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BREAKING — TARGET CEO STEPS DOWN: Target CEO Gregg Steinhafel has stepped down, the retailer announced today. Late last year, Target was the subject of a massive hack that saw 40 million customers’ credit card numbers exposed to data thieves. Steinhafel has been CEO for six years but has been with the company for 35 years.
Target’s announcement made explicit mention of the data breach in the announcement: “[Steinhafel] held himself personally accountable and pledged that Target would emerge a better company.” Steinhafel will also step down from his roles as president and chairman. Target’s CFO John Mulligan will take over as interim CEO.
Steinhafel’s departure appears to be part of a well-orchestrated series of steps by Target to rehabilitate its security systems and its public image. In recent weeks it has also hired a new CTO, announced plans to migrate to payment terminals that accept the new more secure EMV credit cards containing a microchip, and announced its commitment to the more secure chip-and-PIN credit card security standard for EMV. Customers have to enter a PIN number to complete purchases rather than sign a receipt.
WALGREENS PILOTS iBEACON IN NYC: A Walgreens executive revealed that the company is piloting Apple’s iBeacon technology at 10 of its Duane Reade drugstores in New York. Tim McCauley, senior director of mobile commerce at Illinois-based Walgreens, said last week that Bluetooth-powered beacons will push offers and notifications to Duane Reade iPhone apps, Mobile Commerce Daily reports. Walgreens, the nation’s largest drug retailer, initiated the pilot after finding that store shoppers who also transact online and on mobile spend six time more than store-only shoppers. Walgreens also has an app that’s compatible with Apple’s Passbook, which is a mobile wallet for coupons, loyalty cards, and vouchers. Since beacons can also transmit payments data, it’s thought that Passbook and beacons could complement one another in an Apple-controlled payments system.
iBeacon drew little attention immediately following its mid-2013 launch, but the Walgreens pilot is another sign that merchants are warming up to the technology. Recently, we reported on the signs that Apple’s beacon is gaining ground with merchants. By the end of 2014, over 30,000 retailers will have beacons installed, one study predicts. We’ve also estimated that there are over 200 million currently deployed iPhones and iPads capable of acting as or receiving signals via iBeacon.
WELLS FARGO MARCHES CARDS TOWARD EMV: Wells Fargo has announced that it will begin integrating the EMV security standard into its WellsOne commercial card product in the U.S. (commercial cards are used by businesses as company cards). EMV, a card security standard common in Europe and Asia, embeds a microprocessor into cards to make them more secure. The San Francisco-based bank also said it would begin migrating all WellsOne cardholders to the chip technology ahead of an October 2015 deadline, although they will maintain the magnetic stripe so that they will remain be compatible with non-EMV terminals. Retailers and card issuers have been hesitant to begin migration to EMV, but Target has announced that it will upgrade all checkout terminals and store-branded cards to EMV. The Wells Fargo move is another sign of an uptick in the speed of adoption.
REGULATOR — BITCOIN USERS, MINING OPERATORS ARE NOT MONEY TRANSMITTERS: The U.S. Treasury Department’s Financial Crimes Enforcement Network last week announced that renting out computer servers for Bitcoin mining is not money transmission under Federal guidelines — and therefore is not subject to regulations for money transmitters, including reporting and registration requirements. In January, FinCEN ruled that the act of Bitcoin mining, or processing the ledgers that enable Bitcoin transactions, is not itself money transmission.
Former Treasury secretary Larry Summers also weighed in with cautious optimism on Bitcoin in an unrelated interview with the Journal. “I’m not ready to stand with those who are sure they have seen the future here,” he said, “but it seems to me that it’s a serious mistake to write this off as either ill-conceived or illegitimate.”
PAYMENTS PEOPLE ON THE MOVE
Randi Zuckerberg, CEO of Zuckerberg Media and sister of Facebook founder Mark Zuckerberg, has been appointed to the board of directors at Mozido, a white-label mobile payments provider.
First Data has tapped Christopher Foskett as head of global, strategic, and national accounts. Foskett joins the company from JP Morgan, where he was head of global sales.
Nathalie Reinelt has joined investment research firm Aite Group as an analyst focusing on the global payments ecosystem. Prior to joining Aite, she worked for Apple and Facebook.
Loyalty-app maker Belly has recruited a new VP of Engineering. Fred Lee joins the company from online financial services provider Enova, where he was CTO.
PayPal is seeking a new director of strategy.
Editorial director Marcelo Ballvé contributed to this report.
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