SAN ANTONIO, May 24 /PRNewswire-FirstCall/ -- Payment Data Systems, Inc. (OTC Bulletin Board: PYDS) today announced it has signed an agreement to provide merchant services for a major national marketing company and is already processing transactions for the client.

The contract is expected to provide gross transactional revenue of approximately $1,000,000 over the life of the three-year contract. Net income for the contract that can be expected is approximately $150,000 over the same period.

President and COO of Payment Data Systems, Inc. Louis Hoch, said, "While the company has chosen to remain publicly anonymous, they are a national company with a successful track record of consistently processing more than $1,000,000 in credit card sales each month."

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 http://www.paymentdata.com or http://www.otcfn.com/pyds .

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, ACH lockbox and RCK 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.

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.

Contact: Geoffrey Eiten, Investor Relations, (781) 444-6100 x613