By Lisa Beilfuss
Target Corp. said Wednesday that it reached a settlement with
MasterCard International Inc. to reimburse financial institutions
for costs they incurred from the retailer's 2013 data breach that
compromised 40 million credit and debit card accounts.
Under the settlement, which follows months of negotiations and
confirms a Wall Street Journal report late Tuesday, Target has
agreed to fund up to $19 million in recovery payments to issuers
including Citigroup and Capital One. The agreement is conditioned
upon issuers of at least 90% of the eligible MasterCard accounts
accepting reimbursements, either directly or through their
sponsoring issuers, by May 20.
"We are hopeful that Target's agreement to pay up to $19 million
to settle the claims of MasterCard and its issuers will result in a
high level of issuer acceptance. Target intends to continue to
defend itself vigorously against any assessments made by MasterCard
on behalf of MasterCard issuers that do not accept their offers,"
said Scott Kennedy, Target's president of financial and retail
services.
Issuers will be repaid by the end of July for costs that stemmed
from the reissuance of credit and debit cards as well as from some
of the fraud that resulted from the stolen customer
information.
The company said the estimated costs of the settlement are
reflected in the data breach liabilities that Target established
during fiscal 2013 and 2014.
As the Journal earlier reported, the retailer is holding similar
negotiations, according to people familiar with the matter, with
Visa Inc., which is larger than MasterCard.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
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