I believe Issmat is going to be doing a product review that can help provide answers to some of your concerns. We actually encrypt the card information in the reader device as you swipe. Credit card duplication is a non-issue because the output of the reader is encrypted and modulated for every transaction, so the card information isn’t available except to the receiving party.

“End user’s computers are not secure, and until people stop clicking ‘Ok’ on every box that pops up in front of them, they never will be.” – I couldn’t agree more. That’s precisely the reason we invented this product. Any solution which is reliant on the end user’s computer, no matter how “secure”, is susceptible to hackers, malware, etc.. That’s why we’ve taken the computer out of the equation. By encrypting the card information in an external device that isn’t accessible to hackers, malware, etc.. and keeping the information encrypted until it reaches its destination, we bypass all the vulnerabilities on the end user’s computer. Malware cannot target the device because it has no way to communicate with the device.

Hope that answers some of your questions. Feel free to fire back with any others.

Removing the payment gateway means that the connection will be made directly between the user’s computer and the credit card company, and there’s literally hundreds of different ways that info from a swiped card could end up in the wrong hands. Not to mention that swiping a card through a magnetic reader gives you enough information to duplicate it (the info you type into a website merely gives you enough information to pass authorization checks). There could be a whole new breed of malware created to take advantage of these home-based card readers.

Magnetic readers work well in controlled environments like ATM machines and POS systems. End user’s computers are not secure, and until people stop clicking ‘Ok’ on every box that pops up in front of them, they never will be. It sounds to me like a lot of people would buy this product under the assumption that it will somehow help protect them against credit card fraud, when in reality it will probably just make it easier.