SAN ANTONIO, TX--(MARKET WIRE)--Dec 17, 2004 -- Payment Data Systems, Inc. (OTC BB:PYDS.OB - News) an integrated electronic payments solutions provider, announced today that it continues to experience significant growth month over month both in the total dollar value and volume of transactions being processed.

With only half of December completed, we can project that the transaction volumes for December will create PDS' best processing month to date. Before this month, November of this year was the highest transaction processing volume in our history. PDS is experiencing month to month percentage growth in high double digits both in terms of the number of transactions (ACH and Credit Card) as well as the value of the transactions.

"We have been pleased to see this important dimension of sustained growth in our business. Projecting our numbers into December, we do not see anything that suggests the Q4 growth percentages will result in anything different from our prior experience," said Michael Long, CEO.

Long added, "We see this as a clear benchmark that suggests a reasonable expectation of our ability to continue our march toward profitability. Furthermore, it is an endorsement by the market of the viability and effectiveness of our solutions."


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 www.paymentdata.com.

Contact: Michael Long, Investor Relations, Payment Data Systems, Inc. 210-249-4040.

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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