The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this report. References in this section to "International Card Establishment, Inc.," the "Company," "we," "us," and "our" refer to International Card Establishment, Inc. and our direct and indirect subsidiaries on a consolidated basis unless the context indicates otherwise.

This interim report contains forward looking statements relating to our Company's future economic performance, plans and objectives of management for future operations, projections of revenue mix and other financial items that are based on the beliefs of, as well as assumptions made by and information currently known to, our management. The words "expects, intends, believes, anticipates, may, could, should" and similar expressions and variations thereof are intended to identify forward-looking statements. The cautionary statements set forth in this section are intended to emphasize that actual results may differ materially from those contained in any forward looking statement.

EXECUTIVE SUMMARY

Our strategy is to grow profitably by increasing our penetration of the expanding small merchant marketplace for payment processing services and Gift & Loyalty products. We find these merchants primarily through our independent outside agent channel of distribution.

OVERVIEW

We are a provider of credit and debit card-based payment processing services and Gift & Loyalty products to small merchants. As of March 31, 2007, we provided our services to thousands of merchants located across the United States. Our payment processing services enable our merchants to process traditional card-present, or swipe transactions, as well as card-not-present transactions. A traditional card-present transaction occurs whenever a cardholder physically presents a credit or debit card to a merchant at the point-of-sale. Card-not-present transactions occur whenever the customer does not physically present a payment card at the point-of-sale and may occur over the Internet or by mail, fax or telephone. Our Gift & Loyalty products enable our merchants to offer customized merchant branded gift and loyalty cards and programs.

For additional detailed discussion regarding the Company's business and business trends affecting the Company and certain risks inherent in the Company's business, see "Item 6: Management's Discussion and Analysis or Plan of Operations" in the Company's Annual Report on Form 10-KSB for the year ended December 31, 2006.

DEVELOPMENT OF OUR BUSINESS

International Card Establishment, Inc. (the "Company") (formerly Summit World Ventures, Inc.) was incorporated on December 18, 1986 under the laws of the State of Delaware to engage in any lawful corporate activity, including, but not limited to, selected mergers and acquisitions. Prior to July 28, 2000, we were in the developmental stage and could be defined as a "shell" company, whose sole purpose was to locate and consummate a merger or acquisition with a private entity, and we did not have any operations. On July 18, 2003, we acquired iNetEvents, Inc., a Nevada corporation and commenced operations. iNetEvents, Inc., a Nevada corporation, was incorporated on February 3, 1999 and provided Internet support and supply software for real time event/convention information management.

On January 16, 2003, we entered into a Plan and Agreement of Reorganization with International Card Establishment, Inc., a Nevada corporation and its shareholders. International Card Establishment, Inc., a Nevada corporation, was incorporated on July 26, 2002. As part of the acquisition - a reorganization in the form of a reverse merger, International Card Establishment, Inc. became our wholly-owned subsidiary, and there was a change of our control. Following the International Card Establishment, Inc. acquisition we changed our corporate name from iNetEvents, Inc. to International Card Establishment, Inc. and reverse split our outstanding shares of Common Stock on a one for two share basis.

Effective September 8, 2004, we entered into a Plan and Agreement of Reorganization with Neos Merchant Solutions, Inc., a Nevada corporation and its shareholders. Effective September 8, 2004, Neos Merchant Solutions, Inc. became our wholly owned subsidiary.

International Card Establishment, Inc. (the "Company"), a Nevada corporation, is a provider of diversified products and services to the electronic transaction processing industry, offering merchant accounts for the acceptance and processing of credit and debit cards, as well as a proprietary "smart card" based gift and loyalty program. The Company's Merchant Card Services division establishes "merchant accounts" for businesses that enable those businesses to accept credit cards, debit cards, and other forms of electronic payments from their customers; supplies the necessary card readers and other point-of-sale transaction systems; and facilitates payment processing for the accounts. Through its NEOS Subsidiary the Company also markets a proprietary "Smart Card"-based system that enables merchants to economically offer store-branded gift and loyalty cards - one of the fastest growing product categories in the industry.

As used in these Notes to the Consolidated Financial Statements, the terms the "Company", "we", "us", "our" and similar terms refer to International Card Establishment, Inc. and, unless the context indicates otherwise its consolidated subsidiaries. The Companies subsidiaries include NEOS Merchant Services ("NEOS"), a Nevada corporation, which provides smart card loyalty programs in an integrated vertical system for its customers, as well as other electronic payment services (merchant services); International Card Establishment ("ICE"), which provides electronic payment services (merchant services); and INetEvents, Inc. ("INET"), a Delaware Corporation, which was dormant in 2006 and 2005.

ANALYSIS OF BUSINESS

Over the past year, management has critically reviewed the operations of the Company to look for cost savings, efficiencies and better revenue streams. In 2006 the Company changed its processing of credit card transactions to a manner that allowed the recognition gross processing revenues, and we restructured ourselves to be more cost effective and efficient. In 2007, the Company continues to look for additional cost savings and better revenue streams. We have significantly tightened our underwriting criteria for the purpose of lowering our exposure to bad debt for bank card processing. The initial impact of this new credit criterion caused the elimination of several large processing accounts and related revenue streams, which resulted in a decline of net revenues and gross profit for the quarter ended March 31, 2007 as compared to the quarter ended December 31, 2006. We anticipate that this trend will continue until such time as we are able to increase our overall gross sales under the new criteria. We are attempting to increase our sales agent base and identify strategic relations for resale of our services. There is no assurance that we will be successful in growing our agent base given the extremely competitive environment for recruiting sales agents or that attrition of our bank and gift & loyalty card portfolios will not continue to exceed new activations.

CRITICAL ACCOUNTING POLICIES

The methods, estimates and judgments we use in applying our accounting policies have a significant impact on the results we report in our financial statements, which we discuss under the heading "Results of Operations" following this section of our MD&A. Some of our accounting policies require us to make difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Our most critical accounting estimates include the assessment of our allowance for doubtful accounts.

We believe the following critical accounting policies reflect our more significant estimates and assumptions used in the preparation of our consolidated financial statements:

REVENUES
The Company provides merchant services and customer support for merchants and other Merchant Services providers. Revenues are recognized as customer services are provided.

The Company provides merchant services to customers for acceptance and processing of electronic payments. Credit card processing fees are recognized as incurred. Sales and cost of sales of equipment are recognized when the equipment is provided and the customer accepts responsibility for the payment of the equipment.

NEW ACCOUNTING PRONOUNCEMENTS

In February 2006, the Financial Accounting Standards Board ("FASB") issued SFAS No. 155, "Accounting for Certain Hybrid Financial Instruments--an Amendment of FASB Statements No. 133 and 140" ("SFAS No. 155"). SFAS No. 155 allows financial instruments that contain an embedded derivative and that otherwise would require bifurcation to be accounted for as a whole on a fair value basis, at the holders' election. SFAS No. 155 also clarifies and amends certain other provisions of SFAS No. 133 and SFAS No. 140. This statement is effective for all financial instruments acquired or issued in fiscal years beginning after September 15, 2006. We do not expect that the adoption of SFAS No. 155 will have a material impact on our financial condition or results of operations.

In March 2006, the FASB issued SFAS No. 156, "Accounting for Servicing of Financial Assets--an Amendment of FASB Statement No. 140" ("SFAS No. 156"). SFAS No. 156 provides guidance on the accounting for servicing assets and liabilities when an entity undertakes an obligation to service a financial asset by entering into a servicing contract. This statement is effective for all transactions in fiscal years beginning after September 15, 2006. We do not expect that the adoption of SFAS No. 156 will have a material impact on our financial condition or results of operations.

In July 2006, the FASB issued FIN 48, "Accounting for Uncertainty in Income Taxes--an interpretation of FASB Statement No. 109" ("FIN 48"). FIN 48 clarifies the recognition threshold and measurement of a tax position taken on a tax return. FIN 48 is effective for fiscal years beginning after December 15, 2006. FIN 48 also requires expanded disclosure with respect to the uncertainty in income taxes. We are currently evaluating the requirements of FIN 48 and the impact this interpretation may have on our financial statements.

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" (SFAS 157). SFAS 157 provides guidance for using fair value to measure assets and liabilities. SFAS 157 addresses the requests from investors for expanded disclosure about the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value and the effect of fair value measurements on earnings. SFAS 157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value, and does not expand the use of fair value in any new circumstances. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and will be adopted by the Company in the first quarter of fiscal year 2008. We do not expect that the adoption of SFAS 157 will have a material impact on our financial condition or results of operations.

We do not have any of the following:

* Off-balance sheet arrangements.

* Certain trading activities that include non-exchange traded contracts accounted for at fair value.

* Relationships and transactions with persons or entities that derive benefits from any non-independent relationships other than related party transactions discussed herein.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2007 ("2007")
COMPARED TO THE THREE MONTHS ENDED MARCH 31, 2006 ("2006")

Results of operations consist of the following:



                           MARCH 31, 2007     MARCH 31, 2006      $ CHANGE     % CHANGE
                           ____________________________________________________________

Net Revenues                 $2,513,997         $2,311,273       $ 202,724         9%
Cost of Revenues              1,663,050          1,688,508         (25,458)       (2%)
                           ____________________________________________________________
Gross Profit                    850,947            622,765         228,182        37%
Operating, General and
Administrative Costs          1,023,933          1,202,754        (178,821)      (15%)
                           ____________________________________________________________
Net Operating Loss           $ (172,986)        $ (579,989)      $ 407,003       (70%)

The 9 % increase in net revenues as of March 31, 2007 compared to March 31, 2006 is mainly attributable to an increase of $519,000 in Merchant account residuals, offset by approximately $480,000 decrease in equipment and gift card sales.

The costs associated with the merchant account services and the recording of interchange expense increased by approximately $225,000, but was offset by a decrease in commissions and other leasing costs totaling approximately $250,000, hence an overall decrease of 2% in costs.

General and administrative costs decreased by approximately $179,000 largely due to approximately $301,000 decrease in payroll expenses and $15,000 decrease in rents and other office expenses. These reductions in expenses were largely due to cost cutting measures by management and were offset by an increase in bad debts and merchant losses.

LIQUIDITY AND CAPITAL RESOURCES

We are currently seeking to expand our merchant services offerings in bankcard
and gift and loyalty. In addition, we are investigating additional business
opportunities and potential acquisitions; accordingly we will require additional
capital to complete the expansion and to undertake any additional business
opportunities.



                           MARCH 31, 2007     MARCH 31, 2006      $ CHANGE     % CHANGE
                           ____________________________________________________________

Cash                          $ 90,095           $157,528         $ (67,433)     (43%)
Accounts Payable and
   Accrued Expenses           $607,446           $865,336         $(257,890)     (30%)
Accounts Receivable, net      $ 60,426           $ 87,705         $ (27,279)     (31%)

We have financed our operations during the quarter primarily through sales and use of cash on hand. As of March 31, 2007, we had total current liabilities of $1,795,798 compared to $1,980,214 as of December 31, 2006. The decrease in current liabilities is primarily due to a decrease in Accrued Expenses offset by an increase in our Line of Credit, related parties.

Cash decreased 43% as of March 31, 2007 due to the acquisition costs incurred for the purchase of portfolios, $45,440 and payment of Accounts Payable and Accrued Expenses.

As of March 31, 2007, our accounts receivable, net accumulated to $60,426 compared to $87,705 at December 31, 2006. The relating allowance for doubtful accounts was relatively stagnant between the two periods.

We had not equity transactions during the quarter.

We had $90,095 cash on hand as of March 31, 2007 compared to $157,528 as of December 31, 2006. We will continue to need additional cash during the following twelve months and these needs will coincide with the cash demands resulting from our general operations and planned expansion. In addition, our Line of Credit with a related party matures on June 30, 2007. There is no assurance that we will be able to obtain additional capital as required, or obtain the capital on acceptable terms and conditions