An investigation of the breach, which occurred at the Arizona offices of CardSystems Solutions, revealed that vulnerabilities in the processor's systems "allowed an unauthorized individual to infiltrate" CardSystems' network and access cardholder data, according to MasterCard International.
Atlanta-based CardSystems Solutions, Inc., said it spotted "a potential security incident" on May 22 and notified the FBI the following day.
The breach exposed more than 40 million cards of all brands to fraud, including 13.9 million MasterCard branded cards. Visa cards reportedly made up the majority of the exposed accounts.
MasterCard said it immediately notified its customer banks of specific card accounts that may have been compromised.
"CardSystems has already taken steps to improve security of its system," MasterCard said in a statement released Friday. "However, MasterCard is giving it a limited amount of time to demonstrate compliance with MasterCard security requirements."
The incident is the latest in a serious of security breaches that have exposed the personal data of millions this year. Earlier this month, CitiFinancial said computer tapes containing data of 3.9 million customers was lost enroute to a credit bureau.