SOURCE: Payment Data Systems, Inc.

June 13, 2006 16:01 ET

Payment Data Systems Advisory Board Welcomes Paris Hilton Entertainment GM, CredibilitySharing CEO

Industry Leaders Bring Growth Track Records as PDS Prepares to Launch Celebrity and Debit Card Programs

SAN ANTONIO, TX -- (MARKET WIRE) -- June 13, 2006 --Payment Data Systems, Inc. (OTCBB: PYDS) an integrated electronic payments solutions provider, announced today that Jason Moore, General Manager of Paris Hilton Entertainment and long time business manager of Ms. Hilton, and Tom DeBrooke, CEO of CredibilitySharing, a privately held business development organization with ties to the Latino marketplace, have joined the company's newly formed Advisory Board. Messrs. Moore and DeBrooke are expected to be valuable advisors to PDS as it prepares to inaugurate a series of celebrity and debit card programs.

"These two gentlemen have agreed to serve on our new Advisory Board because of their passion for our company, their extraordinary track records and their unsurpassed ability to help the company through two strategic channels; business development, particularly in the areas of celebrity card programs, and acquisitions," said PDS Chairman and CEO Michael Long. "Both are widely recognized as industry leaders with a history of revenue growth, sustained profitability and market leadership."

Mr. Long noted that Mr. Moore's background in celebrity promotions, combined with Mr. DeBrooke's proven capabilities in corporate development and mergers & acquisitions, will be of exceptional value as Payment Data Systems accelerates its growth.

Payment Data Systems' new Advisory Board will sit alongside the Company Board of Directors and will bring significant business acumen to the growth of the Company, Mr. Long said. The membership of this board is non-voting and has no fiduciary responsibility.

Mr. DeBrooke said, "It is a rare opportunity, indeed, to be asked to become more involved in and to work even closer with a Company at the very time that it is poised to achieve the levels of success that I believe are imminent for Payment Data. This invitation to now strengthen and to more clearly formalize our already existing relationship is a very exciting one for me. A long period of observation and due diligence analysis has convinced me that the Management team of Payment Data is without parallel in its field. And, that the continuously evolving, but still very focused, 'story' of how success will be both achieved and sustained is undeniable."

Mr. Moore said, "I am personally excited about this new role and association with Payment Data Systems. PDS has attributes that captured my interest -- such as vision, talent, and unique capabilities. These are the very things the things that we look for in the personalities for whom we provide services. Therefore, I believe there will be opportunity to bring celebrities and card programs together in a way that will create success for everyone involved."

The appointments of Messrs. Moore and DeBrooke closely follows Payment Data Systems' May 31 announcement of April's record credit card dollar volume. Mr. Long noted that dollars processed is the metric that drives the company's revenue from credit card processing. On an unaudited basis, April's volume was 94% higher than dollars processed in April 2005. Additionally, the associated transactions were 140% higher than transactions processed for the same period.

About Payment Data Systems, Inc.

Payment Data Systems is an integrated payment solutions provider to merchants and billers. The organization provides an extensive set of 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. The strength of the company is its ability to offer specifically tailored solutions for card issuance, payment acceptance and bill payments.

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

Payment Data's intellectual property includes U.S. Patent Number 7,021,530 that relates to bill payments made with debit, prepaid and stored value cards.

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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