The universe is all about action and reaction. You can tell how bad something was by the things that follow. Seeing Visa shares drop in value by almost 1% in a day and Mastercard by almost 2%, tells you almost everything you need to know. KitGuru fills in the scary (credit card security) gaps.
Based in Atlanta, Georgia, Global Payments Inc is a Fortune 1000 company [For now, at least – Ed] with its pants around its ankles and the reddest cheeks of shame. Normally, that’s not its preferred business model, but it has been caught out by a huge breach in its defences. If you thought the Wall Street plunges by Visa and Mastercard were bad, then the one for Global Payments was enough to see trading halted as almost 14% of the company’s value disappeared in a day.
Trust will be a big issue with the follow-up investigation, because while Global Payments Inc says is hopes that only 50,000 people will have been hacked and had their details revealed – an independent industry expert says that the figure is more likely to be closer to 10 million.
That Global Payments Inc let itself get ‘hacked’ is one thing. That it mis-understood the level of the problem 200-fold is a disaster. If the figure of 10 million is more accurate, then either Global Payments Inc is deliberately misleading investors or it does not understand the nature of the attack/disaster. In which case, possible charges of incompetence would follow.
One thing is certain, Global Payments Inc has known for weeks that its back door was penetrated, but the extent of the damage is still unclear.
The only positive thing we can take from what we’ve learned so far is that Global Payments Inc CEO, Paul Garcia, is confident that the whole situation is his company’s fault. He’s gone on record to say that no one else is to blame, “It is crucial to understand that this incident does not involve our merchants or their relationships with their customers”. Nice job standing up – we applaud Paul for his honesty.
KitGuru says: We want to believe that there is a 3rd path – one which does not lead to a top executive getting sacked (for misleading people) or a senior security expert (for incompetence). Right now, given the world’s complex economic challenges, we need to believe that the credit and banking industries are competent and secure. We really do.
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