Retailers shut out of Eftpos network

Paymark chief executive Simon Tong. Photo / Norrie Montgomery

Four hundred retailers had their Eftpos terminals shut down by Paymark yesterday to ensure they update their machines to new chip-based technology in time for the Rugby World Cup.

Until these retailers buy the $1000 machines, they will only be able to process cash payments.

Retailers Association head John Alberton said retailers have had ample warning and the majority of the 400 had "very old technology".

"The market has known about this for several years. I think it is fair, they have had considerable warning from both the banks and Paymark. They have been frequently told [to update their systems or they will be shut down]," Mr Alberton said.

Paymark chief executive Simon Tong said no retailers in Christchurch had their systems shut down yesterday.

Mr Tong said discretion was given to businesses in the earthquake region who had not yet upgraded their systems.

"We do not want to add to the stress; none of those businesses in Christchurch will be affected."

About 75,000 retailers around the country have already upgraded their systems, which will make processing international cards much easier during the RWC.

Mr Tong said there had been issues processing UK chip cards during the Lions tour in 2005 and upgrading the technology was a necessity.

"These retailers have received three warnings, shutting them down is drastic. I think a lot of them didn't think we'd do it."

Mr Tong said grace periods had been given to certain retailers, a common extension was because a business had changed hands and therefore the owner wasn't aware the old technology was no longer suitable.

Many of these retailers have until June 1 to upgrade - that is the nationwide cut-off date.

"We've been urging people to upgrade for some time now and the response from most retailers has been fantastic. The sooner the remaining retailers make the move the better.

"Leaving things to the last minute won't work and we owe it to the 75,000 retailers with compliant terminals to stay true to our disconnection date.

"The cost of upgrading is not going to get any cheaper. There are plenty of excellent deals out there at the moment. Our partners are working hard to make the process as easy as possible. This particular group of retailers have had time to make the switch, but have ignored our warnings and as a result will be unable to process Eftpos transactions on our network as of yesterday."

Paymark processes two million Eftpos transactions per day.

Last year, Paymark processed 890 million transactions that totalled $46 billion.