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Sunday Star Times 17 May, 2002
Smart cards raise cost of eftpos18 May 2003 By LESLEY SPRINGALL The move has the country's only eftpos manufacturer, listed technology firm Cadmus Technology, rubbing its hands with glee. But some say it's going to take years for New Zealand to become fully compliant and it's going to hit the country's large retailers in the pocket. Driven by security concerns as fraudsters became more techno-savvy, international credit card agencies Europay, Mastercard and Visa started work on the so-called EMV standard several years ago. It relates to new, so-called smart cards with embedded microchips. Chip cards can store more information than magnetic strip cards and can't be copied so easily by crooks. While major card companies haven't set a date for banks to phase out magnetic cards, after January 2006 retailers and banks will be liable for the cost of fraudulent transactions when non-chip card compliant terminals are used to process cards with a magnetic strip and a microchip. Visa's Asia-Pacific board had set a 2003 target for all new eftpos machines in the region but given Australasian banks' reluctance to introduce smart card technology, New Zealand is already behind, said one banking source. Australia mandated that from February all eftpos machines sold or rented must be capable of reading chip cards. ETSL (Electronic Transaction Services Limited), New Zealand's largest eftpos network owned by four banks, has set August this year as the start of its roll out. ANZ, the only Australasian bank to launch a chip card and New Zealand's other network owner, has been supplying EMV compliant eftpos terminals since the end of 2001 through its subsidiary Eftpos NZ. But uptake has been slow - less than 9000 machines in its database of 30,000, accounting for less than 40% of the country's total rental market. Cadmus Technology gained EMV compliant certification for its new machines two months ago. Though it has only just started to replace machines in New Zealand it expects a surge in sales - potentially boosting its languishing share price. "There's something like 35 million terminals worldwide, most non-compliant and the market's growing at about 15% to 20% a year," said managing director Ian Bailey. "The new standard has to be good for compliant manufacturers and we're one of the first." Cadmus supplies about 30% of the New Zealand market, while sales abroad have grown to about 15,000 terminals a year. The only other eftpos terminal supplier, listed firm Provenco will issue EMV compliant machines from June. For those who rent eftpos terminals the upgrades mean little more than a few dollars a week on their rental bill, averaging about $12 to $15 a week. But for those who own their machines, such as supermarket chain Progressive Enterprises and retailers Briscoes and Farmers, the upgrade will cost thousands as each terminal retails for about $1000. Original article can be found at Sunday Star Times Copyright 2003 Sunday Star Times |
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