Out-of-date eftpos terminal numbers slowly drop

Disconnection notice prompts response, but some machines untraceable

The number of out-of-date eftpos terminals in New Zealand has decreased in response to a disconnection notice but there is a puzzling and obstinate core of old equipment whose owners have not responded to repeated letters and phone calls, says Simon Tong, CEO of leading terminal supplier Paymark.

There are around 4000 outdated terminals and over the next three or four months there will be an intensive effort to track them down in “tranches” and persuade the owners to upgrade before they are cut off. The 650 terminals chosen in May for notice and disconnection were whittled down to 430 by May 31, the disconnection date for that tranche, says Tong.

The disconnection of those 430 terminals on June 1 might have been expected to bring some response from merchants, but as at the late afternoon of June 1, Paymark’s helpdesk had fielded only 20 calls.

Some of the remaining terminals may have been kept by merchants as spares against failure of a front-line up-to-date terminal, says Tong. Some may even be no longer operational and forgotten about – even though merchants have to pay a small monthly fee for each terminal they have.

If old terminals had not been replaced, they may not have worked with chip-equipped cards likely to be brought into the country by visitors for the Rugby World Cup.

There has been a campaign for some years to persuade merchants to acquire or upgrade terminals to comply with the payment card industry data security standard (PCI-DSS), promoted by the card companies (Computerworld, October 27, 2007; October 7, 2009). Other aspects of the EMV (Eurocard-Mastercard-Visa) chip-card standard are also involved in the need for upgrade, says Tong.

In fact early versions of chip-card readers on Paymark terminals failed to process transactions from all cards, including some Australian ones, he says; the early New Zealand terminals worked on the assumption that everyone would have a PIN, which was not true for all visitors’ cards and accommodations have had to be made.

The new terminals have encryption strong enough that they can be safely used on broadband internet connections, as well as through other relatively modern protocols such as GPRS. Ten percent of terminals are now on broadband connections, Tong says. Many still communicate through public switched telephone network connections, though the core of the network now operates in IP.

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