NEW YORK – Visa USA Inc. (search) said Thursday it is delaying by three months its plan to cut ties with CardSystems Solutions Inc. (search) , a payment processor hit by a large security breach earlier this year.
Visa said the delay was for "the sole purpose" of helping the planned acquisition of CardSystems' assets by electronic payments company CyberSource Corp (search).
"We are very encouraged by the development," said a spokesman for CyberSource.
Visa USA said in a statement it is granting an extension to CardSystems' disconnection from the Visa payments system from the scheduled date of October 31, 2005, until January 31, 2006. CyberSource sees its deal with CardSystems closing by the end of December.
Visa USA said the extension is contingent upon several security requirements, including compliance with Visa's data security requirements by both CyberSource and CardSystems.
If Visa's security requirements are not met or the transaction fails to close, Visa said it reserves the right to "eliminate some or all of the extension period" for disconnecting CardSystems.
CyberSource said on Sept. 23 it signed a letter of intent to acquire the assets of privately held CardSystems for an undisclosed amount.
A CyberSource representative said then it was in talks with Visa and American Express (AXP) about continuing to process transactions on CardSystems' assets once the deal is closed.
He did not comment on whether the deal's completion was premised on Visa and American Express staying with the company.
A spokeswoman for American Express said Thursday it was reviewing the situation.
CyberSource has said it intends to acquire substantially all of CardSystems' assets.
These include its payment processing platform with direct connections to major credit card association networks and banks, as well as contracts to process credit card transactions on behalf of more than 120,000 merchants representing over $18 billion in annual processing volume.