Local banks escape Visa Y2K penalty

New Zealand banks have managed to avoid the huge fines being imposed across the Tasman by Visa International for not being year 2000-compliant. Although the original April 30 deadline was extended to June 30, banks which did not meet the original deadline were being fined in the meantime, and will receive a refund if compliant by June 30.

New Zealand banks have managed to avoid the huge fines being imposed across the Tasman by Visa International for not being year 2000-compliant.

Originally Visa International set a deadline of April 30 for banks to ensure their systems were 2000-compliant. Although that deadline was extended to June 30, banks which did not meet the original deadline were being fined in the meantime, and will receive a refund if compliant by June 30.

Some banks in Australia have been upset by these fines, which are reported to have cost each non-compliant bank about $125,000 so far. The fines were reported to have been withheld from card-settlement payments on a monthly basis since April.

However, Visa International country manager Daniel Jeffares says the six New Zealand member banks are all 2000-compliant.

“They’re not a problem. None of the banks in New Zealand are being fined.”

Although not all of them had meet the April 30 deadline, he says the fines that were due as of April 30 were not processed via Visa’s settlement system until late May.

“Those banks were compliant before we processed the fines so whilst some of them were due, they didn’t end up getting fined.”

In dealing with New Zealand banks rather than the Australian ones, he says he has not come across any of the bitterness reported in the Australian media.

“The only mention I’ve seen of that has been in the newspapers.”

He says the New Zealand compliance is not unusual in a worldwide scale, but it has done better than Australia. However, Australian banks had bigger networks and more issues to deal with. He also believes there is more co-operation between banks in New Zealand than in Australia, and that systems are less complex.

He says there is a recognition in New Zealand that there has to be a standard set uniformly around the world.

He says all banks were concerned to ensure they are complaint. While some had particular difficulties and Visa felt sympathy for them, at the end of the day it had to ensure other banks and card-holders were not inconvenienced.

He says the compliance worldwide was “extremely high”.

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