Breach hits credit cards

The U.S. Secret Service is investigating a major cyber intrusion at an Atlanta-based payment processor that could expose millions of MasterCard, Visa, American Express and Discover cardholders to fraudulent charges.

Processor Global Payments Inc said on Friday it had found “unauthorized access” into its system early in March and notified law enforcement and financial institutions.

Payment network operators MasterCard, Visa, American Express and Discover Financial Services confirmed they were affected, along with banks and other franchises that issue cards bearing their logos.

A spokesman for the Secret Service said the agency is leading investigations into the case but declined to give any details.

Though Global Payments is far from a household name, middlemen such as the company are prized targets for hackers because of the vast amount of sensitive financial information they handle.

The company’s stock fell more than nine per cent on the news before trading was halted. It discussed the breach in a phone call for investors on Monday.

It was not immediately clear how Global Payments was penetrated or how many accounts were exposed. Consumers who detect fraud usually can be reimbursed. That leaves merchants on the hook financially, though they could file claims against Global Payments.

Analysts said MasterCard and Visa are unlikely to face costs from the breach, but MasterCard shares fell 1.8 per cent to close at $420.54 and Visa shares dropped 0.8 per cent to $118.

The security breach is just the latest in a long string of incidents that have put the personal information of millions of credit and debit cardholders at risk.

Individual banks and processors said they had not yet determined the full extent of the breach, but the blog Krebs on Security, which first reported the breach, said it was “massive” and could affect more than 10 million cardholders.

Some industry experts suggested the figure might be much lower, perhaps on the order of tens of thousands. Bernstein Research analyst Rod Bourgeois noted that Global Payments is a relatively small player in the transactions services industry, servicing 800,000 merchants with a 3.5 per cent market share. By contrast, the largest competitor, First Data, services millions of merchants, with 22.6 per cent of the market.

— Sun Media News Services

Comments

  1. In the wake of Global Payments’ data breach, there has been a lot of advice on what people should do to protect themselves, but way too often we are asked to do more than what’s needed and that can needlessly lead to different issues. However, while the damage done by the hackers is real, they cannot harm us without first tricking us into revealing the information they don’t yet have (name, address, SSN). So as long as we are cautious and don’t give our personal information to strangers, we will do just fine.