SOURCE: Payment Data Systems, Inc.

May 08, 2006 08:00 ET

Payment Data Systems Inc. and PAYjr Sign Strategic Agreement for Teen Card and Savings Program

SAN ANTONIO, TX -- (MARKET WIRE) -- May 8, 2006 -- Payment Data Systems, Inc. (OTC BB: PYDS), an integrated electronic payments solutions provider, announced today that it has entered into a strategic agreement with PAYjr, Inc., the nation's only online allowance and chore management system, to launch the Billx.com teen prepaid stored value card and youth savings program. Teens, age 13 and up, with parents' permission, qualify for the stored value card while children under age 13 are eligible for allowances to be deposited into a savings account. It is anticipated the stored value card will be issued with a nationally known brand leveraging Payment Data's existing bank relationships.

As specified in this new agreement, Payment Data (PDS) will utilize PAYjr's safe, reliable, and innovative services to help teens learn to effectively manage and budget their money. Integrated into PDS' robust prepaid stored value platform, PAYjr's online allowance and chore system will act as the interface providing an educational and convenient method for parents to pay their teens and kids electronically.

The patent pending PAYjr system allows parents to schedule chores, assign monetary rewards and then automatically deposits the earned rewards into a child's savings account or onto a PDS provided Billx teen prepaid stored value card. Parents have complete control and visibility into their teen's spending activity, while teens enjoy an effective money management tool that gives them the independence to purchase items online and always know their balances via cell phone, email or instant messenger.

Louis Hoch, PDS' President and COO, said, "Differentiation has been a hallmark of PDS. This strategy continues as we partner with PAYjr to provide the best teen prepaid program in the marketplace. The Billx teen prepaid stored value card, coupled with the power and flexibility of the PAYjr system, will position PDS to capture a large portion of the 25 million teens in the nation. Today these teens use nothing other than cash to conduct their spending. The teen market represents over $175 billion in annual spending power, but teens have been taught very little about managing their finances and budgeting."

Joe Huch, Chief Marketing Officer for PAYjr, stated, "Payment Data Systems, with its solid history of prepaid debit card innovation is the perfect company for PAYjr to partner with for delivery of the first teen prepaid program powered by PAYjr. Today, very few graduating high school seniors can answer the most basic questions about personal finance. Launching a program that provides education for teenagers through a hands-on learning experience should serve as a model for financial institutions across the country. It should also provide a powerful tool for parents as they begin to instill responsible personal financial management concepts to their children."

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 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.

About PAYjr, Inc.

Headquartered in Dallas, TX, PAYjr provides smart, practical and easy-to-use online tools that help parents teach their children about money management and budgeting. The company's central focus is helping kids make the connection between financial reward and effort, hard work and discipline, which ultimately establishes a lifetime of smart financial habits. PAYjr also works closely with banks, credit unions and major youth brands to help create market differentiation with branded and co-branded PAYjr programs. PAYjr supports these institutions in their efforts to educate consumers on a wide range of financial management topics, while driving new accounts and increasing sales.

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.

Contact Information