• 18
  • January
    2012

Across the United States, more than eight million merchants are able to accept via Mastercard and Visa. This payment method is vital for many businesses and is made possible by a system of banks and payment processors, such as the Atlanta based payment processing company that now finds itself engaged in litigation with one of these merchants who benefit from this service.

The security of consumers' accounts and credit card information is, of course, one of the top priorities of the banks and payment processing companies. In order to maintain this security these companies investigate potentially fraudulent transactions, and require that merchants abide by certain data retention practices to keep customer information safe. This appears to be at the heart of this dispute.

If it is determined that the security customer account information has been breached, they require that the merchants involved hire an independent forensic examiner to investigate the situation. Visa and Mastercard also prohibit certain account specific information from being stored on merchants' computer systems. In this case Visa claims that more that 30,000 accounts were improperly stored on this merchant's computer. The merchant involved acknowledges that account information was improperly stored on its computer, but claims it was many fewer accounts than Visa claims.

The current dispute between the merchant and the payment processor and bank involves the legitimacy and amount of the fines imposed on the merchant for the alleged security breach and the method by which those fines have been collected.

Source: Delaware Online, "Utah eatery balks at credit card fines in rare lawsuit," Thom Weidlich, Jan. 11, 2012