UPDATED 10:40 EDT / APRIL 11 2011

Square Security Issue Ignites Verifone Words War. Where Does the Mobile Wallet Stand?

As mobile payments become one of the industry movers, companies specializing in this platform will battle it out to the top, whatever it takes. Last week, the bigger Verifone fervently attacked Square and its security features via Facebook. Square and its executives cried foul over this public outburst of Verifone.

VeriFone’s Chief Executive Douglas G. Bergeron had some words for Square that were very frank and direct, saying, “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. 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.”

Following Twitter’s success, its founder Jack Dorsey, ventured into another field, this time with mobile payments, Square. In response to Verifone’s statements, Dorsey airs their sentiment, saying: “Any technology — an encrypted card reader, phone camera, or plain old pen and paper — can be used to ‘skim’ or copy numbers from a credit card. The waiter you hand your credit card to at a restaurant, for example, could easily steal your card details if he wanted to — no technology required. If you provide your credit card to someone who intends to steal from you, they already have everything they need: the information on the front of your card.”

Wanting to be a middleman, ROAM Data, a famed provider of mobile commerce platform and services, released a statement to answer vital points laid public by Verifone’s open letter and ads about Square’s security risks. ROAM Data stressed that rules on security should come from those who govern the tech community.

Perhaps, the disclaimer that ROAM Data is not Square’s competitor seems out of place, when in the latter part they would tag their solutions as the more sophisticated (than Square’s) provider. With growing attention being given to Verifone versus Square, this is probably a great opportunity to see what competitors can in fact do differently to avoid such allegations—then, another door for startups opens wide.


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