A huge knock against the Square system was the lack of encryption in its readers. Using the old Square reader, with the right software, you have a card skimmer. So, in essence, there are now 1 million potential new card skimmers out there.
Square has recognized the problem for some time. A year ago at the 2011 Visa Security Summit, the company announced it would be shipping an encrypting reader in Q3 2011. That didn’t happen. At last, just before Q2 2012, Square is shipping its updated replacement reader that does encrypt the card number. That’s good news for everyone.
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