Hacked card processor could fold if Visa, AmEx cut ties, CEO tells Congress
Embattled CardSystems Solutions Inc. may be forced to go out of business if Visa U.S.A. and American Express Co. don’t reconsider their decisions to cut ties with the processor, John M. Perry, president and CEO, told Congress.
CardSystems processes transactions for more than 105,000 small to mid-size merchants, including online retailers. Its partners include Authorize.net, geocerts.com and USA.NET.
Visa and AmEx last week announced they are terminating their relationships with CardSystems, effective Oct. 31, because the company’s lax security enabled a hacker to gain access to data for 40 million cardholder accounts.
CardSystems has been working virtually non-stop since the May 22 hacking incident to correct security problems, Perry told a congressional subcommittee Thursday. “We are disappointed with (Visa’s and AmEx’s) actions and, in light of our diligent efforts to remediate, hope that both Visa and American Express will agree to discuss their decisions with us and reconsider, lest we be forced to permanently close our doors,” he said.
MasterCard International and Discover Financial Services say they are working with CardSystems to correct the security problems. However, MasterCard said its relationship with CardSystems will be at risk if the processor doesn’t meet an Aug. 31 deadline for compliance with the Payment Card Industry Security Standard.
Perry said that CardSystems expects to be fully certified as compliant by the deadline.
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