Restaurants oppose $7.2 billion credit-card fee settlement

NEW YORK, Tue Sep 25, 2012 – The National Restaurant Association said Tuesday it is joining the opposition to a proposed $7.2 billion settlement between some retailers and Visa Inc and MasterCard Inc. over fees for credit card transactions.

The NRA, which represents the $600 billion U.S. restaurant industry, is the last of six trade groups leading the case to weigh in on the potentially historic settlement.

The trade group’s chief concern is that the settlement would prohibit all merchants that use Visa and MasterCard – whether they decide to opt in or opt out of the settlement – from filing future lawsuits over interchange issues.

“There is strong concern that the proposed settlement agreement will not achieve the litigation’s most critical goal – to fundamentally change a broken marketplace in which swipe fees are set,” NRA President and CEO Dawn Sweeney said in a statement.

NRA’s board of directors unanimously voted to throw the trade group’s weight behind the opposition amassing against the settlement, the group said. While the group has been pushing for reforms that would bring transparency to the interchange system and help lower costs for restaurants, the proposed settlement accomplishes neither, it said.

The antitrust settlement was announced in July and requires the approval of U.S. District Judge John Gleeson in Brooklyn, New York, a process that could stretch well into 2013. If it does receive approval, the settlement would be the largest of its kind in U.S. history, resolving a seven-year-old lawsuit accusing Visa and MasterCard of conspiring with major banks to artificially inflate swipe fees.

Firm dropped by Visa says under 1.5 million card numbers stolen

NEW YORK, Mon Apr 2, 2012 – Visa Inc. has dropped payment processor Global Payments Inc. from its list of approved service providers after a major cyber intrusion that could expose Visa, MasterCard, American Express and Discover card holders to fraud.

Global Payments said it believes less than 1.5 million credit card numbers were stolen in the cyber security breach.

It said so-called Track 2 card data was stolen but card holders’ names, addresses and social security numbers were not obtained. It also believes the affected part of its processing system is confined to North America.

Visa, the world’s largest credit and debit-card processing network, said it removed the company from its registry of compliant service providers due to “unauthorized access into a portion of (Global Payments’) processing system.”

It told Global Payments to revalidate its compliance processes with the payment card industry’s data security standard.

Global Payments, which is based in Atlanta and has estimated its revenues will top $2 billion this financial year, will hold a conference call with investors on Monday morning.

A person improperly using Track 2 information can transfer the account number and expiration date of a card to a magnetic stripe on a fraudulent card and then try to use it to make online purchases.

The attempt could be blocked, however, if an online merchant asks for the CVV code, or the three or four digits usually located on the back of card.

Global Payments is one of dozens of companies that operate along the payment-processing chain. They are targeted by hackers due to the vast amount of sensitive financial information they handle.

The breach was first reported by a blog on computer security and cybercrime, Krebs on Security, which said it could affect more than 10 million card holders.

Global Payments spokeswoman Amy Corn said although the company had been taken off Visa’s list of compliant service providers it continued to process transactions. “We expect to be reinstated once we have been issued a new report of compliance,” she said.

The firm, which has about 3,700 employees, was spun off from information services firm National Data Corp in 2001.

MasterCard, Visa warn of possible security breach

WILMINGTON, Del., Fri Mar 30, 2012 – MasterCard Inc. and Visa Inc. have notified U.S. banks of a potential security breach, the latest in a string of incidents that have put the personal information of millions of credit card holders at risk.

The companies, which are the two largest global credit card processors, said the issue stemmed from a third-party vendor and not their own internal systems.

Following news of the breach, the shares of Atlanta-based Global Payments Inc were halted after dropping more than 9.1 percent. A representative did not immediately return a request for comment.

Several other processing companies, including Heartland Payment Systems Inc, VeriFone Systems Inc and First Data denied responsibility for the potential breach. Card Systems Inc and WorldPay did not immediately respond to inquiries about the matter.

MasterCard said it notified law enforcement officials and has hired an independent data-security organization to review the possible breach.

A U.S. Secret Service spokesman said the agency was investigating, but declined to give any specifics about the breach.

“MasterCard is concerned whenever there is any possibility that cardholders could be inconvenienced and we continue to both monitor this event and take steps to safeguard account information,” the company said in a statement. “If cardholders have any concerns about their individual accounts, they should contact their issuing financial institution.”

Visa emphasized that customers are not responsible for fraudulent purchases.

ATM group sues Visa, MasterCard over access price fixing

WASHINGTON ― A group representing operators of automated teller machines filed a lawsuit against Visa and MasterCard  alleging that the credit and debit card issuers violated antitrust laws by fixing the price of ATM access fees.

The suit, which seeks national class action status, was filed on Wednesday in the U.S. District Court for the District of Columbia on behalf of the National ATM Council and several independent ATM operators.

The suit, charging restraint of trade, alleges that Visa and MasterCard network rules prohibit ATM operators from offering lower prices for transactions over PIN-debit networks that are not affiliated with Visa or MasterCard.

The suit alleges that the price fixing artificially raises the price consumers pay for ATM services, limits ATM operator revenue, and violates antitrust laws.

It claims that rules by the card issuers prevent an operator from offering consumers a discount for ATM transactions not completed over Visa or MasterCard networks.

“Visa and MasterCard are the ringleaders, organizers, and enforcers of a conspiracy among U.S. banks to fix the price of ATM access fees in order to keep the competition at bay,” Jonathan Rubin, of the Rubin PLLC law firm which represents the plaintiffs, said in a statement.

The proposed class, should the case be granted class action status, would be comprised of independent operators of some 200,000 ATMs in the United States, Rubin said.

Visa declined to comment. MasterCard did not immediately return calls seeking comment on the lawsuit.