LPGA Superstar Natalie Gulbis Signs with Payment Data Systems, Inc.

The Natalie Gulbis Gift MasterCard([R]) To Be Available Soon

SAN ANTONIO -- Payment Data Systems, Inc. (OTCBB:PYDS), an integrated electronic payments solutions provider, announced today that it has entered into an agreement with Natalie Gulbis, one of the bright young stars on the LPGA

The Natalie Gulbis Gift MasterCard will be issued by MetaBank pursuant to a license by MasterCard International and will be marketed and administered by Payment Data Systems Inc.

The 23 year-old Gulbis is one of the LPGA Tour's fastest-rising stars. The Sacramento, California native was named Golf Digest's Most Improved LPGA Player, finished sixth on the Money List, and was a contributing member of the victorious U.S. Solheim Cup Team in 2005. Over the past two seasons, Gulbis has recorded 16 top-10 finishes, including three top-5 finishes in 2006.

Ms. Gulbis is in the top five of Advertising Age's most marketable young athletes, pens a popular online diary on her personal website, has started the second season of her Golf Channel reality television show, recently released her second swimsuit calendar, and is a featured character in a Tiger Woods video game.

Louis Hoch, President and COO of Payment Data Systems, said, "We are very pleased to provide Ms. Gulbis her own card program. By virtue of her excellent golf credentials and charismatic persona, she clearly represents the young, successful, and talented demographic we are trying to reach. We will be announcing at a near future date when the cards will be available for purchase as well as where and how they can be purchased."

In addition to the convenience of being accepted everywhere Debit MasterCard is accepted, the cards will include special offers exclusive to card members. Customers will be able to choose from a series of card designs featuring Natalie Gulbis.

About Payment Data Systems, Inc.

Payment Data Systems is an integrated payment solutions provider to merchants and billers. The organization provides an extensive set of products to deliver world-class payment acceptance. Payment Data has solutions for merchants, billers, banks, service bureaus and card issuers. The strength of the company is its ability to offer specifically tailored solutions for card issuance, payment acceptance and bill payments.