"SQUARE" card reader Vulnerability

Researchers at the Black Hat security conference today revealed two ways the Square payment system, which turns any iPhone, iPad or Android into a point-of-sale credit card processor, could be used for fraud.

Adam Laurie and Zac Franken, directors of Aperture Labs, discovered that they can transfer money from a stolen card into their bank account associated with Square without having to swipe a card through the Square dongle card reader. To do this, they used code written by Laurie that lets them feed magnetic stripe data from a stolen card into a microphone and convert it into a sound file. They then played that file--a series of beeps--into the Square device via a stereo cable which transmitted the data directly into the Square app.

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http://www.engadget.com/2011/08/05/square-found-to-be-ripe-for-fraud-turned-into-card-skimmer/