Square takes preorders on more-secure credit card reader
Mom-and-pop shops can accept next-gen credit cards early next year -- and avoid the cost of credit card fraud.
Square is ready for your preorder.
The company, whose free mobile credit card reader makes it easy and less-expensive for small businesses to accept credit cards, said Wednesday that it's taking preorders for a new reader that will work with magnetic stripe-only and EMV cards. The new reader will start at $29.
EMV cards (for Europay, MasterCard and Visa, which co-developed the standard) use embedded computer chips that prevent hackers from capturing card-holders' information. In the wake of last year's credit card breach of Target and other retailers, MasterCard, Visa and American Express said businesses must accept EMV cards by October 1, 2015. Retailers still using only swipe-and-sign terminals will be liable for any fraudulent purchases.
The US is the last major market to use the less-secure swipe-and-sign credit cards. That fact helps explain why half of all credit card fraud occurs in the US, even though the country accounts for a quarter of credit card purchases, Sen. Richard Blumenthal (D-Conn.) told the Senate Judiciary Committee in February.
The Payments Security Task Force, which includes MasterCard, CitiBank, JP Morgan Chase, Bank of America and Wells Fargo, predicts 575 million EMV cards will be issued in the US by the end of 2015, and 47 percent of all US payment terminals will accept the cards.
While most EMV cards require users to type in a personal identification number (PIN) instead of signing their names, Square's new reader will accept only chip-and-signature transactions. Many security experts consider this less secure than the chip-and-PIN transactions common throughout Europe.
Square's approach will still be more secure than today's credit cards in the US, Oliver Manahan, MasterCard's vice president of emerging payments, told CNET. "Square terminals will accept chip-and-sign payments, which is consistent with the payments coming from telephones, which don't have secure PIN pads.
"MasterCard accepts this as a viable alternative because it increases security," Manahan said.
Square's EMV reader will ship in early 2015.
At least one small US retailer who uses Square is on board with the new EMV cards -- and he didn't even know about them before today.
"I value Square's support. They've made a lot of my business possible," said Kai Kronfeld, founder of San Francisco-based chocolatier Nosh This, winner of a 2014 Good Food award. "It would be worthwhile for me to have one of these [EMV readers]."