VeriFone Holdings Inc. plans to offer direct support to merchant clients of Heartland Payment Systems Inc. that are using its payment terminals, over Heartland's objections.
Heartland and VeriFone have been at odds since September when the former partners sued each other over disagreements about the development of a Heartland-branded payment terminal that would use advanced encryption technology. Heartland, a Princeton, N.J., payment processor, calls the device an E3 terminal, short for "end-to-end encryption."
VeriFone, a San Jose, Calif., terminal company, has said it plans to terminate its support agreement with Heartland on Dec. 31. Last week it asked Heartland's clients to register for service and support directly from VeriFone.
On Friday, Heartland asked a judge to block VeriFone from doing so and to stop it from issuing statements discussing Heartland and the dispute. On Monday, a U.S. District Court judge in New Jersey denied both requests.
In its complaint, Heartland said about 80,000 VeriFone devices are in use on its network.
Robert O. Carr, Heartland's chief executive and chairman, said in an interview Tuesday that his company can take care of its merchant clients. "We have lots of parts and supplies for the" VeriFone terminals, he said. "We can support them indefinitely."
The 240,000 merchant sites that use Heartland will start next year a shift to advanced terminals using encryption, he said, but the transition will be voluntary.
"We are not going to force the merchants to upgrade," Carr said. "If they want to keep their VeriFone terminals, they will be able to do that."
Heartland also issued new financial results Tuesday, updating last week's third-quarter report.
The company said that after posting the earlier numbers, it had "engaged in settlement discussions that resulted in an increase in settlement offers" related to a major data breach disclosed in January.
Heartland initially reported a charge of $35.6 million to cover the breach but has now doubled that, to $73.3 million.
As a result, its net loss grew from $13.6 million to $37.1 million.