Of all the iPhone credit card readers that are available for mobile card payments today, the one that is most visible is the Square card reader. This is the one you can get now in the Apple Store and then start taking credit card payments right from your smartphone. Square made a big announcement this week with credit card heavyweight Visa making a strategic investment in the company. Mobile payments on a device as popular as the iPhone is huge for Visa and will give the credit card company one more source of revenue.
You might also remember that back in March the major competitor to Square, VeriFone noted that Square needed to recall all of its readers because they lacked encryption at the read point. VeriFone claimed that the lack of encryption at the point that the card was scanned left the user’s credit card details open to a hacker. Square fired back and claimed that its readers were hunky-dory.
While Square was touting the investment from Visa, Square COO Keith Rabois wrote a blog post that basically validated everything VeriFone accused the Square reader of. The crux of the post was that Square would be meeting Visa’s industry standards, and those standards mean they have to encrypt all the credit card data, including the data at the point the information is read. Square will be releasing a new reader of the iPhone this summer that encrypts the data as soon as it is read, VeriFone was accurate after all.