Security Breach Prompts Visa to Ditch Global Payments

After what's being described as a "massive data breach" at Global Payments, Visa has decided to part ways with the payment processor and try its luck elsewhere, Global Payments CEO Paul Garcia said, according to a report in the Associated Press. MasterCard, meanwhile, is either willing to give Global Payments the benefit of the doubt that this was a one-time snafu, or hasn't yet announced plans of its own to the ditch the payment processor.

Garcia described the situation as being "absolutely contained" at this point, however as many as 1.5 million credit cards across the United States may have been affected. Compromised data includes credit card numbers, but not identifying information such as cardholder names, addresses, and Social Security numbers.

Image Source: Flickr (Håkan Dahlström)

In a separate announcement, Global Payments posted results for its fiscal third quarter ended February 29, 2012, saying its revenues grew 17 percent to $533.5 million compared to the $456.4 million in the prior fiscal year.

"We continue to expect our annual revenue for fiscal 2012 to be $2,150 million to $2,200 million, or 16 percent to 18 percent growth over fiscal 2011 and fiscal 2012 diluted earnings per share on a cash basis to be a range of $3.50 to $3.58, reflecting 14 percent to 16percent growth over fiscal 2011," David E. Mangum, Senior Executive Vice President and CFO, said in a statement. "We now expect GAAP diluted earnings per share of $3.10 to $3.18 representing 19 percent to 22 percent growth over the prior year and reflecting some planned cost saving initiatives for our fourth quarter."

The well timed financial report outlining positive growth could help restore confidence from investors who might otherwise be wary, given the recent security mishap.