Fergie's Tech Blog

Visa gives CardSystems three-month reprieve

Robert McMillan writes in InfoWorld:

Visa U.S.A. is giving CardSystems Solutions a little more time to get its act together. On Thursday, Visa announced that it has delayed plans to sever ties with the Atlanta payment processor by three months, in order to facilitate a planned sale of CardSystems to electronic payment vendor CyberSource Corp.

CardSystems processes credit card transactions totalling about $18 billion per year for approximately 120,000 merchants. Both Visa and American Express Co. had planned to cut ties with the Atlanta company at the end of October, after a CardSystems security breach exposed some 40 million credit card numbers to online thieves. CardSystems Chief Executive Officer John Perry later admitted that some of the stolen records had been improperly stored by his company.

Visa said it will now wait until Jan. 31, 2006, before requiring merchants to move to another credit card processor. "Visa is granting an extension... for the sole purpose of helping facilitate CyberSource's planned acquisition of (CardSystems) assets," the company said in a statement.

Last week, CyberSource signed a letter of intent to acquire CardSystems, but the company hinted that the acquisition would be contingent on Visa and American Express's continued business.

posted by Fergie @ 9/30/2005 06:37:00 AM