Stacey Vanek Smith: Visa has dropped card processor Global Payments after a big data breach on Friday. It compromised the credit card information of more than a million cardholders.
Our own David Gura joins us now from Washington D.C. Good morning, David.
David Gura: Morning Stacey.
Smith: Global Payments is what's called a "payment processor." What exactly is a "payment processor," and how does that fit into the whole credit card system?
Gura: All right, so you go and you buy a cup of coffee, you swipe your card. And I'm going to let Larry Berlin explain what happens next. He's with First Analysis.
Larry Berlin: Global Payments connects the merchant to the credit card company -- to Visa, Mastercard, Discover or AmEx.
He told me to think about the payment processor as an intermediary, sort of the middle man. It makes sure you've got enough money, or credit, to buy that cup of coffee. And it's using data to make sure you're the person that you're claiming to be. All of this happens, all this information is going back and forth Stacey, from the coffee shop up to the payment processor, to the credit card company, to the bank, and all the way back in just the blink of an eye.
Smith: Speaking of coffee, actually, I tried to buy a coffee yesterday with my Visa debit card, and it was rejected. And I found out later that Visa had some kind of outage. Was that related to the data breach?
Gura: It was not related to the data breach. Visa says that it was just doing some maintenance, it was updating its system yesterday, and for 30 or 40 minutes the system was down. But the thing is, that when something big like this happens -- when a network goes down or there's a security breach -- it's a big deal: we notice it, we talk about it, we worry about it.
I talked to Zil Bareisis is an analyst with Celent, and he says, there's really only so much we can do.
Zil Bareisis: I would argue that no matter what security you put in place, breaches will continue to happen because hackers always work out new ways to get into the data system.
And hackers want to get into that data system because that's where the money is -- it's this big treasure trove for hackers. I mean, think about it, Stacey: there are 800 million cards in the U.S. and there are only 300 million people.
Smith: Wow, well, that is a lot to think about. David Gura in Washington, thank you David.
Gura: Thank you.
“I think the best compliment I can give is not to say how much your programs have taught me (a ton), but how much Marketplace has motivated me to go out and teach myself.” – Michael in Arlington, VABEFORE YOU GO