US Dataworks, Inc. Forms Alliance for End-to-End Electronic Payment Processing Solution With Significant Financial Transaction

HOUSTON, May 24  /PRNewswire-FirstCall/ -- US Dataworks, Inc. (AMEX:UDW), a leading developer of payment processing solutions, announced that it has formed a strategic alliance with the nation's largest financial transaction processor for businesses accepting payments via traditional point of sale, hospitality, Internet, catalog and recurring billing.  The contemplated focus of the alliance is to provide an integrated electronic payment processing solution to the marketplace.

Under the terms of the agreement, the partnering company, which offers the industry's most extensive array of payment processing methodologies, will be adding US Dataworks' innovative and proprietary technology, Clearingworks(TM), to provide its customers with a comprehensive solution for their check and Automated Clearing House (ACH) payment processing needs.  This will include Back Office Conversion (BOC), a new procedure allowing retailers and merchants to scan paper items in their own back offices and process them electronically -- dramatically reducing operational expenses and bank costs (float).

US Dataworks is expressly precluded from disclosing specific details from the partnership agreement, including the partner's name, but believes that this agreement will have a material positive impact on its operations as a result.

"As more retailers and merchants begin to implement BOC, we believe this new relationship will place US Dataworks at the forefront in the pursuit for market share," said Charles Ramey, Chairman and CEO of US Dataworks.  "We believe that this alliance will solidify future growth for US Dataworks as our new partner, renown within the financial transaction processing industry, is expected to process over 13 billion transactions this year.  We hope the alliance will boost that volume significantly by adding the ability to process check and ACH payments."

About US Dataworks, Inc.

US Dataworks is a developer of payment processing solutions, focused on the Financial Services market, Federal, State and local governments, billers and retailers.  Software developed by US Dataworks is designed to enable organizations to transition from traditional paper-based payment and billing processes to electronic solutions that automate end-to-end processes for accepting and clearing checks.

Except for the historical information contained herein, the matters set forth in this press release, including, but not limited to, the extensiveness of the operational expense and bank costs savings to be realized by BOC, the magnitude of the positive impact the alliance will have on the operations of UDW and its future growth, the expectation of the partner's transaction volumes for this year and the alliance's ability to boost the partner's total transactional volume are forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including, but not limited to, the Company's position in the marketplace, our ability to develop and timely introduce products that address market demand, the impact of alternative technological advances and competitive products, market fluctuations and other risks detailed from time to time in the SEC reports of US Dataworks, including its annual report on Form 10-K for the period ended March 31, 2005 and its quarterly report on Form 10-Q for the period ended December 31, 2005.  These forward-looking statements speak only as of the date hereof.  US Dataworks disclaims any obligation to update these forward-looking statements.

   CONTACTS:

   John Figone, SVP of Business Development
   US Dataworks, Inc.
   [phone]

   Donald C. Weinberger/Alisa Steinberg (media)
   Wolfe Axelrod Weinberger Assoc. LLC
   Tel. [phone]  Fax [phone]


DATASOURCE: US Dataworks, Inc.



CONTACT:  John Figone, SVP of Business Development of US Dataworks, Inc.,

[phone]; or media, Donald C. Weinberger or Alisa Steinberg, both of

Wolfe Axelrod Weinberger Assoc. LLC, [phone], or fax, [phone],

for US Dataworks, Inc.



Web site:  http://www.usdataworks.com/ 

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