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EXPERTS POSIT HOW THE TARGET DATA BREACH WILL CHANGE PAYMENTS. The Target data breach, which we covered in recent newsletters, may have affected as many as 110 million consumers. The breach was so big that it has legislators calling for clarification on the reporting responsibilities of payments companies when a breach occurs. So, the big question is how this security collapse is going to change the non-cash payments system.

Here are four opinions from industry experts:

1. The media and legislators will lose interest in the story and nothing will happen. "If nothing happens for another six months or a year, they will forget about Target," says Gary Olson, president and CEO of ESSA Bank in Stroudsburg, Pennsylvania.

2. Increased information sharing among payments companies will lead to better security. One way to reduce breaches is for companies to share information on how hacks happened. This helps every organization strengthen security weaknesses and prevent future attacks. Bill Nelson, president and CEO of the Financial Services Information Sharing and Analysis Center, says that information sharing is already quite prevalent as a means for preventing breaches, "... sharing of information has prevented a lot of fraud and massive attacks that a lot of people don't know about."

3. The breach will lead to adoption of end-to-end encryption systems. The problem with the legacy system is that encryption is point-to-point, argues Gartner Vice President Avivah Litan. While upgrading magnetic stripes to EMV cards or "chip cards" could reduce the chances of card fraud, it doesn't get at the crux of the problem. "The point-to-point encryption systems the processors are selling are not good enough because they don't go all the way to the issuer," says Litan. There are many players in every card transaction, as we covered in a recent report, and each interaction between them presents a potential entry point for fraudulent activity.

4. Bitcoin could be the answer. In terms of security, Bitcoin is pretty sound. "[Bitcoin] has the best encryption ever," says Litan. So if security was the only variable in question we might see a switch over right away. On the other hand, Litan also notes that while Bitcoin is secure, it isn't very stable in terms of storing the value of transactions. (American Banker)

ONE OF AMERICA'S LARGEST NEWSPAPERS IS TESTING A BITCOIN PAYWALL. On February 1st, The Chicago Sun-Times will prompt site visitors to donate to The Taproot Foundation in order to read content on its website. Donors will be able to make donations using Bitcoin. Similar announcements regarding acceptance of Bitcoin from Zynga and Overstock.com provide evidence that we will see more mainstream companies adopting Bitcoin as a method of payment. The Taproot Foundation is a nonprofit which helps professionals find pro bono work opportunities at other nonprofits. (Business Insider)

INGENICO SUBSIDIARY LAUNCHES NEW SOFTWARE AND APPS. Ingenico, one of the largest legacy point-of-sale providers, owns a majority stake in ROAM, which sells software to support mobile commerce and payments for merchants. ROAM's latest development, ROAMmcm 5, is a mobile point-of-sale engine aimed at large enterprises. In a nutshell, ROAMmcm 5 allows companies to have a centralized platform for receiving and processing data from all of their mobile points of sale. The idea is to take the concept of mobile payments from a fragmented set of small and medium-sized merchants to huge organizations. (Ingenico)

WELLS FARGO GETS ACQUAINTED WITH BITCOIN. Representatives from America's fourth largest bank met with Bitcoin experts in San Francisco yesterday to get a better feel for the digital currency and its implications for the legacy payments system. No further details about the bank's position on the digital currency were disclosed, but it will be interesting to see how retail banks respond to Bitcoin, which has the potential to offer consumers many of the advantages of a bank account without actually working with a bank. (America Banker)

WELCOME TO PAYMENTS INSIGHTS. We hope you are enjoying this newsletter. Don't forget to sign up and get it every morning in your inbox. Please email johnh@businessinsider.com or BI Intelligence director mballve@businessinsider.com with news and tips.

SHOPKEEP AND GRIFFIN TECHNOLOGY TEAM-UP TO OFFER A MOBILE POINT OF SALE. ShopKeep provides cloud-based point-of-sale solutions and Griffin Technology builds accessories for tech products including mobile devices. The companies are still developing a mobile point-of-sale device, but when it is finished it will provide merchants with a way to accept card payments. In addition, merchants will be able to track customer purchases and gain insights into consumer behavior that may help them sell more products. We recently reported on Griffin's partnership with Square to offer a protective case for merchants' smartphones using Square's mobile card reader. (ShopKeep)

SAP HAS A NEW MOBILE PAYMENTS SOLUTION. At the National Retail Federations' trade show, the German multinational software company SAP announced a new app, the SAP Shopper Experience. The mobile retail app provides consumers with a way to access retailer loyalty programs, self-service payments, and social sharing. So, it looks like the app falls into the mobile wallet category. The features of the app can also be customized according to merchants' needs. (Mobile Payments Today)

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