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Visa and American Express have announced their intention to stop working with CardSystem Solutions, the data processor under fire for its announcement last month that 40 million credit card records had been hacked from its databases.

John Perry, CardSystems’ President and CEO, sounded a warning when he announced the impending defection of two of the company’s largest customers. “If Visa and American Express do not reconsider, the effect of their decision on thousands of our merchants is likely to be significant and could disrupt the operation of their payment card system,” Perry said in a statement. “Many of those merchants will need to find a new payment processor, obtain new software, and retrain their employees on a new software system.”

MasterCard, meanwhile, has required that Cardystems submit a detailed data security compliance plan by August 31, 2005.

Posted under Finance, Privacy

In a credit card industry reeling from regular announcements that consumer information has been compromised in some way, Visa USA announced today that it has introduced a new scoring system that will help the company detect fraud at the transactional and global levels.

“Fighting fraud and protecting cardholders has always been a high priority for Visa,” said Jean Bruesewitz, senior vice president, Processing and Emerging Products, Visa USA. “Visa is continually investing in the most sophisticated fraud-fighting systems to stay one step ahead of the criminals.Advanced Authorization adds another layer of security and ensures ever increased cardholder confidence with each Visa payment card purchase.”

The company said that every transaction submitted to its network would be subject to this evaluation, giving banks an instant rating on a transaction’s potential for fraud. By comparing transactions across the network, the company hopes to more easily identify credit card thieves who may run batches of credit cards through accounts to determine which ones are valid for spending.

Visa also said in a statement that “Visa-system fraud” was at an all-time low of 5 cents per $100.

Posted under Customer Service

Indianapolis based Simon Property Group, which owns or has an interest in 296 shopping properties throughout the United States, altered its Visa Giftcard policy this week after being pressured by New York Attorney General Eliot Spitzer.

The company reported that it entered into a “consent agreement” that will eliminate an “administrative fee” previously charged consumers if they did not use the card during a six month period.

The Attorney General’s office filed a lawsuit against Simon in a Manhattan court last month. In addition to the administrative change, Simon agreed to pay $125,000 in penalties and costs.

Albany lawmakers were quick to praise the Attorney General’s office, one of the highest-profile offices in the country with a reputation for tackling big names and winning big settlements.

Posted under Customer Service