SOURCE: Smart Card Marketing Systems Inc.

March 20, 2007 09:30 ET

Smartcard Marketing Systems and Payment Data Systems Announce Private Brand Agreement

SAN ANTONIO, TX -- (MARKET WIRE) -- March 20, 2007 -- Smart Card Marketing Systems Inc. (PINKSHEETS: SMKG) (FRANKFURT: QYH), a leading provider of prepaid cards, stored value cards and Optical management services, is pleased to announce entering into a Private Brand Sales Agreement with Payment Data Systems, Inc. of San Antonio, TX (OTCBB: PYDS), a leading integrated electronic payments solutions provider, to market stored value cards managed through the combination of Payment Data's card management suite and Smartcard's web-based payment platform VelocityMoney™ and VelocityMerchant.

Smartcard President Bruce Baillio said, "Payment Data has been in the web-based payment business for over 8 years and they bring great experience and technical expertise to the card industry. Combining Payment Data's outstanding technical card management platform with Smartcard's international payment management portal creates a unique value proposition for our business customers. The first program to be launched on this combined platform is a corporate promotion card for incentives, premiums and loyalty reward distribution. The revenue from this card program will have a substantial impact on Smartcard's financial performance in the 2nd qtr of 2007 as the card program begins to penetrate its target market."

"We are tremendously excited to partner with Smart Card Marketing Systems. They have a proven ability to market on a national and international basis successful and value oriented prepaid card programs," said Louis Hoch, Payment Data Systems' President and COO.

Mr. Hoch continued, "The combination of Smart Card's marketing process and our technical expertise in the prepaid industry plus our mutual focus on delivery and quality should resonate quite strongly with prospective customers."

Smartcard has established a solid portfolio of prepaid programs (14) that will allow the company to continue to grow as a premium operator of stored value card programs. "The addition of Payment Data's expertise and financial relationships will strengthen Smartcard's position and payment platform in the industry both domestically and internationally," Mr. Baillio stated.

Smartcard's VelocityMoney.com and VelocityMerchant.com platforms will have an important role in the success of Smartcard's Prepaid Card programs as they provide the initial activation, loading and reloading gateway for merchants and their respective clients. The promotion cards by industry standard will load 6 - 8 deposits monthly, generating transaction revenue for the company for the life of the card.

About Payment Data Systems, Inc.

Payment Data Systems is an integrated payment solutions (http://www.paymentdata.com/) provider to merchants and billers. The organization provides an extensive set of products to deliver world-class payment acceptance. 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 (http://www.billx.com/).

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 Systems Inc. (OTCBB: PYDS) is a registered ISO/MSP of MetaBank.

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