NEW YORK ( TheStreet) -- Shares of Global Payments ( GPN) opened 3% lower on Monday after it said that an "unauthorized access" into its processing system had exposed 1.5 million card accounts. That follows a 9% decline on Friday, when
news of the breach was first reported. The card payments processor said the hackers accessed so called "Track-2" data but cardholder names, addresses and social security numbers were not obtained by the criminals. It also said the incident was confined to North America. Still, Visa ( V) dropped Global Payments from its list of approved service providers after the intrusion and told the company to revalidate its compliance process with the industry's security standard. Global Payments has said it expects to be reinstated once they have issued a new report of compliance, according to press reports. Mastercard ( MA), which also said its customers may have been affected, has not yet taken any action against Global Payments.
The news of the breach overshadowed the earnings report of the payments processor Monday. The company said revenues for the third quarter rose 17% to $533.5 million. Earnings rose 24% to 73 cents per share from 59 cents in the prior year. Analysts were expecting an earnings per share of 84 cents on revenues of $529.3 million. "Obviously, the removal of GPN from Visa's "compliant service providers" list is not a positive, but this does seems like it can be remediated in relatively short order and does not preclude GPN from processing transactions for all brands," KBW analyst Sanjay Sakhrani said in a note on Sunday. The analyst noted that Visa has taken similar actions against service providers in the past following similar breaches and later re-certified them. Sakhrani's "very rough estimate" of potential damages to Global Payments, based on similar instances at Heartland Payments ( HPY) and TJ Maxx ( TMX), works up to about $8 million, although it is hard to quantify loss of business. --Written by Shanthi Bharatwaj in New York >To contact the writer of this article, click here: Shanthi Bharatwaj.