Retail turmoil alert as eftpos upgrade looms

Photo / Martin Sykes

The retail sector could be left in chaos and crucial sales refused if businesses fail to meet a deadline to upgrade their eftpos terminals.

Latest figures show 45,000 terminals have yet to be upgraded by retailers across New Zealand, despite repeated attempts by Paymark to detail the impact on businesses who don't comply.

The deadline for upgrading terminals is June 1, 2011.

Paymark spokesperson Paul Whiston said the upgrades were required to meet new global security standards in time for the Rugby World Cup, which is expected to deliver a $1.25 billion tourism boost for this country, and as concerns mount about card fraud in New Zealand.

Retailers risk being disconnected from the network if they don't meet the deadline.

The new chip and pin cards were expected to mitigate the risk of fraud because they could not be copied as easily as the current magnetic strip cards.

Auckland and Northland have the greatest number of terminals still to be upgraded (19,639) but the greatest per centage of terminals on the old system was in the Wairarapa (48 per cent), Paymark said.

Waikato and the Bay of Plenty are leading the upgrade charge, with two-thirds of terminals now on the new system.

By industry numbers of terminals left to be upgraded are; taxi cabs/limousines (3930), dining out/restaurants (3697), fast food outlets (1119), hotels, motels, resorts (1030), bars/taverns/nightclubs (883), travel agencies (310), florists (140).

Paymark had cut retailers plenty of slack in the past, but warned it would not tolerate anyone who failed to meet the deadline this time around.

With increasing concerns over card fraud and potential issues with international visitors' cards, the upgrades must happen, Whiston said.

"We will reach a point where we have a list of people and we have to turn every single one of their terminals off," he said.

The disconnections would be at the instruction of the four major banks, who had instigated the upgrades.

The upgrades were expected to cost between $1200 and $2000 per terminal, although most retailers leased the terminals at a cost of a few dollars a day.

New Zealand Retailers Association spokeswoman Louise Evans said retailers were aware of the changes, but some were planning on 'getting onto it later'.

This had bred a level of complacency among some people in the sector, she said.

"Since June 2010 we have been sending the message out loud and clear. I believe the uptake is now picking up, but we are clearly still concerned about the amount of retailers that have not yet got the ball rolling," she said.