Payment Data Systems' Subsidiary Signs Bill Payment Agreement

- Agreement Creates Significant Revenue Opportunity

San Antonio, TX January 26, 2009 Zbill, Inc. (OTC BB: PYDS), a wholly-owned subsidiary of Payment Data Systems, an integrated electronic payments solutions provider, today announced that it reached agreement with a company to add PDS' Private Label bill payment services to its payroll card programs. This company has asked that its name be kept anonymous but is a leading provider of stored value cards and transaction processing services to a variety of industry segments including the Over the Road (OTR) trucking services.

This solution will provide the ability for the more than 250,000 employees that use the Company's stored value payroll card services to pay their bills online to over 3,200 nationwide billers. While the three year agreement provides a revenue minimum of nearly $200,000, we could earn over $1,500,000 if a nominal adoption rate of 5% is achieved.

The Company's CEO said, "This implementation is a natural extension to our financial services offerings. It was important for our payroll card customers to be able to pay anyone from their payroll card. We were excited to learn that the system is flexible enough to allow for multiple payment accounts including checking, savings, investment accounts and prepaid debit cards. We chose PDS' bill payment platform because of their ability to implement in less than four weeks and that their platform is bank independent. We also took comfort in knowing that Payment Data's offering is fully licensed under U.S. Patent 7,021,530 that relates to bill payments made with debit and stored value cards."

Michael Long, Payment Data Systems' CEO said, "We are very pleased to add this company to our list of distinguished organizations and in particular one who has been so successful in the OTR marketplace. This functionality will be exposed to a current, but rapidly growing base of more than 250,000 payroll card holders."

About Zbill, Inc.

Zbill, Inc. is a provider of private labeled electronic payment solutions to billers, banks, service bureaus and card issuers. The organization provides an extensive set of functions to a customer to deliver world-class bill payment solutions to their customer base.

Zbill, Inc. 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's intellectual property includes a perpetual license of 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 ir@paymentdata.com.