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PIN Pad Pong: Is Verifone Playing Games With German POS Security?

July 18th, 2012

What neither side is saying—except for a brief reference by Verifone to the researchers as a “commercial” security firm—is that this is probably about money. The researchers want to be hired to fix the problem they found. Verifone doesn’t want to pay their price.

And after the researchers went on TV last week, it’s likely Verifone sees this as war. How dare these hackers publicly embarrass Verifone by showing how easily the PIN pad can be taken over—even if they didn’t actually reveal enough details for Verifone or anyone else to figure out how it was done.

Meanwhile, the researchers are publicly lamenting the state of PIN pad security and the fact that German retailers will be saddled with insecure PIN pads for years, even after their TV appearance, because Verifone and retailers aren’t likely to replace hundreds of thousands of PIN pads with versions that don’t have the hardware diagnostic port exposed.

Yes, it has all descended into the realm of the personal, which is the least useful place for a security problem to be.

The irony, of course, is that after all the huffing and puffing, it may not matter much. A security hole that’s so obscure—and apparently never been exploited in the wild—is very nearly the equivalent of an unknown bug. Except that if a retailer is ever actually breached, the retailer can point to Verifone as the source of the problem.

Yes, there probably is a risk, and it should be fixed. But until someone else figures out the details of the problem, it looks like it’ll be the security researchers’ little secret.

Beyond that, German retailers aren’t likely to care—they’re worried about their own businesses and assuming PIN pad security is someone else’s problem (specifically Verifone’s). Consumers won’t care either, because what they’re most likely to remember is that two guys on TV managed to play Pong on the same device they use to pay for groceries.

That’s not going to encourage consumers to take payment-card security seriously. As one commenter on the tech-news site Ars Technica described an imaginary scenario: “You plug your card into the machine to make a transaction [and] Pong appears on the screen. You know your card security has been breached, but you’re compelled to make it to level 10.”

Then again, it may mean there’s an opportunity for Verifone. If the vendor ever does track down those alleged buffer-overflow problems and issue a software to fix them, maybe it could include a screen-saver option for when the PIN pad isn’t being used for transactions. Tetris, anyone?


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Most Recent Comments

Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

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