Staples announced yesterday that the company will support Apple’s new mobile payment system, Apple Pay. With the launch of this system, some experts believe credit cards will become obsolete sometime in the future. Just hours after that announcement, Staples confirmed it is investigating a possible credit and debit card breach at northeastern locations.
News of this latest potential breach comes a week after Kmart’s name was added to a growing list of retailers under attack this year, which reportedly will cost Kmart $148 million. The potential breach at Staples was first reported by Brian Krebs who said fraud patterns associated with several banks suggested stores in the Northeast were hacked.
At this time, the possible breach affects seven stores in Pennsylvania, at least three in New York, and one in New Jersey. Although Staples operates retail stores throughout the country, it appears the risk is limited to northeastern stores.
Beyond confirming an investigation is underway, Staples has not released any additional information. The company is trying to confirm that credit and debit card data was actually hacked and working closely with law enforcement, this according to Mark Cautela, Senior Public Relations Manager. He added that privacy and protection of customer information is taken seriously and that everything is being done for quick resolution.
The company stresses that if a breach is in fact confirmed, affected customers will not be held responsible for fraudulent activity on credit and debit cards as long as reports are made in a timely manner.
This year, numerous retail and food chain companies have been breached to include Target, Home Depot, and Supervalu among others. In most cases, malware was attached to card payment terminals, making it possible for hackers to steal card numbers once swiped by the customer.
These breaches wreak havoc on business but also financials. However, thanks to mobile payment systems like Apple Pay and Google Wallet, the physical act of swiping cards may come to an end. With the new systems, consumers can make in-store purchases without ever using an actual card.
Experts claim that card swiping will likely stop in the United States within a year because of new EMV chip-and-PIN technology. Most companies worldwide have already implemented chip payment cards so now it is time for the US to catch up.
These payment cards are designed with microchip technology that is inserted into a slot opposed to swiping. Some companies will adopt this new payment system in the near future but after October 2015, they all should since in cases of card fraud, retailers will be held 100% personally and financially liable. Until that date, the burden associated with fraud falls back on banks.
In light of the potential Staples breach, shares dropped $0.22 in premarket trading.