Visa backs Square with Investment

Last year Visa completed its acquisition of CyberSource (Authorize.net) for approximately $2 billion in cash to expand its online payment, fraud and security capabilities. Since then Visa launched online shopping tool, Rightcliq; acquired PlaySpan Inc. (a payments platform to handle transactions for digital goods in online games, digital media and social networks); and signed strategic agreements to deliver P2P payments with CashEdge and Fiserv enabling U.S. Visa account holders to pay each other for the first time.

Now Visa is making a strategic investment in Square, a mobile payments start. Square's card readers plug into the iPhone jack for swiping cards and have been criticized for lacking encryption security. Perhaps with Visa's involvement they will address this issue given on the same day, Visa announced establishing security guidelines for mobile acceptance solutions calling on vendors to follow best practices to limit exposure of account data by encrypting all account data including at the card-reader level and in transmission between the acceptance device and the processor. In any case, one thing seem certain, Visa’s involvement clearing will elevate Square’s credentials.

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