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Media Release - 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 The terminals had a sunset date (the date from which they are no longer valid on the network) of 1st January 2006 after which date the process began towards disconnection of those terminals still not upgraded.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)

Media Release - Retailers will risk fraud loss if not EMV compliant

Provenco Payments, a subsidiary of Provenco Group, is urging retailers to plan upgrades for their EFTPOS terminals and software now, or risk losing customers and revenue.
On the back of global EMV (from Mastercard and Visa) credit card security standards, New Zealand retailers' EFTPOS terminals need to be compliant by January 1, 2006.
Under the new security standards, all credit and EFTPOS cards will contain new chip software, similar to a small computer. The chip software has more security features than the magnetic strip, making it virtually impossible for fraudsters to take data and clone cards.
Provenco Payments CEO John Tait says EMV is a key step in the global fight against plastic card fraud and retailers cannot afford to wait to upgrade.
"Planning is crucial and it is important that retailers know they need to make the switch so they don't get caught in a back-log waiting for their upgrade next year. Banks will no longer pick up the risk from non-compliant terminals after January 1, 2006," he says.
Tait says the new chip-based cards will have the ability to hold more information, eventually giving retailers the opportunity to develop their business using initiatives such as loyalty programmes.
Provenco Payments has been working with a UK-based provider of software solutions for card payments, The Logic Group, to gain insights into how EMV can be better implemented in New Zealand following the UK's successful migration from magnetic strip cards to EMV based payment cards during 2004.
The Logic Group, director segment sales, Alison Greensmith, says EMV compliance is a global mandate in the bid to stop millions of dollars being lost to credit card fraudsters. Copying cards or skimming, is effectively wiped out with the move to new chip cards which are practically impossible to copy.
"In the UK, over £400 million was lost in 2003 from fraudulent transactions and this was on course to increase to £800 million in 2005 if EMV had not been implemented," she says.
Greensmith says it's important for retailers to plan their upgrade early so they can ensure they have the right solution for their requirements.
"I recommend retailers contact their terminal suppliers well in advance of the January 1, 2006 deadline, to ensure there is time to choose, develop, integrate and certify the best solution.
"In the future we'll see more development of terminals and technology for different retail environments. For example, in the UK, wireless terminals have been developed for the hospitality trade using Bluetooth technology. Customers will be able to pay at the table and their cards will never be out of their sight," she says. (http://www.provenco.co.nz, 2005)