- Payment Data Systems Continues Its Month-to-Month Growth Pattern - SAN ANTONIO, Oct. 6 /PRNewswire-FirstCall/ -- Payment Data Systems, Inc. (OTC:PYDS) (BULLETIN BOARD: PYDS) an integrated electronic payments solutions provider, today announced that it continues to experience month-to-month growth in terms of the total dollar value of credit card transactions being processed. With September completed, we can report, on an unaudited basis, that the dollar value volume for that activity month will be PDS' highest processing month to date. In addition, September's numbers are 1141% higher than transactions processed and over 691% higher than dollars processed in September 2004. On a quarterly basis, the transactions for the third quarter of 2005 increased by 1248% from the third quarter of 2004 and dollar value volumes were up 837% from the same comparable period. "We continue to see strong and consistent growth in our metrics and we are encouraged about the future as we examine the opportunity for growth in this existing base of customers and the prospective ones we believe we can sign," said Michael Long, CEO. Last month we announced that we have entered into an agreement with Carmen Electra that grants the company the exclusive marketing and distribution rights of Carmen Electra-branded gift and stored value cards. We expect to have more announcements about this exciting card program in the upcoming months. 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 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: Michael Long, Investor Relations of Payment Data Systems, Inc., +1-210-249-4040, or Web site: http://www.paymentdata.com/ http://www.bills.com/

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