Mobile payments giant Square announced today that it will offer two mobile chip card (EMV) readers to U.S. merchants in the spring of 2015. The headphone jack reader (compatible with iPhone and Android) will retail for $29, while a separate EMV reader that connects to a merchant’s Square Stand will cost $39 per unit. This pricing marks a stark departure from the company’s current system of giving away its card swipers for free.
Some outlets are speculating that the price increase is a way for Square to generate revenue as it strives to become profitable. A more realistic explanation, though, is that the readers simply cost more to produce than the company’s magnetic stripe readers. By comparison, PayPal charges £69.95 for its bluetooth chip-and-PIN reader in the UK, while Europe-based mobile processor iZettle charges £59 for a similar device.
Square’s decision to offer an EMV reader comes in advance of the impending “liability shift” for merchants, which is scheduled to take place in October 2015. After that date, merchants who do not accept EMV payments will be fully liable for any fraud that is committed using counterfeit cards at their locations. Square’s reader does not appear to come with a dedicated PIN pad, which suggests that it will only process chip-and-signature transactions upon launch. However, the company claims that this capability will be enough to keep merchants compliant with the new October guidelines.
Interested merchants can pre-order a mobile phone-powered reader or a Square Stand-compatible reader through the company’s website. The devices are scheduled to ship early next year.
Square EMV Reader Video Introduction
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