Payments processors Heartland Payment Systems (HPY) said on Thursday that it has arrived at a settlement with American Express Company (AXP) related to a criminal breach of Heartland’s payment system environment by cyber thieves in 2008.
According to the deal, Heartland will pay AmEx $3.6 million, resolving all intrusion-related issues between the two parties, Heartland said.
In Jan 2009, Heartland said that cyber thieves had breached its system in 2008 and had stolen credit card information. The current settlement with AmEx marks the first agreement with a card brand related to the intrusion.
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.
New York-based AmEx is a diversified financial services company, with worldwide operations and a strong brand name. It is a significant player in charge and credit payment card products, and travel-related services worldwide.
AmEx’s third quarter earnings of 44 cents per share were well ahead of the Zacks Consensus Estimate of 36 cents, but substantially down from 74 cents earned a year ago. Results for the quarter benefited primarily by its re-engineering efforts and a diversified business model.
Though the billed business is still decreasing on a year-over-year basis, we noticed a moderation in the rate of decline. Additionally, with some early signs of economic recovery, we note that the monthly comparisons of cardmember spending volume have improved. However, we expect the recovery to be sluggish and hence significant expansion of AmEx’s top line will be restricted in the near term.
On Thursday, the shares of Heartland were up by about 1%, closing at $12.46 on the New York Stock Exchange while the shares of AmEx dropped by approximately 2%, closing at $40.45.
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