Heartland Payment Systems (Ofer Abarbanel online library)

Heartland Payment Systems, Inc. is a U.S.-based payment processing and technology provider. Founded in 1997, Heartland Payment Systems’ last headquarters were in Princeton, New Jersey. An acquisition by Global Payments, expected to be worth $3.8 billion[2] or $4.3 billion.[3] was finalized on April 25, 2016.[4]

Heartland Payment Systems provides payment processing for more than 275,000 business locations in the United States and processes more than 11 million transactions a day and more than $80 billion in transactions a year, as of 2014.[1] In 2014, the Nilson Report ranked Heartland the 6th largest payment processor in the country by transaction count, and the 8th largest by processed dollar volume.[5]

Associated businesses

In addition to payment processing, Heartland has developed or acquired businesses in payroll processing, gift card and campus card, point of sale systems, school payments and nutrition, network management, mobile payments and ordering, eCommerce, billing, and lending services.

History

Heartland processed its first card transaction on July 15, 1997. In 2001 the company received a $40 million private equity investment from Greenhill Capital Partners, L.P. (New York, NY), LLR Partners, Inc. (Philadelphia, PA), and their affiliated investment funds. The company went public on the New York Stock Exchange on August 11, 2005. On May 17, 2010, Heartland announced its debut on the list of America’s largest companies at #954.[6]

Security breach

On January 20, 2009 Heartland announced that it had been “the victim of a security breach within its processing system in 2008”.[7] The data stolen included the digital information encoded onto the magnetic stripe built into the backs of credit and debit cards; with that data, thieves can fashion counterfeit credit cards by imprinting the same stolen information onto fabricated cards.[8] One estimate claimed 100 million cards and more than 650 financial services companies were compromised; at the time, it was characterized as the largest ever criminal breach of card data.[9]

An American computer hacker, Albert Gonzalez, was sentenced in March 2010 to 20 years in prison for his role in the hacking ring that broke into the Heartland computer systems.[10] In February 2018, two Russian hackers were sentenced for a string of hacking including the Heartland breach.[11]

On May 1, 2009, Visa and Heartland issued a statement that Heartland successfully validated its compliance with PCI DSS and was returned to Visa’s list of PCI DSS Validated Service Providers.[12]

End-to-end encryption

On May 24, 2009, Heartland commercially launched their E3, an end-to-end encryption technology designed to safeguard credit and debit card account information from the moment of card swipe and through the Heartland network.[13] Gartner Analyst Avivah Litan stated that Heartland “is basically leading the way for the rest of the industry.” She also characterized its plan for end-to-end encryption as the first effort of its kind in the US.[14]

Other processors including Worldpay US and several First Data ISO’s announced end-to-end encryption initiatives soon after Heartland announced theirs.[6][15]

Open letter to the electronic payments industry

Following a keynote address to the Strategic Leadership Forum of the Electronic Transactions Association in October 2013, Heartland CEO Bob Carr published an open letter to the electronic payment processing industry urging an end to unethical, dishonest and illegal pricing practices, referencing the practice of deliberately falsifying interchange rates, deliberately falsifying merchant category codes (MCC), and the use of confusing small print to extort large fines from merchants.[16]

Litigation against Mercury Payment Systems

In January 2014, Heartland filed a lawsuit against the company Mercury Payment Systems, an electronic payment provider, for alleged false advertising and “other deceptive trade practices”.[17] The lawsuit concerns interchange fees charged by credit card networks and alleges violations of the Lanham Act and state laws.[18]

Heartland Secure

In May 2014, Heartland Secure is launched. Backed by a breach warranty, Heartland Secure combines three technologies to provide merchants with security and guard against monetization of stolen card data.

Merger with Global Payments

In April 2016, Heartland and Global Payments completed their merger agreement. The combined company, Global Payments Inc., is publicly traded (NYSE: GPN), and has more than 8,500 employees worldwide.[19]

Acquisitions

  • May 30, 2008 – Heartland completed acquisition of Alliance Data Systems, a provider of payment processing, serving a variety of industries such as petroleum, convenience store, parking and retail.[1]
  • November 18, 2008 – Heartland acquired Chockstone, a privately held provider of gift card programs and loyalty Heartland Payment Systems.[citation needed]
  • January 1, 2011 – Heartland School Solutions acquired School Food Service Software Suite LunchBox from Data Futures, INC., a privately held provider of comprehensive K-12 school nutrition and point-of-sale (POS).[citation needed]
  • October 11, 2011 – Heartland School Solutions acquired School-Link Technologies, Inc., a privately held provider of comprehensive K-12 school nutrition and point-of-sale (POS) solutions.[2]
  • July 9, 2012 – Heartland acquired LunchByte Systems, Inc., a school foodservice back office management and point-of-sale (POS) company led by its NUTRIKIDS menu management, inventory management and POS for K-12 administrators, staff, parents and students.[3]
  • December 17, 2012 – Heartland expanded its Campus Solutions division by acquiring Educational Computer Systems, Inc. (ECSI), a provider of customized payment processing for the higher education industry.[4]
  • January 7, 2013 – Heartland expanded its Payroll Services business by acquiring Ovation Payroll, a U.S. payroll outsourcing company that offers payroll tax preparation and administration, internet payroll reporting, direct deposit, and other services.[5]
  • February 15, 2014, Heartland acquired Merchant Software Corp. (Liquor POS), a provider of POS systems to the liquor retail vertical.[6]
  • April 10, 2014 – Heartland acquired MCS Software, a provider of school foodservice point-of-sale (POS), back office and online payment for more than 4,000 K-12 schools nationwide.[7]
  • August 14, 2014 – Heartland announced the acquisition of Leaf, creator of a mobile Point-of-Sale (POS) tablet designed for commerce.[8]
  • September 4, 2014 – Heartland acquired TouchNet Information Systems, Inc., an integrated commerce provider to higher-education institutions.[9]
  • November 1, 2014 – Heartland announced it acquired XPIENT Solutions, an enterprise-level restaurant POS software service.[10]
  • February 13, 2015 – Heartland acquired Dinerware and PC America, both point of sale systems specializing in the restaurant and retail space.[11]
  • March 1, 2015 – Heartland acquired Payroll 1, a provider of payroll and tax filing products and services for employers in diverse industries throughout the United States [12]
  • October 30, 2015 – Heartland acquired Digital Dining, a point of sale system specializing in the restaurant space [13].

References

  1. ^ Jump up to:ab “Archived copy”. Archived from the original on 2014-01-10. Retrieved 2014-01-10.
  2. ^“Global Payments to Buy Heartland Payment Systems for $3.8 Billion”. Archived from the original on 2017-01-10. Retrieved 2017-03-07.
  3. ^Merced, Michael J. de la (2015-12-15). “Global Payments to Buy Heartland Payment for $4.3 Billion”. The New York Times. ISSN 0362-4331. Retrieved 2017-12-31.
  4. ^“Global Payments Completes Merger with Heartland Payment Systems (NYSE:GPN)”. investors.globalpaymentsinc.com. Archived from the original on 2018-01-16. Retrieved 2017-04-11.
  5. ^“Archived copy”. Archived from the original on 2015-11-17. Retrieved 2015-11-16.
  6. ^ Jump up to:ab Westervelt, Robert. “First Data, RSA push tokenization for payment processing”. www.TechTarget.com. Archived from the original on 15 October 2011. Retrieved 22 September 2009.
  7. ^“Heartland Payment Systems Uncovers Malicious Software In Its Processing System”. January 20, 2008. Archived from the original on January 27, 2009. Retrieved 2009-01-21.
  8. ^Brian Krebs (January 20, 2009). “Payment Processor Breach May Be Largest Ever”. Washington Post. Archived from the original on January 7, 2012. Retrieved January 21, 2009.
  9. ^King, Rachael (6 July 2009). “Lessons from the Data Breach at Heartland”. Archived from the original on 8 June 2014. Retrieved 8 June 2014.
  10. ^“Archived copy”. Archived from the original on 2014-07-14. Retrieved 2014-06-08.
  11. ^“Archived copy”. Archived from the original on 2019-11-18. Retrieved 2019-11-18.
  12. ^Heartland Payment Systems Returns to Visa’s List of PCI DSS Validated Service Providers
  13. ^“Heartland Preps for Its Big End-to-End Encryption Rollout”. DigitalTransactions.net. Archived from the original on 17 November 2015. Retrieved 7 August 2017.
  14. ^“Security breach has cost Heartland £8.4m so far”. UKFast.co.uk. Archived from the original on 9 January 2021. Retrieved 7 August 2017.
  15. ^“RBS WorldPay, VeriFone Market End-to-End Card Encryption Solution”. PaymentNews.com. Archived from the original on 30 August 2009. Retrieved 12 August 2009.
  16. ^“Open Letter to the Electronic Payments Industry”. Archived from the original on 2018-03-12. Retrieved 2018-03-12.
  17. ^Heartland Payment Systems. “Heartland Payment Systems Files Federal Lawsuit Against Mercury Payment Systems, LLC”. Yahoo! Finance. Archived from the original on 2 March 2014. Retrieved 11 February 2014.
  18. ^Villarreal, Alexandra. “Heartland files suit against Mercury Payment Systems over alleged illegal practices” Archived2015-11-17 at the Wayback Machine. Bank Credit News. 1/31/14. Retrieved 2/5/14.
  19. ^“Global Payments Completes Merger with Heartland Payment Systems (NYSE:GPN)”. investors.globalpaymentsinc.com. Archived from the original on 2018-01-16. Retrieved 2016-10-18.
  20. ^Dexter Filkins. “Was There a Connection Between a Russian Bank and the Trump Campaign? A team of computer scientists sifted through records of unusual Web traffic in search of answers”. NewYorker.com. Archived from the original on 11 October 2018. Retrieved 12 October 2018.

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