To resolve the 2008 data breach claims with major card issuers, Heartland Payment Systems (HPY) said on Friday that it will pay about $60 million to issuers of Visa (V) credit and debit cards. The 2008 data breach allowed hackers to gain card information.
The payment will help the Visa issuers to cover losses that they had incurred after Heartland’s computer network was hacked in late 2008. The system used to process Visa, MasterCard (MA), American Express (AXP) and Discover Financial (DFS) card transactions were significantly affected by this disturbance.
At least 80% of the card issuers must approve the settlement and sign a liability release. On Jan 14, Visa will send formal offers and eligible issuers will have time to exercise their option until Jan 29.
To resolve all intrusion-related issues, last month, Heartland arrived at a settlement with American Express related to a criminal breach of Heartland’s payment system environment by cyber thieves in 2008. According to the deal, Heartland has paid American Express $3.6 million.
Heartland is the 5th largest payments processor in the United States. The company delivers credit/debit/prepaid card processing, payroll, check management and payments solutions to more than 250,000 business locations nationwide.
On Friday, the shares of Heartland were up by about 13.5%, closing at $15.00 on the New York Stock Exchange
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