As we recently posted, data security — and the lack thereof — is a huge problem that needs to be fixed for both retailers’ and shoppers’ protection. First, let’s look at some more statistics. Then, let’s consider the best solution.
According to a Ponemon Institute study, as reported by the Wall Street Journal, security breaches have skyrocketed at North American American retailers.
What’s the best solution, keeping in mind that nothing is foolproof?
Harvey Bronfman, an entrepreneur and angel investor, puts it this way: “Why hasn’t the U.S. made the credit-card techno-leap? … it is all about who bears the multi-billion-dollar tab. Until now, cost-benefit analyses by banks and large retailers have concluded that eating the cost of data theft is cheaper than changing over to a more secure system, according to industry analysts. That is perhaps the biggest reason the world’s largest consumer market is so far behind the eight ball on purchasing technology.”
Paul Ziobro and Robin Sidel, writing for the Wall Street Journal, state that:
“Target Chief Executive Gregg Steinhafel is calling on retailers and banks to adopt chip-based credit-card technology to better protect shoppers. But the debate was different a decade ago, when the executive was on the other side of the issue as Target pulled the plug on a $40 million, three-year program that did just that.”
“Chip-based credit cards — in which a smart chip in the card works with special readers installed at stores — are widely used in Europe and Canada, making it more difficult for thieves to profit from the sort of massive data breach that hit Target over the holidays. But the technology has yet to be embraced in the U.S., and as a result, the U.S. has become the preferred target for criminal hackers.”
Click on the image below and then scroll down the WSJ page to see a video clip on this story.
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