Target Corp. moved one step closer to resolving its issues with the global payment networks and their bank customers regarding the card data breach that took place in 2013. This breach reported exposed the information of over 40 million cards. They agreed to a payment amount that reached the upper bounds of what Visa’s rules permit it to fine a merchant in these instances:
Target Corp. agreed to reimburse thousands of financial institutions as much as $67 million for costs incurred from a massive 2013 data breach that damaged the retailer’s reputation with shoppers and cut into sales.
If you will recall, Target tried to settle with MasterCard several months ago, but banks vetoed the amount of the fine, stating it didn’t meet their expectations.
Hoping to put all of this behind them, Target is now offering issuers with Visa debit cards that routed through an EFT Debit Network rather than Visa an incentive to settle outside the courts:
Target is also dangling an incentive to issuers that will reimburse them for any fraud that stemmed from certain debit-card transactions as long as those issuers agree not to sue the retailer, said people familiar with the pact. Those transactions cover debit cards that are branded by Visa, but are routed over other networks, these people said.
Overview by Sarah Grotta, Director, Debit Advisory Service at Mercator Advisory Group
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