Payment Data Systems Reports Second Quarter Results

- Gross Profit Up 40% from Previous Quarter -
 
     
SAN ANTONIO-Payment Data Systems, Inc. (OTCBB:PYDS), an integrated electronic payments solutions provider, today announced financial results for the quarter ended June 30, 2007.

Revenues increased 41% to $761,935 for the quarter ended June 30, 2007 from $539,615 for the second quarter of 2006. Revenues increased 57% to $1,395,131 for the six months ended June 30, 2007 from $887,625 for the same period of 2006. Gross profit increased to $153,222 for the quarter ended June 30, 2007 from $109,081 for the first quarter of 2007.

As previously forecasted by management, net loss was down significantly as compared to the previous quarter. Net loss decreased to $343,101 for the quarter ended June 30, 2007 from $611,555 for the first quarter of 2007. Net loss increased to $343,101 for the quarter ended June 30, 2007 from $328,153 for the prior year quarter.

During the second quarter, we closed sales for 42 new payment processing clients and started processing for a premier insurance carrier that is a listed member of Standard and Poor's Mid-Cap 400 Index and traded on the NYSE. The third quarter will be the first full quarter that we will realize the positive financial impact of this client.

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 transaction and revenue growth from the first quarter, which contributed to the improvement in our quarterly operating loss on a sequential basis."

Long added, "Our credit card transaction dollar volume for the second quarter of 2007 was up 24% from the first quarter of 2007 and is our largest processing quarter in our history. This growth in credit card processing led the 20% increase in our second quarter revenues from $633,196 for the first quarter of 2007. We expect the trend of increasing card-based revenues to continue with more growth anticipated in our merchant processing portfolio and additional revenue generated from our debit card products coming into production, specifically our Natalie Gulbis Gift MasterCard® introduced this month. We expect many key metrics in the third quarter to be better than the second quarter, including transaction dollars processed and revenue."

For further information regarding our financial results for the second quarter of 2007, please read our 10-QSB, which was filed today.


 

About Payment Data Systems, Inc.

Payment Data Systems, Inc. is an integrated provider of world class electronic payment solutions to merchants, billers, banks, service bureaus, and credit and stored-value card issuers. PDS specifically tailored solutions manage critical points along the full spectrum of the transactional chain, ranging from card issuance to payment acceptance to electronic bill payment.

Payment Data 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 holds the exclusive license to market the Natalie Gulbis Gift MasterCard (www.nataliemastercard.com), the Carmen Electra Gift MasterCard (www.electragift.com) and the Carmen Electra Prepaid MasterCard (www.carmencard.com).

Payment Data Systems Inc. (OTCBB: PYDS) is a registered ISO/MSP of MetaBank and a registered ISO/MSP and TPS/TPP of Merrick Bank Corp., South Jordan, UT.

Payment Data is a Level One PCI compliant Third Party Servicer.

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