Payment Data Systems Reports Third Quarter Results

 

- Revenue Increases 10% from Second Quarter -

  

San Antonio, TX November 14, 2007 Payment Data Systems, Inc. (OTCBB: PYDS), an integrated electronic payments solutions provider, today announced financial results for the quarter ended September 30, 2007.

Revenues were $841,171 for the quarter ended September 30, 2007 as compared to $884,269 for the third quarter of 2006. Revenues increased 26% to $2,236,302 for the nine months ended September 30, 2007 from $1,771,894 for the same period of 2006. Net loss was $397,204 for the quarter ended September 30, 2007 compared to a net loss of $261,740 for the prior year quarter. Net loss for the nine months ended September 30, 2007 was $1,351,860, compared to net loss of $1,015,850, for the same period of 2006.

During the third quarter, we closed sales for 33 new payment processing clients and started processing for the Natalie Gulbis Gift MasterCard program.

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 continue from the second quarter, while our administrative expenses remain relatively flat."

Long added, "Our credit card transaction dollar volume for the third quarter of 2007 was up 29% from the second quarter of 2007 and is also our highest processing quarter in our history. We are excited about closing out 2007 and continuing our record setting growth for transaction dollars processed and revenue for a year."

Mr. Long comments on the company's share price by stating, "As you might expect, I have been speaking with a number of shareholders that have questions regarding our share price and its performance. As we have stated so many times before, we do not control the market. However we strongly believe the stock price and market cap does not represent the real value of the company. We base this conclusion on knowing the multiples that are being paid today in the industry just for portfolios."

Mr. Long continued his comments on the company's recently announced accelerated acquisition strategy by stating, "We have examined several opportunities over the past few weeks and are excited about the positive effects that a completed transaction could have on our operations. We believe the right acquisition could further increase sales and take us past the point of profitability and positive cash flow more quickly than what our purely organic growth is providing today. It also strengthens our previously stated strategy to move our stock to a major exchange at some point in the future. In order to put the year to date in some consolidated perspective, I will be providing a shareholder update toward the end of November and as always, we will make the shareholder update available on our Investors' page of our website."

For further information regarding our financial results for the third 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
 
  
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.