Shares of

Catuity

(CTTY)

were soaring nearly fivefold after the Detroit-based point-of-service software provider said it reached an agreement with CertifiChecks to offer a hosted loyalty and gift card service to the company's merchant network.

Under the agreement, CertifiChecks, based in Dayton, Ohio, will use the new Catuity Advanced Loyalty System that will be sold to the merchants and chain stores who now use CertifiChecks' paper-based option.

Catuity was recently trading at $19.77, up $15.77 -- an eye-popping increase of 394%. Volume was equally staggering. By about 1:30 p.m. EDT, more than 5 million shares had traded, while the average daily volume is less than 21,000 shares.

Earlier in the session, the stock traded as high as $22.58. The close Monday was $4, and the prior 52-week high was $9.10.

"CertifiChecks created an innovative business model that makes it easy for merchants and retailers of all sizes to tap into the bottom-line potential of loyalty programs. We are proud that they have chosen CALS to deliver gift card and dynamic loyalty programs to their growing customer base," says John Racine, president and CEO of Catuity Inc. "They serve one of the greatest untapped markets, which is for small merchants who demand a solution that delivers measurable results."

CertifiChecks' gift certificates are accepted at more than 70,000 locations nationwide. In addition, the company provides gift certificate programs to a top-10 grocery store chain, the U.S. military's Defense Commissary Agency and Army and Air Force Exchange Service, and other retailers.