Skip to main content

Credit card processor VeriFone challenges Square

Image used with permission by copyright holder

Credit card processor VeriFone has released an open letter to both consumers and the card processing industry claiming that an smartphone-based credit card reader being marketed by start-up Square is plagued by a “serious security flaw” that puts users’ data at risk. According to VeriFone, the problem lies in the Square card reader dongle that connects to an iPhone, iPad, or Android device’s headphone connector: the dongle reads information off the card’s magnetic strip and sends it to the device unencrypted. The result, according to VeriFone, is that anyone could write a bogus skimming application that collected card information off the Square card reader, and experts could do it from scratch in under an hour. How do they know? They did it.

“In less than an hour, any reasonably skilled programmer can write an application that will “skim”—or steal—a consumer’s financial and personal information right off the card utilizing an easily obtained Square card reader,” VeriFone’s CEO Douglas G. Bergeron wrote in the latter. “How do we know? We did it. Tested on sample Square card readers with our own personal credit cards, we wrote an application in less than an hour that did exactly this.”

The idea behind Square is to enable anyone to accept payments using credit cards using just an smartphone, the Square dongle reader, and Square’s software—of course, users will also need to have a verified, non-prepaid bank account to accept credit card payments. However, VeriFone’s argument is that because the data read off the card is transmitted to the device unencrypted, anyone could write a bogus “Square” application and use it to skim credit card information from unsuspecting credit card users.

VeriFone is demanding Square recall all its card-reading devices, and notes it is handing its application over to the likes of Visa, MasterCard, Discover, American Express, and JP Morgan chase for their examination, urging them to stop accepting payments processed via Square. “If the industry allows Square and other similar attempts to short-circuit security best practices, it will seriously jeopardize the integrity and security of the payment infrastructure and financial systems developed over the last three decades.”

Industry watchers have generally greeted VeriFone’s accusations and open letter with a healthy degree of skepticism. Some have accused VeriFone of having a blatant conflict of interest, since Square’s business model directly undercuts VeriFone’s own business for expensive credit card readers. In that context, VeriFone’s open letter can be viewed an attempt to spread fear, uncertainty, and doubt (FUD) about a competitor’s product. Others have noted that, with the exception of a CVV1 number, the data on a credit card’s magnetic strip is exactly the same as the information printed on the credit card itself: skimmers need only take a decent picture of a credit card in order to “skim” the data off it—and they might get the user’s legal signature too.

[Updated 09-Mar-2011: Original text stated Square operated only with merchant accounts.]

Geoff Duncan
Former Digital Trends Contributor
Geoff Duncan writes, programs, edits, plays music, and delights in making software misbehave. He's probably the only member…
Digital Trends’ Top Tech of CES 2023 Awards
Best of CES 2023 Awards Our Top Tech from the Show Feature

Let there be no doubt: CES isn’t just alive in 2023; it’s thriving. Take one glance at the taxi gridlock outside the Las Vegas Convention Center and it’s evident that two quiet COVID years didn’t kill the world’s desire for an overcrowded in-person tech extravaganza -- they just built up a ravenous demand.

From VR to AI, eVTOLs and QD-OLED, the acronyms were flying and fresh technologies populated every corner of the show floor, and even the parking lot. So naturally, we poked, prodded, and tried on everything we could. They weren’t all revolutionary. But they didn’t have to be. We’ve watched enough waves of “game-changing” technologies that never quite arrive to know that sometimes it’s the little tweaks that really count.

Read more
Digital Trends’ Tech For Change CES 2023 Awards
Digital Trends CES 2023 Tech For Change Award Winners Feature

CES is more than just a neon-drenched show-and-tell session for the world’s biggest tech manufacturers. More and more, it’s also a place where companies showcase innovations that could truly make the world a better place — and at CES 2023, this type of tech was on full display. We saw everything from accessibility-minded PS5 controllers to pedal-powered smart desks. But of all the amazing innovations on display this year, these three impressed us the most:

Samsung's Relumino Mode
Across the globe, roughly 300 million people suffer from moderate to severe vision loss, and generally speaking, most TVs don’t take that into account. So in an effort to make television more accessible and enjoyable for those millions of people suffering from impaired vision, Samsung is adding a new picture mode to many of its new TVs.
[CES 2023] Relumino Mode: Innovation for every need | Samsung
Relumino Mode, as it’s called, works by adding a bunch of different visual filters to the picture simultaneously. Outlines of people and objects on screen are highlighted, the contrast and brightness of the overall picture are cranked up, and extra sharpness is applied to everything. The resulting video would likely look strange to people with normal vision, but for folks with low vision, it should look clearer and closer to "normal" than it otherwise would.
Excitingly, since Relumino Mode is ultimately just a clever software trick, this technology could theoretically be pushed out via a software update and installed on millions of existing Samsung TVs -- not just new and recently purchased ones.

Read more
AI turned Breaking Bad into an anime — and it’s terrifying
Split image of Breaking Bad anime characters.

These days, it seems like there's nothing AI programs can't do. Thanks to advancements in artificial intelligence, deepfakes have done digital "face-offs" with Hollywood celebrities in films and TV shows, VFX artists can de-age actors almost instantly, and ChatGPT has learned how to write big-budget screenplays in the blink of an eye. Pretty soon, AI will probably decide who wins at the Oscars.

Within the past year, AI has also been used to generate beautiful works of art in seconds, creating a viral new trend and causing a boon for fan artists everywhere. TikTok user @cyborgism recently broke the internet by posting a clip featuring many AI-generated pictures of Breaking Bad. The theme here is that the characters are depicted as anime characters straight out of the 1980s, and the result is concerning to say the least. Depending on your viewpoint, Breaking Bad AI (my unofficial name for it) shows how technology can either threaten the integrity of original works of art or nurture artistic expression.
What if AI created Breaking Bad as a 1980s anime?
Playing over Metro Boomin's rap remix of the famous "I am the one who knocks" monologue, the video features images of the cast that range from shockingly realistic to full-on exaggerated. The clip currently has over 65,000 likes on TikTok alone, and many other users have shared their thoughts on the art. One user wrote, "Regardless of the repercussions on the entertainment industry, I can't wait for AI to be advanced enough to animate the whole show like this."

Read more