Square testing “PIN on glass” technology
(20 June 2017 – Australia) According to a report from the Australian Financial Review (AFR), point-of-sale (POS) payment provider Square Payments is in “secret” trials of mobile technology to assist credit card issuers such as Visa, Mastercard and American Express to allow payments via smartphone and tablet screens.
In a move that will ultimately provide more competition for banks at merchant level, the PCI Security Standards Council is set to authorise Square’s method of capturing PINs.
According to the AFR, the standards body is close to finalising a new global standard for the new technology, dubbed "PIN on glass" or "Mobile PIN", and they have advised payment industry executives of the progress.
The technology effective allows merchants to turn smartphones or tablets into a payments terminal by downloading software and attaching a card reader into the device’s headphone jack. It’s expected that the final standard will be published in September, and approve the technology.
According to the Australian Payments Network (AusPayNet), it is monitoring progress of the new technology to determine if the new standards are adopted for eftpos debit cards. Although Eftpos's standards usually adhere to the PCI, "PIN on glass" may be more closely monitored given it will compete with bank-owned solutions.
The international card schemes like mobile point of sale technology because it will allow more credit card payments to be taken by merchants in emerging markets.
Proponents of the technology say it is more secure than traditional payments terminals, because the PIN is captured by the smartphone's software and hardware, whereas the card number is captured by the card reader, meaning the two critical numbers are stored, in encrypted form, on two separate devices, compared to the EMV encryption on traditional payments terminals where card numbers and PIN are taken by the same device.
Although Square is claiming significant market share growth of 60,000 merchant terminals across Australia, East & Partners’ Merchant Payments Program shows banks continue to have market power by way of their extensive networks, and integration with other account facilities.
Additionally, the 2017 data highlights that PayPal and Tyro enjoy the highest market penetration among non-bank providers while Square Payments is quickly gaining traction with 8.4 percent of all businesses reporting either using, or having considered using the mobile friendly credit card reader.
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