The payout will cover the cost that card issuers obtained as a result of the hack, including actions like sending out new cards and taking care of any resulting fraud.
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Around 40 million credit and debit card accounts were at the center of Target’s 2013 computer system breach, with hackers stealing personal information, including names and addresses of as many as 70 individuals, putting them all at risk for identity theft, Philly.com reported.
The retailer will pay as much as $67 million to banks that issue Visa cards, according to a person briefed on the matter, who asked not to be identified because the amount hasnt been disclosed publicly.
The settlement deal is considerably larger than the million settlement that Target reached with MasterCard earlier in the proceedings. Shoppers immediately avoided it stores for fear for the security of their private data, CNBC has learned. Visa shares fell 10 cents to $74.31.
Trade groups which represent credit unions and community banks estimated that they have spent in excess of $350 million in reissuing the debit and credit cards damaged in the breach. The companies are continuing to negotiate and hope to find terms that will satisfy both parties, the retail chain said.
The breach was a major factor behind the abrupt departure of its CEO Gregg Steinhafel past year.
According to Target, it is also trying to make a similar deal with MasterCard Inc. Unlike the previous tentative settlement made with MasterCard, which was considered unacceptable by card issuers, this Visa deal has already found acceptance among the important Visa issuers. We will now place the revised Target settlement offer in front of our customers for their consideration.
“Target is pleased that we have reached a settlement agreement with Visa related to the data breach”, the company said in a Tuesday statement.
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The Wall Street Journal added that Visa said the “agreement attempts to put everything behind” everyone involved as they concentrate on more secure payments.
