Security researchers at the Black Hat Briefings demonstrated a method for turning purloined credit card information into cash, this time using Square, a free credit card reader that promises to turn anyone with a mobile device into a merchant capable of accepting credit card payments. The researchers used a free software program to emulate the Square reader and conduct a transaction over the company s transaction processing service. The main vulnerability on show was the U.S. continued reliance on highly insecure magnetic stripe technology for credit cards.
Source: https://threatpost.com/researchers-square-card-reader-provides-straight-line-illicit-cash-080411/75513/