CyberSource Buys Assets Of Troubled CardSystems - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
News

CyberSource Buys Assets Of Troubled CardSystems

CyberSource agreed to acquire the assets of CardSystems Solutions, a credit-card processing company that was hit by a massive security breach affecting millions of cardholders.

CyberSource Corp. on Friday said it has agreed to acquire the assets of CardSystems Solutions Inc., a credit-card processing company that was hit by a massive security breach affecting millions of cardholders.

CyberSource, a Mountain View, Calif., company that processes credit-card transactions on the web, plans to buy all of the privately held company's assets, including its transaction-processing platform with its direct connections to banks and major credit-card company networks.

In June, CardSystems disclosed that an unidentified person had broken into its network and stolen names, account numbers and other personal information. Some 22 million Visa cards and 14 million MasterCards were exposed to the security breach. The company acknowledged that it had stored the data in violation of rules set by Visa and MasterCard.

In the deal, CyberSource gets contracts to process credit-card transactions on behalf of more than 120,000 merchants representing over $18 billion in annual processing volume, and a network of Independent Sales Organizations that connect CardSystems's consumer-facing front-end with bank services. ISOs are the classic middlemen in credit-card transactions.

CyberSource believes that integrating CardSystems into its operations would broaden its core offering of processing Web transactions by adding point-of-sale processing in retail stores. CardSystems' ISO network also provides a new sales channel for CyberSource, the latter company said.

"We are excited about this acquisition," Bill McKiernan, chairman and chief executive of CyberSource, said in a statement. "It will mean a strategic expansion of CyberSource's payment platform, and allow current CardSystems customers and partners to continue processing without interruption."

Uninterrupted processing, however, is not assured. CardSystems has been notified that it will not be authorized to process transactions through some credit-card associations after Oct. 31. CyberSource and CardSystems are negotiating with banks and the associations to reinstate the latter company's operations, which is pivotal to the completion of the acquisition.

"There are no assurances that the parties will be able to negotiate and enter into a definitive agreement concerning the sale of CardSystems' business or consummate the transaction," CardSystems said in a statement announcing the acquisition plans.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
The State of Cloud Computing - Fall 2020
The State of Cloud Computing - Fall 2020
Download this report to compare how cloud usage and spending patterns have changed in 2020, and how respondents think they'll evolve over the next two years.
Slideshows
10 Ways to Transition Traditional IT Talent to Cloud Talent
Lisa Morgan, Freelance Writer,  11/23/2020
News
What Comes Next for the COVID-19 Computing Consortium
Joao-Pierre S. Ruth, Senior Writer,  11/24/2020
News
Top 10 Data and Analytics Trends for 2021
Jessica Davis, Senior Editor, Enterprise Apps,  11/13/2020
Register for InformationWeek Newsletters
Video
Current Issue
Why Chatbots Are So Popular Right Now
In this IT Trend Report, you will learn more about why chatbots are gaining traction within businesses, particularly while a pandemic is impacting the world.
White Papers
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll