Payment Data Systems, Inc. Joins Green Dot(R) Financial Network -- Adds Tens of Thousands of Load Locations

SAN ANTONIO, TX -- (MARKET WIRE) -- 05/02/2006 -- Payment Data Systems, Inc. (OTC BB: PYDS), an integrated electronic payments solutions provider, announced today that it has reached an agreement with Green Dot Corporation enabling stored value cards issued through Payment Data Systems, Inc. to be loaded at Green Dot Financial Network retail locations.

Payment Data Systems, Inc. cards can now be loaded at major retail partners including: Rite Aid, CVS Pharmacy, RadioShack, Walgreens, Food Lion, Hess, Kum & Go, Pantry, Cumberland Farms, plus other retailers nationwide. Louis Hoch, President and COO of Payment Data Systems, Inc. said, "We are very pleased to become part of this large and rapidly growing cash acceptance network. With leading national retailers serving as cash acceptance locations we can now provide our card consumers maximum convenience and value."

Green Dot Corporation owns and operates the Green Dot Financial Network, one of America's largest retail-based cash acceptance networks, specially designed for the reloading of prepaid debit cards with tens of thousands of major name retail locations. The Green Dot Financial Network empowers consumers across the country to reload any prepaid card from any issuer that is a member of the Green Dot network. With tens of thousands of locations and growing in all fifty states, Green Dot brings unparalleled convenience and value to all prepaid cardholders -- while making the prepaid market more viable and robust for the entire prepaid debit card industry.

About Payment Data Systems, Inc.

Payment Data Systems is an integrated payment solutions provider to merchants and billers. We provide an extensive set of tailored products to deliver world-class payment acceptance, processing, and risk/fraud management. Payment Data has solutions for merchants, billers, banks, service bureaus and card issuers.

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

To learn more about Payment Data's retail stored value and gift cards see www.carmencard.com or www.electragift.com.

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

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.

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Contact:
Michael Long
Investor Relations
210.249.4040
Email Contact

SOURCE: Payment Data Systems, Inc.