Heartland Jumps Into Mobile Payments—And New Security Problems

Written by Frank Hayes
August 10th, 2011

If you thought only phone makers, payment-card brands, mobile carriers or startups believe they can do mobile payments—well, add card processors to that list. On Tuesday (Aug. 9), Heartland Payment Systems announced Mobuyle, its own app and $75 hardware plug-in for Android phones to let its merchant customers take card payments via mobile. Like Square, the plug-in card swiper attaches to the phone’s audio port; unlike Square, the Heartland hardware encrypts the card data before it’s sent to the phone. (Heartland has been big on end-to-end encryption ever since its headline-making $129 million data breach in 2008.)

Heartland is pitching Mobuyle only to its own customers, so it dodges some complications—Mobuyle just has to mimic a Heartland PIN pad. But plenty of so-far-unresolved mobile-payment issues still come into play. If a retailer enters a card number manually, could it be captured by malware before it’s encrypted? What if an OS update breaks the security? Will retailers even have the legal right to send that type of data from their phones? How well Heartland deals with such questions could determine whether it will end up in the headlines all over again.


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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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