Visa Inc. has invested an undisclosed amount of money in Square Inc., the start-up company that lets merchants accept card payments through a small square-shaped device that plugs into smartphones.
In an interview Wednesday, Square's chief operating officer, Keith Rabois, would not say how big the investment was but said the two San Francisco companies plan to work together on product enhancements.
As part of the investment, a senior Visa executive will be appointed to Square's advisory board, Rabois said. "In addition, in the future, we will explore ways to collaborate on products that make sense in terms of expanding credit card acceptance in the US and internationally. We don't have anything to announce today. Today is the first day of our partnership so it might be premature to talk to about those initiatives today."
The investment, which the TechCrunch website first reported, comes after VeriFone Systems Inc., a payment terminal maker and competitor to Square, accused its rival of poor security last month.
A Square executive said at a Visa security conference in Washington on Wednesday that it plans to include data encryption measures in its devices this summer. Visa also released a list of best practices for securing mobile transactions.
"Square's support of our best practices is an important step toward ensuring greater security for mobile acceptance devices," Ellen Richey, Visa's chief enterprise risk officer, wrote in a blog post.
In a tersely worded email from a VeriFone spokesman on Wednesday, VeriFone said that its "message was heard and obviously they agree with it."