This is the final, Class.
What effect do you expect this news will have on CyberCash's stock price if any? And explain your reasoning. You have one hour. Extra blue books will be brought to you if you require them. You may start now.
Y2K Glitch Hits Some Credit Cards
NEW YORK (AP) - Credit companies are warning consumers that their credit cards might get charged more than once because some merchants failed to update computer software for the year 2000.
Visa and Mastercard said Friday they have checks in place to catch duplicate charges, but suggested that customers review their credit card statements. They said the majority of transactions are going through without problems.
The culprit is IC Verify software from CyberCash, which makes electronic transaction processing software. About 100,000 merchants use the software, and the glitch affects all types of credit and debit cards. The company offered free fixes last year, but some merchants didn't get them.
As a result, merchants using the outdated software are charging customers over and over for the same purchase. For example, a customer's credit card gets charged $400 Monday for a new TV purchased that day. The card is again charged $400 on Tuesday, another $400 on Wednesday, and so on, until the software is fixed.
The Y2K bug usually stems from a programming practice of using only two digits to represent the year, so '00' might be misread as 1900. In this case, the problem occurs because of the way the software names its files.
The software keeps monthly records using the last digit of the year, '0,' followed by the month, '01.' However, '001' corresponds with another file that contains charges not yet posted. So when the software adds up payments at the end of each day, it wrongly interprets items in the monthly paid file as outstanding charges.
CyberCash spokeswoman Sydney Rubin said many merchants made the upgrades, but CyberCash received a flood of calls late this week from merchants who still need them.
The problem came to light late Wednesday when credit card processors began noticing unusual charges. |
