SAN ANTONIO and OOLTEWAH, Tenn., Dec. 1  Payment Data Systems, Inc. (OTCBB: PYDS) an Integrated Payments Solution Provider, announced today that it has signed multi-year agreements with ACH Commerce, a private company engaged in ACH (Automated Clearing House, the national network for check clearing) processing and clearing throughout the ACH networks. These agreements define the ability of ACH Commerce to promote and deliver our extensive set of Credit Card products and services into their ACH customer base of banks, billers, and retail merchants.

Specifically these agreements provide for 1.) reselling by ACH Commerce of our credit card gateway services. This gateway connects internet-based applications to all credit card processors and to Payment Data Systems, Inc. for credit card merchant services and 2.) referral of whereby ACH Commerce will refer Payment Data Systems, Inc. to billers and merchants that are using ACH Commerce services today. This referral agreement is strategic to Payment Data Systems, Inc.

Under the terms of the agreement, Payment Data will further add an extensive sales and market opportunity with no additional expense overhead through the deployment of these contracts.

Louis Hoch, president and COO of Payment Data Systems stated, "We are excited to have earned the business of such a respected company in the electronic payments processing industry. ACH Commerce's selection of Payment Data is a credit to the value proposition that we have focused on creating. ACH Commerce's business development team has a proven ability to win business from all sizes of financial institutions and merchants."

Debbie Hickok, founder and president of ACH Commerce said, "We are very pleased to be working with Payment Data Systems to offer credit card processing capabilities to our ACH clients. We have experienced an increasing demand to offer a unified payment platform. The relationship we have established with Payment Data Systems will allow us to offer our clients flexible credit card processing options, either through their existing merchant account, or they can apply to Payment Data Systems for a merchant account. By utilizing Payment Data System's expertise in credit card processing, we can provide a unified payment platform to our customers at very competitive rates while we continue to focus our efforts on our core competency, ACH processing."

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). For additional information, visit www.paymentdata.com or call 210.249.4100 or ir@paymentdata.com .

About ACH Commerce

ACH Commerce, LLC is a leading ACH (Automated Clearing House) processing company that provides outsourcing services for financial institutions and a full array of ACH services to corporations. These include solutions for high- speed check conversion (ARC) with remittance processing, TEL & WEB transactions, check re-presentment, direct debit, direct deposit, cash concentration, authentication and verification, data conversion and custom integration. For additional information, please contact Shannon Bielcik at 800.724.8780 or on the web at www.achcommerce.com

With the exception of historical information contained in this release, this release includes forward-looking statements made under the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements.