SOURCE: Payment Data Systems, Inc.

April 10, 2006 16:01 ET

Credit Card Volume for First Quarter Grows 97% From Prior Year Quarter

SAN ANTONIO, TX -- (MARKET WIRE) -- April 10, 2006 -- Payment Data Systems, Inc. (OTC BB: PYDS), an integrated electronic payments solutions provider, today announced that credit card transactions processed in March were our highest for any month to date. This achievement also makes ten out of the past eleven months in which our credit card transaction volume was higher than the previous month. On a sequential basis, the dollar processing volume for March was 30% greater than the volume in February 2006. Dollars processed is the metric that drives our gross revenue from credit card processing.

Both the transaction and dollar value volumes for March were higher than those for February 2006, our previous highest month. On an unaudited basis, March's volume was 140% higher than transactions processed and 88% higher than dollars processed in March 2005, and the volume for the first quarter of 2006 was 156% higher than transactions processed and 97% higher than dollars processed in the first quarter of 2005.

Michael Long, Chairman and CEO of Payment Data Systems, Inc, said, "We are excited to have finished the first quarter on such a strong note with our dollar processing volume for the first quarter nearly doubling from last year, which will have a corresponding effect on our related revenues."

About Payment Data Systems, Inc.

Payment Data Systems is an integrated payment solutions provider to merchants and billers. We provide an extensive set of tailored products to deliver world-class payment acceptance, processing, and risk/fraud management. Payment Data has solutions for merchants, billers, banks, service bureaus and card issuers. Whether you are in the market for card issuance, payment acceptance or bill payment solutions we have a solution for you.

Payment Data is the owner of the electronic bill payment portal, http://www.billx.com, which has the ability to transmit payments to thousands of national billers.

Payment Data is also the exclusive license holder of the rights to market the Carmen Electra gift and prepaid cards. To receive updates on the Carmen Electra card program sign-up at www.carmencard.com.

For additional information, visit www.paymentdata.com. Contact Michael Long for Investor Relations information at 210.249.4040 or email at ir@paymentdata.com.

FORWARD-LOOKING STATEMENTS DISCLAIMER

Except for the historical information contained herein, the matters discussed in this release include certain forward-looking statements, which are intended to be covered by safe harbors. Those statements include, but may not be limited to, all statements regarding our and management's intent, belief and expectations, such as statements concerning our future and our operating and growth strategy. Investors are cautioned that all forward-looking statements involve risks and uncertainties including, without limitation, the factors detailed from time to time in our filings with the Securities and Exchange Commission. One or more of these factors have affected, and in the future could affect, our businesses and financial results in the future and could cause actual results to differ materially from plans and projections. We believe that the assumptions underlying the forward-looking statements included in this release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that our objectives and plans will be achieved. All forward-looking statements made in this release are based on information presently available to our management. We assume no obligation to update any forward-looking statements, except as required by law.

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