The recent breach of Sony Corp’s customer data, including credit card data, could wind up costing credit card companies as much as $300 Million. Of course this pales in comparison the $1.5 Billion analysts are saying the breach will end up costing Sony Corp. Hackers compromised the Sony system in early April, and gathered the information of some 77 million customers, “possibly” including their credit card details.
Either way, $300 million is no small change, and the biggest losers would likely be VISA and Mastercard, as they have the largest market share among the credit card issuers. American Express and Discover could also be affected, but to a lesser extent. The $300 million estimate is based on a large percentage of the customers affected by the breach actually request new credit cards to replace their potentially breached cards. Of course not all people were likely compromised, and a lot of people are too lazy to bother replacing them, or they don’t even know about the breach.
Analysts say that each credit card replacement request costs the credit card companies anywhere from $3 to $5 per card, including the cost of the plastic, the customer service labor, and the mailing costs. In addition to the actual replacement costs, credit card companies could lose out on additional revenue, lost due to the time it takes the card to get to the customer, and the time to activate the card. This will result in less spending by consumers during this time, or they’ll shift to a different card.
Most of the card companies have declined to comment on the breach or the costs of replacement cards. American Express said they had no indication that any cardmembers data was compromised, but they would be happy to replace any customers card.