At this week’s Visa Security Summit, many in theaudience did a double take and smiled at Square’s security lead SamQuigley’s response to an analyst’s question regarding card numberencryption. His reply was in the affirmative and he said thecompany would start shipping the device during Q3 – and forfree.
Of course, it’s the “right thing to do” because putting hundreds ofthousands of magstripe readers into the world without encryptionturns each of the smartphones using one into a potential cardskimming device. Encryption eliminates that huge problem. Square’scurrent magstripe reader does no encryption whatsoever, a factVeriFone loudly pointed out a couple of months ago.
Well, Square listened and that objection has gone away, a step thatonly makes the predicament of all Square competitors worse,companies that include VeriFone, Intuit, Roam Data, andothers.
Visa’s multi-million dollar investment in Square was not announcedat the Visa Security Summit. But quite a few in the audience,reading the news on their smartphones, were quite aware that themobile merchant start-up had just achieved a level of legitimacyfew anticipated a year ago. As Square improves its risk managementand the software it provides merchants – think value-added featuresaround the payment like coupons and rewards – its competitivestrength grows.
Who says tweets don’t make a noise?