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MASSIVE FRAUD AT TARGET SPOTLIGHTS WEAKNESSES IN THE LEGACY OF PAYMENTS INDUSTRY: Yesterday Target confirmed that it had suffered a huge security breach at its stores between November 27th and December 15th (of course that span of time included Black Friday, one of the biggest offline shopping days of the year).
The breach may have affected 40 million credit and debit cards. As Business Insider's Jim Edwards pointed out in an article yesterday, the notable fact about the work of these hackers is that they exposed credit cards used at Target stores, not at Target.com. (Target)
Despite the fear that e-commerce and mobile commerce sites are most vulnerable to cyber criminals, traditional point-of-sale systems like those used at large retailers can also be hacked and are susceptible to security failures that create huge losses and frustrations for themselves, their consumers, and credit card companies.
IF IT CAN HAPPEN TO TARGET, IT CAN HAPPEN TO ANYBODY: As American Banker writes, "if Target can't protect itself from a data breach, how can any retailer hope to do so? "Target had state-of-the-art security systems and was an early adopter of EMV cards or "chip cards," which are widely used in Europe, and are more difficult to steal data from. Magnetic strip cards are a much easier target for fraudsters. "Stolen data from a magnetic-stripe card can be written to any other type of card, even a hotel room key, and used to make swiped card payments." But EMV cards face a chicken-and-egg problem. Many consumers don't have them, which in turn, is why many retailers don't adopt compatible point-of-sale systems. (American Banker)
In other news...
Airlines are leading the way to mobile payments: Twenty-five percent of airlines now allow customers to buy tickets from mobile apps, up from 10% last year. Of the 56 global airlines surveyed, 57% said that they expected that mobile would be that technology that drove the most new revenue in the next two years. (Mobile Commerce Daily)
A new report from Forrester argues that financial institutions that do not take the plunge into the world of mobile wallets are at risk of becoming irrelevant in face of new competitors like PayPal, Amazon, and Square. (Mobile Payments Today)
A majority of respondents in India, Indonesia, Philippines, Vietnam, Kenya, Nigeria, and South Africa said they felt comfortable investing in Bitcoin, according to a new survey from Jana. The survey also covered Brazil and Mexico, where less than a majority felt comfortable investing in the digital currency. (Venture Beat)
PayPal has completed its $800 million acquisition of Braintree. Braintree will continue as a separate service, but merchants can expect to see PayPal features within Braintee's applications in 2014. (PayPal)
HSBC has made a deal with HKT, a Hong Kong- based telecom, to offer customers a NFC mobile wallet. HSBC has reportedly made similar deals with three other Hong Kong-based telecoms as well. (HKT)
WELCOME TO PAYMENTS INSIGHTS. This is our new newsletter covering all things payments. Don't forget to sign up and get it every morning in your inbox. Please email johnh@businessinsider.com or BI Intelligence director mballve@businessinsider.com with news and tips.
"We'll seek to follow the mainstream. Bitcoins are not forbidden in the U.S. and the U.K. It is out there and will continue to be out there. It just needs to be regulated." says Michael Landberg, chief legal adviser at the Financial Supervisory Authority in Denmark. (Paymentssource)
MasterCard plans to expand its online payments portal, MasterPass, into Italy in early 2014. The service allows consumers to pay for goods online with a simple log in rather than filling out billing information. MasterPass is already available in North America and much of Western Europe. (MasterCard)
MobiKwik an Indian mobile wallet start-up reported a million downloads. In November of last year the company had reported 100,000 downloads. (MobiKwik)
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