Payment Data Systems Projects Record 2nd Quarter Revenue - PDS Continues on Path of Sustained Record Growth - SAN ANTONIO, July 25 /PRNewswire-FirstCall/ -- In review of the transaction volumes processed during the second quarter of 2005, Payment Data Systems, Inc. (OTC:PYDS) (BULLETIN BOARD: PYDS) is able to project that it will show a continuation of record reported revenue for the quarter ended June 30, 2005. In addition, both the credit card transaction and dollar value volumes for June will show as our highest processing month to date. Commenting on the increase in processing volume, Michael R. Long, Chairman and Chief Executive Officer of Payment Data Systems, said, "We are pleased to report that our credit card transaction and dollar volume growth for the second quarter of 2005 is trending upwards of 26% for transactions and up 29% in dollar volume above the first quarter of 2005. Also, our customer base continues to grow in numbers as well as relative size per account. We have grown to over 80 customers today." Long added, "Revenue generated by our merchant customers continues to contribute significantly to our overall numbers. However, we are monitoring a shift in our business and it is possible that higher margin stored-value cards could overtake that number within the next year. Of course, both product lines remain strategic in their value proposition to our customers and in our revenue development." Long continued, "Perhaps one of the more satisfying aspects of our business is that our larger and more complex customers are seeing the value and depth of our solutions and are adding on additional services from PDS." 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 Web site: http://www.paymentdata.com/ http://www.bills.com/

Copyright