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TECHNOLOGY SHAKE-UP AT TARGET FOLLOWING DATA BREACH: In wake of the massive data breach the retailer suffered in late 2013, Target's chief tech officer has resigned, and the retailer is planning to overhaul how it stores and manages sensitive information and risk, according to a memo from Gregg Steinhafel, chief executive officer.
Here is what the Minneapolis-based retailer has in store:
- It will create a new high-level position to oversee cybersecurity.
- It will spend $100 million to upgrade its payments systems to comply with the EMV or "chip card" standard.
- The company will also begin searching for a new chief information officer following the resignation of Beth M. Jacob yesterday— Jacob was Target's highest ranking technology executive and the first high-level executive to leave the company following the breach.
- It will separate oversight of regulatory compliance and risk assurance into two separate roles.
The impact of the data breach on the payments industry could facilitate a faster move towards adoption of the "chip card" standard. Chip cards would not necessarily prevent a Target-style data breach, but it would reduce the incentive for criminals to attempt to harvest sensitive payment information from retailers. Chip cards are difficult to duplicate and therefore difficult to use for fraudulent transactions. (Yahoo via Associated Press)
U.K. REGULATORS TO INCREASE COMPETITION IN THE PAYMENTS SPACE: The Financial Conduct Authority (FCA) — a regulatory body in the U.K. — announced that a new independent regulator will oversee issues facing the payments industry beginning in April 2015. The goal of instituting a new regulator is to promote competition and innovation in a space currently controlled by big banks. "We need to know if the sector is as open as it should be to new entrants into the market," says Martin Wheatly, chief executive officer, FCA. (Finextra via FCA)
STRIPE'S INNOVATIVE NEW CHECKOUT: E-commerce merchant service provider Stripe is rolling out a new low-friction checkout system that merchants can add to their sites and customers can use via tablet, PC or smartphone. When customers make a purchase through Stripe's checkout interface for the first time they will have to enter payment information — a credit card number and a billing address. Customers will then be prompted to select whether they would like to store their information. Assuming they select to store their information, for subsequent purchases customers need only enter their email address which will trigger Stripe's checkout to send a payment code to them via text message. Customers can then enter just the payment code to complete the transaction. (Stripe)
QUOTE OF THE DAY. “PayPal is nowhere close to what we are, we’re working directly with the people who issue all of these cards – and it doesn’t matter if it is a bank, or a retailer, or Google, or, quite frankly, PayPal, which also issues a MasterCard.” — Martina Hund-Mejean, chief financial officer MasterCard, comparing her company's online payment app, MasterPass, to PayPal. (Financial Review)
ISIS REALLY WANTS YOU TO USE THEIR MOBILE WALLET: Yesterday Isis announced a new program in partnership with American Express for people who connect their American Express cards to the Isis mobile wallet and use the wallet to pay for New York City yellow cab rides. Cardholders who do so will receive a refund of up to $100. Isis is a mobile wallet joint venture between AT&T Mobility, T-Mobile USA, and Verizon Wireless. We see the Isis promotion as another example of how desperate mobile wallet providers are as they try to overcome their biggest hurdle: how to get people to actually use mobile wallets to make payments. (BusinessWire via Isis)
GLOBAL PAYMENTS COMPLETES PAYPROS ACQUISITION. In a recent newsletter we reported that payments processor Global Payments had announced a deal to acquire California-based payments technology provider PayPros for $420 million in cash. Yesterday, Global Payments announced that it had completed its acquisition of PayPros. (Finextra via Global Payments)
EUROPE IS CREATING A VIRTUAL CURRENCY TASK FORCE. By July 2014 the European Banking Authority (EBA) will have put together a task force to provide advice on if and how digital currencies like Bitcoin should be regulated, according to a new report from the EBA. (Finextra)
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