SecProbe.io

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(S1 LOGO)
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<S>                                          <C>                    <C>
S1 CORPORATION    HEADQUARTERS 3500 Lenox Road, Suite 200, Atlanta Georgia 30326 U.S.A.
                  T +1 404.923.3500   F +1 404.923.6727  TOLL FREE +1 888.457.2237
</Table>

June 20, 2005

Mr. Craig Wilson
Senior Assistant Chief Accountant
Division of Corporation Finance
United States Securities and Exchange Commission
Station Place
100 F Street, N.E.
Washington, DC  20549

Re:  S1 Corporation
     Form 10-K for Fiscal Year Ended December 31, 2004
     Filed March 16, 2005
     File No. 000-24931

Dear Mr. Wilson:

On behalf of S1 Corporation ("S1" or the "Company"), this letter responds to the
comments in your letter dated May 31, 2005 (the "Comment Letter") regarding the
Company's Form 10-K for the fiscal year ended December 31, 2004. The comments
and responses are set forth below and are keyed to the sequential numbering of
the comments and the headings used in the Comment Letter.

Item 7. Management's Discussion and Analysis of Financial Condition and Results
        of Operations, page 20

RESTRUCTURING CHARGES, PAGE 22

     1.  YOUR DISCLOSURES INDICATE THAT YOU RECORDED THE 2003 EDIFY
         RESTRUCTURING IN ORDER TO ALIGN COSTS WITH EXPECTED REVENUES.
         SUPPLEMENTALLY EXPLAIN TO US WHAT YOU MEAN BY THIS DISCLOSURE. WE
         FURTHER NOTE THAT YOU ALSO RECORDED A GOODWILL IMPAIRMENT CHARGE AND
         ACCELERATED AMORTIZATION IN 2003 RELATED TO THE EDIFY SEGMENT.
         SUPPLEMENTALLY EXPLAIN TO US WHY YOU RECORDED ACCELERATED AMORTIZATION
         OF THE INTANGIBLES AND TELL US WHETHER THESE INTANGIBLES WERE TESTED
         FOR IMPAIRMENT PRIOR TO YOU RECORDING THE ACCELERATED AMORTIZATION.

RESPONSE:

Revenues from the Edify business decreased significantly from $50.6 million in
2001, to $47.4 million in 2002 to $30.0 million in 2003, however operating costs
were not decreasing at the same rate. A significant portion of Edify's operating
costs were relatively fixed and consequently difficult to reduce in the short
term. In light of Edify's performance and in order to return the Edify business
to breakeven profitability, management undertook a restructuring plan to reduce
costs. That plan reduced the workforce and consolidated office facilities and
replaced the entire senior management team of the Edify business. We recorded
restructuring charges of $4.3 million for the year ended December 31, 2003 as a
result of these activities. These restructuring charges were accounted for and
related disclosures were made in accordance with SFAS 146.

As to the accelerated amortization of intangibles, as of July 1, 2002, we began
accounting for the Edify business as held for sale under the provisions of SFAS
144 and ceased depreciation of fixed assets and amortization of other intangible
assets associated with the Edify business in accordance with SFAS 144. In

<PAGE>

April 2003, we determined that we would not be able to sell the Edify business
on terms agreeable to us before June 30, 2003 (one year after the business was
initially placed into the held for sale category). When we reclassified Edify to
continuing operations and ceased discontinued operations treatment, we recorded
an adjustment for any amortization expense that would have been recognized
through March 31, 2003 had the Edify business been continuously classified as
held and used (SFAS 144 para 38) which we characterized in our disclosure as
accelerated amortization expense.

During the third quarter of 2002, when all of the required "held for sale"
criteria were met pursuant to SFAS 144, we compared the carrying value of the
business to the estimated fair value in order to record the assets held for sale
at the lower of the carrying value or the estimated fair value less costs to
sell. We determined the estimated fair value exceeded the carrying value
indicating no impairment was necessary at July 1, 2002 based on indications of
interest we had received from third parties to purchase the Edify business. At
each subsequent balance sheet date, we had indications of interest to purchase
the Edify business for more than the carrying value, which we viewed as positive
evidence that no triggering event had occurred. In April 2003, at the completion
of the buyers evaluation and due diligence, the remaining bids were reduced to
terms that were not agreeable to us. Therefore, in accordance with SFAS 144, we
ceased categorizing the assets as held for sale and discontinued operations
treatment and presented the Edify business as part of continuing operations for
all periods presented. In doing so, we reduced the business' carrying value to
its estimated fair value at the date of the subsequent decision not to sell
(SFAS 144 para 38). This resulted in the goodwill impairment charge that was
recorded in the first quarter of 2003.

     2.  SUPPLEMENTALLY QUANTIFY THE AMOUNT OF SUBLEASE INCOME WHICH WILL OFFSET
         FUTURE RESTRUCTURING RELATED CASH EXPENDITURES.

RESPONSE:

At December 31, 2004, facility lease obligations included in the restructuring
reserves were $19.5 million in future cash expenditures that will be offset by
approximately $11.4 million of sublease income. The sublease income includes
contracted subleases of $10.1 million. The lease obligation and contracted
subleases are included in the tables under Commitments in Liquidity and Capital
Resources (p 39) and footnote 11 Commitments and Contingencies (p 62). The
restructuring reserve also includes an estimate of $1.3 million for anticipated
sublease income on two facilities in Europe.

RESULTS OF OPERATIONS, PAGE 27

     3.  IN THE DISCUSSION OF YOUR RESULTS OF OPERATIONS, YOU REFER TO VARIOUS
         FACTORS THAT HAVE IMPACTED RESULTS WITHOUT QUANTIFYING THE IMPACT OF
         EACH FACTOR. FOR EXAMPLE, YOU REFER TO SEVERAL FACTORS THAT CONTRIBUTED
         TO THE INCREASE IN SELLING AND MARKETING EXPENSES IN FISCAL 2004, BUT
         GIVE NO INDICATION AS TO THE RELATIVE IMPACT OF EACH FACTOR. EXPLAIN TO
         US HOW YOU CONSIDERED SECTION III.D OF SEC RELEASE NO. 33-6835.

RESPONSE:

Section III.D of SEC Release No. 33-6835 asks registrants to discuss and
quantify the contribution of two or more factors in material changes from
year-to-year financial statements to the extent they are necessary to
understanding the business as a whole.

As such, when preparing the MD&A, management considers each item individually
and in the aggregate to determine if they are necessary to understanding the
business as a whole.

For the comparison of the 12 month periods ended December 31, 2004 and 2003,
revenues decreased $6.6 million from $247.6 in 2003 to $241.0 million in 2004
and total operating expenses decreased $47.5 million from $277.5 in 2003 to
$230.0 million in 2004. We believe the primary factor was the termination of the
Zurich contract and that an understanding of that termination was necessary to
understand our business as a whole. As such, we quantified the effect of the
Zurich business on revenues and expenses.

<PAGE>

We also disclosed the impact of certain loss accruals on the direct costs
associated with professional services, quantified the reduction of data center
costs related to the closure of our UK data center, quantified the impact of the
merger related and restructuring charges in detail and described the significant
change in the discontinued operations line. We described, but do not quantify
other changes in operating expenses, because we determined that they were not
material to understanding the business as a whole.

In the future, changes in our results from operations will not include the
effects of the termination of the Zurich contract and therefore other factors
may be material to the understanding of our business as a whole. As such, we
will expand our quantification of material factors in our results of operations
discussion in future filings.

ITEM 8, FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA, PAGE 41

CONSOLIDATED STATEMENTS OF OPERATIONS, PAGE 45

     4.  WE NOTE THAT YOU EXCLUDE DEPRECIATION, AMORTIZATION OF PURCHASED
         TECHNOLOGY AND SOFTWARE DEVELOPMENT COSTS FROM COST OF REVENUES. REVISE
         YOUR PRESENTATION AS THESE COSTS SHOULD NOT BE EXCLUDED FROM COST OF
         REVENUES. REVISIONS SHOULD ALSO BE MADE TO YOUR MANAGEMENT'S DISCUSSION
         AND ANALYSIS AND YOUR QUARTERLY FINANCIAL INFORMATION (UNAUDITED).
         REFER TO ITEM 5-03(b)(2) OF REGULATION S-X AND QUESTION 17 OF THE FASB
         STAFF IMPLEMENTATION GUIDE TO SFAS 86.

RESPONSE:

We respectfully advise the Staff that our consolidated statement of operations
does not include a subtotal summarizing cost of revenues nor does it contain a
line item for gross margin. In response to the Staff's comment and consistent
with guidelines in SAB Topic 11B, the Company will no longer report gross margin
in the MD&A and S-K 302 data and will add parenthetical disclosure discussed in
SAB Topic 11B in future filings.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, PAGE 48

FINANCIAL INSTRUMENTS, PAGE 49

     5.  WE NOTE THAT YOU RECLASSIFIED CERTAIN AUCTION RATE SECURITIES FROM CASH
         AND CASH EQUIVALENTS TO SHORT TERM INVESTMENTS. REVISE YOUR DISCLOSURES
         TO QUANTIFY THE EFFECT THE RECLASSIFICATION HAD ON YOUR BALANCE SHEET
         AND STATEMENT OF CASH FLOW. YOU INDICATE THAT THE RECLASSIFICATION WAS
         MADE BASED ON A RE-EVALUATION OF THE MATURITY DATES ASSOCIATED WITH THE
         UNDERLYING BONDS YET IT APPEARS THE RECLASS WAS MADE IN ORDER TO COMPLY
         WITH SFAS 95. YOUR DISCLOSURES SHOULD BE REVISED ACCORDINGLY.
         ADDITIONALLY, TELL US HOW YOU CONSIDERED DISCLOSING THE
         RECLASSIFICATION IN THE "RECLASSIFICATIONS" POLICY ON PAGE 55.

RESPONSE:

The table below reflects the impact of the reclassification on S1's consolidated
financial statements (in thousands).

Consolidated Balance Sheet - December 31, 2003

<Table>
<Caption>

                                             Previously
                                              Reported       Reclass         Revised
                                             ----------     ----------      ----------
<S>                                          <C>            <C>             <C>
Cash and cash equivalents                    $  150,064     $  (73,351)     $   76,713
Short-term investments                           14,126         73,351          87,477
                                             ----------     ----------      ----------
    Total                                    $  164,190     $       --      $  164,190
</Table>

<PAGE>

Consolidated Statement of Cash Flow - Year Ended December 31, 2003

<Table>
<Caption>

                                           Previously
                                            Reported        Reclass          Revised
                                           ----------      ----------      ----------
<S>                                        <C>             <C>             <C>
Maturities of short-term
  investments securities                   $   31,483      $    8,650      $   40,133
Purchases of short-term
  investments securities                      (28,135)        (45,821)        (73,956)
                                           ----------      ----------      ----------
      Net change                           $    3,348      $  (37,171)     $  (33,823)
</Table>

Consolidated Statement of Cash Flow - Year Ended December 31, 2002

<Table>
<Caption>

                                           Previously
                                            Reported        Reclass          Revised
                                           ----------      ----------      ----------
<S>                                        <C>             <C>             <C>
Maturities of short-term
  investments securities                   $   74,789      $    2,095      $   76,884
Purchases of short-term
  investments securities                      (60,814)        (25,009)        (85,823)
                                           ----------      ----------      ----------
  Net change                               $   13,975      $  (22,914)     $   (8,939)
</Table>

In considering disclosing the reclassification in the "Reclassifications" policy
on page 55, we noted the change had no impact on our current assets, cash flows
from operating activities and financing activities, liquidity or capital
resources or any ratios required to be maintained for leases, letters of credit
and other third party agreements that stipulate required minimum amounts of cash
and short term investments. Therefore, while from a quantitative perspective the
amount reclassified is large, qualitatively speaking it is of little
consequence. As part of our SAB 99 analysis, we concluded that the adjustment
was not material to the financial statements and decided that a reclassification
was appropriate treatment. Based on the foregoing, management believes the
presentation of this adjustment as a reclassification is valid and disclosure is
appropriate. We respectfully advise the Staff that for the remaining Form 10-Q's
in 2005, we will disclose a quantitative analysis of the impact of the
reclassification to comply with SFAS 95 on prior year's quarterly information.

     6.  WE FURTHER NOTE THAT YOUR AUCTION RATE SECURITIES ARE CLASSIFIED AS
         AVAILABLE FOR SALE SECURITIES. JUSTIFY THE CLASSIFICATION OF THESE
         SECURITIES AS CURRENT BY ADDRESSING HOW YOU DETERMINED THAT YOU HAVE A
         REASONABLE EXPECTATION OF COMPLETING A SUCCESSFUL AUCTION WITHIN THE
         SUBSEQUENT TWELVE-MONTH PERIOD. REFER TO PARAGRAPH 17 OF SFAS 115 AND
         CHAPTER 3A OF ARB AS WELL AS SFAS 95.

RESPONSE:

We have discussed investment risks and liquidity of these types of instruments
with the Company's independent investment advisors. The auction rate securities
we hold are of the highest credit rating, fully collateralized by debt
securities and are highly liquid. The Company is not aware of any auction
failure for auction rate securities with the collateral and credit ratings in
which we invest and believes the risk is so remote as to make the classification
appropriate. Management has chosen to invest in them due to the high liquidity
and low risk related to these securities, and we continue to view these
investments as highly liquid with a favorable market return relative to risk. In
accordance with ARB No. 43, par.4, we have designated these investments as short
term investments because they are reasonably expected to be realized in cash or
sold or consumed during our normal annual operating cycle in 2005. Our
experience since the balance sheet date through May 31, 2005 supports the
liquidity of these asset backed auction rate securities as we have liquidated
$24.4 million of the $62.7 million held at December 31, 2004 through successful
auctions. Additionally, through successful auctions we have opted to hold $35.5
million since December 31, 2004.

<PAGE>

     7.  SUPPLEMENTALLY TELL US HOW YOU CONSIDERED THIS RECLASSIFICATION WHEN
         ASSESSING YOUR ITEM 307 DISCLOSURE CONTROLS AND PROCEDURES AND ITEM
         308(c) CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING.

RESPONSE:

In assessing Item 307 disclosure controls and procedures and Item 308(c) changes
in internal controls over financial reporting, we determined the
reclassification was a significant deficiency based on the prudent official test
under AS No. 2, but not a material weakness and therefore not subject to
disclosure. We believe that the concl