NEW YORK—The tiny portable credit card readers used to pay at small businesses are becoming a security concern, a new report indicates.
While more transactions are passing through the readers, devices from four of the leading companies in the space-Square, SumUp, iZettle, and PayPal-turn out to have a variety of concerning security flaws, Wired reported.
“Leigh-Anne Galloway and Tim Yunusov from the security firm Positive Technologies looked at seven mobile point of sale devices in all. What they found wasn't pretty: bugs that allowed them to manipulate commands using Bluetooth or mobile apps, modify payment amounts in magstripe swipe transactions, and even gain full remote control of a point of sale device,” Wired explained.
"The very simple question that we had was how much security can be embedded in a device that costs less than $50?" Galloway told Wired. "With that in mind we started off quite small by looking at two vendors and two card readers, but it quickly grew to become a much bigger project."
All four manufacturers are addressing the issue, and not all models were vulnerable to all of the bugs. In the case of Square and PayPal, the vulnerabilities were found in third-party hardware made by a company called Miura. The researchers presented their findings at the recent Black Hat security conference, Wired reported.
The researchers found that they could exploit bugs in Bluetooth and mobile app connectivity to the devices to intercept transactions or modify commands. The flaws could allow an attacker to disable chip-based transactions, forcing customers to use a less secure magstripe swipe, and making it easier to steal data and clone customer cards.