As an astute reader of this space, you have, of course, been following all the news and fallout emanating from the Target data breach, affecting upwards of 110 million customers (and of course numerous banks and credit unions who suddenly had to reissue cards, cover fraudulent charges, etc.)
Now Target reports just how much that breach cost them, in terms of customer dollars: Nearly 46% in 4th Quarter profits, according to figures in the Wall Street Journal. And while it should be noted that the loss, compared to the same quarter the year before, was also driven by an expansion into Canada. the breach, and the negative publicity, was the main facet of the downturn.
“Sales fell 3.8% to $21.52 billion,” the article continues “Concerns over the breach kept shoppers away during the crucial holiday season, leading to a 5.5% drop in the number of transactions, the largest quarterly decline since Target began reporting the statistic in 2008.”
According to a related article from NPR’s Marketplace, “Target has also pledged $100 million to pay for an upgraded payment system, and faces costs that remain to be calculated for litigation and reimbursing fraudulent purchases. Retail analyst Philip Zahn believes the final figure will be well into the hundreds of millions of dollars.”
And in that same article, Brian Krebs, of the renowned Krebs on Security website (which first broke news of the stolen data), said “It is a lot of money no matter how you slice it.”
But, he continues, there will be additional impacts: “If you look at their leadership page on their website you see not one person who has security in their title. And I think organizations like Target really need to rethink that.”
Some rethinking is already taking place. Industry website Pymnts.com reports that Visa has partnered with First Data Financial Services, who operate the Star Network so prevalent in ATMs. According to the announcement, both will take steps to insure EMV security — those coming chips that will eventually replace the magnetic stripes on American plastic — comes to debit cards as well.
“First Data’s Star Network is pleased to lead the effort by being one of the first debit networks to take this step and assist issuers, acquirers, and merchants with equal access to a shared EMV chip card technology,” their president declared. “Not only does it accelerate the migration to EMV adoption, but also moves the industry a step closer to additional debit payment security.”
Whether your customers are using credit, debit, prepaid — or even eChecks — to pay you for the goods and services you sell, it’s never too late to find out how you can update your own payment procedures, while becoming more secure in the process.
You may not be as Target — not yet, anyway! — but your reputation is just as important. Certainly to you, and your customers.
Unlike the big boys, you don’t need to wait to “rethink” in a changing security environment: Contact your AVPS rep today to find out about upgrades, options, and new services — and we’ll see you on the other side of your healthy quarterly reports.