2017 may be right around the corner, but in some ways, the mantra of “out with the old, in with the new” just isn’t that simple.
While Yahoo can’t seem to shake the consequences of its massive data breach, Costco may have finally gotten things right with its co-branded credit card, and IBM is keeping its eye on the blockchain prize.
This week’s Data Dive takes a look at the turning points for those big names in payments and commerce.
Yahoo’s Breach Bungles
While it’s bad enough that the biggest data breach in history wasn’t disclosed until years after it took place, this week’s news made what we already knew official: That compromised data is now being sold to the highest bidders on the Dark Web.
Yahoo confirmed this week that hackers made off with the records of more than 1 billion users back in 2013, which included names, birth dates, phone numbers, passwords and even security questions and backup email addresses used to reset lost passwords.
“Yahoo,” exclaimed cybercrooks the world over.
Not only was the data stolen, but security experts at InfoArmor said full copies of the database were selling for as much as $300K on the Dark Web.
Andrew Komarov, chief intelligence officer at InfoArmor, told The New York Times that a hacking collective based in Eastern Europe quietly began offering the whole database for sale in August. It’s believed that Yahoo had no idea the attack had even taken place until it was approached with samples of hacked data from an unknown source.
In September of this year, it was revealed that over 500 million Yahoo accounts had been compromised back in 2014. The latest cyberattack, which has affected over a billion of its users and their private data, may have been launched by the same state-sponsored actor the company believes is responsible for the data theft back in September.
“The stolen user account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (using MD5) and, in some cases, encrypted or unencrypted security questions and answers. We have invalidated unencrypted security questions and answers so that they cannot be used to access an account,” wrote Bob Lord, chief information security officer at Yahoo, in a blog post announcement.
While Yahoo investigates its data breaches, Verizon may be re-evaluating its potential acquisition of the internet giant. The latest data breach is double the size of the other one, which has delayed the closing of the deal. In a statement to the media, Verizon said: “As we’ve said all along, we will evaluate the situation as Yahoo continues its investigation. We will review the impact of this new development before reaching any final conclusions.”
Costco Turns The Credit Card Corner
The road to a co-branded credit card has been a bumpy one for Costco.
The wholesale retailer caught a great deal of flack from customers this year when it decided to migrate its branded cards to Visa via Citibank from American Express. The decision ended Costco’s 16-year-old relationship with Amex, thereby taking away the business of close to 81 million Costco members from the credit card company.
But the transition was far from smooth.
The main issue seemed to be slow distribution, which left many members without a new card in hand when the Amex cards were officially switched off. Understandably, many cardless members were very vocal about Costco’s card debacle.
However, this week marked a turning point as Costco reached a new milestone.
The company confirmed that 1 million members have signed up for its co-branded Citi Visa Anywhere credit card.
According to a report, the new card is resonating with consumers.
“Most of them have it in hand,” Costco CFO Richard Galanti said during the company’s earnings call on Dec. 7. “In terms of conversion, usage and new sign-up for the card, all [is] good so far.”
Out of the chain’s approximately 11.4 million American Express co-branded cards, “about 7.5 million accounts were converted to the new Citi Visa Anywhere card,” Galanti added. “More than 85 percent of the accounts transferred over have been activated.”
IBM Backs The Blockchain
The tech giant recently announced its official foray into blockchain, with the launch of a blockchain ecosystem aimed at accelerating the creation of blockchain networks.
IBM said the new ecosystem has the potential to transform the way all sorts of industries conduct business transactions and will bring together industry players to foster that change.
“The future growth and adoption of blockchain is reliant upon building a strong ecosystem. Business networks will only reach critical mass when innovators, industry experts and infrastructure providers come together in new ways to reinvent how business transactions happen,” Bridget Van Kralingen, SVP of IBM Industry Platforms, explained. “The growing maturity of the Hyperledger Project code is a major milestone. That’s why IBM is investing to help developers accelerate the creation of blockchain networks by providing an environment where these players can work together.”
According to IBM, the blockchain ecosystem program is geared toward innovators that are looking to build real networks. Those include venture capitalists, startups, systems integrators, independent software vendors and enterprise developers. To support the innovations, IBM said it will provide education and tools to reduce the time required to go from idea to actual product or service. IBM blockchain professionals will be able to help via the Hyperledger Fabric Slack channel, providing support to developers and helping them troubleshoot problems. There will also be courses and learning modules for business users and developers.
So, what did we learn this week?
It looks as though everyone is ready for a fresh start in the new year. Yahoo will look to repair the damage of its massive data breaches and hopefully seal the deal with Verizon, Costco will likely avoid any further changes to its co-branded credit card and IBM will continue to explore its new blockchain venture.
Cheers to 2017!
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