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Visa Inc. (V - Analyst Report) has dropped Global Payments Inc. (GPN - Snapshot Report) from its list of service providers after detecting a cyber intrusion in the latter’s system that likely threatens about 1.5 million customer accounts. This was the second breach of card data by in a year.
Atlanta-based Global Payments aids both Visa and MasterCard Inc. (MA - Analyst Report) in processing credit card transactions for merchants. Card giants such as Visa, MasterCard, American Express Co. (AXP - Analyst Report) and Discover Financial Services (DFS - Analyst Report) seek help of over dozen such payment processors to reach out to the merchants, and hence these payment processors are liable to offer a secure customer transaction.
The breach of data was initially reported by ‘krebsonsecurity.com,’ which tracks cyber crimes, on Friday and had estimated about 10 million card accounts to have been accessed by the hackers. However, early last month, Global Payments had already identified breach of card data on its customer accounts that were causing theft of personal details of the customers along with fraudulent transactions through their accounts. It is believed that the hackers have infringed upon the Track 1 and Track 2 data that incorporate details like customer names, card numbers, validation codes and customer addresses.
Meanwhile, the federal and banking officials as well as Visa and other credit card service providers have accused Global Payments for presenting very less information about the places where the breach of data took place. Moreover, other details regarding the identification of the customer accounts that are sufficiently exposed to cyber threat were kept veiled.
While Global Payments has been strictly recommended to revise its cyber protection policies and systems, card giants have been advised by the federal officials to enhance their security compliances in order to avoid another data attack in future.
This is not the first such case wherein hackers have poached into the cyber security zone. Industry giants such as Citigroup Inc. (C - Analyst Report) and Google Inc. (GOOG - Analyst Report) along with global organizations such as the International Monetary Fund (IMF) and National Public Radio were the primary ones who faced data attacks last year. In previous years too, there have been reports of more such cases. The latest breach of data issue once again raises question over the degree of the data protection within the payment processing industry and also increases the need for a foolproof regulation to mitigate risks from frauds and money laundering.
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