From my careful reading of their released material this is how I think they are doing it:
They clone the magnetic stripe part of a chip and pin card and then have their own chip and pin layer that they put on top.
In the UK the only reason you can't use magnetic stripe is because no shops allow it (if they do then they are completely reliable for the authenticity of that transaction) - if you could add a chip and pin layer on top of mag strip data then this might work (would still require a lot of fiddling and as far as I can see transactions would have to go via platc like google wallet).
Plenty of shops still allow it in the UK (source: my chip broke), but hardly any employees know how to tell the till to swipe a card, so it's still difficult.
They clone the magnetic stripe part of a chip and pin card and then have their own chip and pin layer that they put on top.
In the UK the only reason you can't use magnetic stripe is because no shops allow it (if they do then they are completely reliable for the authenticity of that transaction) - if you could add a chip and pin layer on top of mag strip data then this might work (would still require a lot of fiddling and as far as I can see transactions would have to go via platc like google wallet).