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                                                                   Exhibit 20.10

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[LOGO]    LETTERHEAD LML Payment Systems                         news release
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                             LEGAL ACTION SETTLED

VANCOUVER, BC, February 26, 2001 - LML PAYMENT SYSTEMS INC. (the "Corporation")
(Nasdaq: LMLP) announces that it has settled the lawsuit commenced in the United
States District Court, Middle District of Florida, Ocala Division, by the former
owners of the Wildwood Estates property concerning their claims for the release
of 252,501 shares of the Corporation's common stock being held under a voluntary
escrow pooling agreement established in connection with the acquisition by LHTW
Properties Inc., a subsidiary of the Corporation, of the Wildwood Estates
property in November, 1993. The plaintiffs had alleged that the Corporation was
improperly preventing the release from escrow of the shares.

Pursuant to the terms of the settlement agreement, the Corporation will allow
126,251 shares to be released from escrow upon receipt of an opinion letter from
the plaintiffs' counsel that meets applicable securities requirements that the
resale legends on the shares may be removed. The agreement also calls for the
remaining 126,250 shares to remain in escrow until the property is sold in its
entirety or until November 30, 2002, whichever occurs first.

The Corporation also agreed to pay $150,000 by March 13, 2001 towards costs.

The plaintiffs have agreed that the Corporation and LHTW Properties Inc. have no
duty to sell or attempt to sell the property or any additional lots before
November 30, 2002.

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 re-presented
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, includes
new U.S. Patent No. 6,164,528 regarding Internet checking transactions, in
addition to U.S. Patent No. 5,484,988 which 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