Payment Data Systems Continues Record Growth in August
 Q3 Volume Through August Already Surpasses Previous Quarter’s Total

San Antonio, TX September 18, 2006 Payment Data Systems, Inc. (OTC BB: PYDS), an integrated electronic payments solutions provider, today announced that its August credit card dollar volume set a record, continuing a streak of milestone- setting monthly performance in 2006.

On an unaudited basis, the company recorded a year- over-year 609% jump in monthly transaction volume in August, while dollar volume advanced 189% from last year. The record set in August continues a pattern of milestone monthly growth for Payment Data Systems.

The company noted that its combined dollar volume for July and August has already exceeded the total for the previous quarter as a whole. Payment Data Systems executives noted that they expected similar monthly volume in September to result in significant growth in the current Third Quarter.

"We continue to log substantial increases in activity from the prior year, both in number of transactions and dollar volume,” said Payment Data Systems Chairman and CEO Michael Long. "We are especially pleased that Payment Data Systems continues to exceed its goals as we advance toward profitability.”

Payment Data Systems also announced that it has doubled its guidance for transaction volume in the current quarter -- to an expected 600% year-over- year increase – while maintaining its estimated year- over-year increase of 150% in dollar volume in the quarter. The company’s Second Quarter revenues showed a sequential increase of 55%.
 
About Payment Data Systems, Inc.
Payment Data Systems, Inc. is an integrated payment solutions provider to merchants and billers. The organization provides an extensive set of products to deliver world-class payment acceptance. Payment Data has solutions for merchants, billers, banks, service bureaus and card issuers. The strength of the company is its ability to offer specifically tailored solutions for card issuance, payment acceptance and bill payments.

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

Payment Data's intellectual property includes U.S. Patent Number 7,021,530 that relates to bill payments made with debit and stored value cards.

For additional information, visit www.paymentdata.com. Contact Michael Long for Investor Relations information at 210.249.4040 or email at ir@paymentdata.com. Websites: www.paymentdata.com, and www.billx.com.

 
Payment Data Systems, Inc.
Michael Long
Chairman and CEO
phone: 210-249-4040
 
  
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