Payment Data Systems Signs South Texas Consumer Credit Counseling Centers

March 10, 2004

SAN ANTONIO, /PRNewswire-FirstCall/ -- Payment Data Systems, Inc. (OTC Bulletin Board: PYDS - News) announced today that it has signed a multi-year, multi-phase contract with Consumer Credit Counseling Service (CCCS) of Greater San Antonio as well as CCCS of Laredo a provider of credit-counseling services to the greater part of South Texas including the cities of San Antonio, New Braunfels, Seguin, Del Rio, and Laredo.

President and COO of Payment Data Systems Louis Hoch, said, "Our payment processing solutions are well-suited to the needs of debt consolidation and credit counseling centers. Consumer Credit Counseling Service is a nationally-recognized leader in the area of credit services. CCCS Greater San Antonio and Laredo alone process more than $1.5 million in payments each month. We are pleased with the prospects provided by such an important contract with a representative of this market leader. Success with CCCS opens doors to a number of fruitful opportunities with other debt solutions providers nationwide."

According to terms of the agreement, Payment Data Systems will convert all of CCCS' check payments into electronic payments, build a system to accept telephone payments, and develop and host a one-time payment website on behalf of CCCS. Payment Data will deliver services to CCCS through its Integrated Payment Solutions (IPS) platform. IPS Express(TM) is CCCS's choice for telephone payments, IPS Select(TM) is their choice for check conversion processing and IPS Express Bill Pay(TM) is their choice for consumer one-time payments from the web.

Larry Morrison, vice president of Business Development for Payment Data Systems said, "CCCS selected Payment Data Systems after a diligent review of vendors in the payment processing industry. We are pleased that Payment Data Systems was the superior solution for CCCS because we are able to meet all of their processing needs (ACH, Merchant Services, Gateway Services, Data Warehousing and Storage) as a single source solution."

About Consumer Credit Service Corporation

CCCS, established in 1984, is a non-profit organization affiliated with National Foundation for Consumer Credit (NFCC). They are fully accredited by the Council on Accreditation of Services for Families and Children.

CCCS' mission, as a non-profit organization, is to provide assistance to consumers and businesses in the communities they serve by providing professional consumer credit and money management education, confidential counseling and debt repayment services.

For additional information, visit www.cccssa.org.

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).

Additional products available from PDS include services and products that can be implemented more quickly and less expensively than the alternative of adding multiple payments companies as these solutions offer a full range of payment processing capabilities. 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 acceptance of credit cards and checks, Interactive Voice Response systems which totally automate the payment receiving process, and data warehousing that enable you to store and retrieve all of your payment history from one location.

These are all managed within a single comprehensive storage and retrieval system thereby providing the customer consolidated tracking and reporting of all payment types regardless of source or channel.

For additional information, visit www.paymentdata.com , www.otcfn.com/pyds or call (210) 249-4100 or ir@paymentdata.com .

Investor Relations Contact: Geoffrey Eiten, OTC Financial Network, (781) 444-6100 x613; geiten@otcfn.com .

With the exception of historical information contained in this release, this release includes forward-looking statements made under the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements.