EMPLOYMENT AGREEMENT


     THIS EMPLOYMENT AGREEMENT (the "Agreement"),  effective as of September 30,
1997,  is entered  into by and  between  GLOBAL  PAYMENT  TECHNOLOGIES  INC.,  a
Delaware corporation,  with executive offices at 20 East Sunrise Highway, Valley
Stream,  New York 11582 (the  "Company"),  and  STEPHEN  KATZ,  residing at 1308
Auerbach Avenue, Hewlett Harbor, New York 11557 (the "Executive").

                                  WITNESSETH:

     WHEREAS,  the  Company  has  determined  that it  desires to  continue  the
employment of the Executive as Chief Executive Officer and Chairman of the Board
of the Company; and

     WHEREAS,  the Company and the  Executive  desire to enter into an agreement
relating to such employment;

     NOW,   THEREFORE,   in   consideration  of  the  covenants  and  agreements
hereinafter set forth, the parties hereto agree as follows:

     1. EMPLOYMENT

     1.1 The Company  hereby agrees to employ the  Executive,  and the Executive
hereby  agrees  to  accept  employment  with the  Company,  upon the  terms  and
conditions  herein  contained,  as the  Company's  Chief  Executive  Officer and
Chairman of the Board of Directors of the Company (the "Board of Directors"). In
such capacity, the Executive shall be the highest ranking officer of the Company
and  Chairman  of the Board of  Directors  and shall  have  full  authority  and
responsibility  for  formulating  the plans and  policies of the Company and for
administering the same and shall have the duties and  responsibilities  normally
inherent in such capacity in public  corporations of similar size and character.
The  Executive  shall also serve,  if elected or  appointed,  as a member of any
committee of the Board of Directors, its subsidiaries or affiliates.

     1.2 The term of employment under this Agreement shall commence on September
30, 1997 and, subject to the terms hereof, shall terminate two years thereafter;
provided,  however,  that  the term of this  Agreement  shall  automatically  be
extended for an additional one-year term beyond the initial two-year term unless
and until either the Company or the Executive  provides 90 days' advance written
notice to the other of its or his desire to terminate  this  Agreement as of the
end of the then  current  fiscal  year of the Company  (such term of  employment
(including any extensions thereto) is referred to hereinafter as the "Employment
Term").  It is the  intent of the  parties to  negotiate  an  extension  of this
Agreement commencing on or about 18 months after the effective date hereof.

     1.3 Throughout the Employment Term, the Executive shall devote such efforts
to the  business  and  affairs of the  Company as the  Executive  shall  believe
necessary to fulfill his

<PAGE>

obligations  hereunder.  In this  connection,  the Company  recognizes  that the
Executive  has  other  interests,  business  and  otherwise,  and  that  nothing
contained  herein shall  prohibit the Executive  from engaging in other business
endeavors and from spending time and  attention  with respect  thereto,  whether
business, charitable,  philanthropic, or otherwise. The Company understands that
the  Executive  is the  Chief  Executive  Officer  and a member  of the Board of
Directors of Cellular  Technical  Services  Company,  Inc.  ("CTS"),  a publicly
traded company, and that the Executive spends time and attention with respect to
the  business  of CTS.  In the event  that  such  involvement  by the  Executive
requires the Executive (as  determined by the Board of Directors) to devote less
than the required time to carry out his  responsibilities  to the Company,  then
the Board of Directors,  upon 30 day's advance  written  notice,  may propose an
adjustment to the  compensation of the Executive  provided  hereunder to reflect
such circumstances.  Such adjustment,  if any, shall become final and binding if
the  Executive  does not  dispute it within 30 days.  If,  within 30 days of the
Board of Director's determination,  the Executive disputes such adjustment, then
a third party  mutually  agreeable  and  knowledgeable  in the area of executive
compensation will determine the adjustment, if any, which determination shall be
final and binding on the parties.

     1.4 The duties and  services to be  performed  by the  Executive  hereunder
shall be rendered at the Company's current  headquarters or any new headquarters
(provided that any new  headquarters  are located within a radius of 25 miles of
Valley Stream, New York), except for reasonable travel on the Company's business
incident to the performance of the Executive's  duties.  The Executive shall not
be required to perform any duties or services  that  require him to relocate his
current principal residence.

     2. SALARY

     During the Employment  Term,  the Executive  shall be entitled to receive a
base  salary at a rate of  $150,000  per annum  payable in  accordance  with the
Company's regular payroll practice for senior executives of the Company.

     3 ANNUAL BONUSES

     During the Employment  Term, for each fiscal year of the Company (October 1
through  September 30), the Executive shall be eligible to receive a bonus in an
amount to be  determined  by the Board of Directors of the Company,  in its sole
discretion.

     4. ADDITIONAL COMPENSATION

     4.1 Each year the Executive  will be eligible to receive stock options made
available to other  officers in an amount  determined by the Board of Directors.


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<PAGE>

     4.2 Upon the execution of this Agreement, the Executive's outstanding stock
options to purchase an aggregate of 400,000 shares of the Company's Common Stock
heretofore  granted under the Company's  1994 and 1996 Stock Option Plans shall,
to the extent not currently exercisable, become fully exercisable.

     5. TERMINATION WITHOUT CAUSE OR GOOD REASON

     5.1 If the  Executive's  employment is terminated by the Company other than
for "Cause" (as hereinafter  defined) or the Executive terminates his employment
for "Good Reason" (as  hereinafter  defined)  prior to the end of the Employment
Term,  the Executive  shall  receive his base salary and all other  payments and
benefits hereunder as if such employment had not been terminated.

     5.2 Upon  termination of employment  pursuant to Section 5.1, the Executive
shall be entitled to continued participation for the remainder of the Employment
Term in the medical  reimbursement  plans of the Company available  generally to
senior  executives,  provided  that if the  Executive  is  eligible  for similar
coverage under another  employer's  plan, any such coverage by the Company shall
cease.

     6. PERMANENT DISABILITY OR DEATH

     6.1 If, prior to the end of the Employment Term, the Executive shall suffer
a "Permanent Disability" (as hereinafter defined), the Company may terminate the
Employment Term by notice in the manner described  below. If so terminated,  the
Executive  shall  receive a bonus  for the  fiscal  year in which his  Permanent
Disability occurred equal to the pro rata portion of the bonus determined by the
Board of Directors pursuant to Section 3 hereof based on the Executive's efforts
from the  beginning  of that  fiscal  year to the date on  which  the  Permanent
Disability occurred.  Such bonus shall be paid in a lump sum as soon as possible
following the  determination  of said bonus, but in no event later than December
31 following  the end of such fiscal  year.  In addition,  the  Executive  shall
receive any portion of the bonus attributable to any completed fiscal year which
has accrued but has not yet been paid. In addition, the Executive shall continue
to receive  compensation  payable monthly equal to the Executive's  then current
base salary until the end of the  Employment  Term;  provided that the Company's
current  group LTD  policy  (or its  equivalent)  remains  in  force,  which the
Executive has  acknowledged  is  acceptable to him,  shall be used to offset the
Company's  liability  under this Section 6.1. The foregoing  obligations  may be
paid out monthly or in lump sum as  determined  by the Board of Directors in its
sole discretion.  The amounts payable under this Section 6.1 shall be in lieu of
any amount to which the  Executive  is entitled  under  Sections 2 and 3 of this
Agreement.  In the event the Company is  successful  in obtaining an  individual
long-term disability insurance policy for the Executive,  which insurance policy
is reasonably satisfactory to the Executive, then the amounts received under any
such  insurance  policy shall be in lieu of the Company's  obligation to pay the
monthly amounts to the Executive described above.


                                       -3-
<PAGE>

     Any  termination  by the  Company on account of the  Executive's  Permanent
Disability  shall be  communicated  to the  Executive by a Notice of  Disability
Termination 30 days in advance of the proposed termination date. For purposes of
this Agreement, a "Notice of Disability Termination" shall mean a written notice
which sets forth in  reasonable  detail the facts and  circumstances  claimed to
provide a basis for  termination  of Executive's  employment  under this Section
6.1.  For  purposes of this  Agreement,  no such  purported  termination  by the
Company shall be effective without such Notice of Disability Termination.

     For  purposes  of this  Agreement,  the  Executive  shall be deemed to have
suffered a "Permanent  Disability"  if the  Executive,  by reason of physical or
mental illness, shall have been unable to perform satisfactorily the services to
be  rendered  by him  hereunder  for a  consecutive  period  of 180  days.  Such
determination  shall be made by the  Board of  Directors  upon the  advice  of a
qualified physician  appointed by the Board of Directors.  The Executive (or, if
applicable,  the person or persons  legally  empowered to make such decisions on
behalf of the  Executive)  shall  have the  opportunity  to  select a  qualified
physician  of his  own  choice  and if  such  physician  does  not  support  the
conclusions of the physician  appointed by the Board of Directors,  then a third
qualified  physician,  mutually  agreed upon by the Board of  Directors  and the
Executive,  shall be appointed and such third physician's determination shall be
final and binding on both parties.

     6.2 If, prior to the expiration of the Employment Term, the Executive shall
die, the Executive's estate,  designated  beneficiaries or legal  representative
shall receive a bonus for the fiscal year in which his death  occurred  equal to
the pro rata portion of the bonus determined by the Board of Directors  pursuant
to Section 3 hereof based on the Executive's  efforts from the beginning of that
fiscal year to the date on which death  occurred.  Such bonus shall be paid in a
lump sum as soon as possible  following the  determination of said bonus, but in
no event later than  December 31  following  the end of such  fiscal  year.  The
preceding two sentences  shall have no application or effect on the  Executive's
right to receive any portion of the bonus  attributable to any prior fiscal year
which has  accrued  but has not yet been  paid.  In  addition,  the  Executive's
estate,  designated  beneficiaries  or legal  representative  shall  continue to
receive compensation payable monthly equal to the Executive's base salary at the
time of his death until the end of the Employment Term; provided,  however, that
the  foregoing  payments  shall not become  payable if the  Executive's  estate,
designated  beneficiaries or legal representative receives no less than $500,000
from the life insurance the Company will make its  reasonable  efforts to obtain
under this  Agreement.  The amounts  payable  under this Section 6.2 shall be in
lieu of any amounts to which the Executive is entitled under Sections 2 and 3 of
this Agreement.

     6.3  The  Company  shall  have  the  right  to  fund  all of the  foregoing
obligations  with insurance as it shall  determine and the Executive shall fully
cooperate with respect thereto.





                                       -4-

<PAGE>


     7. TERMINATION FOR GOOD REASON

     The Executive may terminate his employment hereunder for Good Reason at any
time during the Employment Term, in which event the Executive shall be deemed to
have to resigned  from all of his  positions  with the Company.  For purposes of
this  Agreement  "Good  Reason"  shall mean any of the  following  (without  the
Executive's express prior written consent):

          (a)  The  assignment  to  the  Executive  by  the  Company  of  duties
     inconsistent  with the Executive's  position as Chief Executive Officer and
     Chairman  of the  Board of  Directors  or any  reduction  in his  duties or
     responsibilities, or any removal of the Executive from any of his positions
     as Chief Executive  Officer and Chairman of the Board of Directors,  or any
     failure to continue the Executive as a member of the Board of Directors, or
     any  amendment  to  the  By-Laws  of  the  Company  as  in  effect  at  the
     commencement of the Employment Term materially and adversely  affecting the
     Executive's  position,  responsibilities  and  duties  as  Chief  Executive
     Officer  and  Chairman  of  the  Board,   except  in  connection  with  the
     termination of the Executive's  employment for Cause,  Permanent Disability
     or as a result of the  Executive's  death or  termination  by the Executive
     other than for Good Reason;

          (b) A reduction  by the Company in the  Executive's  base salary as in
     effect at the  commencement  of the  Employment  Term or as the same may be
     increased from time to time during the Employment Term;

          (c) (i) A relocation of the Company's principal executive offices to a
     location  outside of a radius of 25 miles  from  Valley  Stream,  New York,
     unless such relocation is required by the Company in order to carry out the
     operations of the Company as determined by the Board of Directors; (ii) the
     Company's  requiring  the  Executive  to be  based  anywhere  other  than a
     location within such radius,  except for reasonable travel on the Company's
     business incident to the performance of the Executive's duties.

          (d) The taking of any action by the Company  which  would  deprive the
     Executive of any material  fringe  benefit  enjoyed by the Executive at the
     commencement  of the  Employment  Term after the Executive has provided the
     Company  written  notice  of his  objection  and such  action  has not been
     rescinded in a reasonable period of time;

          (e) Any  material  breach  by the  Company  of any  provision  of this
     Agreement  after the Executive has provided the Company  written  notice of
     the breach and such  breach  has not been cured in a  reasonable  period of
     time; or

          (f) Any order by the Company to the Executive,  including  pressure of
     sufficient force to have the effect of an order, requiring the Executive to
     perform any act which the Executive  reasonably  believes and would in fact
     constitute  a civil or criminal  violation  of any law,  regulation,  court
     decision,  administrative decision, or other pronouncement having the force
     of  law,  but not a mere  suggestion  of the  Company  that  the  Executive
     consider a course of action


                                       -5-

<PAGE>


     considered illegal by the Executive and after the Executive has advised the
     Company of his belief and the Company nonetheless requires the Executive to
     perform such act or course of conduct.

     8. DISCHARGE FOR CAUSE

     8.1 If the Company  terminates  the  employment of the Executive for Cause,
its  obligations  under  this  Agreement  to make any  further  payments  to the
Executive  shall  thereupon  cease and  terminate,  except  for any  obligations
accrued but which remain unpaid.

     8.2 As used herein,  the term "Cause"  shall mean (a) any act or failure to
act which constitutes a breach of the Executive's fiduciary duty to the Company;
(b) any act of willful  malfeasance by the Executive  having a material  adverse
effect on the  Company;  or (c) any  failure to act by the  Executive  involving
willful  malfeasance  having a material adverse effect on the Company;  provided
that (b) and (c) shall be inapplicable if the Executive  reasonably believed his
conduct  to be  consistent  with the best  interests  of the  Company  or if his
conduct occurred under circumstances  entitling the Executive to indemnification
under the Certificate of  Incorporation,  the Company's  By-Laws,  or applicable
law.

     8.3 Termination of the Executive for Cause pursuant to this Section 8 shall
be communicated by a Notice of  Termination.  For purposes of this Agreement,  a
"Notice of  Termination"  shall mean  delivery to the  Executive  of a copy of a
resolution duly adopted by the affirmative  vote of not less than three quarters
(3/4)  of the  entire  membership  of the  Board  of  Directors  (excluding  the
Executive)  at a  meeting  of the  Board of  Directors  called  and held for the
purpose (after reasonable notice to the Executive and reasonable opportunity for
the Executive,  together with the  Executive's  counsel,  to be heard before the
Board of Directors  prior to such vote),  finding that in the good faith opinion
of the Board of  Directors,  the  Executive  was guilty of conduct  set forth in
Section 8.2 above and specifying the particulars  thereof in reasonable  detail.
For purposes of this  Agreement,  no such  purported  termination of Executive's
employment shall be effective without such Notice of Termination. 

     9. EXPENSES

     The Executive is authorized to incur reasonable  expenses for promoting the
business of the Company,  including  expenses for travel and similar items.  The
Company  will  reimburse  the  Executive  for  all of the  above  expenses  upon
presentation  by the Executive from time to time of an itemized  account of such
expenditures in accordance with the Company's reasonable procedures as in effect
from time to time.

     10. EMPLOYEE BENEFITS

     10.1 The  Executive  shall be provided,  to the extent  eligible,  with all
benefits coverage afforded by the Company to its senior  executives,  including,
without limitation, life 

                                      -6-
<PAGE>

insurance (in an amount of not less than $500,000),  health and  hospitalization
insurance,  individual  long-term  disability  insurance,  travel  insurance and
vacations.

     10.2 In all events, and  notwithstanding  any termination of this Agreement
for any reason  other than Cause,  the  Company  shall,  for a six-month  period
commencing on the date of termination of this  Agreement,  pay all premiums of a
life  insurance  policy (in an amount of not less than  $500,000) on the life of
the Executive with the  beneficiaries to be designated by the Executive.  At the
end of the  aforementioned  six-month period, the Executive shall have the right
to purchase the insurance policy or policies of his life owned by the Company by
agreeing  to pay and  paying  all  future  premiums  due  under  such  policy or
policies.

     10.3 The  Executive  shall be  included  in all  pension,  profit  sharing,
incentive  or other  similar or  comparable  plans,  programs  and  arrangements
applicable  generally to senior executives of the Company in accordance with the
terms  thereof and shall be provided  with the benefits  provided by the Company
under such plans, programs and arrangements as allowed by law.

     10.4  The  Executive  shall  be  provided  with  the  full-time  use  of an
automobile  and shall be reimbursed  by the Company for all expenses  related to
such automobile.

     11. RESTRICTIVE COVENANTS

     11.1 Similar  Business.  During the Employment Term and during the one-year
period thereafter, the Executive will not directly or indirectly own, manage, be
employed  by,  engage in,  carry on, or be connected in any like manner with any
other business  similar to the type of business  conducted by the Company within
100 miles of any office or job site of the Company  within its trade  territory,
or engage  in any other  conduct  which  would  interfere  with or  disrupt  the
operations of the Company.

     11.2  Customers.  The Executive  will not at any time,  either  directly or
indirectly,  make known or divulge to any person,  firm or corporation the names
or  addresses of any of the  customers of the Company at the time the  Executive
entered the employ of the Company or with whom the Executive  became  acquainted
after entering the employ of the Company.  Furthermore,  the Executive will not,
during the  period of one year  immediately  after  termination  of  employment,
directly or  indirectly,  either for himself or for any other  person,  firm, or
corporation,  call upon,  solicit,  divert,  or take away or attempt to solicit,
divert or take away any of the customers or patrons of the Company upon whom the
Executive called, whom he solicited,  to whom he catered, or with whom he became
acquainted during his employment with the Company.

     11.3  Employees.  The  Executive  will  not,  during  the  one-year  period
immediately after termination of employment,  directly or indirectly, either for
himself or for any other person, firm, or corporation,  approach any employee of
the Company  holding the position of Vice President or higher,  as a prospective
employee of the Executive, nor shall the Executive


                                       -7-


<PAGE>


within the same period accept an employment application or grant a job interview
to any such employee of the Company.

     11.4 Information. The Executive will not at any time, in any fashion, form,
or manner, either directly or indirectly,  divulge,  disclose, or communicate to
any person, firm, or corporation in any manner whatsoever any information of any
kind, nature, or description concerning any matters affecting or relating to the
business of the Company, including,  without limitation, the names of any of its
customers,  the prices it obtains  or has  obtained  or at which it sells or has
sold its  products,  or any other  information  concerning  the  business of the
Company, its manner of operation,  or its plans, processes, or other data of any
kind,  nature,  or  description,  without  regard to  whether  any or all of the
foregoing matters would be deemed confidential, material, or important.

     11.5 Records. All books, records, reports, accounts, and documents relating
in any manner to the Company's  business or customers,  whether  prepared by the
Executive  or otherwise  coming into the  Executive's  possession,  shall be the
exclusive  property  of the Company  and shall be  returned  immediately  to the
Company on termination of employment or at the Company's request at any time.

     11.6 Breach.  The parties hereby  stipulate  that, as between them, each of
the foregoing matters are important,  material,  and  confidential,  and gravely
affect the effective and successful conduct of the business of the Company,  and
its goodwill,  and that any breach of the terms of this Section 11 is a material
breach of this Agreement, from which the Executive may be enjoined and for which
the  Executive  shall also pay to the Company all  damages  (including,  but not
limited to, compensatory,  incidental,  consequential and lost profits damages),
which arise from the breach,  together with interest,  costs and attorney's fees
to collect such damages. Any lawsuit for breach may be brought in Nassau County,
New York, which shall be a proper venue.

     11.7 Savings  Clause.  To the extent that any of the foregoing  restrictive
covenants  are  inconsistent  with New York law, as to either time or geography,
they shall be  reformed  and  enforced  in  accordance  with New York law in any
arbitration or legal proceedings arising hereunder. This Section 11 is severable
from all other sections in this  Agreement,  and all of the  subsections  herein
(11.1 through 11.7, inclusive) are severable from one another.

     12. ARBITRATION

     Any controversy or claim arising out of or relating to this Agreement shall
be  settled  by  arbitration  in  accordance  with  the  Rules  of the  American
Arbitration Association,  one arbitrator,  and shall be enforceable in any court
having competent jurisdiction.

     13. NOTICES

     All notices or communications  hereunder shall be in writing,  addressed as
follows:


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<PAGE>


     To the Company:

                          Global Payment Technologies, Inc.
                          20 East Sunrise Highway
                          Valley Stream, New York 11582

     To the Executive:

                          Stephen Katz
                          1308 Auerbach Avenue
                          Hewlett Harbor, New York 11 557

     All such notices or  communications  shall be sent  certified or registered
mail, return receipt requested,  postage prepaid, addressed as above (or to such
other address as such party may designate in writing from time to time), and the
actual date of receipt as shown by the receipt  therefor,  shall  determine  the
time at which notice was given.

     14. SEPARABILITY; LEGAL FEES

     If any  provision  of this  Agreement  shall be  declared  to be invalid or
unenforceable,  in whole or in part, such invalidity or  unenforceability  shall
not affect the remaining  provisions hereof which shall remain in full force and
effect.  The Company shall pay all legal fees and other fees and expenses  which
the Executive may incur in entering into this Agreement,  if executed  (provided
the amount of such legal fees shall not exceed  $25,000),  or in  obtaining,  or
attempting to obtain (if ultimately successful),  compensation or other benefits
under this Agreement.

     15. BINDING EFFECT; ASSIGNMENT

     This Agreement  shall be binding upon and inure to the benefit of the heirs
and  representatives  of the  Executive  and the assigns and  successors  of the
Company, but neither this Agreement nor any rights hereunder shall be assignable
or otherwise  subject to hypothecation  by the Executive or by the Company.  The
Company  shall not  assign  this  Agreement  to any  successor  or assign of the
Company without the written consent of the Executive.

     16. GOVERNING LAW

     This Agreement shall be construed,  interpreted, and governed in accordance
with the laws of the State of New York.

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<PAGE>

     17. ENTIRE AGREEMENT

     This  Agreement  represents  the entire  agreement of the parties and shall
supersede any and all previous contracts, arrangements or understandings between
the Company and the Executive  with respect to the subject  matter  hereof.  The
Agreement may be amended at any time by mutual written  agreement of the parties
hereto.

                                    GLOBAL PAYMENT TECHNOLOGIES, INC.


                                    By /s/ Edward Seidenberg, VP
                                       ----------------------------------
                                       Name: Edward Seidenberg
                                       Title: Vice President & COO

                                              /s/  Stephen Katz
                                       ----------------------------------
                                                Stephen Katz






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