Payment Data Systems, Inc. Contracts with XL Payment Systems, Inc. for Funds Loading Services SAN ANTONIO, Texas, July 21 /PRNewswire-FirstCall/ -- Payment Data Systems, Inc. (OTC:PYDS) (BULLETIN BOARD: PYDS) today announced the signing of a multi-year agreement with XL Payment Systems, Inc. to provide payment services for debit card loading and risk management. The PDS solution provides payment origination for debit card loading that can come directly from an XL Payment Systems Customer Service Representative or an XL Payment Systems branded website. XL Payment Systems implemented Payment Data's IPS ACH*Gateway which is a Microsoft(R) .NET Connected webservice. The gateway will be used to debit consumers' checking and/or savings accounts when loading funds on their XL Payment Systems Debit Card for worldwide usage. XL Payment Systems also chose to utilize Payment Data's IPS CSR*View product for tracking and reporting as well as customer relationship management for their in-house call center. President and COO of Payment Data Systems, Inc. Louis Hoch, said, "We are very pleased to be able to deliver this solution to this relationship with XL Payment Systems. XL Payment Systems has done well issuing VISA branded cards and we believe our risk & fraud systems will provide effective loading of funds for their consumers while minimizing the risk for all participants." XL Payment Systems President and CEO, Robert Cannon, said, "We are thrilled with the solution that PDS created for our card programs. We selected PDS due to their deep experience in payment origination, risk management, account verification, security, technology, and customer service. PDS qualifying for the Microsoft(R) .NET Connected Logo program relieved any concerns about compatibility with our systems. We look forward to more implementations with PDS." About XL Payment Systems, Inc. XL Payment Systems is a VISA ISO and is a leading provider of prepaid debit cards worldwide. Based in Houston, Texas, XL Payment Systems is able to provide a prepaid debit card solution for every need. We provide a turn-key solution including card production, PIN generation, customer service, Regulation E, funds management, settlement, network access, bank issuance/sponsorship, transaction processing, and transaction reporting. This is all performed at the Card level, merchant level, and distributor level. The XL Payment Systems Card Program is sponsored by First Federal Bank. All Cards are issued by First Federal Bank. For more information visit http://www.xlcard.com/ or (800) 510-1314. About Payment Data Systems, Inc. Payment Data Systems, Inc., is an Integrated Payments Solution Provider delivering comprehensive, cost-effective solutions to billers and retailers for the processing and management of electronic payments via the Internet, point of sale, or payments taken by Customer Service Representatives or an Interactive Voice Response (IVR). Additional products available from PDS include services and products that can be implemented more quickly and less expensively than the alternative of adding multiple payments companies as these solutions offer a full range of payment processing capabilities. These service offerings include: one time and recurring ACH debits and credits, electronic lockbox and returned check services, Web pay acceptance of credit cards and checks, telephone pay to Customer Service Representatives for acceptance of credit cards and checks, Interactive Voice Response systems which completely automate the payment receiving process, and data warehousing that enable the storage and retrieval of all payment history from one location. These are all managed within a single comprehensive storage and retrieval system thereby providing the customer consolidated tracking and reporting of all payment types regardless of source or channel. Payment Data is the owner of the electronic bill payment portal, http://www.bills.com/ . Bills.com has the ability to transmit electronic payments to thousands of national billers. For additional information, visit http://www.paymentdata.com/ . Contact Michael Long for Investor Relations information at 210.249.4040 or email at . 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. DATASOURCE: Payment Data Systems, Inc. CONTACT: investor relations, Michael Long of Payment Data Systems, Inc., +1-210-249-4040, ; or XL Payment Systems, Inc., +1-800-510-1314 Web site: http://www.paymentdata.com/ http://www.bills.com/ http://www.xlcard.com/

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