Data Dive

Breaches, Beginnings And A Buying Spree

Last week was one of those good news/bad news kind of weeks in payments where either every dark cloud had a silver lining or vice versa, depending on one’s perspective. New things started, old problems reoccurred, and by the end of the week, everyone was looking to the future — for a variety of reasons.

So, where were the high and low points?

Well…

Macy’s Systems Breached

As Queen famously sang, another one bites the dust — or as modified for the modern era, another one bites the breach.

This week, the lucky winner is Macy’s, which disclosed to the world that hackers had obtained names and passwords of online customers — and might have accessed credit card numbers and expiration dates as well.

According to Macy’s, the breach impacted one-half of one-percent of customers who were registered on Macys.com or Bloomingdales.com, spokeswoman Blair Rosenberg said Tuesday (July 10), according to Bloomberg.

“We have investigated the matter thoroughly, addressed the cause and, as a precaution, have implemented additional security measures,” Macy’s said in an emailed statement.

Macy’s was able to confirm that social security numbers were not accessed — but that data like birthdays and addresses might have been. Reports indicate that the attack happened between April 26 and June 10. Suspicious activity was first observed on June 11 and profiles were officially blocked on June 12.

Those who may have been hit by the breach have been contacted, and Macy’s says it will offer data protection services to those breached.

Macy’s is, of course, just the latest retailer in a long string to be hit with such a breach. Last month, Adidas revealed that it had come under attack from cybercriminals that had likely made off with the personal information of millions of customers. In April, retailer Hudson’s Bay disclosed that customers at Saks and Lord & Taylor stores in North America have had their payment cards compromised. The breach, which is believed to involve 5 million cards, and was one of the larger breached directly tied to card data in the last year.

Under Armor revealed in early 2018 that it suffered one of the biggest hacks in history after data from 150 million users of its MyFitnessPal diet and fitness app was compromised in February.

Citizens Rolls Out Digital Bank

Citizens Financial Group officially announced the launch of its nationwide, direct-to-consumer digital bank earlier this week: Citizens Access.

Citizens access will offer consumers FDIC-insured online savings and CD accounts with attractive rates and no fees to customers across the United States.

“Over the last several years, direct bank deposits have grown six times faster than deposits at traditional banks as consumers have sought innovative new ways to save money,” said John Rosenfeld, president of Citizens Access. “To address these evolving customer needs, we designed Citizens Access to provide an exceptional digital experience where every task is intuitive and easily accomplished, even on a mobile phone.”

To open an account, potential customers need a mobile device or computer and about five minutes. Apart from an account — the app reportedly offers users savings tools to help educate them on ways to save.

Citizens also offers a fee-free model — despite the trend in direct banking to add-on fees for banks services like returned deposit items, official checks or excessive transactions. The Citizen Access digital bank will also be marketed separately from Citizens’ current branch footprint. It will also operate separately from Citizens Bank’s current retail offerings, which include approximately 3,300 ATMs and around 1,150 branches in 11 states in the New England, the Mid-Atlantic and the Midwest.

Instead of the typical retail banking offering, Citizens Access will instead be more focused on helping consumers run their longer-term financial lives. Customers, for example, can use the platform’s tools to construct a CD ladder to benefit from higher, longer-term rates without the hassle of locking all of their money up for the entire duration.

“The industry is seeing a renewed interest in CDs as consumers turn their attention to digital-savings’ products,” Rosenfeld said. “After 10 years of declining popularity with consumers, recent trends have shown that CD growth [has] begun to outpace savings and MMA growth. Citizens Access is initially offering differentiated CD offerings and we want to help consumers understand how to best utilize these products in their savings plans.”

PayPal Has Only Just Begun To Buy

With the recent run of big acquisitions by PayPal, one might think they were getting tired of hitting the checkbook.

But in fact, according to CEO Dan Schulman, they have only just begun to acquire. PayPal is planning for further acquisitions, setting aside up to $3 billion a year for future deals.

“We have a healthy balance sheet and we are ready to put it to work to buy more companies,” President and CEO Dan Schulman told Germany’s Handelsblatt business daily in an interview, according to Reuters.

Schulman went on to say that PayPal is ready to invest $3 billion a year on acquisitions that enable it to acquire specific capabilities.

“I wouldn’t rule out that we take on a bigger deal if there’s a good fit for us,” said Schulman.

And the deals have been getting bigger of late. In May, PayPal made its biggest purchase to date with the $2.2 billion purchase of Swedish payments company iZettle.

“iZettle and PayPal are a strategic fit, with a shared mission, values and culture — and complementary product offerings and geographies,” said Schulman in a statement. “In today’s digital world, consumers want to be able to buy when, where and how they want.”

Before the big iZettle buy, PayPal announced its intended purchase of Hyperwallet for $400 million in cash. The completion of the acquisition, expected in the fourth quarter, will result in PayPal picking up increased prowess in “localized, multi-currency payment distribution capabilities … with numerous disbursement options, including prepaid card, bank account, debit card, cash pickup, check and PayPal,” according to a company statement.

And the Hyperwallet acquisition was part of a 2-for-1 that week: PayPal also announced its acquisition of Simility, a fraud prevention and risk management platform, as part of an effort to enhance and strengthen its suite of services for merchants.

A lot of big buys — and according to its CEO, it is just getting started.

So what did we learn this week?

Be on the lookout — cyber-criminals are lurking, banking is resetting and PayPal could buy something at any minute.

And, of course, it’s Prime Day for the next day and a half still — so try to control yourselves.

See you next week.

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