Should Payment Card Issuers Reissue Cards in Response to a Data Breach ?
نویسندگان
چکیده
Credit card issuers face a choice when card data has been exposed in a data breach but has not yet been used for attempted fraud: reissue the cards or wait until fraud is attempted. This article empirically investigates the first-order public and private costs and benefits of each of these options. Based on extrapolations of the total number of credit card records exposed in data breaches, the probability that a card exposed in a breach will be used for fraud, and the cost of fraud, the first-order costs of automatically reissuing cards seems to be higher than waiting until fraud is attempted. We also briefly discuss second-order costs that may change the results of our first-order model.
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