Global Payments breach update

International payment processor Global Payments Inc. said the data breach it discovered in March 2012 cost the company $84.4 million in remediation expenses and card company penalties this fiscal year. The company shared the price of the breach damage for the first time in its fourth quarter year-end earnings report released July 26, 2012. Global Payment's fiscal year ended May 31, 2012.

The company also reported it has completed its investigation of the breach and is working with the major card companies to restore its security compliance certification – a process the company believes it will complete by the end of 2012.

Earnings report, future costs

Global Payments Chairman and Chief Executive Officer Paul Garcia said the company achieved 18 percent revenue growth over 2011 even after the $84.4 million breach costs. Revenues in the fourth quarter grew 15 percent to $597 million. Garcia said his company has double digit growth in virtually all of its markets except Canada and anticipates strong future growth in Asia.

In a conference call with reporters held to discuss the earnings report, Garcia said estimating future costs related to the data breach is difficult, but the company anticipates costs of between $55 million and $65 million in 2013. These costs may be partially offset by up to $28 million in additional insurance payments.

"The data intrusion incident will soon be behind us, and we will emerge with a world class technology infrastructure offering future operating leverage," Garcia stated.

Compliance

Global Payments reported account and PIN numbers for up to 1.5 million cards could have been stolen during the breach. The company additionally acknowledged detailed merchant account information, including such sensitive data as bank account and Social Security numbers, was put at risk during the breach.

Garcia said the results of its breach investigation were turned over to the card companies. "The card associations are taking all the data, compiling it and trying to understand if there are any other liabilities," he said. "The process they have is unbelievably thorough and, quite frankly, it really works."

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