Global Payments Still Quantifying Costs Of Data Breach
02 Aprile 2012 - 4:07PM
Dow Jones News
Global Payments Inc. (GPN), one of the largest processors of
Visa Inc. (V) and MasterCard Inc. (MA) card transactions, is
working around the clock to stem fallout from a data breach that
exposed as many as 1.5 million cardholder accounts, executives said
Monday.
The Atlanta-based company believes it has entirely contained an
intrusion of its processing system it discovered in early March,
which it disclosed late Friday after trading of its stock was
halted following a Wall Street Journal report naming it as the
source of a breach.
Since the incident came to light, Visa removed Global Payments
from a list of approved service providers it maintains, though the
company remains able to continue processing Visa card payments,
Chairman and Chief Executive Paul Garcia said.
"We are working around the clock literally" to get back into
compliance with Visa, Garcia said, though he did not give a
specific time frame for when it could regain Visa's seal of
approval.
On Sunday, Global Payments released additional information about
the breach, saying it believes less than 1.5 million accounts were
exposed. It also said that information such as card numbers and
other information, which can be used to create counterfeit cards,
was exposed, but cardholder names, addresses and Social Security
numbers were not.
Global Payments has not quantified the total cost associated
with the breach, though it expects to record a charge once it has
determine all steps it will need to take to rectify the situation,
executives said.
"This is manageable," Garcia said.
News of the breach sparked new concerns over security in the
credit-card industry. The incident potentially affects cards
bearing the logos of Visa and MasterCard, as well as Discover
Financial Services (DFS) and American Express Co. (AXP), though the
card companies' systems were not breached.
Global Payments shares were down $2.00 at $45.50 in recent
trading.
The size of breach based on current estimates is relatively
small compared with prior breaches. As many as 130 million
cardholder accounts were exposed in a breach involving Heartland
Payment Systems Inc. (HPY) disclosed in 2009. CardSystems Solutions
exposed as many as 40 million accounts in 2005.
Global Payments is what is known in the payments industry as a
merchant acquirer, which contracts with merchants to provide card
processing. The company is the seventh-largest merchant acquirer in
the U.S. based on the volume of Visa and MasterCard payments it
processed in 2011, according to The Nilson Report, a
payments-industry newsletter.
Visa's decision to remove Global Payments from a list of
companies that meet industry-enforced security standards known as
PCI, or Payment Card Industry, requirements does not preclude the
company from signing up new merchants, Garcia said.
However, experts say it could make merchants leery of doing
business with the company.
As of last weekend, MasterCard had not taken a similar step,
though Garcia warned it would not be "unexpected to have MasterCard
take similar action."
Analysts peppered management with questions over how its lack of
compliance with the standards could affect costs for it and its
merchant clients in the future.
"Clearly not being PCI compliant has financial liability,"
Garcia said, adding the company is still working on quantifying
total costs.
-By Andrew R. Johnson, Dow Jones Newswires; 212-416-3214;
andrew.r.johnson@dowjones.com
Grafico Azioni Discover Financial Servi... (NYSE:DFS)
Storico
Da Giu 2024 a Lug 2024
Grafico Azioni Discover Financial Servi... (NYSE:DFS)
Storico
Da Lug 2023 a Lug 2024
