iOS Mobile Point-of-Sale Fail

Turns out some of those hip iPod and iPad point-of-sale systems popping up at retailers and restaurants are not so hip at protecting payment card information.

Within 10 minutes of a penetration-testing engagement, Mike Park, managing consultant at Trustwave, says he and his team were able to pull credit card numbers off of one of the iPod-based devices at a major retailer client after jailbreaking the device. The retailer was handling card data encryption in the software, Park says, which was "a terribly bad idea."

That pen test nearly two years ago was an eye-opener for Park, who has since conducted several other mobile PoS engagements with other major retail clients with similar results. "A lot of retailers are moving to 'i' devices because they want to look trendy, hip, and be a cool retail location. They don't want those bulky mobile PoS devices -- they want the cool Apple devices," he says. "The problem really is that it increases the attack surface," and they don't realize it, he says.

And that problem is underscored by how big a target retailers have become for hackers: Trustwave in its recent global threats report said that 47 percent of the breaches it investigated were in retail, and 24 percent in food and beverage.

Park will present the results of his research in iOS mobile PoS systems on Thursday at AppSec USA in New York City.

The retailer Park pen tested with the iPods eventually switched over to hardware encryption once it became available, Park says, because when the company first wrote its app, that was not available.

In a recent retail customer engagement, Park discovered that the company wasn't encrypting card data at all. "I was just shocked that they had gotten it so completely wrong. Their card reader was able to encrypt, but they were not doing it. And they accepted [card data] through the UI [user interface], which provides a lot of opportunities for the bad guy," he says.

The retailer relied on the assumption that since only its employees had access to the iOS devices, then they were safe from abuse. "They were overlooking the insider attack," Park says, not to mention any man-in-the-middle attacks from the outside that could sniff information.

More retailers are looking at iOS-based PoS systems as a modern way to minimize the wait for their customers in long lines around the holidays or special sale days, as well as to portray a more hip image for the stores. It also allows the salesperson to check on inventory via the device. "So the guy who just sold you shoes and several shirts can now [handle the transaction] and pull the receipt off his belt like the rental car guys do today" with their earlier-generation mobile PoS devices, Park says. The customer never has to go wait in a long line and consider scrapping the purchase, for example, he says.

But like many software development projects, security is an afterthought, if at all, in mobile PoS apps.

[The new PCI 3.0 changes focus on compliance as a business-as-usual process, rather than a snapshot. See New Version Of PCI Compliance Guidelines Released .]

"Retailers are making some poor choices at the beginning ... that are going to allow these kinds of systems to be compromised unless they think from a security perspective," he says. "The big thing [they are doing wrong] is encryption in software. Regular PoS systems don't do that -- it's all done in the hardware."

It would be more difficult for an outside hack of these mobile PoS systems than for an insider, but "not that difficult," Park says, akin to a TJX-style wireless breach, for instance.

He says he hasn't seen any breaches exploiting these mobile PoS systems to date. But with large retailers leaving these systems open to internal abuse, it's only a matter of time. "I want to be the guy waving the red flag," he says.

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