Factors such as
announcements of the introduction of new products or services by our competitors
or by us, market  conditions in the banking and other  emerging  growth  company
sectors and rumors  relating  to our  competitors  or us have had a  significant
impact on the market price of our common stock in the past.


     We possess limited patent or registered  intellectual  property rights with
respect to our  technology  and any loss or  infringement  of those rights could
cause us to lose a valuable  competitive  advantage or incur  costly  litigation
expenses that adversely affect our business, operations and financial condition.

     We possess limited patent or registered  intellectual  property rights with
respect to our technology.  We depend, in part, upon our proprietary  technology
and know-how to  differentiate  our products from those of our  competitors  and
work  independently and from time to time with third parties with respect to the
design and  engineering  of our own products.  We also rely on a combination  of
contractual  provisions,  trademarks,  and  trade  secret  laws to  protect  our
proprietary technology. There can be no assurance, however, that we will be able
to protect our technology or successfully  develop new technology or gain access
to such  technology,  that third  parties  will not be able to  develop  similar
technology independently or design around our intellectual property rights, that
competitors will not obtain unauthorized  access to our proprietary  technology,
that third parties will not misuse the  technology to which we have granted them
access,  or that our contractual or legal remedies will be sufficient to protect
our  interests  in  our  proprietary  technology.  Enforcing  or  defending  our
intellectual property rights could be very expensive.  If we cannot preserve our
intellectual property rights, we may be at a competitive disadvantage.


     Claims against us for infringement of another party's intellectual property
rights could cause us to incur costly litigation  expenses or impact our ability
to offer products or services to our market.

     The Internet banking  software and services  industry has become an area of
substantial  litigation  concerning  intellectual  property  rights.  Claims  of
infringement  by third parties could have a  significant  adverse  impact on our
business. The expenses associated with defending claims, even if successful, are
often  significant.  In the event that we were found to infringe a third party's
rights, we would be required to enter into a royalty  arrangement to continue to
offer  the  infringing  products  and  services.  If we were  unable  to  obtain
acceptable  royalty  terms,  we would be  forced  to  discontinue  offering  the
infringing  products  and services or modify the products and services to become
non-infringing.  This  could  result  in the  significant  loss of  revenues  or
considerable additional expense.

<page>
     Delays in the development of new products or in the  implementation  of new
or existing products at customer locations and defects or errors in the products
we sell could adversely affect our business, operations and financial condition.

     Software  development for our market is highly  complex.  We may experience
delays in the development of the software and computing  systems  underlying our
products and services.  Additionally, we may experience delays when implementing
our products at customer locations, and customers may be unable to implement our
products  in the time  frames and with the  functionalities  that they expect or
require. There can be no assurance that, despite our testing, errors will not be
found in the underlying  software,  or that we will not  experience  development
delays,  resulting in delays in the  shipment of our  products,  the  commercial
release of our products or in the market  acceptance  of our  products,  each of
which  could have a material  adverse  effect on our  business,  operations  and
financial condition.


     We are dependent on key personnel,  the loss of whom could adversely affect
our business, operations and financial condition.  Additionally, we will need to
locate,  hire and retain additional  qualified personnel to continue to grow our
business.

     Our  performance  is  substantially  dependent  on the  performance  of our
executive  officers  and key  employees.  We depend on our ability to retain and
motivate high quality personnel,  especially  management and skilled development
teams.  The loss of  services  of any of our  executive  officers  or other  key
employees  could have a material  adverse effect on our business,  operations or
financial condition.

     Our future  success  also  depends on our  continuing  ability to identify,
hire,  train  and  retain  other  highly  qualified   technical  and  managerial
personnel.  Competition  for such  personnel  is  intense,  and  there can be no
assurance  that we will be able to attract,  assimilate  or retain  other highly
qualified  technical and  managerial  personnel in the future.  The inability to
attract and retain the necessary technical and managerial personnel could have a
material adverse effect upon our business, operations or financial condition.


     Certain  provisions of Delaware law, our certificate of  incorporation  and
bylaws make a takeover by a third-party difficult.

     Certain  provisions of Delaware law and of our certificate of incorporation
and bylaws could have the effect of making it more  difficult  for a third party
to acquire, or of discouraging a third party from attempting to acquire, control
of us. These provisions include:

     o    a provision allowing us to issue preferred stock with rights senior to
          those of the common  stock  without any further  vote or action by the
          holders  of common  stock.  The  issuance  of  preferred  stock  could
          decrease the amount of earnings and assets  available for distribution
          to the holders of common  stock or could  adversely  affect the rights
          and  powers,  including  voting  rights,  of the holders of the common
          stock. In certain  circumstances,  such issuance could have the effect
          of decreasing the market price of the common stock;
     o    the  existence  of a stock rights plan that results in the dilution of
          the value of common stock held by a potential acquirer;
     o    the  existence  of a staggered  board of  directors in which there are
          three classes of directors  serving  staggered  three-year  terms, and
          thereby  expanding  the time required to change the  composition  of a
          majority of directors and perhaps  discouraging someone from making an
          acquisition proposal for us;
     o    the bylaws' requirement that stockholders  provide advance notice when
          nominating our directors;
     o    the  inability  of  stockholders  to convene a  stockholders'  meeting
          without the meeting first being called by the chairman of the board of
          directors  or  the  secretary  at the  request  of a  majority  of the
          directors; and
     o    the  application  of Delaware law  prohibiting us from entering into a
          business  combination  with the beneficial owner of 15% or more of our
          outstanding  voting stock for a period of three years after the 15% or
          greater  owner first  reached  that level of stock  ownership,  unless
          certain criteria are met.

<PAGE>

Risk Factors Associated With Our Industry


     Our Payment  Solution  products  and  services  are  targeted  for the EBPP
industry,  which is a  relatively  new and  developing  market,  and our success
depends on the acceptance  and growing use of electronic  bill  presentment  and
payment.

     EBPP continues to be a developing  market.  Our future financial success in
the relatively new EBPP marketplace depends, in part, upon:

     o    consumer acceptance of, and financial  institutions' support for, EBPP
          technologies;
     o    continued growth in personal computer sales and the number of personal
          computers with Internet access and continued reductions in the cost of
          personal computers and Internet access;
     o    the  degree of  financial  institutions'  success  in  marketing  EBPP
          products to their customers at little or no cost to the customer,  and
          the  ability  of  these  institutions  to  implement  applications  in
          anticipated   time   frames   or   with   anticipated   features   and
          functionalities; and
     o    the impact of current and future regulatory  controls and oversight of
          the Internet and electronic commerce.

     Even  if  this  market  experiences  substantial  growth,  there  can be no
assurance that our products and services will be commercially successful or that
we will benefit from such growth. Therefore, there can be no assurance as to the
timing, introduction, or market acceptance of, or necessary regulatory approvals
for, our products and services.


     Concerns related to system security and consumer  protections could prevent
the  widespread  acceptance  of Internet  banking  and EBPP and could  adversely
affect our business,  operations  and financial  condition.  The  willingness of
consumers and financial institutions to use personal computer and Internet-based
banking,  bill payment and other financial  services will depend,  in part, upon
the following factors:

     o    our  ability to protect  consumer  information  relating  to  personal
          computer  and  Internet-based  banking  and other  financial  services
          against the risk of fraud, counterfeit and technology failure;
     o    the  frequency of  interruptions,  delays and  cessation in service to
          financial   institutions  and  individuals   resulting  from  computer
          viruses, break-ins or other problems;
     o    the increase in the cost of our services and products,  as well as the
          cost to up-grade  the  services and products to keep pace with rapidly
          changing  computer  and  Internet  technologies,  may be  increased by
          expenditures  of capital and  resources to reduce  security  breaches,
          break-ins and computer viruses;
     o    the erosion of public and  consumer  confidence  in the  security  and
          privacy of Internet banking and EBPP; and
     o    whether financial  institutions are able to offer internal banking and
          EBPP service to their customers at little or no cost.

     The threat of  increased  government  regulation  of the  Internet  and the
continuing legal uncertainty and potential  liabilities  associated with sharing
personal and financial  information on the Internet could  adversely  affect our
business, operations and financial condition.

     Our products rely on the  cost-effectiveness of, and ease of access to, the
Internet.  There are currently few laws or  regulations  directly  applicable to
commerce or other communications on the Internet. However, due to the increasing
popularity and use of the Internet, it is possible that new laws and regulations
may be  adopted  with  respect to the  Internet,  covering  issues  such as user
privacy,  the  collection  or  processing  of  personal  information,  copyright
infringement  and the  pricing,  characteristics  and  quality of  products  and
services.  Consumers'  concerns  relating to privacy,  security  and  increasing
regulation  could hinder the use of the Internet and the growth of our business.
The adoption of restrictive  laws or regulations  may increase the cost of doing
business over the Internet. The application to the Internet of existing laws and
regulations  governing such issues as property ownership and personal privacy is
subject to substantial uncertainty. Mandatory privacy and security standards and
protocols  still are being  developed by government  agencies,  and we may incur
significant  expenses  to  comply  with any  requirements  that  are  ultimately
adopted.  Our  financial  institution  customers  require  that our products and
services will permit them to operate in compliance  with all applicable laws and
regulations.  We may become  subject to direct  regulation as the market for our
products and services evolves. Additionally,  current or new government laws and
regulations, or the application of existing laws and regulations,  may expose us
to significant liabilities or otherwise impair our ability to achieve our
<page>

strategic  objectives  through  increased  operating  costs  or  reduced  market
acceptance.  If  Internet  use does not grow as a result of privacy or  security
concerns,  increasing  regulation  or for other  reasons,  the sale of  Internet
banking and electronic bill  presentment and payment  products would be hindered
and  our  business,  operations  and  financial  condition  would  be  adversely
affected.


ITEM 7a.      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.


<PAGE>


ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
-----------------------------------------------------


                 INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS


                                                                            Page
                                                                            ====

Consolidated Financial Statements

  Consolidated Balance Sheets as of December 31, 2003 and 2002................33

  Consolidated Statements of Operations for the Years Ended
    December 31, 2003, 2002, and 2001.........................................34

  Consolidated Statements of Changes in Stockholders' Equity for the Years Ended
    December 31, 2003, 2002, and 2001.........................................35

  Consolidated Statements of Cash Flows for the Years Ended
    December 31, 2003, 2002, and 2001.........................................36

  Notes to the Consolidated Financial Statements for the Years Ended
    December 31, 2003, 2002, and 2001.........................................37


Independent Auditors' Report..................................................51


<PAGE>


                       INTELIDATA TECHNOLOGIES CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2003 AND 2002
                        (in thousands, except share data)
<TABLE>


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

ASSETS
  CURRENT ASSETS
     Cash and cash equivalents                                                      $      7,603    $      5,674
     Accounts receivable, net                                                              2,890           2,974
     Other receivables                                                                       180             309
     Prepaid expenses and other current assets                                               625             802
                                                                                    ------------    ------------
         Total current assets                                                             11,298           9,759

  NONCURRENT ASSETS
     Property and equipment, net                                                           1,529           2,554
     Goodwill, net                                                                        26,238          26,238
     Intangibles, net                                                                      5,060           5,780
     Other assets                                                                            211             175
                                                                                    ------------    ------------

TOTAL ASSETS                                                                        $     44,336    $     44,506
                                                                                    ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY
  CURRENT LIABILITIES
     Accounts payable                                                               $      1,531    $      2,081
     Accrued expenses                                                                      1,599           3,458
     Deferred revenues                                                                     1,351           1,673
     Accrued rent                                                                            364             252
     Net liabilities of discontinued operations                                               45              51
                                                                                    ------------    ------------
TOTAL CURRENT LIABILITIES                                                                  4,890           7,515
     Accrued rent                                                                            380             337
     Net liabilities of discontinued operations                                               75             200
                                                                                    ------------    ------------
TOTAL LIABILITIES                                                                          5,345           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 52,065,000 shares in 2003 and 49,797,000 shares in 2002;
        outstanding 51,231,000 shares in 2003 and 48,991,000 shares in 2002                   52              50
     Additional paid-in capital                                                          306,963         302,833
     Treasury stock, at cost:  834,000 shares in 2003 and 806,000 shares in 2002          (2,546)         (2,473)
     Deferred compensation                                                                  (228)           (304)
     Accumulated other comprehensive income                                                   --              --
     Accumulated deficit                                                                (265,250)       (263,652)
                                                                                    ------------    ------------
TOTAL STOCKHOLDERS' EQUITY                                                                38,991          36,454
                                                                                    ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                          $     44,336    $     44,506
                                                                                    ============    ============

</TABLE>

        See accompanying notes to the consolidated financial statements.

<PAGE>

                       INTELIDATA TECHNOLOGIES CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                      (in thousands, except per share data)
<TABLE>
                                                                                2003            2002               2001
                                                                           -----------       -----------      -----------
<S>                                                                        <C>               <C>              <C>

Revenues
     Software                                                              $   1,235         $  1,289         $   1,790
     Consulting services, recurring and termination fees                      19,395           20,206            16,506
                                                                           -----------       -----------      -----------
         Total revenues                                                       20,630           21,495            18,296
                                                                           -----------       -----------      -----------

Cost of revenues
     Software                                                                     --               --                 5
     Consulting services, recurring and termination fees                       7,549            8,474             9,005
                                                                           -----------       -----------      -----------
         Total cost of revenues                                                7,549            8,474             9,010
                                                                           -----------       -----------      -----------

Gross profit                                                                  13,081           13,021             9,286
Operating expenses
     General and administrative                                                7,496            8,629            10,065
     Selling and marketing                                                     1,910            2,947             9,575
     Research and development                                                  5,020            8,807            15,729
     Amortization of goodwill and intangibles                                    720              720             4,255
                                                                           -----------       -----------      -----------
         Total operating expenses                                             15,146           21,103            39,624
                                                                           -----------       -----------      -----------

Operating loss                                                                (2,065)          (8,082)          (30,338)
Realized gain (loss) on sales of investments                                      --             (748)              378
Unrealized loss on Sybase warrants                                                --               --              (866)
Other income (expenses), net                                                     179               99               625
                                                                           -----------       -----------      -----------

Loss before income taxes                                                      (1,886)          (8,731)          (30,201)
Provision (benefit) for income taxes                                            (288)            (137)             (160)
                                                                           -----------       -----------      -----------

Net loss                                                                   $  (1,598)        $ (8,594)        $ (30,041)
                                                                           ===========       ===========      ===========


Basic and diluted earnings (loss) per common share                         $   (0.03)        $  (0.18)        $   (0.65)
                                                                           ===========       ===========      ===========

Basic and diluted weighted-average common shares outstanding                  50,028           48,869            45,897
                                                                           ===========       ===========      ===========

</TABLE>

        See accompanying notes to the consolidated financial statements.


<PAGE>

                       INTELIDATA TECHNOLOGIES CORPORATION
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                  YEARS ENDED DECEMBER 31, 2003, 2002, AND 2001
                                 (in thousands)
<TABLE>

                                                                                                                     Accumulated
                                                                           Additional                                   Other
                                  Preferred Stock        Common stock        Paid-in      Treasury      Deferred    Comprehensive
                                  Shares  Amount       Shares     Amount     Capital        Stock     Compensation  Income (Loss)
                                  ------  ------       ------     ------     -------        -----     ------------  -------------
<S>                               <C>     <C>         <C>         <C>      <C>           <C>          <C>           <C>

Balance at January 1, 2001          --    $  --       39,321    $    39    $ 261,552     $  (2,123)    $  (1,375)     $      494
   Issuance of common stock:
     Acquisition of Home Account    --       --        6,900          7       31,950            --            --              --
     Private placement              --       --        2,863          3        7,228            --            --              --
     Exercise of stock options      --       --          220         --          412            --            --              --
     Employee stock purchase plan   --       --           29         --           66            --            --              --
     Exercise of stock warrants     --       --            3         --           11            --            --              --
   Issuance of restricted stock     --       --          481          1        2,082            --        (2,083)             --
   Cancellation of restricted stock --       --          (92)        --         (509)           --           509              --
   2000 Home Account Incentive Plan --       --           --         --          349            --          (349)             --
   Purchase of treasury stock,
         at cost                    --       --           --         --           --          (350)           --              --
   Realized gains on investments
        sold                        --       --           --         --           --            --            --            (284)
   Amortization of deferred
        compensation                --       --           --         --           --            --         1,903              --
   Net loss                         --       --           --         --           --            --            --              --

   Comprehensive loss
                                   ---    ------     --------   --------   ----------    ----------    ----------     -----------
Balance at December 31, 2001        --    $  --       49,725    $    50    $ 303,141     $  (2,473)    $  (1,395)     $      210
                                   ---    ------     --------   --------   ----------    ----------    ----------     -----------
   Issuance of common stock:
     Exercise of stock options      --       --           11         --           15            --            --              --
     Employee stock purchase plan   --       --           30         --           30            --            --              --
   Issuance of restricted stock     --       --          139         --          247            --          (247)             --
   Cancellation of restricted stock --       --         (108)        --         (406)           --           406
   2000 Home Account Incentive Plan --       --           --         --         (194)           --           194
   Realized gains on investments
        sold                        --       --           --         --           --            --            --            (210)
   Amortization of deferred
        compensation                --       --           --         --           --            --           738              --
   Net loss                         --       --           --         --           --            --            --              --

   Comprehensive loss
                                   ---    ------    ---------   --------   ----------    ----------    ----------     -----------
$  (8,804)
Balance at December 31, 2002        --    $  --       49,797    $    50    $ 302,833     $  (2,473)    $    (304)     $       --
                                   ---    ------    ---------   --------   ----------    ----------    ----------     -----------
   Issuance of common stock:
     Exercise of stock options      --       --          669          1          802            --            --              --
     Employee stock purchase plan   --       --           16         --           15            --            --              --
     Exercise of stock warrants     --       --        1,454          1        3,132            --            --              --
   Issuance of restricted stock     --       --          155         --          226            --          (226)             --
   Cancellation of restricted
      stock                         --       --          (26)        --          (45)           --            45              --
   Purchase of treasury stock,
       at cost                      --       --           --         --           --           (73)           --              --
   Amortization of deferred
        compensation                --       --           --         --           --            --           257              --
   Net loss                         --       --           --         --           --            --            --              --
   Comprehensive loss
                                   ---    ------    ---------   --------   ----------    ----------    ----------     -----------
Balance at December 31, 2003        --    $  --       52,065    $    52    $ 306,963     $  (2,546)    $    (228)     $       --
                                   ===    ======    =========   ========   ==========    ==========    ==========     ===========
<page>

                                   Accumulated  Comprehensive
                                     Deficit        Loss        Total
                                     -------        ----        -----

Balance at January 1, 2001         $(225,017)                  $33,570
   Issuance of common stock:
     Acquisition of Home Account          --                    31,957
     Private placement                    --                     7,231
     Exercise of stock options            --                       412
     Employee stock purchase plan         --                        66
     Exercise of stock warrants           --                        11
   Issuance of restricted stock           --                        --
   Cancellation of restricted stock       --                        --
   2000 Home Account Incentive Plan       --                        --
   Purchase of treasury stock,
         at cost                          --                      (350)
   Realized gains on investments
        sold                              --    $    (284)        (284)
   Amortization of deferred
        compensation                      --                     1,903
   Net loss                          (30,041)     (30,041)     (30,041)
                                                ----------
   Comprehensive loss                           $ (30,325)
                                   =========    ----------     --------
Balance at December 31, 2001       $(255,058)                  $44,475
                                   ----------                  --------
   Issuance of common stock:
     Exercise of stock options            --                        15
     Employee stock purchase plan         --                        30
   Issuance of restricted stock           --                        --
   Cancellation of restricted stock       --                        --
   2000 Home Account Incentive Plan       --                        --
   Realized gains on investments
        sold                              --    $    (210)        (210)
   Amortization of deferred
        compensation                      --                       738
   Net loss                           (8,594)      (8,594)      (8,594)
                                                ----------
   Comprehensive loss                           $  (8,804)
                                     --------   ==========     --------

Balance at December 31, 2002       $(263,652)                  $36,454

   Issuance of common stock:
     Exercise of stock options            --                       803
     Employee stock purchase plan         --                        15
     Exercise of stock warrants           --                     3,133
   Issuance of restricted stock           --                        --
   Cancellation of restricted
      stock                                                         --
   Purchase of treasury stock,
       at cost                            --                       (73)
   Amortization of deferred
        compensation                      --                       257
   Net loss                           (1,598)   $  (1,598)      (1,598)
   Comprehensive loss                           ----------
                                                $  (1,598)
Balance at December 31, 2003                    ==========
                                   $(265,250)                  $38,991
                                   ==========                  ========

</TABLE>

        See accompanying notes to the consolidated financial statements.

<page>

                       INTELIDATA TECHNOLOGIES CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  YEARS ENDED DECEMBER 31, 2003, 2002, AND 2001
                                 (in thousands)
<TABLE>


                                                                     2003             2002              2001
                                                                 -----------       -----------      -----------
<S>                                                              <C>               <C>              <C>
Cash flows from operating activities
     Net loss from continuing operations                         $   (1,598)       $   (8,594)      $  (30,041)
     Adjustments to reconcile loss from continuing operations
     to net cash used in operating activities of continuing operations:
      Realized loss (gain) on sales of investments                       --               748             (378)
      Unrealized loss on Sybase warrants                                 --                --              866
      Amortization of goodwill and intangibles                          720               720            4,255
      Depreciation and amortization                                   1,037             1,532            2,061
      Deferred compensation expense                                     257               738            1,903
      Net loss (gain) on disposal of property and equipment             138                23              (60)
      Changes in operating assets and liabilities:
        Accounts receivable                                              84             2,018           (2,192)
        Prepaid expenses and other current assets                       270                31             (501)
        Accounts payable                                               (550)           (1,215)          (2,588)
        Accrued expenses and accrued rent                            (1,704)           (2,183)            (771)
        Deferred revenue                                               (322)           (1,491)             971
                                                                 ----------        ----------       ----------
         Net cash used in operating activities of
         continuing operations                                       (1,668)           (7,673)         (26,475)

         Net cash used in discontinued operations                      (131)             (253)            (251)
                                                                 ----------        ----------       ----------

         Net cash used in operating activities                       (1,799)           (7,926)         (26,726)
                                                                 ----------        ----------       ----------

Cash flows from investing activities
     Proceeds from sales of investments                                  --             1,968            6,637
     Release of cash escrow                                              --                --              311
     Proceeds from disposal of property and equipment                    --                --              225
     Purchases of property and equipment                               (150)             (389)            (921)
     Payments on acquisition related costs                               --               (50)          (1,805)
     Cash paid for Home Account common stock                             --                --             (320)
                                                                 ----------        ----------       ----------
         Net cash (used in) provided by investing activities           (150)            1,529            4,127
                                                                 -----------       ----------       ----------

Cash flows from financing activities
     Proceeds from the issuance of common stock                       3,951                45            7,720
     Payments to acquire treasury stock                                 (73)               --             (350)
                                                                 ----------        ----------       ----------
         Net cash provided by financing activities                    3,878                45            7,370
                                                                 ----------        ----------       ----------

Increase (decrease) in cash and cash equivalents                      1,929            (6,352)         (15,229)
Cash and cash equivalents, beginning of year                          5,674            12,026           27,255
                                                                 ----------        ----------       ----------
Cash and cash equivalents, end of year                           $    7,603        $    5,674       $   12,026
                                                                 ==========        ==========       ==========


        See accompanying notes to the consolidated financial statements.

</TABLE>

<PAGE>


                       INTELIDATA TECHNOLOGIES CORPORATION
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                  YEARS ENDED DECEMBER 31, 2003, 2002, AND 2001


(1)  ORGANIZATION

     InteliData Technologies  Corporation and subsidiaries  ("InteliData" or the
"Company") provides electronic bill payment and presentment  ("EBPP") and online
banking solutions to the financial  services  industry.  The Company's  products
provide financial  institutions ("FI's") with the real-time financial processing
infrastructure  needed to provide their customers with bill payment services and
online banking via the Internet and other online delivery channels.  The Company
markets its products  and services to banks,  credit  unions,  brokerage  firms,
financial institution processors and credit card issuers.

     InteliData's   product  suite  consists  of  three  complementary   product
offerings:

     Payment and Presentment
     ------------------------
     o    Payment Solutions - providing payment  warehousing,  payment matching,
          biller directory management,  and least cost routing functionality for
          EBPP transactions;

     o    Card  Services - providing  Internet-based  account  activation,  bill
          presentment, balance consolidation, and e-Statement capabilities; and

     Online Banking
     --------------
     o    Online Banking - providing  Internet-based access to real-time account
          information,  as well as interfaces to personal  financial  management
          software such as Intuit's Quicken(R) and Microsoft Money(R).

     The market for online  banking and bill  payment  infrastructure  has grown
considerably  over the last two to three years,  and the Company  believes  that
significant  growth  opportunities  remain. As Internet  financial services have
become  more  mainstream,  FI's  have  focused  less on  innovation  and more on
broadening  existing  operations  - adding  functionality,  improving  operating
efficiencies,  and migrating  significant  portions of their online  banking and
bill payment operations in-house.

     In January 2001,  InteliData  acquired Home Account Holdings,  Inc. and its
operating subsidiary,  Home Account Network, Inc., by means of the merger of one
of the Company's wholly owned  subsidiaries with and into Home Account Holdings,
with Home Account  Holdings  surviving  the merger.  Home Account  Holdings is a
wholly owned  subsidiary of InteliData.  This acquisition was accounted for as a
purchase.

     The Company is  incorporated in the State of Delaware and has its corporate
headquarters in Reston,  Virginia. There are operating facilities in Charleston,
South Carolina, Omaha, Nebraska, and Toledo, Ohio.

(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   inter-company    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, allowance for doubtful accounts, costs of environmental  remediation
for real property  previously sold,  depreciation of fixed assets,  valuation of
long-lived assets, provision for discontinued operations,  and project plans for
the completion and delivery of certain solutions. These accounting estimates are
based on information
<Page>

currently  available.  Actual results could differ from those  estimates and in
some cases the actual results could vary materially from the estimates.

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

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

     The Company  also  enters  into  multiple  element  arrangements.  Elements
typically include software,  consulting,  implementation  and PCS. PCS contracts
generally  require the  Company to provide  technical  support and  unspecified,
readily available software updates and upgrades to customers.  Revenue 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
software in an ASP  environment.  The  customer may not take  possession  of the
software without incurring  significant  transition and infrastructure costs, as
well as potential  payments of fees to the Company for the  termination  of such
arrangements.  In cases  where  the  customer  has not  licensed  software  from
InteliData,  the customer must also purchase a license prior to having the right
to use the  software  in its  own  operating  environment,  in  addition  to the
aforementioned fees. In these situations, the Company applies the guidance under
EITF 00-3 and the Staff  Accounting  Bulletin No. 101,  Revenue  Recognition  in
Financial  Statements,  and recognizes the revenue  associated  with the license
and/or implementation fees ratably over the initial term of the contract.

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

(d)  Cash  and Cash  Equivalents -  The Company  considers  all  non-restricted,
highly liquid investments with original maturities of three months or less to be
cash  equivalents.   Cash  and  cash  equivalents  are  stated  at  cost,  which
approximates their fair market value.

(e)  Investments   -  Prior  to  January  1, 2001,  the Company  considered  its
investment in warrants to purchase common stock of Sybase, Inc. ("Sybase") to be
available-for-sale  under the  provisions  of Statement of Financial  Accounting
Standard ("SFAS") No. 115, Accounting for Certain Investments in Debt and Equity
Securities ("SFAS 115"). Effective January 1, 2001, the Company adopted SFAS No.
133, Accounting for Derivative  Instruments and Hedging Activities ("SFAS 133"),
which establishes  accounting and reporting standards for derivative instruments
and for hedging  activities by requiring  that all  derivatives be recognized in
the balance  sheet and measured at fair value.  Effective  January 1, 2001,  the
Company's investment in the Sybase warrants was accounted for in accordance with
SFAS 133.

     The  Company   reported  its   investments  in  marketable   securities  as
available-for-sale  with any  unrealized  holding  gains and losses,  net of the
related  income tax effect,  excluded  from  earnings and reported as a separate

<page>

component  of  stockholders'  equity  until such  gains or losses are  realized.
Dividends and interest  income are  recognized  when earned.  Realized  gains or
losses are included in earnings and are derived  using the  first-in,  first-out
method for determining cost of securities sold.

(f)  Property and Equipment - Property and equipment is stated at cost,  net  of
any  accumulated  depreciation.   Depreciation  of  property  and  equipment  is
calculated using the straight-line method over the estimated useful lives of the
assets, which are generally in the range of two to seven years.

(g)  Deferred  Revenues  -  Deferred  revenues  represent  unearned revenues for
services  that have not yet been provided or where  certain  accounting  revenue
recognition criteria have not yet been met.

(h)  Income  Taxes  -  Income  taxes are accounted  for in  accordance  with the
asset and liability  method.  Deferred tax assets and liabilities are recognized
for  the  future  tax  consequences  attributable  to  differences  between  the
financial  statement  carrying  amounts of existing  assets and  liabilities and
their  respective tax bases.  Deferred tax assets and  liabilities  are measured
using  enacted  tax rates  expected  to apply to taxable  income in the years in
which those temporary  differences are expected to be recovered or settled.  The
effect  on  deferred  tax  assets  and  liabilities  of a change in tax rates is
recognized in income in the period that includes the enactment  date.  Valuation
allowances are established against deferred tax assets when it is deemed,  based
on available evidence,  that it is more likely than not that some portion or all
of the deferred tax asset will not be realized.

(i)  Accounting   for  Stock-Based   Compensation  -  The  Company  accounts for
employee stock options in accordance  with Accounting  Principles  Board Opinion
No. 25,  Accounting for Stock Issued to Employees ("APB 25").  Under APB 25, the
Company recognizes no compensation expense related to employee stock options, as
no options are  granted at a price  below the market  price on the day of grant.
The Company  accounts for stock options  issued to  non-employees  in accordance
with the  provisions of SFAS No. 123,  Accounting for  Stock-Based  Compensation
("SFAS 123").

     SFAS 123 prescribes the  recognition of  compensation  expense based on the
fair  value of  options  on the grant  date and  allows  companies  to  continue
applying APB 25 if certain pro forma disclosures are made assuming  hypothetical
fair value method application.  The Company has elected to continue to apply the
provisions of APB 25 for options  granted to employees and provide the pro forma
disclosures pursuant to SFAS 123. Pro forma information  regarding the Company's
net loss has been  determined  as if the Company had  accounted for its employee
stock  options  under the fair  value  method of SFAS 123.  Under the fair value
method,  compensation  costs are  measured  at the grant  date based on the fair
value  of  the  award  and  is   recognized   over  the  service   period.   The
weighted-average fair values of options granted during 2003, 2002, and 2001 were
$1.70, $0.95, and $3.57, per share,  respectively.  The fair value is determined
by using the Black-Scholes  option-pricing model with the following assumptions:

                                             2003        2002         2001
                                            ------      ------      ------
 Risk free interest rate                    2.97%       3.82%       4.56%
 Dividend yield                                0%          0%          0%
 Volality                                     81%        105%         92%
 Expected life of options (years)               6           6           6

     Had  compensation  cost been  determined  based on the fair value method of
SFAS 123,  the  Company's  results of  operation  would have been as follows (in
thousands, except for per share data) for the years ended December 31:


                                                  2003        2002        2001
                                               ---------   --------   ----------

 Net loss, as reported                         $ (1,598)   $ (8,594)  $ (30,041)
 Stock-based employee compensation expense       (1,327)     (3,264)     (5,305)
                                               ---------   --------   ----------
 Pro forma net loss                            $ (2,925)   $(11,858)  $ (35,346)
                                               =========   ========   ==========
 Basic and diluted loss per common share       $  (0.06)   $  (0.24)  $   (0.77)
                                               =========   ========   ==========

(j)  Earnings (Loss) Per Common Share - Basic earnings (loss) per common   share
("EPS") is computed by dividing net income (loss) by the basic  weighted-average
common shares outstanding during the year. Diluted EPS
<page>

reflects  the  dilutive  effect of stock  options  and stock  awards  granted to
employees under stock-based  compensation plans, as well as stock warrants.  The
effects of stock  options and  warrants  were not included in the loss per share
computations in 2003, 2002 and 2001, because they would have been anti-dilutive.

(k)  Fair Value of Financial Instruments - The carrying values of the  Company's
financial  instruments such as cash and cash equivalents,  accounts  receivable,
accounts payable and accrued expenses, approximate their fair values.

(l)  Concentration  of  Credit  Risk  -  Financial  instruments that potentially
subject the Company to credit risk consist principally of trade receivables. The
Company sells its products  primarily to FI's in the United States.  The Company
believes  that the  concentration  of credit  risk in its trade  receivables  is
substantially  mitigated by the Company's on-going credit evaluation process and
the financial  position of the FI's that are highly regulated.  The Company does
not generally  require  collateral  from customers.  The Company  establishes an
allowance for doubtful  accounts based upon factors  surrounding the credit risk
of specific customers,  historical trends and other information.  As of December
31, 2003, the Company's top eight customers  comprised  approximately 58% of the
net accounts receivable balance.

(m)  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 the
scope of SFAS 150 as a liability.  Under prior guidance,  these same instruments
would  be  classified  as  equity.  SFAS  150 is  effective  for  all  financial
instruments  entered  into or  modified  after May 31,  2003.  Otherwise,  it is
effective  on July 1,  2003.  The  adoption  of SFAS 150 did not have a material
effect on our financial position, results of operations, or cash flows.

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

     In December 2002, the FASB issued SFAS No. 148,  Accounting for Stock-Based
Compensation-Transition  and  Disclosure-an  amendment of FAS 123 ("SFAS  148").
SFAS 148 amends SFAS No. 123,  Accounting for  Stock-Based  Compensation  ("SFAS
123"),  to  provide  alternative  methods  of  transition  for  an  entity  that
voluntarily changes to the fair value based method of accounting for stock-based
employee  compensation.  It also amends the disclosure provisions of SFAS 123 to
require  prominent  disclosure  about the effects on  reported  net income of an
entity's  accounting  policy  decisions  with  respect to  stock-based  employee
compensation  as noted in note 2(i).  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 did not  have  any  impact  on our  financial  position,
results of operations, or cash flows.

     In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated
with  Exit  or  Disposal  Activities  (including  Certain  Costs  Incurred  in a
Restructuring)  ("SFAS 146"), which supersedes  Emerging Issues Task Force Issue
No. 94-3,  Liability  Recognition for Certain Employee  Termination Benefits and
Other Costs to Exit an Activity ("EITF 94-3"). SFAS 146 requires  recognition of
a liability  for costs  associated  with an exit or disposal  activity  when the
liability is incurred, rather than when the entity commits to an exit plan under
EITF  94-3.  The  provisions  of SFAS 146 are  effective  for  exit or  disposal
activities  that are initiated  after  September 30, 2002. As of March 31, 2003,
the  Company  ceased  using one of its leased  spaces at its  offices in Reston,
Virginia.  The remaining  obligation on this lease was approximately  $1,080,000
through  December 31, 2006. In accordance  with SFAS 146, the Company  estimated
the fair  value  of net  sublease  rent to be  approximately  $465,000  over the
remaining term.  Accordingly,  the Company recorded an expense of $625,000 and a
corresponding liability as of March 31, 2003. As of May 1, 2003, the Company has
a subtenant for this space for the majority of the remaining
<page>

lease term and the actual  results of net  sublease  rent could  differ from the
above estimates.  As of December 31, 2003, the estimated remaining liability was
approximately $435,000.

     In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment
or Disposal of Long-Lived Assets ("SFAS 144"), which became effective January 1,
2002.  This  statement  replaces SFAS No. 121,  Accounting for the Impairment of
Long-Lived  Assets  and for  Long-Lived  Assets  to Be  Disposed  Of,  and  some
provisions of Accounting  Principles Board Opinion No. 30, Reporting the Effects
of  Disposal  of  a  Segment  of  a  Business  and  Extraordinary,  Unusual  and
Infrequently  Occurring  Events and  Transactions.  SFAS 144  requires  that one
accounting  model be used  for  long-lived  assets  to be  disposed  of by sale,
whether  previously  held and  used or  newly  acquired.  It also  broadens  the
presentation of discontinued  operations to include more disposal  transactions.
The Company's  adoption of this  pronouncement on January 1, 2002 did not have a
material affect on the Company's financial position,  results of operations,  or
cash flows.

     In June 2001, the FASB issued SFAS No. 141,  Business  Combinations  ("SFAS
141"), and SFAS No. 142, Goodwill and Other Intangible Assets ("SFAS 142"). 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 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.

     In November 2002, the Emerging  Issues Task Force issued a final  consensus
on Issue No. 00-21,  "Revenue  Arrangements with Multiple  Deliverables"  ("EITF
00-21").  In an  arrangement  with multiple  deliverables,  EITF 00-21  provides
guidance on how the arrangement  consideration  should be measured,  whether the
arrangement  should be divided into  separate  units of  accounting, and how the
arrangement  consideration  should  be  allocated  among the  separate  units of
accounting.  To  the  extent  that  a  multiple-deliverable   arrangement  or  a
deliverable  in a  multiple-deliverable  arrangement  is  within  the  scope  of
higher-level  authoritative literature,  EITF 00-21 does not apply. The guidance
in this Issue is  effective  for  revenue  arrangements  entered  into in fiscal
periods beginning after June 15, 2003. The adoption of EITF 00-21 did not have a
significant effect on our operations, financial position, or cash flows.

(3)  INVESTMENTS

     On January 20, 2000, Home Financial  Network,  Inc.  ("HFN"),  a company in
which  InteliData  held  approximately  a 25%  ownership  interest,  merged with
Sybase, Inc.  ("Sybase").  InteliData  accounted for its investment in HFN using
the equity method.  In exchange for its portion of ownership in HFN,  InteliData
received approximately  $5,867,000 in cash and approximately 1,770,000 shares of
Sybase stock.  The Company also held  warrants to purchase HFN common stock.  As
part of the merger  agreement,  such  warrants were  converted  into warrants to
purchase Sybase common stock.  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.

     As part of this merger  transaction,  an escrow account was  established to
provide Sybase  indemnity  protection  against  possible claims that might arise
against  HFN.  Approximately  133,000  shares of Sybase  common  stock  owned by
InteliData  were put in escrow,  along with  approximately  $440,000 of cash. In
March 2001, the Company received the escrow payments less approximately $129,000
for  miscellaneous  claims under the escrow provision.  During 2000,  InteliData
disposed of some of the Sybase  common stock.  The remaining  holdings of Sybase
common stock were sold during 2001.

     Prior to January 1, 2001, the Company considered its investment in warrants
to purchase  common stock of Sybase,  Inc.  ("Sybase") to be  available-for-sale
under the provisions of SFAS 115. Effective January 1, 2001, the
<page>

Company adopted SFAS 133, which establishes  accounting and reporting  standards
for  derivative  instruments  and for hedging  activities by requiring  that all
derivatives be recognized in the balance sheet and measured at fair value.

     SFAS  133  requires  that all  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  stockholders'  equity (as a component of
comprehensive  income),  depending  on whether the  derivative  is being used to
hedge changes in fair value or cash flows. The Company's  holdings of the Sybase
warrants are defined as derivatives under this guidance.  The Company's adoption
of SFAS 133,  effective  January 1, 2001, did not have a material  effect on the
Company's financial  statements as of the adoption date and did not result in an
adjustment  for the  cumulative  effect of an  accounting  change,  because  the
carrying value reflected fair value under the previous accounting  guidance.  In
accordance with SFAS 133, the Company  recorded an unrealized loss on investment
of $866,000 for the year ended December 31, 2001.  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 received
net proceeds of  approximately  $1,718,000  and  recognized a realized loss from
sales of investments of approximately $748,000.

     As of December 31, 2001, the accumulated other  comprehensive  loss balance
of  $210,000  represented  the  changes in the fair  market  value of the Sybase
common stock recorded as unrealized  gains on  investments  under SFAS 115. This
amount was realized  with the  Company's  disposition  of the  remaining  Sybase
investments in June 2002. Additionally, in 2001, the Company sold its investment
in marketable  securities at their carrying  values and received net proceeds of
$250,000.

(4)  PROPERTY AND EQUIPMENT

     Property  and  equipment  consists  of the  following  at  December  31 (in
thousands):

                                       2003        2002
                                      -------    --------
 Building improvements                $  194     $  457
 Office equipment                      4,844       6,408
 Furniture and fixtures                  765         765
                                      -------    --------
                                       5,803       7,630
 Accumulated depreciation             (4,274)     (5,076)
                                      -------    --------
 Total                                $1,529     $ 2,554
                                      =======    ========

(5)  ACCRUED EXPENSES AND OTHER LIABILITIES

     Accrued  expenses  and  other  liabilities  consists  of the  following  at
December 31 (in thousands):

                                       2003        2002
                                      -------     -------
 Accrued compensation                 $  773      $ 1,772
 Provision for forward loss                -          120
 Accrued professional fees               215          595
 Accrued insurance                       257          250
 Deferred taxes                            -          288
 Other liabilities                       354          433
                                      -------     -------
  Total                               $1,599      $ 3,458
                                      =======     =======

     The  provision  for  forward  loss of  $120,000  as of  December  31,  2002
represented the future  anticipated loss based on the excess of the estimates at
completion  of the total  contract  costs  over  total  contract  revenues.  The
contract related to the $120,000 accrual was completed during 2003.

<PAGE>

(6)  DISCONTINUED OPERATIONS

     Under various  disposal plans adopted in 1997,  1998, and 2000, the Company
completed the divestiture of all of its telecommunications, interactive services
businesses and the Caller ID adjunct leasing activities, respectively.

     As of December 31, 2003, the net liabilities of discontinued  operations of
$120,000 relate to the telecommunications divisions. These liabilities relate to
the  environmental  clean  up  associated  with  prior  tenants'  operations  at
InteliData's  former  New  Milford,   Connecticut  property.  In  January  2000,
InteliData sold the New Milford,  Connecticut  property and the building located
thereon,  its  only  remaining  asset  in  its  discontinued  operations  of the
telecommunications  division.  In the context of this sale, InteliData agreed to
undertake  limited  remediation of the site in accordance with applicable  state
and federal  law. The subject  site is not a listed  federal or state  Superfund
site and InteliData has not been named a "potentially  responsible party" at the
site. The remediation plan agreed to with the purchaser allows InteliData to use
engineering and institutional controls (e.g., deed restrictions) to minimize the
extent  and costs of the  remediation.  Further,  at the time of the sale of the
facility,  InteliData established a $200,000 escrow account from the proceeds of
the sale for certain  investigation/remediation  costs. As of December 31, 2003,
this escrow account balance was $223,000, which is to be paid out to InteliData.
Moreover, InteliData has obtained environmental insurance to pay for remediation
costs up to  $6,600,000  in excess of a  retained  exposure  limit of  $600,000.
InteliData  estimates  its  remaining  liability at December 31, 2003 related to
this matter and other  costs to be  approximately  $120,000  and has a liability
recorded 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.   The  net   liabilities  of
discontinued operations as of December 31, are as follows (in thousands):

                                                 2003       2002
                                                ------     ------
        Other current liabilities               $  45      $  51
        Other noncurrent liabilities               75        200
                                                -----      ------
        Total                                   $ 120      $ 251
                                                =====      ======


(7)  STOCKHOLDERS' EQUITY

(a)  Issuance and  Subsequent  Conversion of  Preferred  Stock and Warrants - In
July 1999, the Company issued 600 shares of 4% Convertible  Preferred  Stock and
warrants to purchase  120,000 shares of InteliData  common stock. As of December
31, 1999, all of the preferred stock was converted into common stock.

     The fair value of these 120,000 warrants,  which expire five years from the
issuance date and have an exercise price of $4.53, was estimated as of the grant
date using the  Black-Scholes  model.  The following  assumptions  were used: no
dividend yield,  expected  volatility of 129%, life of 5 years,  and a risk free
interest  rate  of  4.00%  per  annum.   Accordingly,   the  Company   allocated
approximately  $369,000 to these  warrants and the charge was amortized over the
period that the  preferred  stock was  outstanding.  As of December 31, 2003 and
2002, 101,500 warrants remained  outstanding.  These warrants expire on July 22,
2004.

(b)  Stock  Options and Awards - The Company  sponsors  several stock option and
award plans that cover  substantially  all employees and members of the board of
directors.  Options  and awards  granted  under such plans  typically  vest over
periods  ranging  from one to five years and  generally  expire in eight and ten
years,  although some grants  provide for vesting in annual  increments or allow
for accelerated vesting based upon reaching performance milestones.

     The Company amortizes the fair value of the stock awards (based on the fair
value of common  stock on the grant  dates  multiplied  by the  number of shares
granted) over the  respective  vesting  periods.  In 2003,  2002,  and

<PAGE>

2001, the Company recorded $178,000, $841,000, and $1,484,000,  respectively, of
compensation expense related to these awards.

     Options  granted  under the plans  allow the  purchase of stock at the fair
value of such common stock at the respective  grant dates.  Because  options are
issued with  exercise  prices equal to the fair value of the common stock on the
grant  dates,  the Company  does not record any  compensation  expense for these
options.

     A summary of stock option  activity for each of the Company's  stock option
plans is as follows:

                                         Exercise Prices
                                    -----------------------------    Number
                                     Minimum        Maximum        Of Options
                                     -------        -------     ----------------
         January 1, 2001             $ 0.69      $   19.44       3,603,775
           Granted                   $ 1.00      $    5.90       1,139,834
           Exercised                 $ 0.68      $    4.91        (220,000)
           Canceled                  $ 0.81      $   18.94        (665,482)
                                                                ----------------
           December 31, 2001         $ 0.69      $   19.44       3,858,127
           Granted                   $ 0.60      $    2.35       1,302,000
           Exercised                 $ 1.00      $    2.31         (11,825)
           Canceled                  $ 0.80      $   10.31        (914,505)
                                                                ----------------
           December 31, 2002         $ 0.60      $   19.44       4,233,797
           Granted                   $ 1.50      $    3.02         111,000
           Exercised                 $ 0.60      $    1.83        (668,645)
           Canceled                  $ 0.60      $    7.56        (225,423)
                                                                ----------------
         December 31, 2003           $ 0.60      $   19.44       3,450,729
                                                                ================

     The  Company has  options  outstanding  and  exercisable  in varying  price
ranges. The schedule below details the Company's options by price range:
<TABLE>

                                  Options Outstanding                                   Options Exercisable
                 --------------------------------------------------------------   -----------------------------
                                                                       Weighted                      Weighted
                                                      Weighted         Average                        Average
                    Range of            Number        Average          Exercise       Number of       Exercise
                 Exercise Prices       Of Options      Life            Price          Options          Price
                 ---------------       ----------      ----            -----         --------         -----
<S>             <C>                  <C>            <C>            <C>            <C>            <C>

                $  0.000  - 1.000        593,336     6.2 years       $   0.73         250,197      $     0.78
                   1.001  - 1.500      1,576,585     4.7 years           1.23         959,626            1.22
                   1.501  - 2.000        264,645     5.8 years           1.78         190,532            1.81
                   2.001  - 2.500         88,000     6.5 years           2.20          58,244            2.21
                   2.501  - 3.000        145,558     4.5 years           2.97         130,144            2.98
                   3.001  - 5.000        462,675     5.4 years           4.15         405,428            4.20
                   5.001  -10.000        298,000     4.7 years           7.25         296,665            7.26
                  10.001  -21.375         21,930     3.2 years          15.80          21,930           15.80
                -----------------   ------------   -----------    -----------     -----------    ------------
                                       3,450,729                                    2,312,766
                                    ============                                  ===========
</TABLE>

(c)  Employee  Stock  Purchase  Plan  -  Under  the Employee Stock Purchase Plan
(approved by the Company's  stockholders in 1996),  the Company is authorized to
issue up to 500,000  shares of common stock to its full-time  employees,  nearly
all of whom are eligible to participate. Under the terms of the Plan,  employees
can  choose  each  period  to have up to twenty  percent  of their  annual  base
earnings  withheld to purchase the Company's common stock. The purchase price of
the stock is 85 percent of the lower of its beginning-of-period or end-of-period
market price.  During the years ended  December 31, 2003,  2002,  and 2001,  the
Company  issued  15,640,  29,868,  and  28,822,  shares of stock under the Plan,
respectively.

(d)  Treasury Stock - In 2003 and 2001, the Company paid $73,000 and $41,000  to
acquire  an  additional  27,310  and  15,632  shares  of its own  common  stock,
respectively.  These  shares were  surrendered  by  employees  of the Company to
satisfy  tax-withholding  obligations  associated  with the  vesting  of certain
restricted  stock awards.  Additionally,  the Company  participated in a program
permitted by the  Securities  and Exchange  Commission  and Nasdaq and purchased
100,000  shares of its common stock  shortly  after the events  surrounding  the
terrorist attacks

<PAGE>

on September 11, 2001 for a total of $309,000. As of December 31, 2003 and 2002,
the Company had a total of 834,000 and 806,000  common  shares in treasury at an
aggregate cost of $2,546,000 and $2,473,000, respectively.

(e)  Stockholder  Rights  Plan - In  January   1998,  the   Company's  Board  of
Directors  adopted a Stockholder  Rights Plan.  This plan was amended on May 24,
2000.  The rights are  designed  to assure that all the  Company's  stockholders
receive fair and equal  treatment  in the event of any proposed  takeover of the
Company and to guard against  partial tender offers,  open market  accumulations
and other tactics to gain control of the Company without paying all stockholders
a control premium.

     Terms of the Stockholder Rights Plan provide for a dividend distribution of
one right for each  share of common  stock to  holders of record at the close of
business on February 6, 1998.  Shareholders  will be able to exercise the rights
only in the event,  with certain  exceptions,  an acquiring party accumulates 20
percent  or more of the  Company's  voting  stock,  or if a party (an  acquiring
person)  announces an offer to acquire 20 percent or more without prior approval
of the Company's Board of Directors. The rights will expire on January 21, 2008.
Each right  initially  will  entitle the holder to buy one  one-thousandth  of a
share of a new series of preferred stock at a price of $42.50.

     In addition,  upon the occurrence of certain events,  holders of the rights
will be entitled to purchase  either the Company's  common stock or shares in an
acquiring person at half of market value. Further, at any time after a person or
group acquires 20 percent or more of the Company's outstanding voting stock, the
board of directors may, at its option, exchange part or all of the rights (other
than rights held by the acquiring person,  which will become void) for shares of
the Company's  common stock on a one-for-one  basis.  The rights will  therefore
cause substantial dilution to a person or group that acquires 20 percent or more
of the Company's common stock on terms not approved by the board.

(f)  Stock   Warrants  -  In   2000,  the   Company   entered  into a  five-year
agreement with an unrelated  party,  whereby the Company issued warrants to this
entity in exchange  for the entity's  becoming a premier  reference  site.  As a
premier  reference  site,  the entity  would  make its  facility  and  personnel
reasonably accessible for InteliData,  InteliData's potential clients, analysts,
and industry publication reporters,  in order to demonstrate or answer questions
regarding  InteliData's  solution  and  its  capabilities.  On  June  30,  2000,
InteliData issued five-year,  fully-vested warrants to purchase 50,000 shares of
InteliData  common stock at an exercise price of $4.75 per share. The fair value
of these  warrants was  estimated  as of the grant date using the  Black-Scholes
model.  The  following  assumptions  were  used:  no  dividend  yield,  expected
volatility of 143%, life of 2 years,  and a risk free interest rate of 6.44% per
annum.  Accordingly,  the Company  recorded  approximately  $419,000 of deferred
compensation  that is being amortized over the term of this  agreement.  For the
years ended  December 31, 2003,  2002 and 2001,  the Company  incurred  expenses
related to these warrants were $80,000 per year. As of December 31, 2003, all of
these warrants were still outstanding. These warrants expire on June 30, 2005.

(g)   Private  Placement  and  Warrants - In  November and  December  2001,  the
Company closed private  placement  sales of an aggregate of 2,863,000  shares of
its common stock for a price of $2.75 per share,  and warrants  exercisable  for
the purchase of 1,431,364  shares of its common stock,  at an exercise  price of
$2.75 per share, resulting in a gross proceeds of approximately $7,873,000.  The
placement  agent  in  the  transaction   received   approximately   $472,000  in
commissions  and  warrants  exercisable  for the  purchase of 286,000  shares of
InteliData's common stock, at an exercise price of $2.75 per share.

     During July 2003, the Company issued  1,431,000  shares of its common stock
pursuant to the exercise of warrants,  as amended. The warrant exercise resulted
in gross  proceeds  of  approximately  $3,335,000.  The  placement  agent in the
transaction received  approximately  $200,000 in commissions,  and exercised the
net issuance  provision within their 286,000 warrants and received 23,000 shares
of the Company's  common stock.  All of the warrants that were issued as part of
the 2001 private placement have been exercised.

(8)  EMPLOYEE 401(k) PLAN

     The Company  sponsors a defined  contribution  plan ("Plan") that qualifies
for  tax  treatment   under  Section  401(a)  of  the  Internal   Revenue  Code.
Participation  in the Plan is available to employees who are at least twenty-one
years of age.  Company  contributions  to the Plan are based on a percentage  of
employee contributions.  The Company

<PAGE>

contributed   $86,000,   $118,000,   and  $153,000  in  2003,  2002,  and  2001,
respectively.  The Company also pays for administrative expenses incurred by the
Plan.

(9)  INCOME TAXES

     A reconciliation of income taxes computed at the statutory federal tax rate
on earnings  (loss) before income taxes (from  continuing  operations) to actual
income taxes for the years ended December 31, is as follows (in thousands):

<TABLE>

                                                                             2003            2002          2001
                                                                         -----------     ----------      ---------
<S>                                                                    <C>               <C>            <C>

         Income tax liability (benefit) computed at the statutory rate  $    (660)       $  (3,056)      $ (10,570)
         Other                                                               (736)          (1,207)          1,264
         Change in valuation allowance                                      1,108            4,126           9,146
                                                                        ---------        ---------       ---------
              Provision (benefit) for income taxes                      $    (288)       $    (137)      $    (160)
                                                                        =========        =========       =========
</TABLE>


     The current federal income tax benefit of $288,000  represents the reversal
of a prior year  accrual for  exposure  that did not  materialize  and no longer
exists at December 31, 2003. The tax effects of temporary  differences that give
rise to  significant  portions of the  deferred  tax assets and  liabilities  at
December 31, 2003 and 2002 are as follows (in thousands):

                                                     2003           2002
                                                  ---------       ---------
  Net operating loss carryforwards                $  71,576       $  70,153
  Basis differences in intangibles                   (3,241)         (3,399)
  Accounts receivable                                    38             112
  Property and equipment                                (11)             44
  General business credit carryforward                  489             489
  Other                                                 423             767
  Alternative minimum tax credit carryforward            60              60
                                                  ---------       ---------
       Total gross deferred tax assets               69,334          68,226
       Valuation allowance                          (69,334)        (68,226)
                                                  ---------       ---------
           Net deferred tax assets                $      --       $      --
                                                  =========       =========

     The net  changes  in the total  valuation  allowance  for the  years  ended
December 31, 2003,  2002, and 2001, were an increase of $1,108,000,  $4,126,000,
and  $30,020,000,  respectively.  A  valuation  allowance  was  established  for
deferred  tax assets as of  December  31,  2003 and 2002  because it was deemed,
based on  available  evidence,  that it is more  likely than not that all of the
deferred tax asset will not be realized.

     At December 31, 2003, the Company had net operating loss  carryforwards for
federal income tax purposes of approximately $205 million,  which expire in 2008
through 2023,  general  business tax credits of  approximately  $489,000,  which
expire in 2005 through 2010, and an alternative  minimum tax credit carryforward
of approximately  $60,000, which may be carried forward indefinitely and used to
offset  future  regular  taxable  income.  Approximately  $45 million of the net
operating  loss were  incurred by Home Account prior to its  acquisition  by the
Company and are  subject to an annual  limitation  pursuant to Internal  Revenue
Code Section 382 as a result of cumulative changes in ownership of more than 50%
in 2001.

(10) COMMITMENTS AND CONTINGENCIES

(a)  Purchase Obligations  - The Company entered into multiple vendor agreements
for outsourced  services as part of its ASP solution offering for certain Online
Banking and Payment  Solutions  clients.  Some of these  vendor  agreements  are
long-term  (i.e.,  expire  in April  and May 2005) and  commit  the  Company  to
specified  minimum  charges during the terms of the contracts.  These  long-term
obligations are disclosed below.  During 2003,  several of the Company's clients
migrated  from  this  ASP   environment  to  an  in-house   solution   utilizing
InteliData's  licensed  software.  As a result, a possibility  exists for future
losses due to the decrease in estimated  future  revenue  streams when  compared
with the Company's  current  contractual cost structure for outsourced  services
within this ASP environment. Entering 2004, the projected costs are estimated to
exceed projected revenues by approximately  $79,000 on a monthly basis; this gap
will fluctuate based on monthly activity.

<PAGE>

     In assessing  potential  future  losses  associated  with the Company's ASP
business,  the Company may include the possibility of new clients that would add
incremental revenue to this ASP environment.  Additionally, the Company may have
the opportunity to restructure vendor contracts and decrease contractual charges
(i.e.,  extend the current  contract  with lower  minimum  charges or migrate to
different  vendors).  Management  continues to assess both the potential for new
business  prospects and the  possibility of reducing the Company's costs through
renegotiation  of existing  agreements.  In accordance  with generally  accepted
accounting  principles,  the Company is accounting  for these  contract costs as
they are incurred. Expenses were $3,158,000,  $2,832,000, and $2,325,000 for the
years ended December 31, 2003, 2002, and 2001, respectively.

     Leases - The Company leases  facilities and equipment under  cancelable and
noncancelable  operating  lease  agreements.  The facility leases have remaining
terms from two to three years.  Rent  expense was  $1,111,000,  $1,369,000,  and
$1,436,000 for the years ended December 31, 2003, 2002, and 2001, respectively.

     Future  minimum lease payments under  noncancelable  operating  leases with
initial or  remaining  terms in excess of one year at  December  31,  2003,  and
future minimum payments under purchase  obligations for outsourced services were
as follows (in thousands):

<TABLE>

                                                       Lease            Purchase
     Years Ending December 31,                      Obligations        Obligations      Total
     -------------------------                    ---------------      -----------   -----------
     <S>                                          <C>                  <C>           <C>
          2004                                        $     1,317      $    3,180    $     4,497
          2005                                              1,138           1,080          2,218
          2006                                                836              --            836
          2007                                                 --              --             --
          2008 and thereafter                                  --              --             --
                                                       ----------      ----------    -----------
              Total minimum lease payments            $     3,291      $    4,260    $     7,551
                                                      ===========      ==========    ===========
</tABLE>

     The future minimum lease  obligations  do not include  $560,000 of expected
receipts from subleases. See Notes 2(m) and 13 for additional information on the
subleased space.

(b)  Patent   Matters  -  The  Company  does not believe  that its  products and
services  infringe  on the  rights of third  parties.  From time to time,  third
parties  may assert  infringement  claims  against  InteliData.  There can be no
assurance  that any such  assertion  will not  result  in costly  litigation  or
require the  Company to cease  using,  or obtain a license to use,  intellectual
property of such parties.

(c)  Litigation  - The   Company  is  not  currently  a  party  to any  material
litigation.  From time to time, the Company may be a party to routine litigation
incidental to its business.  Management  does not believe that the resolution of
any or all of such routine  litigation will be likely to have a material adverse
effect on the Company's financial condition or results of operations.

(11) VALUATION AND QUALIFYING ACCOUNTS

     The components of significant  valuation and qualifying accounts associated
with accounts  receivable for the years ended December 31, 2003 and 2002 were as
follows (in thousands):

          Balance, January 1, 2002                          $      1,044
             Recoveries                                              252
             Charged to costs and expenses                          (340)
             Write-offs                                             (635)
                                                            ------------
          Balance, December 31, 2002                                 321
             Charged to costs and expenses                           (70)
             Write-offs                                             (141)
                                                            ------------
          Balance, December 31, 2003                        $        110
                                                            ============

     As part of the Home  Account  acquisition  in 2001,  the  Company  acquired
certain accounts  receivables that were outstanding as of the acquisition  date.
The Company pursued collection efforts,  but ultimately  determined that some of
these  accounts  were  uncollectible.  Such doubtful  accounts  related to these
acquired assets could not be adjusted as part of the purchase price  allocation,
so the bad debt expense has been recognized in operations in 2001.

<PAGE>

During  2001,  the  Company  recorded  costs  associated  with these  particular
uncollectible  accounts and began to write off some  accounts.  Additionally  in
2002, the Company wrote off some previously reserved legacy InteliData accounts.
During 2003 and 2002, the Company  experienced  improved cash collection on some
previously  reserved  accounts  and an account  that had been  written off. As a
result of these collection efforts and the resulting cash receipts,  the Company
reduced  its bad debt  expense  in 2003 and 2002 by  approximately  $70,000  and
$340,000, respectively, to reflect the positive developments.

(12) GOODWILL AND OTHER INTANGIBLES

     In June 2001, the FASB issued SFAS No. 141,  Business  Combinations  ("SFAS
141"), and SFAS No. 142, Goodwill and Other Intangible Assets ("SFAS 142"). 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 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  and  the  assembled  workforce
intangible asset, and the assembled workforce intangible asset was combined with
goodwill for financial accounting and reporting.  Accordingly,  the goodwill and
intangible asset consist of the following components (in thousands):


     As of December 31, 2003:           Goodwill       Intangible        Total
                                      -----------     -----------      ---------
      Gross carrying amount           $   29,793      $    7,200       $ 36,993
      Accumulated amortization            (3,555)         (2,140)        (5,695)
                                      -----------     -----------      ---------
      Net                             $   26,238      $    5,060       $ 31,298
                                      ===========     ===========      =========

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

     The  Company's   intangible   asset  consists  of  $7,200,000   related  to
contracts/relationships,  which  has an  estimated  useful  life  of ten  years.
Contracts/relationships  was  determined  based on the history of low attrition,
the high cost of switching,  market prices,  forecasted revenues,  evaluation of
competitors,  and other factors.  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
                                                     -------
                  2004                               $   720
                  2005                                   720
                  2006                                   720
                  2007                                   720
                  2008                                   720

     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 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
<PAGE>

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.  As of  December  31,  2003,  the Company is not aware of such events or
circumstances that could indicate potential impairment.

(13) ACQUISITION OF HOME ACCOUNT

     On January 11,  2001,  the Company  acquired  Home Account  Holdings,  Inc.
("Home  Account")  and its  operating  subsidiary,  Home Account  Network,  Inc.
Pursuant  to the merger  agreement,  the  Company  purchased  Home  Account  for
approximately  $320,000 in cash and 6,900,000 shares of Company common stock and
the merger was accounted for as a purchase. The purchase price was the result of
an arm's-length  negotiation between the Company and Home Account,  based on the
Company's  evaluation  of the  fair  market  value of Home  Account's  business,
including its revenues.

     As a  result  of the  acquisition  of  Home  Account,  InteliData  incurred
acquisition  expenses  for  costs to exit  certain  activities  at Home  Account
locations  and to  involuntarily  terminate  employees of the acquired  company.
Generally  accepted   accounting   principles  require  that  these  acquisition
integration  expenses,  which are not  associated  with the generation of future
revenues, have no future economic benefit and which meet certain other criteria,
be reflected as assumed  liabilities  in the allocation of the purchase price to
the  net  assets  acquired.  The  components  of  the  acquisition   integration
liabilities  included  approximately  $1,010,000 for lease costs for the vacated
Home Account  headquarters in Emeryville,  California.  As of December 31, 2003,
the Company had a remaining  liability  of $309,000  associated  with such lease
costs,  of which  $258,000 is current and $51,000 is  noncurrent.  Beginning  in
August 2002,  the Company  subleased  this space for the remainder of the lease,
ending in February 2005.

     Due to the fact that the  acquisition was completed on January 11, 2001, no
pro forma  financial  information is presented to give effect to the acquisition
of Home Account as if it occurred on January 1, 2001. The Company  believes that
the results of operations for the eleven-day period are not material.

(14) HOME ACCOUNT INCENTIVE PLAN

     In 2000,  Home Account  approved the 2000  Incentive  Plan to encourage the
retention  of  certain  officers  of Home  Account  through a change of  control
transaction,  and after such a  transaction  to the extent,  up to one year,  as
desired by the acquirer.  Upon  acquisition of Home Account by an acquirer,  the
2000  Incentive  Plan  provided  for the  granting  to plan  participants  of an
aggregate of 15% of the net amount of the merger consideration allocable to Home
Account's preferred  stockholders after payment of the debt preference and other
expenses  associated  with a transaction.  Under the InteliData and Home Account
merger  transaction,  this  incentive plan was payable in the form of InteliData
common  stock and such  payments  were made by the group of former Home  Account
preferred   stockholders   (who  are   collectively   considered   a  "principal
stockholder").  Two-thirds of the 2000 Incentive Plan  allocation  vested on the
transaction  closing  date  and  represent  a  pre-acquisition  expense  to Home
Account.  In  connection  with the merger  transaction,  the  Company  agreed to
advance  the  participants  funds to pay for their tax  withholding  obligations
associated with the two-thirds  portion.  The original  principal amount of this
receivable  balance was  approximately  $1,116,000.  The shares allocable to the
participants  were  placed in an escrow  account  and were  released to the Home
Account Stockholders' Representative in accordance with the Merger Consideration
Escrow Agreement.  As of December 31, 2001, the remaining outstanding receivable
balance,  including interest, was approximately $466,000 and is reflected in the
"Other  receivable"  balance.  On February 4, 2002,  the  remaining  outstanding
balance plus additional interest accrued was paid in full.

     The remaining  one-third of the participants'  allocation vested on January
11, 2002 (one year from the  transaction  closing  date).  All forfeited  shares
reverted to the former  preferred  stockholders  of Home Account.  In connection
with the 2000  Incentive  Plan  allocation,  the deferred  compensation  for the
one-third portion became fixed and measurable on April 1, 2002 at $155,000 based
on $1.20 (the closing price of the Company's common stock at April 1, 2002). The
difference  between this amount and the recognized  expense in the prior periods
was recorded as an $183,000 reduction of expense during 2002.
<PAGE>

(15) UNAUDITED QUARTERLY FINANCIAL DATA

         The results of the Company's quarterly operations for the years ended
December 31, 2003 and 2002 are set forth in the following table (in thousands,
except per share data):
<TABLE>

                                                 First        Second          Third         Fourth         Year
                                             -----------   -----------   ------------   -----------    ----------
<S>                                         <C>           <C>            <C>           <C>            <C>
2003
----
Revenues                                     $     5,625    $     5,951    $    4,692    $    4,362     $   20,630
Cost of revenues                                   1,934          1,948         1,858         1,809          7,549
Operating expenses                                 3,809(A)       4,026         3,417         3,894         15,146(B)
                                             -----------    -----------    ----------    ----------     ----------
Operating loss                                      (118)           (23)         (583)       (1,341)        (2,065)
Other income (expense), net                          (29)            12            16           180            179
Provision (benefit) for income taxes                   -              -             -          (288)          (288)
                                             -----------    -----------    ----------    ----------     ----------
Net loss                                     $      (147)   $       (11)   $     (567)   $     (873)    $   (1,598)
                                             ===========    ===========    ==========    ==========     ==========

Basic and diluted earnings (loss)
     per common share                        $     (0.00)   $    (0.00)    $    (0.01)   $    (0.02)    $    (0.03)
                                             ===========    ===========    ==========    ==========     ==========

Basic and diluted weighted-average
     common shares outstanding                    48,853         49,002        50,864        51,078         50,028
                                             ===========    ===========    ==========    ==========     ==========

     (A)  Operating expenses reflect a  reversal  of approximately  $630,000  in
          estimated  bonus  accruals  that  were not paid,  but were  previously
          provided for in 2002.

     (B)  The  Company  did not accrue for  bonuses in fiscal  year 2003 as none
          will be paid.


2002
----
Revenues                                     $     4,708    $     5,461    $    6,010    $    5,316     $   21,495
Cost of revenues                                   1,959          2,079         2,376         2,060          8,474
Operating expenses                                 6,066          6,151         5,281         3,605         21,103
                                             -----------    -----------    ----------    ----------     ----------
Operating loss                                    (3,317)        (2,769)       (1,647)         (349)        (8,082)

Other income (expense), net                          391         (1,084)           32            12           (649)
Provision (benefit) for income taxes                   -              -             -          (137)          (137)
                                             -----------    -----------    ----------    ----------     ----------
Net loss                                     $    (2,926)   $    (3,853)   $   (1,615)   $     (200)    $   (8,594)
                                             ===========    ===========    ==========    ==========     ==========

Basic and diluted earnings (loss)
     per common share                        $     (0.06)   $    (0.08)    $    (0.03)   $    (0.00)    $    (0.18)
                                             ===========    ===========    ==========    ==========     ==========


Basic and diluted weighted-average
     common shares outstanding                    48,494         48,501        48,815        48,840         48,869
                                             ===========    ===========    ==========    ==========     ==========

</TABLE>
                                   * * * * * *

<PAGE>
                        INDEPENDENT AUDITORS' REPORT



To the Board of Directors and Stockholders of
InteliData Technologies Corporation
Reston, Virginia

     We have audited the accompanying  consolidated balance sheets of InteliData
Technologies  Corporation  and  subsidiaries  (the "Company") as of December 31,
2003 and 2002, and the related consolidated statements of operations, changes in
stockholders'  equity,  and cash flows for each of the three years in the period
ended  December  31,  2003.  These  consolidated  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

     We conducted our audits in accordance  with  auditing  standards  generally
accepted in the United States of America.  Those standards  require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

     In our opinion,  such consolidated  financial statements present fairly, in
all material respects, the financial position of the Company and subsidiaries as
of December  31, 2003 and 2002,  and the results of their  operations  and their
cash flows for each of the three years in the period ended December 31, 2003, in
conformity with accounting principles generally accepted in the United States of
America.

/s/ Deloitte & Touche LLP

McLean, Virginia
March 10, 2004

<PAGE>


ITEM 9.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
--------------------------------------------------------------
              ACCOUNTING AND FINANCIAL DISCLOSURE
              -----------------------------------

              None.

ITEM 9A.   CONTROLS AND PROCEDURES
----------------------------------

(a)        EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

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

(b)        CHANGE IN INTERNAL CONTROLS

     There has been no change in the Company's  internal  control over financial
reporting  during  the  quarter  ended  December  31,  2003 that has  materially
affected,  or is reasonably likely to materially  affect, the Company's internal
control over financial reporting.


PART III
========

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
-------------------------------------------------------------

     Directors  and  Executive  Officers - The  Company  incorporates  herein by
reference the information  concerning directors and executive officers contained
in its Proxy Statement for its 2004 Stockholders' Meeting to be filed within 120
days after the end of the Company's fiscal year (the "2004 Proxy Statement").

     Section  16(a)  Beneficial  Ownership  Reporting  Compliance  - The Company
incorporates  herein by  reference  the  information  concerning  Section  16(a)
beneficial ownership reporting compliance contained in its 2004 Proxy Statement.

     Code  of  Ethics  -  The  Company  incorporates  herein  by  reference  the
information concerning its code of ethics contained in its 2004 Proxy Statement.

ITEM 11. EXECUTIVE COMPENSATION
-------------------------------

     The Company  incorporates  herein by reference the  information  concerning
executive  officer  and  director  compensation  contained  in  the  2004  Proxy
Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
-----------------------------------------------------------------------

     The Company  incorporates  herein by reference the  information  concerning
security ownership of certain beneficial owners and management  contained in the
2004 Proxy Statement.

<PAGE>


SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

                               Number of           Weighted average
                               securities to       exercise           Number of
                               be issued upon      price of           securities
                               exercise of         outstanding        remaining
                               outstanding         options,           available
                               options, warrants   warrants           for future
                               and rights          and rights         issuance
                               ----------------   ----------------   -----------
Equity compensation plans
  approved  by stockholders      2,386,000         $ 2.69                541,000
Equity compensation plans
  not approved by stockholders   1,351,000         $ 1.60                      -
                                 ---------         ------                -------
Total                            3,737,000         $ 2.30                541,000
                                 =========         ======                =======

     The equity  compensation  plans not  approved by  stockholders  consists of
warrants that are described in Note 7 to the consolidated  financial  statements
included  in this  Annual  Report  on Form  10-K  and the 1998  Chief  Executive
Officer's Plan.

     The 1998 Chief Executive  Officer's Plan (the "Plan") was adopted to induce
Alfred S.  Dominick,  Jr. to become the  Company's  Chief  Executive  Officer in
August 1998. The Plan provided for the grant of an option to purchase  1,200,000
shares of the  Company's  common  stock at an  exercise  price of $1.22.  Of the
option grant,  200,000 vested in one-third  increments over a three-year  period
from August 1998 to August 2001. Another 500,000 vested based on the achievement
of specified  trading  prices for the  Company's  common  stock.  The  remaining
500,000 will vest subject to Mr.  Dominick's  continued  employment and upon the
earlier of i) the  Company's  common  stock  trading  above $25.00 per share for
sixty consecutive days, or ii) April 15, 2008.

     Additionally,  the Company has no i) individual options, rights or warrants
assumed in any merger, acquisition or consolidation transaction;  ii) securities
available for future issuance under a compensation plan other than upon exercise
of options,  rights or warrants; and iii) equity compensation plan that contains
a formula for calculating the number of securities  available for issuance under
the plan.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
-------------------------------------------------------

     The Company  incorporates  herein by reference the  information  concerning
certain  relationships  and  related  transactions  contained  in the 2004 Proxy
Statement.

ITEM 14.   PRINCIPAL ACCOUNTING FEES AND SERVICES
-------------------------------------------------

     The Company  incorporates  herein by reference the  information  concerning
principal  accounting fees and services and the audit  committee's  pre-approval
policies and procedures contained in the 2004 Proxy Statement.

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
-------------------------------------------------------------------------

(a)  DOCUMENTS FILED AS PART OF THIS REPORT

     1.   FINANCIAL STATEMENTS - See Item 8 of this Report

     2.   FINANCIAL STATEMENT SCHEDULES - None

     3.   EXHIBITS

(b)  REPORTS ON FORM 8-K

     The  Company  furnished  a  Current  Report  on Form 8-K  (Item  12) to the
Securities and Exchange  Commission on November 6, 2003, to report  InteliData's
results of operations  and financial  condition for the quarter ended  September
30, 2003 (not incorporated by reference).
<PAGE>

     The Company filed a Current Report on Form 8-K (Item 5) with the Securities
and Exchange  Commission on July 9, 2003,  relating to the July 8, 2003 issuance
of 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.

(c)  EXHIBITS

  Exhibit No.                        Description
  ----------                         -----------

     3.1  Amended and Restated Certificate of Incorporation, dated June 14, 2002
          (Incorporated  herein by  reference  to Exhibit  3.1 to the  Company's
          Report on Form 10-Q for the quarter ended June 30, 2002).

     3.2  Bylaws of InteliData Technologies Corporation. (Incorporated herein by
          reference  to  Appendix  V to the Joint  Proxy  Statement  /Prospectus
          included  in the  Registration  Statement  on Form S-4 filed  with the
          Commission on August 29, 1996, as amended, File Number 333-11081).

     4.1  Rights  Agreement,  dated as of January 21,  1998,  by and between the
          Company and American Stock Transfer & Trust Company,  as Rights Agent.
          (Incorporated  herein by  reference to the  Registration  Statement on
          Form 8-A filed with the Commission on January 26, 1998).

   4.1.1  Amendment No. 1 dated May 24, 2000 to the Rights  Agreement,  dated as
          of January 21,  1998,  by and between the Company and  American  Stock
          Transfer & Trust  Company,  as Rights Agent.  (Incorporated  herein by
          reference  to  the  Current  Report  on  Form  8-A/A  filed  with  the
          Commission on July 6, 2000).

     4.2  Form of Warrant Certificate.  (Incorporated herein by reference to the
          Company's Registration Statement on Form S-3, File Number 333-85313).

    10.1  Description  of  InteliData  Technologies   Corporation  Merger  Stock
          Compensation Plan.  (Incorporated herein by reference to the Company's
          Registration Statement on Form S-8, File Number 333-76631).

    10.2  InteliData Technologies Corporation 1996 Incentive Plan. (Incorporated
          herein by reference to the  Company's  Registration  Statement on Form
          S-8, File Number 333-16115).

  10.2.1  Description  of  Amendment to the 1996 Incentive  Plan.  (Incorporated
          herein by reference to the Company's  Proxy  Statement  filed with the
          Commission on August 6, 1999).

  10.2.2  Description  of  Amendment to the 1996 Incentive  Plan.  (Incorporated
          herein by reference to the Company's  Proxy  Statement  filed with the
          Commission on April 24, 2000).

  10.2.3  Description  of  Amendment to the 1996 Incentive  Plan.  (Incorporated
          herein by reference to the Company's  Proxy  Statement  filed with the
          Commission on April 20, 2001).

    10.3  InteliData  Technologies  Corporation  Non-Employee  Directors'  Stock
          Option  Plan.  (Incorporated  herein  by  reference  to the  Company's
          Registration Statement on Form S-8, File Number 333-16117).

    10.4  InteliData  Technologies  Corporation  Employee  Stock  Purchase Plan.
          (Incorporated  herein  by  reference  to  the  Company's  Registration
          Statement on Form S-8, File Number 333-16121).

    10.5  Employment   Agreement   dated  April  5,  1999   between   InteliData
          Technologies  Corporation  and Alfred S. Dominick,  Jr.  (Incorporated
          herein  by  reference  to the  Company's  Report  on Form 10-Q for the
          quarter ended March 31, 1999).

  10.5.1  InteliData  Technologies  Corporation 1998  Chief  Executive Officer's
          Plan. (Incorporated herein by reference to Exhibit 10 to the Company's
          Report on Form 10-K for the year ended December 31, 1999).
<page>

  10.5.2  First   Amendment   to   Employment   Agreement   between   InteliData
          Technologies  Corporation and Alfred S. Dominick,  Jr., dated April 5,
          2002  (Incorporated  herein  by  reference  to  Exhibit  10.5.2 to the
          Company's Report on Form 10-Q for the quarter ended June 30, 2002).

  10.5.3  Second   Amendment   to  Employment   Agreement   between   InteliData
          Technologies  Corporation  and Alfred S. Dominick,  Jr., dated January
          14, 2003  (Incorporated  herein by reference to Exhibit  10.5.3 to the
          Company's Report on Form 10-K for the year ended December 31, 2002).

  10.5.4  Third   Amendment   to  Employment   Agreement    between   InteliData
          Technologies  Corporation and Alfred S. Dominick,  Jr., dated April 2,
          2003  (Incorporated  herein  by  reference  to  Exhibit  10.5.4 to the
          Company's Report on Form 10-Q for the quarter ended March 31, 2003).

 *10.5.5  Amended  and  Restated  Change In Control Severance  Agreement between
          InteliData Technologies Corporation and Alfred S. Dominick, Jr., dated
          February 3, 2003.

     10.6 Employment  and  Non-Competition  Agreement  dated  December  17, 1997
          between  InteliData  Technologies  Corporation  and Albert N. Wergley.
          (Incorporated  herein by  reference  to  Exhibit  10 to the  Company's
          Report on Form 10-K for the year ended December 31, 1997).

  10.6.1  Amendment  to the  Employment and  Non-Competition  Agreement  between
          InteliData Technologies  Corporation and Albert N. Wergley, dated June
          14,  1999.  (Incorporated  herein by  reference  to  Exhibit 10 to the
          Company's Report on Form 10-K for the year ended December 31, 1999).

 *10.6.2  Amended and  Restated  Change In Control  Severance Agreement  between
          InteliData  Technologies  Corporation  and  Albert N.  Wergley,  dated
          February 3, 2003.

    10.7  Employment   and   Non-Competition    Agreement   between   InteliData
          Technologies  Corporation and Michael E. Jennings, dated June 14, 2000
          (Incorporated  herein by  reference  to  Exhibit  10 to the  Company's
          Report on Form 10-Q for the quarter ended September 30, 2000).

  10.7.1  Amended and Restated Change  In Control  Severance  Agreement  between
          InteliData  Technologies  Corporation  and Michael E. Jennings,  dated
          February 3, 2003.

    10.8  Employment   and   Non-Competition    Agreement   between   InteliData
          Technologies  Corporation  and John R.  Polchin,  dated  April 8, 2002
          (Incorporated  herein by  reference  to Exhibit  3.1 to the  Company's
          Report on Form 10-Q for the quarter ended June 30, 2002).

 *10.8.1  Amended and  Restated  Change In Control  Severance  Agreement between
          InteliData  Technologies   Corporation  and  John  R.  Polchin,  dated
          February 3, 2003.

  * 21.1  InteliData Technologies Corporation List of Significant  Subsidiaries.

  * 23.1  Consent of Deloitte & Touche LLP.

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

  * 31.2  Certification of Principal  Financial Officer pursuant to Section  302
          of the Sarbanes-Oxley Act of 2002.

  * 32.1  Certification of Principal  Executive  Officer  pursuant to 18  U.S.C.
          Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
          Act of 2002.

  * 32.2  Certification of  Principal  Financial  Officer  pursuant to 18 U.S.C.
          Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
          Act of 2002.
-------------
 *  Filed herewith.

<PAGE>



                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) 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.

                                   INTELIDATA TECHNOLOGIES CORPORATION

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


     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.
<TABLE>

Signature                               Title                                                    Date
---------                               -----                                                    ----
<S>                                     <C>                                                     <C>

/s/ Alfred S. Dominick, Jr.             Chairman and Chief Executive Officer                      March 12, 2004
--------------------------------
Alfred S. Dominick, Jr.


/s/ John R. Polchin                     Vice President, Chief Financial Officer,                  March 12, 2004
-------------------------------
John R. Polchin                         and Treasurer (Principal Financial and
                                        Accounting Officer)


/s/ Neal F. Finnegan                    Director                                                  March 12, 2004
-------------------------------
Neal F. Finnegan


/s/ Patrick F. Graham                   Director                                                  March 12, 2004
-------------------------------
Patrick F. Graham


/s/ John J. McDonnell, Jr.              Director                                                  March 12, 2004
-------------------------------
John J. McDonnell, Jr.


/s/ L. William Seidman                  Director                                                  March 12, 2004
-------------------------------
L. William Seidman


/s/ Norman J. Tice                      Director                                                  March 12, 2004
-------------------------------
Norman J. Tice

</TABLE>