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                                                                    Exhibit 20.1

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[LOGO]    LETTERHEAD LML Payment Systems                         news release
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                      LML SUBSIDIARY CONTRACTS TO PROVIDE
             ELECTRONIC PAYMENT SERVICES TO 57 ABCO FOODS OUTLETS.

Vancouver, BC, December 4, 2000 - LML Payment Systems Inc. (the "Corporation")
(Nasdaq: LMLP) is pleased to announce the finalization and signing of agreements
between Corporation subsidiary Phoenix EPS Inc. (Phoenix) and Fleming Foods
subsidiary ABCO Food Group (ABCO). ABCO is a premiere brand in the Fleming
Retail Group's portfolio, and operates a chain of 57 retail grocery stores in
Arizona.

Under the terms of the first agreement, Phoenix will provide ABCO with
electronic payment transaction services, including the switching and routing of
credit, debit, EBT and check transactions to and from third party processors for
authorization and settlement. Phoenix will use their proprietary REPS system to
fulfill this agreement, and additionally to provide full audit capacity for each
transaction type and real time monitoring of transaction traffic for each
district, store and/or register terminal. Processing will take place in
Phoenix's new processing facility in Scottsdale Arizona, and fees will accrue on
a per transaction basis with prescribed volume pricing.

"We've been very happy with the performance of Phoenix EPS and the REPS system.
We look forward to continuing this relationship for all of our corporately owned
stores." said Fleming Vice President of Retail Systems Gary Rhyne.

ABCO Food Group has 3400 employees and is a subsidiary of Fleming Companies Inc.
of Lewisville, Texas. Fleming Companies Inc. is an industry leader in food
distribution, food retailing and business-to-business e-commerce fulfillment
which owns and operates several hundred supermarkets under the familiar brand
names of: Rainbow Foods, Favar Concepts Limited (Yes!Less), Richmar, University
Foods and Arizona Price Impact L.L.C (Phoenix Food 4 Less), which are also
contracting with Phoenix EPS for payment processing services.

"We have enjoyed our relationship with the Fleming Retail Group to date, and
believe the ABCO contract represents a continuing vote of confidence in our
systems and our people," said Phoenix EPS President Robert Peyton. "We are
thrilled to see our involvement with this category leader evolve to the next
level of service."

In the second agreement, Phoenix will provide OS/390 System Services to ABCO.
These services include operating and maintaining ABCO's legacy business
application systems on the Phoenix EPS data center's OS/390 mainframe. This will
enable ABCO to further reduce their operating expenses in the highly competitive
Phoenix and Tucson markets.

"The built-in functionality and real-time features of the REPS system, together
with our suite of intellectual property and vertically integrated services and
companies, creates a compelling cost-saving and efficiency story for retailers,
" said Corporation President and CEO Patrick Gaines. "The ABCO contract is the
harbinger of the next stage of development in our business plan. "
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                                   - more -

LML Payment Systems is a financial payment processor specializing in providing
end-to-end check processing solutions for national, regional and local retail
merchants. The Corporation's processing services include traditional check
verification and collection along with electronic processing services including
Electronic Check Re-presentment (whereby returned paper checks are represented
for payment electronically) and Electronic Check Conversion (whereby paper
checks are converted into electronic transactions right at the point of sale).
The Corporation's intellectual property estate, owned by a subsidiary, will
include a recently allowed patent application regarding internet checking
transactions, in addition to U.S. Patent No. 5,484,988. U.S. Patent No.
5,484,988, describes a "Checkwriting point of sale system," which, through a
centralized database and authorization system, is capable of providing and
administering various electronic payment services for customers and businesses.

Statements contained in this news release which are not historical facts are
forward-looking statements, subject to uncertainties and risks. For a discussion
of the risks associated with the Corporation's business, please see the
documents filed by the Corporation with the SEC.

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CONTACTS:      Patrick H. Gaines
               President and CEO             Investor Relations
               LML Payment Systems Inc.      LML Payment Systems Inc.
               (604) 689-4440                (800) 888-2260