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Square’s New Reader Embraces Chip; PIN, Not So Much

With U.S. retailers hesitant to embrace chip and pin and U.S. consumers apathetic about the same, Square announced Wednesday (July 30th) that it will support microchip-enabled EMV cards but not PIN. In the next generation of its matchbook sized credit card reader will be able to read will only support the less secure signature payments.

“There are more and more ways to pay, and with options like bitcoin and contactless, customers expect to pay however they want. Cashiers should never have to say ‘We don’t accept that’,” said Jack Dorsey of Square in a release on the company’s blog. “Square started by empowering anybody to accept credit cards and enabling customers to pay with their name. Our EMV readers are the next step towards ensuring sellers make every sale.”

Like it’s predecessors, Square’s EMV compliant reader (which will not require the sometimes associated additional step of punching in a PIN) will be small enough to fit in a pocket and compliant with both iOS and Android.

That is not to say there won’t be differences.  Currently, a Square reader comes free of charge when a business activates its Square account.  Due to the elevated cost of material involved in constructing the EMV compliant reader, Square will be charging for this one.  According to its blog, however, the cost of Square’s will be lower than the price points of its competitors.

If Square really is offering an affordable version of EMV conversion for the SMB market, it could break open what has seemed like a very likely point of friction on the inevitable march toward the October 2015 compliance deadline.

“What we see in other markets is that the small merchants tend to become the last to adopt,” Stephanie Ericksen, vice president for risk products at Visa, was quoted saying in The New York Times. “They not only have to upgrade their hardware, but also their software and back-end systems as well.”

However, Square faces hurdles as it pushes into the EMV space as well—competitors Ingencio and Verifone have both been seeding the market for some time with chip compliant products, whereas Square’s offering won’t be available until 2015.

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