UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON D.C. 20549

                                    FORM S-8

         REGISTRATION  STATEMENT  UNDER  THE  SECURITIES  ACT  OF  1933

                         PAYMENT  DATA  SYSTEMS,  INC.

         (Exact  name  of  registrant  as  specified  in  its  charter)

                  NEVADA                                98-0190072
                 ---------                              ----------
     (State  or  other  jurisdiction                  (IRS  Employer
     of  incorporation  or  organization)          Identification  No.)

                           12500 SAN PEDRO, SUITE 120
                             SAN ANTONIO, TX  78216
                           Telephone:  (210) 249-4100
                                 --------------
    (Address,  Including  Zip Code and Telephone Number, of Principal Executive
                                    Offices)

           AMENDED AND RESTATED 1999 EMPLOYEE COMPREHENSIVE STOCK PLAN

                      (Full  Title  of  the  Plan)

                                 MICHAEL R. LONG
                             CHIEF EXECUTIVE OFFICER
                                 12500 SAN PEDRO
                                    SUITE 120
                            SAN ANTONIO, TEXAS 78216
                                 (210) 249-4100

                     (Name,  Address  and  Telephone  Number,
                including  Area  Code,  of  Agent  for  Service)

                          Copies of communications to:

                              AMY M. TROMBLY, ESQ.
                              TROMBLY BUSINESS LAW
                           1320 Centre St. Suite 202
                                Newton, MA 02459
                                 (617) 243-0060

                         CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
<S>                   <C>          <C>               <C>                 <C>
Title of each                    Proposed maximum  Proposed maximum   Amount of
Class of securities Amount to be offering price   aggregate offering  registration
To be registered      registered    per share         price               fee

Common Stock,
..001 Par Value       20,000,000     $0.11             $2,200,000        $235.40
</TABLE>

(1)  In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
registration  statement  also  covers an indeterminate amount of interests to be
offered  or  sold  pursuant  to  the  employee benefit plan(s) described herein.

(2)  The  price  of  $0.11  per share, which was the average of the high and low
prices  of  the  Registrant's  Common Stock, as reported on the Over-The-Counter
Bulletin  Board  on May 22, 2006 is set forth solely for purposes of calculating
the  registration  fee pursuant to Rule 457(c) of the Securities Act of 1933, as
amended.

                                     PART  I

           INFORMATION  REQUIRED  IN  THE  SECTION  10(a)  PROSPECTUS

ITEM  1.     PLAN  INFORMATION

Pursuant to the Note to Part I of the Form S-8, the information required by Part
I  is  not  filed  with  the  Securities  and  Exchange  Commission.

ITEM  2.     REGISTRANT  INFORMATION  AND  EMPLOYEE  PLAN  ANNUAL  INFORMATION

The  Registrant  will  provide without charge to each person to whom a copy of a
Section  10(a)  Prospectus  hereunder  is  delivered,  upon  the oral or written
request of such person, a copy of any document incorporated in this Registration
Statement  by  reference.  Requests  for  such information should be directed to
Payment  Data  Systems,  12500  San  Pedro,  Suite  120,  San Antonio, TX 78216.

                    PART  II
    INFORMATION  REQUIRED  IN  THE  REGISTRATION  STATEMENT

ITEM  3.     INCORPORATION  OF  DOCUMENTS  BY  REFERENCE.

     The  following documents are incorporated by reference in this registration
statement.

a)   The Registrant's  Annual  Report  on  Form 10-KSB for the fiscal year ended
     December  31,  2005  filed  pursuant  to  Section  13(c)  or  15(d)  of the
     Securities  Exchange  Act  of  1934,  as  amended  (the  "Exchange  Act");

b)   All other reports filed by Registrant pursuant to Section 13(c) or 15(d) of
     the  Exchange  Act  since  the  end  of the fiscal year covered by the Form
     10-KSB  referred  to  in  (a)  above.

c)   The description of the common stock, $.001 par value per share (the "Common
     Stock") of the Registrant is contained in the Registrant's annual report on
     Form  10-KSB.

     All  documents filed by the Registrant pursuant to Section 13(a), 13(c), 14
and  15(d)  of  the  Exchange  Act  subsequent  to the date of this registration
statement  and  prior  to  the  filing  of  a  post-effective  amendment to this
registration  statement  which indicates that all securities offered hereby have
been  sold  or  which  deregisters all securities then remaining unsold shall be
deemed  to be incorporated in this registration statement by reference and to be
a  part  hereof  from  the  date  of  filing  of  such documents.  Any statement
contained  in  this registration statement, in a supplement to this registration
statement  or in a document incorporated by reference herein, shall be deemed to
be  modified  or  superseded  for purposes of this registration statement to the
extent that a statement contained herein or in any subsequently filed supplement
to  this  registration  statement  or  in  any  document  that  is  subsequently
incorporated  by  reference  herein  modifies  or supersedes such statement. Any
statement  so  modified or superseded shall not be deemed, except as so modified
or  superseded,  to  constitute  a  part  of  this  registration  statement.

ITEM  4.     DESCRIPTION  OF  SECURITIES

Not  applicable.  The  class  of  securities  to  be offered is registered under
Section  12  of  the  Exchange  Act.

ITEM  5.     INTEREST  OF  NAMED  EXPERTS  AND  COUNSEL

No  expert  or counsel will receive a direct or indirect interest in our company
or  was  our  promoter,  underwriter,  voting  trustee,  director  or officer or
employee.  Nor  does  any  expert or counsel have any contingent based agreement
with  us  or  any  other  interest  in  or  connection  to  us.

ITEM  6.     INDEMNIFICATION  OF  DIRECTORS  AND  OFFICERS.

Nevada law generally sets forth the powers of the Company to indemnify officers,
directors,  employees  and agents. The Articles of Incorporation for the Company
provide  as  follows:

No  director  or officer shall have any personal liability to the corporation or
its  stockholders  for the damages for breach of fiduciary duty as a director or
officer,  except that this Article shall not eliminate or limit the liability of
a  director  or  officer  for  (i)  acts  or  omissions that involve intentional
misconduct,  fraud  or  a  knowing  violation of the law, or (ii) the payment of
dividends  in  violation  of  Nevada  Revised  Statutes.

The  By-laws  of  the  Company  provide  as  follows:

Every  person who was or is a party or is threatened to be made a party to or is
involved  in  any  action,  suit  or  proceeding,  whether  civil,  criminal,
administrative  or  investigative,  by reason of the fact that he or a person of
whom  he  is  the  legal  representative  is or was a Director or officer of the
corporation  or  is  or was serving at the request of the corporation or for its
benefit  as  a  Director  or  officer  of  another  corporation,  or  as  its
representative in a partnership, joint venture, trust or other enterprise, shall
be indemnified and held harmless to the fullest legally permissible extent under
the general Corporation Law of the State of Nevada from time to time against all
expenses,  liability  and  loss  (including attorney's fees, judgment, fines and
amounts paid or to be paid in settlement) reasonably incurred or suffered by him
in  connection  therewith.  The  expenses  of officers and Directors incurred in
defending  a  civil  or  criminal action, suit or proceeding must be paid by the
corporation  as they are incurred and in advance of the final disposition of the
action, suit or proceeding upon receipt of an undertaking by or on behalf of the
Director  or  officer  to  repay  the amount if it is ultimately determined by a
court of competent jurisdiction that he is not entitled to be indemnified by the
corporation.  Such  right of indemnification shall be a contract right which may
be  enforced in any manner desired by such person. Such right of indemnification
shall  not  be  exclusive  of  any other right which such Directors, officers or
representatives  may  have  or  hereafter  acquire  and,  without  limiting  the
generality  of such statement, they shall be entitled to their respective rights
of  indemnification  under any bylaw, agreement, vote of stockholders, provision
of  law  or  otherwise,  as  well  as  their  rights  under  this  Article.

The  Board  of  Directors  may  cause  the  corporation to purchase and maintain
insurance  on  behalf  of  any person who is or was a Director or officer of the
corporation,  or  is  or  was  serving  at  the  request of the corporation as a
Director  or  officer  of  another  corporation,  or  as its representative in a
partnership,  joint  venture,  trust  or  other enterprise against any liability
asserted against such person and incurred in any such capacity or arising out of
such  status,  whether  or not the corporation would have the power to indemnify
such  person.

The  Board  of Directors may from time to time adopt further Bylaws with respect
to  indemnification  and amend these and such Bylaws to provide at all times the
fullest indemnification permitted by the General Corporation Law of the State of
Nevada.

Under the foregoing provisions of the Registrant's Articles of Incorporation and
By-Laws, each person who is or was a director or officer shall be indemnified by
the  Registrant  to  the  full  extent  permitted  or  authorized by the General
Corporation  Law  of  Nevada.  Under such law, to the extent that such person is
successful on the merits of defense of a suit or proceeding brought against such
person  by  reason  of  the  fact  that  such person is a director or officer of
Payment  Data  Systems,  such  person  shall  be  indemnified  against expenses,
including  attorneys'  fees, reasonably incurred in connection with such action.
If  unsuccessful in defense of a third-party civil suit or a criminal suit or if
such  a  suit  is  settled,  such  a  person shall be indemnified under such law
against  both  (1) expenses (including attorneys' fees) and (2) judgments, fines
and  amounts  paid  in  settlement  if  such person acted in good faith and in a
manner  such  person  reasonably  believed to be in, or not opposed to, our best
interests,  and  with respect to any criminal action, had no reasonable cause to
believe  such  person's  conduct  was  unlawful.

Insofar  as indemnification for liabilities arising under the Securities Act may
be  permitted  to  directors, officers and controlling persons of the Registrant
pursuant  to  the  foregoing  provisions,  or otherwise, the Registrant has been
advised  that  in  the  opinion  of  the Securities and Exchange Commission such
indemnification  is  against  public  policy  as  expressed  in  the Act and is,
therefore,  unenforceable.

ITEM  7.     EXEMPTION  FROM  REGISTRATION  CLAIMED.

Not  applicable.

ITEM  8.     EXHIBITS

Exhibit  No.  Description
------------  -----------

4.1   Amended  and  Restated  1999  Employee  Comprehensive  Stock  Plan

5.1   Opinion  of  Amy  Trombly,  Esq.

23.1  Consent  of  Akin,  Doherty,  Klein  &  Feuge,  P.C.

23.2  Consent  of  Counsel  (included  in  Exhibit  5.1  hereto).

ITEM  9.     UNDERTAKINGS

(a)     The  Registrant  hereby  undertakes:

     1.   To file,  during  any  period  in  which it offers or sells securities
          are  being  made,  a  post-effective  amendment  to  this registration
          statement  to:

          (i)  Include  any  additional  or  changed  material  information with
               respect  to  the  plan  of  distribution.

     2.   For determining  liability  under  the  Securities  Act  of 1933, that
          each  post-effective  amendment as a new registration statement of the
          securities offered, and the offering of the securities at that time to
          be  the  initial  bona  fide  offering.

     3.   File a  post-effective  amendment  to  remove  from  registration  any
          of  the  securities  that  remain  unsold  at the end of the offering.

For  determining  any  liability under the Securities Act, treat the information
omitted from the form of prospectus filed as part of this registration statement
in  reliance  upon  Rule  430A  and contained in form of prospectus filed by the
Registrant  under  Rule  424(b)(1), or (4) or 497(h) under the Securities Act as
part  of  this  registration statement as of the time the Commission declared it
effective.

For  determining  any  liability  under  the  Securities  Act,  treat  each
post-effective  amendment  that  contains  a  form  of  prospectus  as  a  new
registration statement for the securities offered in the registration statement,
and  that  offering  of  the  securities  at  that time as the initial bona fide
offering  of  those  securities.

                                   SIGNATURES

     Pursuant  to the requirements of the Securities Act of 1933, the Registrant
certifies  that  it  has  reasonable grounds to believe that it meets all of the
requirements  for  filing  on  Form  S-8  and  has duly caused this registration
statement  to  be  signed  on  its  behalf  by  the  undersigned, thereunto duly
authorized  in  the  City  of  San  Antonio,  State  of Texas on the 25th day of
May,  2006.

                          PAYMENT  DATA  SYSTEMS,  INC.


 By:  /s/  Michael  Long
      ------------------
      Michael  R.  Long
      Chief  Executive
      Officer  and  Chief  Financial  Officer


SIGNATURES                                                  DATE

By:  /s/   Michael  R.  Long
     -----------------------                           May 25,  2006
     Michael  R.  Long
     Chief  Executive
     Officer  and  Chief  Financial  Officer
     (principal  executive  officer  and
     principal  financial  and  accounting  officer)


By:  /s/  Louis  A.  Hoch                              May 25,  2006
     --------------------
     Louis  A.  Hoch
     President,  Chief  Operating  Officer
     and  Director


By:  /s/  Peter  G.  Kirby                             May 25,  2006
     ---------------------
     Peter  G.  Kirby
     Director
[{"type": "S-8", "sequence": "1", "filename": "pyds525s8.txt", "description": "S-8", "secsgml_size_bytes": 14809}]
{"company-data": {"conformed-name": "PAYMENT DATA SYSTEMS INC", "cik": "0001088034", "assigned-sic": "6099", "irs-number": "980190072", "state-of-incorporation": "NV", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-134451", "film-number": "06866747"}, "business-address": {"street1": "211 N LOOP 1604 EAST", "street2": "SUITE 200", "city": "SAN ANTONIO", "state": "TX", "zip": "78232", "phone": "2104025039"}, "mail-address": {"street1": "211 N LOOP 1604 EAST", "street2": "STE 200", "city": "SAN ANTONIO", "state": "TX", "zip": "78232"}, "former-company": [{"former-conformed-name": "BILLSERV INC", "date-changed": "20011219"}, {"former-conformed-name": "BILLSERV COM INC", "date-changed": "19990607"}]}
UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON D.C. 20549

                                    FORM S-8

         REGISTRATION  STATEMENT  UNDER  THE  SECURITIES  ACT  OF  1933

                         PAYMENT  DATA  SYSTEMS,  INC.

         (Exact  name  of  registrant  as  specified  in  its  charter)

                  NEVADA                                98-0190072
                 ---------                              ----------
     (State  or  other  jurisdiction                  (IRS  Employer
     of  incorporation  or  organization)          Identification  No.)

                           12500 SAN PEDRO, SUITE 120
                             SAN ANTONIO, TX  78216
                           Telephone:  (210) 249-4100
                                 --------------
    (Address,  Including  Zip Code and Telephone Number, of Principal Executive
                                    Offices)

           AMENDED AND RESTATED 1999 EMPLOYEE COMPREHENSIVE STOCK PLAN

                      (Full  Title  of  the  Plan)

                                 MICHAEL R. LONG
                             CHIEF EXECUTIVE OFFICER
                                 12500 SAN PEDRO
                                    SUITE 120
                            SAN ANTONIO, TEXAS 78216
                                 (210) 249-4100

                     (Name,  Address  and  Telephone  Number,
                including  Area  Code,  of  Agent  for  Service)

                          Copies of communications to:

                              AMY M. TROMBLY, ESQ.
                              TROMBLY BUSINESS LAW
                           1320 Centre St. Suite 202
                                Newton, MA 02459
                                 (617) 243-0060

                         CALCULATION OF REGISTRATION FEE
Title of each                    Proposed maximum  Proposed maximum   Amount of
Class of securities Amount to be offering price   aggregate offering  registration
To be registered      registered    per share         price               fee

Common Stock,
..001 Par Value       20,000,000     $0.11             $2,200,000        $235.40
(1)  In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
registration  statement  also  covers an indeterminate amount of interests to be
offered  or  sold  pursuant  to  the  employee benefit plan(s) described herein.

(2)  The  price  of  $0.11  per share, which was the average of the high and low
prices  of  the  Registrant's  Common Stock, as reported on the Over-The-Counter
Bulletin  Board  on May 22, 2006 is set forth solely for purposes of calculating
the  registration  fee pursuant to Rule 457(c) of the Securities Act of 1933, as
amended.

                                     PART  I

           INFORMATION  REQUIRED  IN  THE  SECTION  10(a)  PROSPECTUS

ITEM  1.     PLAN  INFORMATION

Pursuant to the Note to Part I of the Form S-8, the information required by Part
I  is  not  filed  with  the  Securities  and  Exchange  Commission.

ITEM  2.     REGISTRANT  INFORMATION  AND  EMPLOYEE  PLAN  ANNUAL  INFORMATION

The  Registrant  will  provide without charge to each person to whom a copy of a
Section  10(a)  Prospectus  hereunder  is  delivered,  upon  the oral or written
request of such person, a copy of any document incorporated in this Registration
Statement  by  reference.  Requests  for  such information should be directed to
Payment  Data  Systems,  12500  San  Pedro,  Suite  120,  San Antonio, TX 78216.

                    PART  II
    INFORMATION  REQUIRED  IN  THE  REGISTRATION  STATEMENT

ITEM  3.     INCORPORATION  OF  DOCUMENTS  BY  REFERENCE.

     The  following documents are incorporated by reference in this registration
statement.

a)   The Registrant's  Annual  Report  on  Form 10-KSB for the fiscal year ended
     December  31,  2005  filed  pursuant  to  Section  13(c)  or  15(d)  of the
     Securities  Exchange  Act  of  1934,  as  amended  (the  "Exchange  Act");

b)   All other reports filed by Registrant pursuant to Section 13(c) or 15(d) of
     the  Exchange  Act  since  the  end  of the fiscal year covered by the Form
     10-KSB  referred  to  in  (a)  above.

c)   The description of the common stock, $.001 par value per share (the "Common
     Stock") of the Registrant is contained in the Registrant's annual report on
     Form  10-KSB.

     All  documents filed by the Registrant pursuant to Section 13(a), 13(c), 14
and  15(d)  of  the  Exchange  Act  subsequent  to the date of this registration
statement  and  prior  to  the  filing  of  a  post-effective  amendment to this
registration  statement  which indicates that all securities offered hereby have
been  sold  or  which  deregisters all securities then remaining unsold shall be
deemed  to be incorporated in this registration statement by reference and to be
a  part  hereof  from  the  date  of  filing  of  such documents.  Any statement
contained  in  this registration statement, in a supplement to this registration
statement  or in a document incorporated by reference herein, shall be deemed to
be  modified  or  superseded  for purposes of this registration statement to the
extent that a statement contained herein or in any subsequently filed supplement
to  this  registration  statement  or  in  any  document  that  is  subsequently
incorporated  by  reference  herein  modifies  or supersedes such statement. Any
statement  so  modified or superseded shall not be deemed, except as so modified
or  superseded,  to  constitute  a  part  of  this  registration  statement.

ITEM  4.     DESCRIPTION  OF  SECURITIES

Not  applicable.  The  class  of  securities  to  be offered is registered under
Section  12  of  the  Exchange  Act.

ITEM  5.     INTEREST  OF  NAMED  EXPERTS  AND  COUNSEL

No  expert  or counsel will receive a direct or indirect interest in our company
or  was  our  promoter,  underwriter,  voting  trustee,  director  or officer or
employee.  Nor  does  any  expert or counsel have any contingent based agreement
with  us  or  any  other  interest  in  or  connection  to  us.

ITEM  6.     INDEMNIFICATION  OF  DIRECTORS  AND  OFFICERS.

Nevada law generally sets forth the powers of the Company to indemnify officers,
directors,  employees  and agents. The Articles of Incorporation for the Company
provide  as  follows:

No  director  or officer shall have any personal liability to the corporation or
its  stockholders  for the damages for breach of fiduciary duty as a director or
officer,  except that this Article shall not eliminate or limit the liability of
a  director  or  officer  for  (i)  acts  or  omissions that involve intentional
misconduct,  fraud  or  a  knowing  violation of the law, or (ii) the payment of
dividends  in  violation  of  Nevada  Revised  Statutes.

The  By-laws  of  the  Company  provide  as  follows:

Every  person who was or is a party or is threatened to be made a party to or is
involved  in  any  action,  suit  or  proceeding,  whether  civil,  criminal,
administrative  or  investigative,  by reason of the fact that he or a person of
whom  he  is  the  legal  representative  is or was a Director or officer of the
corporation  or  is  or was serving at the request of the corporation or for its
benefit  as  a  Director  or  officer  of  another  corporation,  or  as  its
representative in a partnership, joint venture, trust or other enterprise, shall
be indemnified and held harmless to the fullest legally permissible extent under
the general Corporation Law of the State of Nevada from time to time against all
expenses,  liability  and  loss  (including attorney's fees, judgment, fines and
amounts paid or to be paid in settlement) reasonably incurred or suffered by him
in  connection  therewith.  The  expenses  of officers and Directors incurred in
defending  a  civil  or  criminal action, suit or proceeding must be paid by the
corporation  as they are incurred and in advance of the final disposition of the
action, suit or proceeding upon receipt of an undertaking by or on behalf of the
Director  or  officer  to  repay  the amount if it is ultimately determined by a
court of competent jurisdiction that he is not entitled to be indemnified by the
corporation.  Such  right of indemnification shall be a contract right which may
be  enforced in any manner desired by such person. Such right of indemnification
shall  not  be  exclusive  of  any other right which such Directors, officers or
representatives  may  have  or  hereafter  acquire  and,  without  limiting  the
generality  of such statement, they shall be entitled to their respective rights
of  indemnification  under any bylaw, agreement, vote of stockholders, provision
of  law  or  otherwise,  as  well  as  their  rights  under  this  Article.

The  Board  of  Directors  may  cause  the  corporation to purchase and maintain
insurance  on  behalf  of  any person who is or was a Director or officer of the
corporation,  or  is  or  was  serving  at  the  request of the corporation as a
Director  or  officer  of  another  corporation,  or  as its representative in a
partnership,  joint  venture,  trust  or  other enterprise against any liability
asserted against such person and incurred in any such capacity or arising out of
such  status,  whether  or not the corporation would have the power to indemnify
such  person.

The  Board  of Directors may from time to time adopt further Bylaws with respect
to  indemnification  and amend these and such Bylaws to provide at all times the
fullest indemnification permitted by the General Corporation Law of the State of
Nevada.

Under the foregoing provisions of the Registrant's Articles of Incorporation and
By-Laws, each person who is or was a director or officer shall be indemnified by
the  Registrant  to  the  full  extent  permitted  or  authorized by the General
Corporation  Law  of  Nevada.  Under such law, to the extent that such person is
successful on the merits of defense of a suit or proceeding brought against such
person  by  reason  of  the  fact  that  such person is a director or officer of
Payment  Data  Systems,  such  person  shall  be  indemnified  against expenses,
including  attorneys'  fees, reasonably incurred in connection with such action.
If  unsuccessful in defense of a third-party civil suit or a criminal suit or if
such  a  suit  is  settled,  such  a  person shall be indemnified under such law
against  both  (1) expenses (including attorneys' fees) and (2) judgments, fines
and  amounts  paid  in  settlement  if  such person acted in good faith and in a
manner  such  person  reasonably  believed to be in, or not opposed to, our best
interests,  and  with respect to any criminal action, had no reasonable cause to
believe  such  person's  conduct  was  unlawful.

Insofar  as indemnification for liabilities arising under the Securities Act may
be  permitted  to  directors, officers and controlling persons of the Registrant
pursuant  to  the  foregoing  provisions,  or otherwise, the Registrant has been
advised  that  in  the  opinion  of  the Securities and Exchange Commission such
indemnification  is  against  public  policy  as  expressed  in  the Act and is,
therefore,  unenforceable.

ITEM  7.     EXEMPTION  FROM  REGISTRATION  CLAIMED.

Not  applicable.

ITEM  8.     EXHIBITS

Exhibit  No.  Description
------------  -----------

4.1   Amended  and  Restated  1999  Employee  Comprehensive  Stock  Plan

5.1   Opinion  of  Amy  Trombly,  Esq.

23.1  Consent  of  Akin,  Doherty,  Klein  &  Feuge,  P.C.

23.2  Consent  of  Counsel  (included  in  Exhibit  5.1  hereto).

ITEM  9.     UNDERTAKINGS

(a)     The  Registrant  hereby  undertakes:

     1.   To file,  during  any  period  in  which it offers or sells securities
          are  being  made,  a  post-effective  amendment  to  this registration
          statement  to:

          (i)  Include  any  additional  or  changed  material  information with
               respect  to  the  plan  of  distribution.

     2.   For determining  liability  under  the  Securities  Act  of 1933, that
          each  post-effective  amendment as a new registration statement of the
          securities offered, and the offering of the securities at that time to
          be  the  initial  bona  fide  offering.

     3.   File a  post-effective  amendment  to  remove  from  registration  any
          of  the  securities  that  remain  unsold  at the end of the offering.

For  determining  any  liability under the Securities Act, treat the information
omitted from the form of prospectus filed as part of this registration statement
in  reliance  upon  Rule  430A  and contained in form of prospectus filed by the
Registrant  under  Rule  424(b)(1), or (4) or 497(h) under the Securities Act as
part  of  this  registration statement as of the time the Commission declared it
effective.

For  determining  any  liability  under  the  Securities  Act,  treat  each
post-effective  amendment  that  contains  a  form  of  prospectus  as  a  new
registration statement for the securities offered in the registration statement,
and  that  offering  of  the  securities  at  that time as the initial bona fide
offering  of  those  securities.

                                   SIGNATURES

     Pursuant  to the requirements of the Securities Act of 1933, the Registrant
certifies  that  it  has  reasonable grounds to believe that it meets all of the
requirements  for  filing  on  Form  S-8  and  has duly caused this registration
statement  to  be  signed  on  its  behalf  by  the  undersigned, thereunto duly
authorized  in  the  City  of  San  Antonio,  State  of Texas on the 25th day of
May,  2006.

                          PAYMENT  DATA  SYSTEMS,  INC.

 By:  /s/  Michael  Long
      ------------------
      Michael  R.  Long
      Chief  Executive
      Officer  and  Chief  Financial  Officer

SIGNATURES                                                  DATE

By:  /s/   Michael  R.  Long
     -----------------------                           May 25,  2006
     Michael  R.  Long
     Chief  Executive
     Officer  and  Chief  Financial  Officer
     (principal  executive  officer  and
     principal  financial  and  accounting  officer)

By:  /s/  Louis  A.  Hoch                              May 25,  2006
     --------------------
     Louis  A.  Hoch
     President,  Chief  Operating  Officer
     and  Director

By:  /s/  Peter  G.  Kirby                             May 25,  2006
     ---------------------
     Peter  G.  Kirby
     Director