Hypercom Corp. says it is working with Heartland Payment Systems Inc. to develop the payment processor's advanced encryption product. Point-of-sale terminal maker Hypercom says Princeton, N.J.-based Heartland will license Hypercom's SmartPayments Server Software and rebrand it as Heartland Connect Gateway, which will enable Hypercom products to connect to Heartland's encryption service, Scottsdale, Ariz.-based Hypercom says. Hypercom was available to comment by CardLine's deadline. Following the January announcement that Heartland's network had been breached (CardLine, 1/20), the processor boosted its security efforts to develop an encryption system that protects sensitive cardholder from the POS terminal through transmission to the card brands (CardLine, 1/27). Since then, Heartland has begun testing an encryption system (CardLine, 8/6). Heartland also had been working with VeriFone Holdings Inc., a San Jose, Calif.-based POS device maker, but that appears to be on hold as the two companies are suing each other (CardLine, 10/22). In a statement, Heartland says on August 11 VeriFone stopped doing business with the processor, including selling terminals or providing support for existing devices. VeriFone claims Heartland's planned encryption product infringes on a patent a VeriFone subsidiary holds. Heartland alleges that VeriFone is engaged in unfair trade practices following Heartland's refusal to relinquish that product development effort.