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A U.S. District Court in New Jersey Monday dashed Heartland Payment Systems Inc.'s effort to prevent VeriFone Holdings Inc. from enticing its merchants to work directly with the point-of-sale terminal maker. Heartland filed suit Friday seeking to stop VeriFone from luring its merchants to a Web site where they could register for terminal support directly through VeriFone. Heartland also wanted VeriFone to stop issuing press releases that discuss Heartland and the dispute between the two companies, and to stop contacting anyone who had received VeriFone's communications on the matter. Judge Mary K. Cooper denied all of Heartland's requests. Princeton, N.J.-based Heartland and San Jose, Calif.-based VeriFone have been at odds since September, when the former partners sued each other over disagreements about Heartland's development of its own payment terminal that would use advanced encryption technology (CardLine, 10/22). Heartland calls the device an E3 terminal, short for "end-to-end encryption." VeriFone says it will stop selling equipment and support to Heartland after Dec. 31, though Heartland says it will continue to support its merchant clients that use VeriFone equipment. Merchants in Heartland's network deploy some 80,000 VeriFone devices, Heartland says in its complaint. "We have lots of parts and supplies for the countertop terminals," Robert O. Carr, Heartland CEO and chairman, tells CardLine sister publication ISO&Agent Weekly. "We can support them indefinitely." Heartland now is working with Hypercom Corp., a Scottsdale, Ariz.-based POS-device maker, on future technology (CardLine, 10/23). It also has had discussions with other terminal makers, but Carr would not identify them or note the status of those discussions. Meanwhile, Heartland today updated its third-quarter 2009 earnings, citing an accounting-rule interpretation that requires the company to set aside more funds for potential settlements related to the well-publicized data breach it announced in January (CardLine, 1/20). The processor has doubled the reserve to $73.3 million from $35.6 million. The change alters Heartland's net loss for the quarter to $37.1 million from $13.6 million, Heartland's quarterly report shows.

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