Retail security breaches were too common in 2014, with attacks on Michaels, Albertsons, Home Depot, Kmart, Target and Staples affecting more than 100 million credit cards. Eleven percent of all security breaches in 2014 occurred in retailers and 10% happened at hotels and restaurants.
Retailers need to take these breaches seriously, as they change consumer behavior to a pattern not in their favor. For example, 70% of shoppers that have been affected by a security breach say they are more likely to use cash (and therefore spend less). Close to 40% said the security breaches encouraged them to shop less.
L2’s Insight Report: Security Breaches places the blame on technology swipe credit cards, with the solution being contactless payment systems such as Apple Pay or chip and pin technology widely adopted in Europe. However, any new payment system must be viewed with scrutiny as Merchant Customer Exchange-developed CurrentC was deemed insecure before launch. CurrentC gave retailers unmediated access to consumer back accounts, opening up possibilities for fraud.
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