Seeking Alpha

Reaction to Target's security breach

  • Target (TGT -0.4%) issues a new security update in which the company says it remains "confident" that PIN numbers of cardholders were not compromised, although encrypted pin data was removed. The assertion runs counter to what some data security bloggers have been maintaining.
  • The data security breach of 40M Target accounts continues to draw the ire of politicians. More Congressmen want the FTC to increase the depths of its probe on the delay of Target's disclosure and the number of lawsuits filed against the company continues to increase.
  • Shares of Target have been somewhat resilient following the security breach, only dropping 0.5% since the story broke.
  • What to watch: Most countries have adopted smart cards which contain data on microchips, instead of magnetic strips, to allow for much better encryption, but the U.S. lags behind. Banks in the U.S. have been hesitant to force the issue due to the pricey upgrades to payments systems the new technology would require for some large retailers mired with older systems. If the timetable for the adoption of smart cards in the U.S. is pushed forward due to the Target fiasco, some point-of-sale hardware firms (NCR, PAY, MCRS, DBD) could pick up extra business.
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