The mobile payment wars are on. Recently, Twitter co-founder Jack Dorsey announced his new venture, Square, a device that allows a physical credit card payments to be swiped via their mobile phone. Soon after Verifone annouced a similar solution, PAYware Mobile. While PAYware Mobile attaches to an iPhone, Square aims to work with any mobile device provided it has a headphone jack. Since iPhone Apps took off, there have been many payment apps and there have many payment solutions/add-ons for mobile devices.
So what's all the fuss? Is the Square a game-changer and is it secure? Is Verifone's PAYware Mobile a "Square-killer"? PYMNTS.com has been following Square and it appears they have been following us too, or at least as seen in a recently posted Tech Crunch video.
Tech Crunch's Michael Arrington has been cozy with Mr. Dorsey and helping him spread the word about Square. In a recent blog post, Arrington, kindly using PYMNTS.com, showed Mr. Dorsey the Verifone announcement and took a swipe at Verfione for using a Photoshopped image of the PAYware Mobile product. Arrington claims that due to Square's great press that other payment providers, like Verifone, were rushing to put their product on the market. Arrington and Dorsey discuss how Square is different than Verifone's offering and how secure Square will be. (see the video at the bottom of this post)
While it may be true that Verifone rushed to market, it is also true that there have been many other applications to hit the market (see the CC Terminal App for the iPhone) and hardware in the market.
In reaction to our Square announcement, John Frank (VP Sales & Marketing, HomeATM ePayment Solutions), noted his company had a similar product prior to Square and PAYware Mobile:
"The hype over this is amazing considering that HomeATM ePayment Solutions came up with a better product (PCI 2.x PED Certified) more than a year ago (which also plugs into an earphone jack of any phone). Especially considering that our device not only accepts Credit and Debit but PIN based Debit and Prepaid cards and allows for real-time money transfer. There's absolutely no question that if Mr. Dorsey was not the Silicon Valley Rock Star he is, based on the fact that he's the founder of Twitter, the buzz around the product would be closer to the buzz we've gotten over the last 12 months. I have yet to see anything written regarding the security of the device (i.e. HomeATM utilizes 3DES DUKPT encryption and encrypts the Track 2 data) but nonetheless, it is refreshing to see to see interest in the device as I am of the position that in an 'Apple to Apple' comparison, the HomeATM device (with all due respect) is far superior in most every way. That said, it might make for an interesting story if PYMNTS was the one to conduct that comparison and publish the results. We would certainly be willing to go head to head with the device in a product comparison."(PYMNTS.com would love to host a head-to-head as well, and has requests out to Square and Verifone)
Continue Reading at PYMNTS.com
Obviously PYMNT.com deemed it unfair to compare our device to the Square because the Square cannot conduct PIN based transactions nor is it PCI 2.x PED Certified. The outcome would be too predictable. So I left a comment as to that effect:
Posted by John B. Frank, 11/12/2009 1:27pm (58 secs ago)
See the video here:
A: We have an integrated PIN Pad
B: Our PIN Entry Device has been PCI 2.x PED Certified.
C: We 3DESD/DUKPT encrypt the PIN and the Track 2 Data at the maghead.
That said, It will be interesting to see how the Ver-iPhone stacks up against the Square. It's also good to see the industry ask important security based questions.
When the Square and Verifone unit are capable of doing PIN Based Transactions, (and are PCI 2.x PIN Entry Device Certified) we would welcome a head to head match-up. Until then, the outcome of which device is superior is too predictable.
Oh, one more thing. If and when the Square gets PCI 2.x certified and has a PIN Pad, we'll not only be happy to participate in a magnetic head to head/encryption comparison, but we can also compare patent applications filed on hooking up a mobile device via an earjack.
John B. Frank
VP Sales & Marketing
HomeATM ePayment Solutions
www.HomeATMBlog.com