Square Suspends Shipping of Readers to Deal with Credit Card Fraud Risk
Twitter co-founder’s new mobile payment company has just announced it suspends shipments of the reader that enables users to take payments until it sorts out fraud and chargeback issues. Jack Dorsey unveiled Square in December of last year, amid much fanfare, promising it would change the way credit card processing is done.
Many industry insiders saw it differently, saying that Dorsey just didn’t get the complexities of the industry and how challenging fighting fraud actually is. Now it seems like Square has conceded this point. “We need to strengthen our underwriting infrastructure so that we can handle the huge demand for readers and still manage the risk of chargebacks and fraud,” Dorsey wrote in a letter explaining the reasons for the suspension of the hardware shipments.
“The way we are handling the risk of chargebacks and fraud is through transaction limits, but we have received feedback that those limits are too low. We are rethinking and expanding our underwriting infrastructure to address this issue,” Dorsey added.
(Via SquareUp.com)
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