The gloves are off between VeriFone and Square. If you haven’t heard of Square, it’s an easy to use credit card swiping system that attaches into your iPhone’s headphone jack. This is a great system for those who want to do payments on the go, or if they don’t have a physical store but still want to sell things via credit card. I’m not going to get into the nitty gritty of how Square works, but I am going to talk about a recent claim that VeriFone, a large provider of credit card processing systems, has brought against them.
VeriFone has branded Square as a “skimming device”, which are devices that illegally steal credit card information. VeriFone has demanded the immediate removal of the Square device from the market. What it seems like to me, personally, is that this is more of a Social Engineering hoax, where software is taken out of the equation and people are tricked into giving private information. How the exploit, as VeriFone has called it, works is that a bad guy creates a fake Square app for their phone, plugs in the card reader, and steals unencrypted credit card information without processing an actual payment through the Square system. Below is a video that VeriFone created showcasing how the “exploit” works:
Now, obviously, Square isn’t going to let VeriFone take a swipe at them without defending themselves. The CEO of Square, and creator of Twitter, Jack Dorsey has followed up VeriFone’s accusation as “not fair or accurate” and states that many necessary security measures are already built-in to your credit card itself. He also brings up the point that this kind of credit card theft can occur any time you hand your credit card over to buy that purse you just had to have or when you’re paying your server for overindulgence in cake.
I’m not necessarily saying that there aren’t any security issues with the Square app, but it seems like VeriFone is trying really hard to dirty Square’s name a little bit. Feel free to make your own assumptions. Unfortunately, there are people out there who want your Credit Card information so they can take that expensive trip to Cabo they’ve always wanted. Trust your gut… if something just doesn’t “feel right” about a transaction, you have every right to back out.