SOURCE: Payment Data Systems, Inc.

February 14, 2006 06:00 ET

Payment Data Systems Continues to Experience Steady Growth

SAN ANTONIO, TX -- (MARKET WIRE) -- February 14, 2006 -- Payment Data Systems, Inc. (OTC BB: PYDS), an integrated electronic payments solutions provider, today announced that credit card transactions processed in January were the Company's highest for any month to date.

Both the transaction and dollar value volumes for January were higher than those for December, our previous highest month. On an unaudited basis, January's volume was 175% higher than transactions processed and 121% higher than dollars processed in January 2005.

Michael Long, Chairman and CEO of Payment Data Systems, Inc., said, "We are pleased to see that 2006 has gotten off to a good start and that our volumes continue to increase. We look forward to working towards even more significant gains as the year unfolds."

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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