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The 2014 Debit Issuer Study found that 14% of all debit cards were compromised by data breaches in 2013, up from just 5% in 2012, and credits the epic Target breach that exposed account details of more than 100 million customers late last year for driving up the numbers.

“The Target breach impacted every financial institution that participated in the study, causing fraud loss rates to increase in 2013 and compelling issuers to re-evaluate their strategies for improving card security in 2014,” the researchers said.

The study also measured a sustained increase in the use of debit cards by both consumers and businesses alike, and that debit program performance showed appreciable improvement in 2013 as consumers increasingly opted to use debit cards for transactions.

The study also found that many institutions are now seeking enhanced security solutions in the wake of the Target breach, including plans to implement the more secure EMV (chip-and-pin) debit and credit cards.

“In the wake of several high-profile data breaches, the industry has come together to look for solutions to increase security and advance EMV implementation,” said Steve Sievert of PULSE, who commissioned the study.

“While PIN debit remains the most secure payment method in the market, this year’s study confirms the industry is reaching a tipping point toward EMV. The majority of financial institutions plan to issue EMV debit cards starting in 2015.”

Other key findings in the study include:

  • Consumers continue to shift to electronic payments, with transactions per active card increasing to 20.1 per month from 19.4 a year earlier
  • 84 percent of financial institutions reissued all exposed cards in response to Target, compared to only 29 percent that typically reissue all exposed cards as a standard response to breaches
  • 86 percent of financial institutions stated that they plan to begin issuing EMV cards in the next two years, a significant increase from 50 percent in 2012

“We were quite surprised by the across-the-board embrace of EMV by debit issuers,” said Tony Hayes of Oliver Wyman, which partnered in the study. “There has been a dramatic shift from issuers’ tepid interest last year to their active plans to implement EMV beginning in 2015.”

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