As the Wall Street Journal first reported, San Francisco startup Square has landed funding from Visa in the "single digit millions." Several pundits point out the money (and implied endorsement) from Visa helps the small startup jump ahead of competitors like Verifone.
Verifone and Square both allow iPhone users to process credit cards through their mobile devices.
In Square's case, it's a small, square-shaped dongle that attaches to the iPhone/iPad's headphone jack. Swipe a credit card through and Square the company handles the transfer of funds.
It means lemonade stands, school bake sales and sales can take credit cards.
Apple, however, may soon take some of Square's business in the future. Already we're hearing the Apple iPhone 5 will allow users to make "near field communication" (NFC) payments.
Paul Rasori, senior vice president of Marketing at VeriFone, says encryption and addressing overall security with Square is critical to this deal getting done -- and that there is more to do on this front.
"It appears that Visa's investment in Square would not have happened without a commitment from Square to address the lack of security of their payment card readers.
"The industry has heard our concern, and Square has finally decided to take security into consideration by including encryption on their mobile payment device later this year. Although this is a step in the right direction, it is concerning that they continue to advertise, support and ship a solution that they admit is insecure."
