Payment Data Systems Files Final Patent Documents for Industry's First Debit Card Bill Payment Technology SAN ANTONIO, March 11 /PRNewswire-FirstCall/ -- Payment Data Systems, Inc. (OTC:PYDS) (BULLETIN BOARD: PYDS) an integrated electronic payments solutions provider, announced today that it has filed the final application for patent protection from the U.S. Patent Office for the technology that will enable the industry's first bill payment capability using a debit card. The debit card technology for which Payment Data Systems has filed for patent protection, allows a cardholder to use their stored-value Secure Cash Network debit or ATM card to pay local, national, or international bills with the card from their electronic balance. Because it does not require linkage to a traditional checking or savings account, this new debit technology is unique in that it allows for use by 'unbanked' consumers. Payment Data Systems, in anticipation of owning patent rights to this industry-first bill payment processing technology, has agreed to provide our partner Secure Cash Network with a perpetual license for use of the technology as part of an initial roll-out strategy. However, the Payment Data Systems debit card bill payment technology can also be licensed by any provider of debit or stored-value cards and networks, including: MasterCard, Visa, and American Express among others. President and COO of Payment Data Systems, Inc. Louis Hoch said, "Trends continue to project extensive growth in demand for products and services available to unbanked consumers -- who now represent a worldwide market potential of $1.1 trillion -- but at the same time traditional payment processing products have done little to remove the inconvenience and expense of bill payment for this large group. Payment Data Systems expects to become a market leader in the payment services sector by establishing first entry into this underserved segment of the marketplace with our superior payment processing solutions." Payment Data Systems' new payment processing solution aligned with our partner Secure Cash Network, marries the stored value debit card and its extensive debit network with the electronic payment and settlement connections of Payment Data Systems, Inc. to traditional billers. In the event a biller cannot accept electronic payments, Payment Data Systems allows for bill payment by unbanked consumers using its own check-writing capabilities. The unique new bill payment functionality, which works equally well for all banked customers, will be added to Secure Cash Network's card products currently marketed under the brand name, "Secure Cash Payday" for employer payroll applications and "Pronto Banco" for retail applications. The new features added by the Payment Data Systems patent introduce capabilities for unbanked consumers using our linked debit or ATM cards to pay bills, shop at millions of retail locations, access cash though ATMs and access and transfer funds internationally. Additional products will be developed to further meet the needs of employers, banked and unbanked consumers. About Payment Data Systems, Inc. Payment Data Systems, Inc., is an Integrated Payments Solution Provider delivering comprehensive, cost-effective solutions to billers and retailers for the processing and management of electronic payments via the Internet, point of sale, or payments taken by Customer Service Representatives or an Interactive Voice Response (IVR). Payment Data Systems' electronic payment processing solutions can be implemented more quickly and less expensively than alternative solutions because PDS allows for a full range of payment processing capabilities using a single, comprehensive storage retrieval system that allows for consolidated tracking and reporting of all payment types, regardless of source or channel. These service offerings include: one time and recurring ACH debits and credits, ACH lockbox and RCK services, Web pay acceptance of credit cards and checks, telephone pay to Customer Service Representatives for acceptance of credit cards and checks, Interactive Voice Response systems which completely automate the payment receiving process, and data warehousing that enable the storage and retrieval of all payment history from one location. For additional information, visit http://www.paymentdata.com/ . Investor information can be found at: http://www.otcfn.com/pyds . 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. CONTACT: Michael Long, Chairman and CEO of Payment Data Systems, Inc., +1-210-249-4040, or . DATASOURCE: Payment Data Systems, Inc. CONTACT: Michael Long, Chairman and CEO of Payment Data Systems, Inc., +1-210-249-4040, or Web site: http://www.paymentdata.com/ http://www.otcfn.com/pyds

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