A massive hack of customer information at Canadian-based online photo ordering software specialist PNI Digital Imaging has closed down the online photo ordering businesses of some of the biggest names in North American and UK retailing, including Walmart (Canada), Costco, Sam’s Club, CVS, Rite Aid and Tesco (UK).
Operating via these stores and others, PNI operates some 8000 kiosks and handles over 18 million transactions a year, according to its website. More than 30,000 retail locations are connected to the PNI Digital Media platform, according to a 2014 press release.
Walmart in Canada closed down its online photo services about three weeks ago and still hasn’t recovered, and the other stores mentioned also continue to be offline, indicating the severity of the situation. (Adultery facilitation website Ashley Madison is already back online and apparently secure following its more notorious breach of customer data!)
Walmart Canada said it closed the site following a ‘potential compromise of customer credit card data.’ Walmart US does not appear to be using PNI software.
CVS and Walmart Canada have asked customers to monitor their credit card transactions closely for unauthorised charges.
Payment information on the websites of the chains mentioned is collected by PNI Digital Media. Ironically, the owner of PNI, office goods giant Staples (which aquired PNI last year for CDN$74 million) does not use the PNI platform. It’s online photo and print services are ‘powered by EFI Digital Storefront’.
‘We take the protection of information very seriously. PNI is investigating a potential credit card data issue, and outside security experts are assisting in the investigation,’ said Kirk Saville, vice president, global communications at Staples Inc.
PNI itself hasn’t made any public comments.
Both photo websites and mobile apps have been suspended by the impacted chains.
PMA CEO Georgia McCabe has identified a lack of engagement by mass merchants in the quality of the service delivered by third party online service providors as a weakness in the current business model:
‘When the mass adoption of digital cameras began in 2000, many mass retailers relied on specialty companies to quickly start their online photo retailing activities and without the need to deal with the actual transactions, merchandising models and hosting services. As a result, there has been no mass retailer taking the lead to drive these services forward.
‘This temporary security issue should be taken as a wake-up call highlighting to the whole industry that a comprehensive business model is now long overdue.’
Keith, thanks for spreading the word. At the moment a very large portion of the US internet photo industry is offline. CEOs and internal IT departments worldwide are tirelessly working to preserve the reputation and integrity of their brands but unfortunately, data theft is a major underground industry. The current methodology of acquiring photo web sites,with branding and commerce, from third parties runs counter to their efforts and the recent event will prove cathartic. However, it also provides an exciting opportunity to completely retool the consumer photo experience. Personally many of us have been there before, some even at the beginning of the digital transition decades ago.
At the same time, the photo ecosystem has major new thought leaders who are unaware of the intricacies and issues surrounding output creation and fulfillment. But the news there is good. Market movers like Google, Apple and Amazon understand that no modern, innovative and connected photo solution is marketable…without an easy pathway to output! Our goal is to be the industry catalyst that gets everybody into the same room in order to understand each other’s problems and help create a straightforward path to the future, in business models, product merchandising, product fulfillment and including the digital technologies and important conventions that are required in order to make this happen. Certainly Kodak and Fuji are still highly active in representing our industry, but we need to bring the new thought leaders “into the tent.” We intend to be the catalyst for making this happen and our September business and technology innovation summit will be the vehicle. Paul Atkins has agreed to speak and participate, and we welcome others from OZ to attend and be part of the solution as well.
This industry has been good to all of us and many have enjoyed tremendous returns over the years. Sure it’s a big problem and an immense challenge, but nothing less than the future of our industry is at stake.