Thousands of retailers are in danger of having their eftpos terminals shut down because they haven’t updated their technology.
The cut-off date is June 1. That’s when new high-level security standards, driven worldwide by Visa and Mastercard, come into effect.
Paymark, which has 75 per cent of the New Zealand eftpos market, comprising more than 100,000 terminals, says 26,000 are not compliant. The other 25 percent of the market is held by Eftpos NZ.
Paymark head of sales and marketing Paul Whiston says that if the retailers haven’t upgraded by June 1, they will be disconnected.
“We understand that at least half of the [non-compliant] terminals are being upgraded,” he says.
Earlier this month, Paymark shut down 400 retailers who had received three warnings about the need to upgrade.
Whiston says it costs between $1200 and $2000 to replace the old terminals with the new chip-compliant ones. Alternatively, retailers can lease terminals at a cost of $40-60 a month over a three to five-year contract.
“We’ve been pushing the message for the past six to nine months,” he says.
There are around seven main brands of terminal but many variations in the software.
The new standards are known as PCI (Payment Card Industry) and DSS (Datacard Security Standard).
They don’t affect users. The new terminals can read the magnetic stripe debit cards that many bank customers still have. Eventually, the banks will phase out magnetic stripe cards.
Another issue, which may affect World Cup visitors in particular, is that of contactless cards.
The technology has been around for two years and, according to Whiston, is being deployed as a pilot in some stadiums.
“But there’s not a lot of demand other than as a transit card,” he says.
That appears to be because the banks will take a click on the ticket for contactless transactions, whereas the New Zealand eftpos model is a straight debit model with no processing charges.