DrCaleb DrCaleb:
The Elepahnt in the room that no one seems to be asking is "Why are they recording PINs anyhow?" What business purpose could it serve?
$1:
Target said it doesn't have access to nor does it store the encryption key within its system, and the PIN information can only be decrypted when it is received by the retailer's external, independent payment processor.
...
In 2009 computer hacker Albert Gonzalez plead guilty to conspiracy, wire fraud and other charges after masterminding debit and credit card breaches in 2005 that targeted companies such as T.J. Maxx, Barnes & Noble and OfficeMaxe. Gonzalez's group was able to decrypt encrypted data.
This is what happens when people assume that encryption is infallible. In a POS system you have to store the encrypted data at least briefly, and you can bet that the "retailer's external, independent payment processor" assured them that once data is encrypted nobody can ever decrypt it without the key.