yberSource Corp., a provider of electronic payment and risk management solutions to e-commerce merchants, announced on Sept. 23, 2005 plans to acquire all the assets of third-party processor CardSystems Solutions Inc.

The acquisition will " ... allow current CardSystems' customers and partners to continue processing without interruption," said Bill McKiernan, CyberSource Chairman and Chief Executive Officer.

CardSystems came under fire this summer when a widely publicized breach of its systems resulted in compromised data for an estimated 40 million credit and debit card accounts. The company was also found noncompliant with the card Associations' Payment Card Industry (PCI) Data Security Standard.

Subsequently, both Visa U.S.A. and American Express Co. (AmEx) said that after Oct. 31, they would no longer authorize CardSystems to process transactions on their networks.

Despite CardSystems' recent announcement of achieving PCI compliance, Visa and AmEx maintained their original position. CyberSource acknowledged CardSystems' current standing with these card companies and said it is working with card Associations and banks to provide uninterrupted processing for CardSystems merchants and ISO channel partners. In light of the pending acquisition will Visa and AmEx retract their policy against CardSystems? It remains to be seen.

"Changing the minds [of Visa and AmEx] is very important to providing uninterrupted [processing] service," said Bruce Frymire, CyberSource Director of Corporate Communications and Investor Relations.

Although Visa has not released any official comment, a Visa spokesman speculated that if CardSystems no longer exists, and its purchasing company is 100% compliant, theoretically there would be nothing to ban (Frymire said "everything is on track" for CyberSource to achieve full compliance). AmEx could not be reached for comment.

CyberSource plans to acquire all assets of CardSystems: its processing platform with direct connection to card Association network and banks; contracts with more than 120,000 merchants; and access to the company's network of ISO partners.