CardSystems Liquidates Assets

Embattled credit card processing company CardSystems, which in June exposed the card numbers of approximately 40 million customers, has agreed to be acquired by CyberSource, an electronic payment solutions provider.

CardSystems' servers were hacked in June, resulting in a federal investigation of the company. While only 200,000 of the cards were marked as a high risk for fraud, the FBI called an investigation for a theft of that size "the next logical step."

Visa and American Express in July announced that they would no longer allow their cards to be processed on CardSystems network after October, meaning customers of the company would have been severely limited in the cards they could accept.

Bill McKiernan, chairman and CEO of CyberSource, said the agreement was in the best interests of both companies, as well as their customers.

"It will mean a strategic expansion of CyberSource's payment platform, and allow current CardSystems customers and partners to continue processing without interruption," McKiernan said.

CardSystems handled roughly $18 billion in annual processing for over 120,000 merchants.

CyberSource, however, was quick to point out that they would give no guarantee on being able to renegotiate deals with the credit card companies that had already blacklisted the service.

The acquisition will likely be completed by the end of this year, subject to regulatory approvals.