“Fiscal 2007 was a pivotal year for Tier,” said Ronald Rossetti, Chairman and Chief Executive Officer for Tier. “We are seeking to divest non-core assets which, in the past, have limited our ability to focus on growing our EPP business and we are committed to making the investments in our EPP business that we believe are necessary to achieve long-term sustainable growth for our shareholders.

“We continue to experience strong growth in both sales and earnings from our electronic payment segment. During fiscal 2007, revenue from electronic payment processing represented nearly 90% of Tier’s revenue from continuing operations. Electronic payment revenues and net income before corporate overhead increased over 26% and 50%, respectively, over last year’s results," Mr. Rossetti continued. “We continue to make progress toward divesting our non-core assets and look forward to updating you on our future progress.”

Conference Call

Tier will host a conference call today at 5:00 p.m. Eastern Time to discuss these results. To access the conference call, please dial (888) 335-3240 and provide conference ID #27123028. The conference call will also be broadcast live via the Internet at www.tier.com. A replay will be available at www.tier.com or by calling (800) 642-1687 and entering conference ID#27123028 from approximately two hours after the end of the call until 11:59 p.m. Eastern Time on December 27, 2007.

FISCAL 2007 – A YEAR IN TRANSITION

During fiscal 2007, Tier undertook a strategic initiative to maximize long-term profitability and shareholder value. As part of that initiative, Tier concluded that it should focus its financial and managerial resources on growing its core business—Electronic Payment Processing, or EPP. Tier is seeking to sell the majority of its Government Business Process Outsourcing operations, or GBPO, and Packaged Software and Systems Integration, or PSSI, and to wind-down the remainder of these GBPO and PSSI operations over a five-year period. Figure 1 illustrates our overall structure as of September 30, 2007.

The non-core businesses that the Company is seeking to sell are classified as “held-for-sale” on its consolidated balance sheets and “discontinued operations” on its consolidated statements of income. All historical financial information presented in this earnings release has been reclassified to conform to the current year’s presentation.

Fiscal Year 2007 Results:

For fiscal year 2007, Tier reported a loss of $3.0 million, or $0.16 per fully diluted share, which represents a $6.4 million or 68% improvement over the results reported for fiscal year 2006. Tier’s continuing operations reported a loss of $18.3 million, or $0.94 per fully diluted share, while the Company’s discontinued operations reported net income of $15.2 million, or $0.78 per fully diluted share.

Tier’s continuing operations are composed of three major categories: Tier’s core EPP business, wind-down operations and corporate overhead. During fiscal year 2007, EPP generated net income of $8.4 million, or $0.43 per fully diluted share, excluding allocation of corporate overhead expenses. This represents a $2.8 million, or 50.5%, increase over fiscal 2006, primarily resulting from increases in the number of transactions and dollar volume processed by EPP.

Wind-down operations reported a loss of $11.2 million, or $0.58 per fully diluted share, including a $9.2 million impairment loss recorded in fiscal 2007 to write down the carrying value of the Tier’s wind-down operations to fair value. During fiscal 2008, we expect to wind down two businesses that generated the remaining losses and during the next five years we expect to wind down a third business that generated modest income in fiscal 2007.

Tier’s corporate overhead, which includes the Company’s governance and shared-service functions, reported $15.4 million of net costs during fiscal 2007. We expect that the need for these shared services and other corporate functions will significantly diminish after we sell and/or wind down our GBPO and PSSI businesses.

Tier’s discontinued operations reported income of $15.2 million, or $0.78 per fully diluted share, an increase of $5.8 million over fiscal 2006. Approximately $8.1 million, or $0.41 per fully diluted share, of the income reported for fiscal 2007 resulted from the reversal of a reserve for a 2003 tax refund, which received final approval from the Internal Revenue Service in March 2007 and other transactions related to the final close-out of Tier’s Australian operations. The remaining $7.1 million, or $0.37 per fully diluted share, of income from discontinued operations reported in fiscal 2007 was generated by GBPO and PSSI operations that are held-for-sale. Although these operations generated income in fiscal 2007 on a standalone basis (excluding an allocation of corporate overhead costs), the expiration of two GBPO contracts and the completion of a number of PSSI projects in fiscal 2007 are expected to result in lower earnings in future years.

Fourth Quarter Fiscal 2007 Results:

For the quarter ended September 30, 2007, Tier reported a net loss of $3.3 million or $0.17 per fully diluted share, which represents a $1.4 million, or 30%, improvement over results reported for the same quarter last year. Continuing operations generated a loss of $2.5 million, or $0.13 per fully diluted share, compared to a loss of $6.4 million, or $0.33 per fully diluted share, during the comparable 2006 quarter. The loss reported during the fourth quarter of fiscal 2007 includes: a $0.4 million write-down of two wind-down businesses to fair value and a $0.7 million adjustment to catch-up depreciation and amortization for a third wind-down business that was transferred from held-for-sale status to held and used during the fourth fiscal quarter. The loss reported for Tier’s fourth quarter of fiscal 2007 also includes the costs of shared-services and other corporate functions, which we expect to decrease after we sell and/or wind-down our GBPO and PSSI businesses.

Liquidity:

As of September 30, 2007, Tier had $74.3 million in cash and cash equivalents, and investments in marketable securities, and $18.4 million in restricted investments. During fiscal year 2007, Tier’s continuing and discontinued operations generated $13.8 million of cash, of which $0.4 million was generated by our continuing operations. During fiscal 2007, Tier received cash from the repayment of a note and interest totaling $4.4 million and the sale of its minority interest in a PSSI investment. Tier has no short-term or long-term debt.

FISCAL 2008 – TRANSITIONING TIER’S FOCUS TO EPP

Tier expects that fiscal 2008 will be another transition year as it positions the company for EPP’s long-term growth. In fiscal 2008, Tier expects to see strong revenue growth in its EPP business and to generate positive cash flows from operations. However, Tier expects to make significant investments to improve the efficiency and reduce the costs of EPP’s back office structure. Tier also expects to expand its traditional governmental client-base to a commercial biller-direct payment processing space. The Company also expects to right-size its corporate operations once the divestiture process is complete. While Tier believes that certain of these initiatives will produce some cost savings in fiscal 2008, Tier expects that the cost of implementing these initiatives will outweigh those savings during fiscal 2008 and that it will incur a net loss in fiscal 2008.

About Tier Technologies, Inc.

Tier Technologies, Inc. primarily provides federal, state and local government and other public sector clients primarily with electronic payment processing and other transaction processing services. Tier Technologies is headquartered in Reston, Virginia. Its electronic payment processing clients include over 3,000 federal, state, and local governments, educational institutions, utilities and commercial clients throughout the U.S. Through its subsidiary, Official Payments Corp., Tier delivers payment processing solutions for a wide range of markets. For more information, see www.tier.com and www.officialpayments.com.