BECKMAN, LIEBERMAN & BARANDES, LLP
                       100 Jericho Quadrangle, Suite 329
                            Jericho, New York 11753
                                  516-433-1200
                            Facsimile: 516-433-5858

                                                      September 15, 2006



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
                  Christine Davis, Division of Corporate Finance
                  Anne Nguyen, Division of Corporate Finance


                  Re:      Direct Insite Corp.
                           Registration Statement on Form SB-2
                           Amendment No. 2 filed on May 5, 2006
                           File No. 333-128039

                           Form 10-KSB for the year ended December 31, 2005
                           Form 10-QSB for the periods ended March 31, 2006
                           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 May 26, 2006 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 May 26, 2006 comment letter.


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

1. The Company has updated the financial statements for the three and six months
ended June 30, 2006, included in Registration  Statement on Form SB-2, Amendment
No. 3.

Form 10-KSB for the Fiscal Year Ended December 31, 2005
- -------------------------------------------------------

Item 8A.  Controls and Procedures, page 24
- ------------------------------------------

2. - 7. The Company has  revised  the  disclosures  as now set forth in its Form
10KSB/Amendment No. 1 for the year ended December 31, 2005, filed simultaneously
with the amended registration statement.

Securities and Exchange Commission
September 15, 2006
Page - 2 -

Financial Statements

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

8. In response to the Staff's  comment,  the Company's  recognizes  revenue from
Custom Engineering Services and ASP services.

     ASP services consist of transactional data processing  services through the
Company's  Invoice Online ("IOL")  solution which allows the customer to perform
electronic  invoice   presentment  and  payment  to  its  customers  in  an  ASP
environment.  The customer is charged a fixed rate on a per transaction basis or
a fixed fee based on monthly transaction  volumes.  Revenue is recognized as the
services are performed.

     Custom Engineering services involve  modifications or customization of IOL.
This consists  primarily of change orders and to a lesser  extent,  services for
set up of data feeds which allow the customer's system to  download/upload  data
to IOL. Change orders are changes in the Company's base IOL solution to meet new
specifications  or to add  additional  functionality  based  on the  request  of
customers  such as  additional  languages,  new data  fields,  or changes to the
customers data feeds.  Custom Engineering  services are billed based on expected
hours to complete the customers request at established hourly billing rates. The
existing ASP services agreements are not effected by these changes.

     As requested by the Staff,  the Company has reviewed SAB Topic  13(A)(3)(f)
("Topic 13") to determine if the Custom Engineering  Services were initial setup
fees which should be deferred over the term of the hosting arrangement. In order
to apply the guidance of Topic 13, the Company  first had to  determine  whether
the Custom  Engineering  services qualified as a single unit of accounting under
EITF 00-21, "Revenue Arrangements with Multiple Deliverables."

     EITF 00-21 Paragraph 9 states "In arrangements with multiple  deliverables,
the delivered items(s) should be considered a separate unit of accounting if all
of the following criteria are met:

a.   The delivered item(s) has value to the customer on a stand alone basis. The
     item(s) has value on a stand alone  basis if it is sold  separately  by any
     vendor or the customer could resell the delivered  item(s) on a stand alone
     basis.  In the  context of a  customer's  ability  to resell the  delivered
     item(s),  the Task Force  observed that this criterion does not require the
     existence of an observable market for that deliverable(s).

b.   There  is  objective  and  reliable  evidence  of  the  fair  value  of the
     undelivered item(s)

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September 15, 2006
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c.   If the  arrangement  includes  a general  right of return  relative  to the
     delivered  item,  delivery or  performance  of the  undelivered  item(s) is
     considered probable and substantially in the control of the vendor."

     Currently,  Custom Engineering  services consist primarily of time incurred
in  connection  with  custom  change  orders.  The change  orders are  performed
pursuant to separate contracts or agreements. Change orders are requested by the
Company's  customers  to  either  meet  a  customer   specification  or  to  add
functionality  to the  existing  software  solution.  These  change  orders  are
generally  requested as a result of the customer's  evolving  needs.  The change
order  contracts  are not entered into at or near the same time as the contracts
for ASP  services.  As such,  the change  orders  have a value on a stand  alone
basis. Once a change order is completed there are no remaining items to deliver.
In addition, due to the nature of the service there are no rights of return. The
change  orders do not impact  the ASP  services  agreements  in that they do not
modify the terms of those agreements  either to price or term and the continuing
ASP services are not contingent on  implementing  the change order.  The Company
has determined that the change order represents a single unit of accounting.

     The setup of the data feeds has a value to the  customer  on a stand  alone
basis.  Data feeds  allow the  customer's  system to download or upload with the
Company's IOL solution to ultimately provide electronic invoice  presentment and
payment.  The  Company  gives its  clients  the  option  to use  their  internal
resources,  use a third party  consultant  or use the Company to create the data
feeds.  Once  the  data  feed is  established,  the  feed  can be used  with the
Company's ASP software solution or a similar solution of a competitor's  related
to electronic invoice presentment and payment.  The feeds could also be used for
other  software  platforms.  The  services  for the setup of the data  feeds are
separate contractual  arrangements.  The Company's major customers International
Business Machines  Corporation  ("IBM") and Electronic Data Systems  Corporation
("EDS"), which represent over 90% of the Company's revenue, are industry leaders
in software solutions. Both IBM and EDS have the internal ability to perform the
setup of the data feeds, but due to constraints on their internal  resources and
related opportunity costs, elect to have the Company perform these services. IBM
and EDS can also engage a third party to perform these  services.  As such,  the
Company  has  determined  that the  initial  setup feeds have a value on a stand
alone basis.

     The undelivered item, which is the ASP services, has objective and reliable
evidence of fair value.  The ASP services  consist of data processing  using the
Company's ASP software solution in the form of on line presentment of customers'
invoices to their  customers  and  payments  systems.  The customer is charged a
fixed rate on a per use basis or a fixed fee is determined by estimated  monthly
invoice  presentment  volumes  based on  contractually  agreed upon  terms.  Our
customers are  continually  renewing their ASP contracts with us (well after the
initial data feed work and initial ASP services have been  completed),  and as a
result,  we sell the ASP  services  on a  completely  stand alone  basis.  These
arrangements are separate  contractual  arrangements and are not bundled or part


Securities and Exchange Commission
September 15, 2006
Page - 4 -

of a multiple element contractual arrangement. As such, the ASP services have an
objective and reliable evidence of fair value.

     The initial  setup of the data feeds do not have a general right of return.
As a result,  paragraph 9(c) of EITF 00-21 is not applicable to the setup of the
data feeds.

     As such, the Company determined that the Custom Engineering Services should
be accounted  for as a single unit of  accounting.  Topic 13 states  "unless the
up-front fee is in exchange for products  delivered or services  performed  that
represent the culmination of a separate earning process, the deferral of revenue
is  appropriate."  Topic 13 refers to  Statement  of  Financial  Concepts No. 5,
footnote 51,  which  states,  "Earnings  in this sense is a technical  term that
refers  to  the   activities   that   give  rise  to  the   revenue--purchasing,
manufacturing,  selling,  rendering services,  delivering goods,  allowing other
entities to use enterprise  assets,  the  occurrence of an event  specified in a
contract and so forth.  All of the  profit-directed  activities of an enterprise
that  comprise the process by which  revenue is earned may be called the earning
process."

     As  evidence  that the earning  process is  completed  with  respect to the
Custom Engineering services, the Company notes that should either their customer
or the Company  terminate  the ASP  arrangement  there would be no refund of the
Custom  Engineering  service fees. As further evidence that the earnings process
is completed for Custom  Engineering  services the Company looked analogously to
the  example in  question 12 of the FAQs to Staff  Accounting  Bulletin  No. 101
("SAB  101").  In the  example in  question 12 of SAB 101 a provider of wireline
telecommunication services provides activation of phone service and installation
of an  additional  phone jack.  The example  explains that  although  rare,  the
registrant  will sometimes  install the phone jack where it is not providing the
basic local  service.  In addition  the  customer  can choose  other  vendors to
install the phone jack. SAB 101 states:

     "The staff believes that revenue  should be recognized  when the additional
jack is  installed.  In this case,  installation  of the  additional  phone jack
represents  a  separate  and  distinct  earning  process,  as  indicated  by the
following factors:

     o    The functionality of the on-going basic local service is unaffected by
          the number of phone  jacks that  existed  at a customer  location,  as
          evidenced by the fact that the timing of the  installation of the jack
          need  not  coincide  with  the  activation  of  basic   service.   The
          functionality  of the  jack is  unaffected  by the  extent  of  future
          services.
     o    The registrant provides  installation  services in situations where it
          is not also activating basic local service.
     o    The registrant provides  telecommunication services without installing
          the phone jack (e.g,  when the  customer  does not want an  additional
          jack).
     o    Customers  may choose other vendors to install the phone jack in their
          residence.

Securities and Exchange Commission
September 15, 2006
Page - 5 -


     o    Customers may install additional phone jacks themselves.
     o    The  installation  of the jack provides an enhancement to the value of
          the  customer's  residence,  even if no  local  telephone  service  is
          contracted for.

     If the  installation  of the  additional  phone  jack is one  element  in a
multiple-element arrangement, there should be sufficient reliable, objective and
verifiable  evidence of fair value for the various elements in order to allocate
the related fee among the elements".

     The setup of the initial data feeds are negotiated  separately from the ASP
services.  In addition,  the customer has three  alternatives  to establish  the
setup data feeds: (i) the customers have the ability to establish the data feeds
with their  internal  resources,  (ii) the  customer  can  engage a third  party
consultant  establish  the data  feeds,  or (iii) the  customer  can  engage the
Company  to  establish  the  data  feeds.  The  Company  can  provide  only  the
installation of the data feeds,  only the ASP services or both the  installation
and ASP services.  The  installation  services and ASP services are offered on a
standalone  basis.  As such, the Company  determined the setup of the data feeds
represent a separate earning process.

     EITF  00-21,  Paragraph  12 states  "if  there is  objective  and  reliable
evidence  of fair  value  (as  discussed  in  paragraph  16) for  all  units  of
accounting in an arrangement,  the arrangement consideration should be allocated
to the separate  units of  accounting  based on their  relative fair values (the
relative fair value method)." Paragraph 16 further states  "contractually stated
prices for individual  products and/or services in an arrangement  with multiple
deliverables should not be presumed to be representative of fair value. The best
evidence of fair value is the price of a deliverable  when it is regularly  sold
on a standalone basis. Fair value evidence often consists of  entity-specific or
vendor-specific objective evidence (VSOE) of fair value." The Company offers its
Custom  Engineering  services  based on expected hours to complete the customers
request and  established  hourly billing  rates.  The Company's ASP services are
based on  contractual  arrangement  which is generally  negotiated  on an annual
basis. Custom Engineering  services are not sold at discounts in order to secure
ASP  Services.  The  profit  margins  of the  Custom  Engineering  services  are
generally  60-65%  compared  to the 80-85% of the ASP  services  provided by the
Company. The lower margins are a result of the labor hours needed to perform the
Custom Engineering services and the competitive rates at which such hours can be
billed. The lower margins therefore are the result of a competitive market place
for the Custom Engineering  services. As such the relative fair value of each of
these  services is equal to that of the standalone  contracts,  which is consist
with vendor-specific objective evidence.

     As such, the Company  believes that pursuant to the guidance of EITF 00-21,
separate units of accounting exist for the Custom  Engineering  services and the
ASP  services.  EITF  00-21  states  in  paragraph  7 that  "applicable  revenue
recognition  criteria  should be  considered  separately  for separate  units of
accounting."

Securities and Exchange Commission
September 15, 2006
Page - 6 -

     For ASP  services,  in  accordance  with EITF 00-3,  "Application  of AICPA
Statement  of  Position  97-2 to  Arrangements  That  Include  the  Right to Use
Software Stored on Another Entity's Hardware,"  "(a)rrangements that do not give
the customer  such an option [the  contractual  right to take  possession of the
software]  are  service  contracts  and are  outside  the  scope  of SOP  97-2."
Accordingly, the Company follows the general recognition criteria of SAB 104 and
recognizes revenue monthly as the services are performed.

     For  Custom  Engineering  services  the  Company  recognizes  revenue  on a
percentage  of  completion  basis of  accounting.  SOP 97-2,  "Software  Revenue
Recognition"  Paragraph 74 states:  "If an arrangement to deliver  software or a
software system,  [Custom Engineering services] either alone [Custom Engineering
services]  or together  with other  products or services,  requires  significant
production, modification, or customization of software, the service element does
not meet the  criteria for separate  accounting  set forth in paragraph  65. The
entire  arrangement  [Custom  Engineering  services]  should be accounted for in
conformity  with ARB No. 45,  using the relevant  guidance in SOP 81-1  [section
10,330].  Nevertheless,  transactions that normally are accounted for as product
sales should not be accounted  for as  long-term  contracts  merely to avoid the
delivery  requirements  normally  associated  with  product  sales  for  revenue
recognition."


     SOP 97-2 paragraph 75 further states "In applying contract accounting,  the
vendor   must  use  either   the   percentage-of-   completion   method  or  the
completed-contract method. The determination of the appropriate method should be
made according to the recommendations in paragraphs 21 through 33 of SOP 81-1."

     As EITF 00-21  paragraph 7 notes above that  separate  units of  accounting
should follow  separate  applicable  revenue  recognition  criteria,  the Custom
Engineering  services  alone are  accounted  for  under SOP 81-1 as it  involves
significant modification or customization of software or a software system.

Form 10-QSB For The Fiscal Quarter Ended March 31, 2006
- -------------------------------------------------------
Note 3. Stock Based Compensation

9. The Company has included in its Form 10-QSB for the Fiscal Quarter Ended June
30,  2006  filed  with the  Commission  on August 17,  2006 the  disclosures  as
required by paragraphs 64, 65, 84, and A240 through A242.

     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:      Michael J. Beecher
         Chief Financial Officer
         and Secretary