BECKMAN, LIEBERMAN & BARANDES, LLP
                             100 Jericho Quadrangle
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                            Jericho, New York 11753

                            Telpehone (516) 433-1200
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                                           December 8, 2005



Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549-0406

Attention:      Barbara C. Jacobs, Assistant Director
                Maryse Mills-Apenteng, Division of Corporate Finance
                Marc Shuman, Division of Corporate Finance

Re:     Direct Insite Corp.
        Registration Statement on Form SB-2
        Filed: September 1, 2005
        File No. 333-128039

        Form 10-KSB for the year ended December 31, 2004
        Form 10-QSB for the periods ended March 31 and June 30, 2005
        File No. 0-20660

Ladies and Gentlemen:

     Following are our responses,  including  supplemental  information,  to the
comments of the Securities and Exchange  Commission (the "SEC") set forth in its
letter dated September 19, 2005 with respect to the  above-referenced  documents
filed by Direct Insite Corp.  (the "Company" or "Direct  Insite").  Supplemental
information  provided  to you in this  letter is based upon  information  and/or
documentation  provided by the Company.  The numbers of the Company's  responses
parallel  the  numbers  in your  September  19,  2005  comment  letter.  We have
reflected all responses in Amendment  No. 1 to the Company's  Form SB-2,  except
for those  related  to the  Company's  MD&A  which  have been  reflected  in the
Company's  Form 10-QSB for the nine  months  ended  September  30, 2005 filed on
November 15, 2005.  We do not believe  amendments  to  previously  filed '34 Act
documents are necessary due to the changes the Company will  incorporate  in its
future Form 10- QSB's and, in our opinion,  as there are no material  changes to
either the substantive or financial information in previously filed reports.


Securities and Exchange Commission
December 8, 2005
Page -2-


Form SB-2
- ---------

General
- -------

     1. The Company has informed us that the inclusion of the interest shares in
the registration  statement was made at the request of Sigma and MetVP. They had
informed the Company  that each desired to receive its interest  payments in the
form of shares of the  Company's  common  stock.  The Company  believes that the
offer  and  sale  of  the  interest  shares  was  complete  when  it  filed  the
registration statement because:

     (i)  each of Sigma and MetVP had  already  expressed  its desire to receive
          any interest which may become due and payable in the form of shares of
          common stock in lieu of cash;

     (ii) the Company approves of the issuance of shares of common stock in lieu
          of cash;

     (iii) pursuant to the terms of the Senior  Subordinated  Secured Note,  the
          Company  retains the right to approve or  disapprove  the  election by
          Sigma and MetVP to  receive  shares  in lieu of cash  which  takes the
          election out of their  control,  and in the event the Company does not
          make an interest  payment in cash by the interest  payment date,  such
          interest is to be paid in shares of common stock;

     (iv) the  issuance  of shares in  payment of  interest  is part of the same
          transaction for which the registration  statement was originally filed
          and to the same institutional accredited investors; and

     (v)  the inclusion of the shares in the  registration  statement is not for
          capital  raising  purposes,   but  merely  to  fulfill  the  Company's
          obligations in connection with the completed transaction.

     Additionally,  the Company  believes  that  including  the number of shares
potentially issuable is meaningful to an investor as it clearly shows the number
of shares which may be available  for future sale and the impact of the issuance
of such shares to potential investors.

Selling Securityholders

     2. The section on Selling  Securityholders  has been revised to include the
(i)  information  required  by  Item  507 of  Regulation  S-B,  (ii) a  detailed
introductory   description   of  the   transactions   by  which   each   Selling
Securityholder  acquired  their  securities,  and  (iii) a  materially  complete
description  of the  securities.  Additionally,  we have  included a  materially
complete  description of any material  relationship  between the Company and the
Selling Securityholders. See page 8.



Securities and Exchange Commission
December 8, 2005
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     3. We have revised the disclosure to identify the natural person or persons
who  exercise  voting or  investment  control with respect to the shares held of
record  by each of three  selling  securityholders,  none of which is an  entity
which filed  periodic  reports  pursuant to Section 13 or 15(d) of the  Exchange
Act. See page 9.

Plan of Distribution

     4. We confirm that Direct Insite is aware of Corporation  Finance Telephone
Interp. A.65 (July 1997) regarding short sales.

Exhibits

     5. We have revised the Exhibit List to include the agreement  governing the
July 12, 2005 purchase  warrants issued to Tall Oaks Group L.L.C. and are filing
same with Amendment No. 1.

     6. We have  incorporated  by reference to the Company's  Current  Report on
Form 8-K filed March 31, 2005 the forms of Senior Subordinated  Secured Note and
Common Stock Purchase Warrant issued in the March 29, 2005 transaction.

Signatures

     7.  Michael J.  Beecher has been  identified  in his  capacity as Principal
Accounting Officer on the signature page.

Form 10-KSB for the Fiscal  Year Ended  December  31, 2004 Item 6.  Management's
Discussion and Analysis or Plan of Operation Critical Accounting Policies

     8. Note 2 of the Notes to Consolidated  Financial  Statements,  Significant
Accounting Policies,  contains disclosure regarding the Company's policy and use
of estimates.  As disclosed in the footnote,  disclosures  that are particularly
sensitive to estimation  include  management's  liquidity  plans as set forth in
Note 13. In future  filings  the  Company  will  include  in the MD&A  section a
specific  discussion of its Critical  Accounting  Policies and its estimates and
assumptions.

Item 8A.  Controls and Procedures

     9. In all future  filings the Company will omit the language "as is typical
of small  companies."  Additionally,  the Company  advises the  Commission  that



Securities and Exchange Commission
December 8, 2005
Page -4-


currently,  it's disclosure  controls and procedures are designed to insure that
information  required to be  disclosed is recorded,  processed,  summarized  and
reported  within the time periods  specified by the  Commission in its rules and
forms.

     10. Regarding the Company's disclosure controls and procedures, the Company
believes  its  disclosure  controls and  procedures  are designed to ensure that
information  required to be  disclosed  is recorded,  processed  and  summarized
sufficiently  to  communicate  to management  items that require  disclosure and
would,  therefore,  be  reported  within  the  time  periods  specified  in  the
Commission's rules and forms,  however, as was disclosed in the Annual Report on
Form  10-KSB for the year ended  December  31, 2004 (the "Form  10-KSB"),  these
controls and  procedures  were not  effective  with respect to  timeliness  with
respect to the Form 10-KSB. The Company's  evaluation of the disclosure controls
and  procedures  was for the 90 day period prior to the filing of the report and
for the period as of the date of the report. In future filings, the Company will
include the language required by Item 307 of Regulation S-B.

     11. The Company confirms that during the Company's fourth fiscal quarter of
the year ended December 31, 2004, there were no changes in the internal controls
over financial reporting that has materially affected or is reasonably likely to
materially affect the Company's internal control over financial reporting.

     12. The reportable  condition and material  weakness  disclosed in Item 8A,
under Internal Controls and Financial  Reporting refers to the limited personnel
resources in the Company's accounting and finance department. As a result of the
limited  staff,  the  financial  closing of accounts  and books took longer than
anticipated  due to other demands on these  resources.  The Company had only its
Chief  Financial  Officer  and a  part-time  accountant  to perform  the closing
process and complete its financial reports.  Also due to the limited staff there
is limited  separation  of duties  requiring the Chief  Financial  Officer to be
principally  responsible for accounting and financial  reporting and thus limits
the ability to have alternate review and approval processes.

     As resources  permit,  the Company intends to add to its accounting  staff
thus permitting more  segregation of duties and appropriate  review and approval
procedures.  In the interim the Company has  expanded  the use of the  part-time
accountant  (not to be confused  with the  Company's  independent  auditors)  to
assist with the financial closing process, to review transactions and supplement
the accounting staff to insure timely financial closings.

     13. The Company has informed us that the  disclosure  indicating  that "the
Board of Directors has had confidence that there have been no  irregularities in



Securities and Exchange Commission
December 8, 2005
Page -5-


the Company's  financial  reporting or in the protection of its assets" is meant
to indicate that the Board, based on discussions with the Company's  independent
auditors and its Chief Financial Officer and Chief Executive Officer,  were able
to conclude that there were no irregularities.

     Included in the Internal  Controls and  Financial  Reporting  section,  the
Company separately states management's  responsibility to establish and maintain
adequate internal  controls over financial  reporting and further discloses that
the Company's  independent  auditors  reported to the Board certain matters that
they deemed were material  weaknesses in internal  controls.  With this separate
disclosure the Company believes that readers will not confuse these  disclosures
with those required by Item 308(a) of Regulation S-B.

     14.  The  mitigating   procedures  performed  by  management  included  (i)
additional time incurred by the Company's  Chief Financial  Officer in reviewing
the accounting records and financial statements  specifically  regarding revenue
recognition  policies and procedures , (ii) engaging a consultant to assist with
the  financial  closing  and  financial  statement  preparation  with the  Chief
Financial Officer spending  additional time reviewing the closing procedures and
the work performed by the  consultant,  and (iii) thorough  discussion  with the
Company's  independent  auditors  regarding such policies and disclosures in the
Company's financial statements and notes thereto.

     The Company's auditors considered the reportable condition and, in planning
and executing  their audit plan they placed very little or no reliance on Direct
Insite's internal controls.  Marcum & Kleigman LLP ("M&K") planned and performed
sufficient  substantive  audit  procedures  to obtain  reasonable  assurance  to
determine whether the financial  statements are free of material  misstatements.
The substantive  procedures  performed by M&K were deemed sufficient to overcome
the material  weaknesses  related to the Company's  financial  closing  process,
limited  segregation  of duties  and the  absence  of  appropriate  reviews  and
approvals of transactions and accounting entries.

     Financial Statements
     Consolidated Statement of Operations, page F-4

     15. The Company has informed us that  Management has considered  separately
reporting  cost of  revenue  and  gross  profit  during  the past few  years and
determined that the presentation was not meaningful for the following reasons:



Securities and Exchange Commission
December 8, 2005
Page -6-


     a.   Leading up to and including the calendar year ended  December 31, 2004
          the Company has focused on  developing  and  modifying  their  invoice
          presentment  technology.  This  development  work has been  undertaken
          Company  wide  in an  effort  to  meet  the  needs  of  the  Company's
          significant   customer,   IBM.  As  the  Company  focused  on  product
          development,  tracking costs on a specific  project by project was not
          deemed a priority  unless the  development  was associated with a long
          term agreement where  percentage of completion  calculations  would be
          required.

     b.   The Company  has  incurred  net losses  during the past few years as a
          result of  investing  a  significant  amount  of time and  money  into
          research  and  development  related to  expanding  and  improving  its
          produced  offering.  Part of this research and development  initiative
          has been incurred  working  directly  with the  Company's  significant
          customers in an attempt to meet  customer  needs.  As a result of this
          significant,  ongoing development project,  management has not focused
          on the Company's  gross margin level and does not utilize gross margin
          levels in the decision making  process.  Management is tightly focused
          on product  development and reducing the Company's losses.  Therefore,
          presentation  of cost of goods  sold  and  gross  profit  has not been
          deemed  significant.

     c.   Management  has  noted  several  other  publicly   traded   technology
          companies  which do not  present  cost of  services  and gross  margin
          including but not limited to Datawatch Corporation and Cray, Inc.

     In summary,  management does not currently  require or utilize gross margin
information in its decision making process. As a result, capturing and reporting
expenses  required to  properly  present  gross  margin has not been a priority.
Management  believes that gross margin  levels are not  currently  meaningful to
readers of the financial statement as the focus has been and will continue to be
improving the Company's bottom line. Once the Company becomes profitable and the
Company's  produced  offering becomes more stable,  presentation and analysis of
the Company's gross margin may become meaningful to management and the financial
statement users.


Notes to Consolidated Financial Statements
Note 2 - Significant Accounting Policies
Revenue Recognition, page F-9

     16. SOP 97-2,  paragraph 7,  indicates  that if an  arrangement  to deliver
software or a software  system,  either alone or together with other products or
services,  requires significant production,  modification or customization,  the
entire arrangement should be accounted for in conformity with ARB 45, Long- term
Construction Type Contracts and the guidance of included in SOP 81-1, accounting
for Performance of Construction Type and Certain Production Type Contracts.  The
Company's principal product is an on-line invoice presentment and payment system


Securities and Exchange Commission
December 8, 2005
Page -7-


offered as an Application  Service Provider which is a service offering excluded
under SOP 97-2.  As  described  in response to comment 17 below the Company does
customize this service offering under separate contract and thereby accounts for
these separate  contracts  using the guidance in SOP 81-1 as provided in SOP 97-
2.

     17. The Company has informed us that Custom  Engineering  Services involves
customizing  the  Company's  software  to specific  requirements  of each of its
customers.  This service is provided under separate contracts or agreements with
customers for each  customization  project and is separate and distinct from its
ongoing  Application Service Provider Services.  The customization  projects are
usually  of  relatively  short  duration,  have  specific  deliverables  and are
separately  priced on a project  by  project  basis.  Since the  revenue  can be
matched  to  specific  deliverables  as  defined in the  contracts  the  Company
believes that contract accounting is the appropriate  accounting  principal used
in accounting for these projects.  These projects are not "service arrangements"
as defined in SOP 81-1.

Note 4 - Accounts Receivable and Short-Term Revolving Loans

     18. The material  terms of the  agreement  with DIRI Rec Fund LLC (the "Rec
Fund" is as follows):

The Company may receive loans from the Rec Fund upon pledging  certain  accounts
receivable to the Rec Fund.

The  Company  pays  interest  to the Rec Fund at the rate of 1% per month on the
maximum amount  available to the Company for such loans. In addition the Company
pays the Rec Fund the  administrative  costs of the Rec  Fund,  principally  the
costs of the third party administrator (Trustee) of the Rec Fund.

The Company accounts for the costs as incurred.

The Company has no  obligation to pay any losses that may be incurred by the Rec
Fund.

The  Company,  which  reviewed  and  discussed  this issue with its  independent
auditors,  considered  whether or not the DIRI Rec Fund  qualified as a Variable
Interest Entity and required  consolidation under FIN-46. The Company considered
the qualifying criteria defined in FIN 46 Par. 5. The evaluation  considered was
as follows:

     -    The DIRI Rec Fund has been fully funded by equity investments.


Securities and Exchange Commission
December 8, 2005
Page -8-




     -    The total equity at risk is sufficient to permit the entity to finance
          its  activities  without  subordinated   financial  support  from  any
          parties.

     -    The  equity  investors  of the fund have full  control  of the  entity
          including the ability to make  decisions and the  obligation to absorb
          any losses.

     -    The equity investors have  appropriate  voting rights based upon their
          respective investments.

     The  Company  has  concluded  that the DIRI Rec Fund does not  qualify  for
consolidation treatment under FIN-46.

     Please  call me at (516)  433-1200  if you have any  questions  you wish to
discuss with us concerning this letter or any of the enclosed materials.

                                        Very truly yours,

                                        /s/ David H. Lieberman
                                        David H. Lieberman

cc:  James A. Cannavino, Chairman
     and Chief Executive Officer
     Direct Insite Corp.