You're correct in thinking that "code injection" is a bad thing. However, your text seems to be referring to "key injection", as described on these pages:

http://www.mainstreetinc.net/encryption.html
"Encryption/Key Injection Services"

http://www.futurex.com/products/ski_series.cfm
"The Excrypt™ SKI Series Secure Key Injector injects keys into PIN Entry Devices (PED's)."

http://www.posdata.com/service_staging.html
"POSDATA has successfully performed tens of thousands of secure key injections. Our state-of-the-art key injection facility maintains complete integrity throughout the entire process, giving our customers total security confidence."

Try googling "key injection" and you get a bunch of hits, many referring to PINs.

(On another note, you say the system "encodes" PINs. Does it encode or encrypt? These are two very different words that are often incorrectly confused. I would be very distrustful of any security-related system that merely encodes data.)