A few months ago the Smartphone was in news because it was being considered as a safer alternative to the swiping machines at various outlets. But, now the story seems to be slightly different. Paying through the credit card using your Smartphone may not be as safe as it is presumed to be, especially if you are using the Square mobile credit card reader, as per an open letter by VeriFone posted on Monday.

According to the letter, the setup provided by Square can be easily hacked. It requests the company based in San Francisco to recall all the card readers released in the market to prevent misuse of critical data.

Doug Bergeron, the CEO of VeriFone, wrote that this letter is not only a wake-up call to the payment industry, but also to customers. The Square device, which is known as the “dongle”, can prove to be an asset to criminals who could easily develop applications that could pilferage the personal and financial information from credit cards.

Bergeron also wrote that the primary concern was the poor construction of Square’s hardware that does not have the ability to encrypt the personal information of customers, thereby transforming the Smartphone from a safe payment device to a skimming machine that feeds criminals with data that can be easily misused.

In addition to sending out the letter, VeriFone, one of the world’s secure payment systems has also posted a skimming application sample and has informed other payment agencies such as JP Morgan Chase, American Express, MasterCard and Visa about this concern.