Target takes two steps to combat data breach

04/29/2014 10:11 PM

04/29/2014 10:11 PM

Target took two steps Tuesday to try to put its holiday data breach nightmare behind it.

The second-largest U.S. retailer said Bob DeRodes, who has advised the U.S. Department of Homeland Security, the Justice Department and the Defense Department, will become chief information officer on May 5.

The company also named MasterCard as the processor for the more secure house-brand credit and debit cards it plans to introduce early next year.

Chief executive officer Gregg Steinhafel has been working to regain customer loyalty after hackers stole card data and personal information from tens of millions of shoppers during the holiday season. The Minneapolis retailer said earlier this year that it would spend $100 million to accelerate the rollout of cards with better security technology. Beth Jacob, Target’s top technology officer during the breach, stepped down last month.

“Establishing a clear path forward for Target following the data breach has been my top priority,” Steinhafel said in a statement. “Target has a tremendous opportunity to take the lessons learned from this incident and enhance our overall approach to data security and information technology.”

As part of its plan to convert to cards that store information on embedded chips, rather than less secure magnetic strips, Target will have its REDcards use MasterCard technology. The transactions will run on MasterCard’s network instead of that of larger rival Visa. The new cards will require customers to enter a personal identification number.

“MasterCard has been vocal and steadfast on the importance of moving” to chip cards, said Chris McWilton, MasterCard’s president. “Our road map provides merchants and issuers with choices on how to implement” the chip cards.

The chip card technology is often referred to as EMV, named for its founders EuroPay International, MasterCard and Visa. It makes it more difficult for hackers to clone card data and has become a standard in Europe and much of the rest of the world. Starting October 2015, retailers and banks that don’t use it will be liable for counterfeit transactions.

Target said it will introduce new payment devices in all of its almost 1,800 U.S. stores by September, six months earlier than originally planned.

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