Square adds encryption to its Square reader

Above: The old (unopened) reader is on the left; the new reader is on the right, with encryption and a battery.

Square has added encryption technology to its Square reader.

Competitor VeriFone tried to drum up sentiment against Square last year because Square’s readers did not encrypt credit card numbers from the reader to the application.

In the recent launch of PayPal’s competing product, PayPal Here, the company referenced popular unencrypted readers, while mentioning that its own dongle does encryption.

Now, they can’t hold that over Square.

The added circuitry does mean higher costs, but it’s unclear how much. The battery alone adds 15 to 25 cents in costs.

All of the Square readers currently shipping have encryption; I received mine today. Square plans to migrate existing users to the new readers over time. (I asked for a replacement reader.)

This moves the security risk one level up — to the fact that credit cards have the credit card number printed on them.