Target Corp has agreed to the reimbursement of thousands of different financial institutions to a total sum of $67 million for the costs that were incurred from a huge data breach in 2013 that damaged the reputation of the retailer with its shoppers and hurt its holiday and post holiday sales.
The agreement, which was reached on behalf of banks as well as other companies that issue debit and credit cards, with Visa comes as merchants and the card industry are heading towards cards that are more secure with an aim of stopping such massive attacks.
Target announced as well that it was working with MasterCard to reach a similar deal for issuers of its cards.
The size of the settlements could be near an agreement in 2010 where Heartland Payment Systems entered an agreement to pay over $100 million to MasterCard and Visa for a huge breach in 2008.
The data breach on the system at Target exposed over 40 million debit and credit cards to fraud during the holiday season of 2013.
The retailer’s breach is amongst the most high profile to strike any retailer over recent years. It was followed by a number of other breaches at well known merchants that included Home Depot, Neiman Marcus and P.F. Changs the restaurant chain.
The total final amount of this fraud from the Target breach is still not known. Trade groups that represent banks as well as credit unions estimate they have spent over $350 million to reissue debit and credit cards and deal with additional issues linked to the breach at Target and the Home Depot subsequent attack.
Visa and Target confirmed they entered the deal although neither announced the amount that would be paid out in this settlement or any details of it. Target announced the deal has seen support form the largest issuers of cards with Visa.
Target is dangling incentives to its issuers that will reimburse them for fraud that is stems from specific card transactions if the issuers agree not to file suit against the retailer.