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First phase of EMV upgrade completed

To continue to provide customers with world-leading payment security, Paymark EFTPOS and its owner banks have embarked on a program to implement a standard called EMV and stronger network security measures. EMV stands for Europay, MasterCard, Visa specifications and is a technical specification for chip cards and terminals.

While implementing the new EMV requirements, Paymark is also taking the opportunity to strengthen security by introducing 3DES to financial transactions made across the Paymark network. 3DES is a strong form of encryption which provides further protection for cardholder PINs when transmitted over the Paymark network.

In New Zealand, the EMV standards will be phased in over a number of years with all phases complete by 1st January 2008.

The first wave of 5.1 EMV/3DES upgrades was completed on the 13th March 2006 and marks a major milestone in the program. Some 35,907 terminals were converted since monitoring of numbers commenced in July 2003. The 3.4 version terminals represented the older equipment in the market and were neither triple DES nor EMV compliant. It was logical therefore that these were the first terminals targeted for upgrade. The terminals had a sunset date (the date from which they are no longer valid on the network) of 1st January 2006 after which date the process began towards disconnection of those terminals still not upgraded.

Merchants could apply to their bank for a dispensation to continue operating a 3.4 terminal post the sunset date if they had valid business reasons to do so. Banks followed strict criteria in the granting of such dispensations.

On the 13th March 2006, banks reluctantly authorised the disconnection of those 3.4 version terminals still not upgraded or without dispensation. It was an action taken after numerous written and verbal communications to the merchants involved. The action taken by the Banks was necessary to maintain the integrity of the program going forward.

There has been no adverse reaction to the disconnection process and indeed in light of the recent ATM security breaches the public is certainly aware of the necessity for stringent security standards across the payments network to safeguard their transactions.

Plans are now under way for the conversion of approximately 62,000 version 4.x and 5.0 terminals before the deadline of 1st January 2008. Paymark EFTPOS will work closely with its owner banks, terminal vendors and their onsellers in the conversion of these terminals to fully compliant 3DES/EMV terminals by the required deadline. (http://www.paymark.co.nz,2006)