Target confirmed a massive data breach on Thursday that rocked the payments world at the busiest time of the year in commerce. Initial estimates suggest the breach compromised the names, credit card numbers, debit card numbers, expiration dates and CVVs of more than 40 million consumers.
Data was stolen during physical transactions at Target stores nationwide over a period of more than two weeks. Subsequent reports indicate the information contains data that could be used for widespread fraud, as it allows cybercriminals to create counterfeit cards by encoding information onto any card with a magnetic stripe.
In response to the news PYMNTS.com spoke exclusively with George Wallner, chief technologist of Loop and the founder and CEO of point-of-sale (POS) solution provider Hypercom, for insight into the big-picture problems with the U.S. payments system that the Target breach has brought to light.
Calling the event "unsurprising," Wallner told PYMNTS.com that by adding a dynamic authentication element to the transaction, such a large-scale breach could have been easily avoided (Jump to 0:30). Further, the tenure of the conversation suggests Wallner believes this is a wake-up moment for the industry.
"If it is magnetic-stripe data that was stolen, then that data was most likely not stored," Wallner explained to MPD CEO Karen Webster. "The likelihood is that they penetrated the servers where the transaction data traveled through (Jump to 3:35)."
Wallner went on to discuss how the payments ecosystem should move forward, weighing in with insights into how mobile transactions and EMV could have safeguarded the massive data loss (Jump to 5:30).
For more on the Target data breach and Wallner's insights for the ecosystem, listen to the full exchange between Wallner and Webster below.
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George Wallner, chief technologist, Loop
George is a payment industry pioneer and innovator. He has been in the payment industry for more than three decades, and was the founder and CEO of Hypercom. He launched the first modern mag stripe POS terminals and POS Network equipment that support the electronic payment industry today. Mr. Wallner took Hypercom from zero to IPO and become the #1 or #2 POS provider worldwide for many years before his retirement, and its later acquisition by VeriFone.
Mr. Wallner was also an active board member and investor in Mr. Graylin’s two previous mobile payments companies ROAM and WAY. Most recently he co-founded and invested in Loop with Mr. Graylin, where he invented the Magnetic Secure Transmission (MST) technology and has taken on his first operating role since Hypercom to help make Loop a leader in mobile commerce. George is heading up technology innovation at Loop including MST development in peripherals and phones. Mr. Wallner has numerous inventions in the field of POS, payment networks, and radio communications and is also a leading expert in radio antenna design.