San Antonio, TX May 04, 2005 Payment Data Systems, Inc. (OTC BB: PYDS) an integrated electronic payments solutions provider, announced today that Credit Payment Services, Inc. (CPS) a high growth provider of consumer-oriented loans has ordered an additional 50,000 debit cards for distribution into their national consumer base.

"We are pleased to see that CPS and we have created a highly successful and growing debit card program. Clearly there has been, and continues to be, a great deal of acceptance of this card program by the individual clientele. We have believed our debit card offering would be successful for this industry segment by providing access to a closed loop, private payment system that leverages public ATM and debit networks. We are also seeing the card being re-loaded multiple times. This suggests that CPS is creating a value proposition that the consumer has fully endorsed and embraced through their actions." said Mr. Louis Hoch, President and Chief Operating Officer.

The functionality of the offering provides an immediate funding of the loan rather than the customary delays associated with the ACH credit process. This rapid access to the loan amount ensures higher service levels for consumers and opportunity of new revenue for CPS.

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.