PYDS Reports Third Quarter Results
- Revenue Up 178% from Prior Year Quarter -

San Antonio, TX November 14, 2006 Payment Data Systems, Inc. (NASDAQ OTCBB: PYDS) an integrated electronic payments solutions provider, today announced financial results for the quarter ended September 30, 2006.

Revenues increased 178% to $884,269 for the third quarter of 2006 from $318,206 for the third quarter of 2005. Net loss for the quarter ended September 30, 2006 decreased to $261,740, or $0.01 per share, from a net loss of $672,166, or $0.02 per share, for the third quarter of 2005. Revenues increased 102% to $1,771,894 for the nine months ended September 30, 2006 from $876,094 for the same period of 2005. Net loss for the nine months ended September 30, 2006 was $1,015,850, or $0.03 per share, compared to net loss of $1,624,677, or $0.06 per share, for the same period of 2005.

Commenting on the results for the quarter, Michael R. Long, Chairman and Chief Executive Officer of Payment Data Systems, said, “We are pleased to see the sequential improvement in the third quarter results and are thrilled about the significant step towards profitability that it represents.”

Long added, “Our credit card processing transaction and dollar volume for the third quarter was up 140% and 52%, respectively, from the second quarter of 2006 and this growth was primarily responsible for the 64% increase in third quarter revenues from $539,615 in revenues for the preceding second quarter.”

For further information regarding our financial results for the quarter ended September 30, 2006, please read our 10 QSB that was filed on November 14, 2006.

 
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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