Payment Data Systems, Inc. Announces Secure Cash Network's Pronto Banco Retail Purchase and Reload Internet Site

- PDS Becomes Payment Transaction Engine Behind SCN's Stored Value Cards -

SAN ANTONIO, Oct. 19 /PRNewswire-FirstCall/ -- Payment Data Systems, Inc. (OTC Bulletin Board: PYDS - News) an integrated electronic payments solutions provider and Secure Cash Network (SCN), announced today that PYDS is the electronic payment engine powering SCN's Pronto Banco(TM) internet marketing site (http://enroll.prontobanco.com ) and SCN's internet reload site (http://www.reloadhere.com ).

Marketing Pronto Banco(TM) on the Internet provides consumers a quick and easy way to purchase the cards and receive them at home in a few days. Cardholders are then able to re-load their cards on the Internet after logging onto their account or making a cash load at any of thousands of merchant locations in the United States.

President and COO of Payment Data Systems, Inc. Louis Hoch, said, "With the rapid growth in SCN's stored value card products and the equally rapid expansion of their distribution network, SCN needed a highly flexible, responsive, and reliable payment transaction processing network to support them today and into the future. After the evaluation of various solutions, we are pleased that SCN has chosen to add our payment processing system to what we believe will be an extremely successful product. It appears that the key influencing factors in SCN's decision were our significant experience in ACH payment origination via the Federal Reserve network, fraud screening and risk management abilities, and our ability to transfer funds securely."

Greg Bloh, President and CEO of Secure Cash Network said, "Our relationship with Payment Data Systems allows us to sell our product to millions of consumers via the Internet. We are using affiliate networks, search engines and online advertising to draw consumers to our website located at http://enroll.prontobanco.com/ . Additionally, our funds reloading site (http://www.reloadhere.com ) provides convenience to our cardholders for adding funds to their debit cards over the Internet. We are excited to add this capability to our Pronto Banco(TM) product as well as to the many private label products hosted on our platform."

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.

Payment Data is the owner of the electronic bill payment portal, http://www.billx.com . billx.com has the ability to transmit electronic payments to thousands of national billers.

For additional information, visit http://www.paymentdata.com . Investor information can be found at: http://www.otcfn.com/pyds .

Contact: Geoffrey Eiten, Investor Relations, OTC Financial Network, (781) 444-6100 ext. 613.

Source: Payment Data Systems

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.

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