Yes, there’s more to report on the Target Breach and its fallout. We know, as Pymnts.com columinist Karen Webster wrote, that “The Target data breach is old news to most people by now, but the ’terrible roars’ unleashed by those responsible for this breach will be heard throughout the payments industry for years to come. And, the marks left by the ‘terrible claws’ on the future of retail payments and consumer payment habits may in fact become indelible.”
The “claws” and “roars” she mentions were references to Maurice Sendak’s “Where the Wild Things Are,” a work she cites at the beginning of her article, referring to the wild ride ahead for the payments industry.
And this was before the full scope of the breach was known. As has come to light since, other retailers were affected, including Neiman-Marcus (and some others yet to be named), and in the Target hack alone, it now turns out that instead of the original 40 million thought affected, data could have been filched for upwards of 110 million customers.
Webster thinks that customers may be more reluctant to use debit cards in the future — compared to credit cards, since the fraud protection is presumably greater for the latter (or at least, you’re not theoretically waiting for money to be restored to an account, should something go awry). She also addresses the question about whether EMV standards — those cards used abroad which have chips in them for information coding, instead of magnetic strips — could have stopped such a large scale breach from happening.
“Many say that ‘if only’ the U.S. had implemented EMV the Target breach wouldn’t have happened. For sure, EMV cards are more expensive to clone into physical cards and if physical stores where the only places fraudulent card information could be used, EMV would, indeed, stop card fraud cold and so could have made it less appealing for the bad guys to devise their plot. Except that there’s one big problem: the bad guys now have a lot more places to use stolen card information – like millions of online outlets where they can buy stuff and/or buy stuff and return it for cash at physical stores. And, the facts bear this out. In every place in the world where EMV has been implemented, online fraud has increased.”
So online may be the arena where security will continue to be tightened, and rethought, in the aftermath of the data breach.
John Stephenson is a portfolio manager at First Asset Investment Management. In a recent interview, he said that he doubted the recent meant more people would suddenly start using cash, instead of plastic. “This is America we’re talking about,” he says. “Of course they’re not going to start using cash more frequently.”
What he does think will happen, though, is that the “brands” of the places hit — rather than the card issuers themselves — will be affected. Stephenson, according to one article, “sees the recent credit card trouble as a problem for retailers like Target and Neiman Marcus, not for processing companies like MasterCard or its larger rival, Visa.”
All of which means, how can your brand be protected? Make sure you’re up-to-date on all the security protocols for the types of payments you already accept. If you want to make it easier for customers to pursue alternatives, like eChecks or prepaid cards, AVPS can help with that, as well.
We of course, will continue to follow the “roars,” “claws,” and overall fallout from this still-unfolding story in the weeks and months ahead. And as the industry, and AVPS, continue to update their own procedures, we will keep you posted.
But if you want to get started shoring up your own payment security, give your AVPS rep a call today.
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