ATLANTA, GA – Credit card processor CardSystems Solutions suffered yet another blow this week when American Express announced that it would cut ties with the company over a security breech that placed roughly 40 million credit card numbers at risk. The announcement from American Express comes right on the heels of a similar announcement from Visa USA, which also said this week that it would sever ties with the struggling credit card processor. The moves place the future of CardSystems at risk.According to American Express, CardSystems processed only a very small percentage of the company’s charges, so the move is seen largely as having symbolic significance. An American Express spokesperson said the company will terminate its agreement with CardSystems at the end of October.
The decision by Visa, however, was damaging. An internal Visa memo leaked to the New York Times seemed to show Visa felt too much damage had been caused by the security breech, and that the situation was beyond repair.
“CardSystems has not corrected, and cannot at this point correct, the failure to provide proper data security for those accounts,” said Tim Murphy, Visa’s SVP for operations in the memo. “Visa USA has decided that CardSystems should not continue to participate as an agent in the Visa system.”
MasterCard, on the other hand, announced that it would give CardSystems a chance to fix the security problems that led to the breech. MasterCard has given CardSystems until the end of August to demonstrate that it is in compliance with requested changes.
Discover Financial has not yet made a decision regarding its future relationship with CardSystems.
Executives from all three of the major credit card companies, as well as CardSystems’ chief executive John M. Perry, are scheduled to testify before Congress on Thursday about the security breech.
The security breech was discovered by MasterCard and a bank, which traced a high level of fraudulent activities back to problems at CardSystems. Of the approximate 40 million card numbers placed at risk, around 200,000 have been confirmed stolen. The stolen data also included card ccv codes, but not customer addresses.
