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Square’s CEO responds to VeriFone’s Security Claims

Yesterday, I reported on VeriFone’s claims that Square’s free credit card reader’s inability to encrypt credit card information is a serious security issue that needed to be dealt with. It’s only fair that I also report Square’s response to those claims.

In a letter from Square’s CEO, Jack Dorsey, posted on the company’s website, he noted that the information encrypted on the black strip on the back of any credit card is similar to the information located on the front of the card in the sense that anybody who you has your credit card, has all the information needed to steal and use your card, regardless of the type of technology used.

Any technology—an encrypted card reader, phone camera, or plain old pen and paper—can be used to “skim” or copy numbers from a credit card. The waiter you hand your credit card to at a restaurant, for example, could easily steal your card details if he wanted to—no technology required. If you provide your credit card to someone who intends to steal from you, they already have everything they need: the information on the front of your card.

He also points out that if in fact your credit card information is stolen, banks will go through the customary practice of reversing any fraudulent charges. In other words, regardless of HOW your credit card information is illegally obtained (from a Square credit card reader, a VeriFone credit card processing machine, or any other POS device), the same rules apply to rectify the situation.

I think the issue with VeriFone is in the lengths they went to out Square’s alleged security issues. The fake Square skimming app, and the video tutorial went beyond informative and instead explained how to steal credit card information using a Square credit card reader. If there is a genuine security issue, more private and secure methods involving ALL parties could have been taken.

In the end, all of this brings up a valid point – with the accessibility, ease of use, and coolness that technology brings, you still have to be careful with who you entrust your information with…financial or otherwise. The same technology that makes our lives easier is the same technology that can become a hassle.

“Pray for the best, but expect the worst”