Just as we see insurance rates rise on the back oif a huge natural disaster such as bushfires or floods, retailers and other businesses receiving payments online or over the counter by card will be forced to shoulder some of the costs associated with the extraordinary data breach reported by US retail giant Target.
While there is talk about fines and other costs for target and its partners, a knock-on effect for even retailers in Australia is something we should anticipate as card issuers, consumers and, yes, retailers, seek a more secure card processing environment. In saying this, I am well aware of the difference between the card processing platform in Australia and the US. That does not mean regulators and or card issues won’t use this extraordinary data breach to increase security. I am certain retails will bear some costs associated with this either in infrastructure changes or an increase in fees we pay.
Given that authorities are saying the Target breach is part of a broader attack, there are bound to be worldwide implications. This will be a cost of being part of a connected always-on world, a cost that will continue to rise.
My concern is that small business retailers will end up paying a higher price as a percentage of turnover than companies like Target that are, in my view, more vulnerable to attack.
Forbes has published an article documenting the timeline of the breach which is good reading. The Chicago Tribune has a good backgrounder on the breach.