Post-breach, Heartland plans aggressive encryption project

Heartland Payment Systems plans to protect its credit- and debit-card processing network with an end-to-end encryption system that it will begin rolling out with its merchants in the third quarter.

After acknowledging in January that it suffered a data breach, Heartland today "is basically leading the way for the rest of the industry," says Gartner analyst Avivah Litan, noting that Heartland's plan for an end-to-end encryption system will be the first effort of its kind in the United States.

The system will be based on hardware and software that Heartland is spending millions of dollars to develop with help from soon-to-be-announced technology partners. Heartland has not yet publicly released the technical specifications.

Heartland processes about 100 million card transactions each month, and it's not yet clear exactly how much fraud was committed as a result of the breach, though Visa and MasterCard, as well as some banks, have indicated fraud can be traced back to the break-in.  (Heartland may discuss the breach impact in more detail in its financial earnings call Thursday.)

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