Protocol change for eftpos

By RICHARD WOOD

Telecom's ageing eftpos transaction network is to be replaced with an internet protocol-based service.

A tip to the Herald indicated a date of December 2005 for the decommissioning of the x.25 protocol-based service and that eftpos terminals nationwide will need to be replaced.

The eftpos network is used by 90,000 businesses, most of which are small retailers.

The transactions pass through to processing firm ETSL and ANZ subsidiary Eftpos New Zealand.

Rhoda Holmes, Telecom general manager of network investment, confirmed the network would be an "early" casualty as the company moved to IP for all its data and telephony services, but said merchants should not be concerned.

"I really don't want there to be a scare," she said.

"It is a normal platform upgrade with some really exciting possibilities for our customers."

Holmes said merchants would not necessarily need new equipment because a voice line could be offered as one service down an IP line.

She also said a lot of existing terminals had a port that could be used for an IP connection but it had not been developed "because there isn't an IP service for them to connect to".

Holmes said December 2005 "would be a planning date" and a "closedown date" had not been set.

"We have to make sure we pick the optimum time and give people lots of warnings that there are going to be issues there for them that they will need to start managing within their businesses."

Telecom may also be wary of competition developing. ETSL business development manager Ron Brown said his firm was putting a lot of effort into deciding the next generation of services.

"I have to say, because we're doing a lot of work with telecommunication providers, that Telecom are not the only game in town."

Brown said any network that was developed must allow for a smooth transition and there were only some terminals with suitable ports for IP.

But he said other business concerns, such as the need for extra security precautions by credit card firms, would lead to upgrading in the meantime.

Brown said that in this scenario "five years down the track" a small amount of older equipment might need to be made redundant.

Eftpos New Zealand business development manager John Collins said he was not aware of any end dates from Telecom and he believed existing terminals could probably still be used.

"Everyone will be looking for the path of least resistance, which means keeping the retailer happy," said Collins.

Holmes said what was important was that the customers "know that we are considering all aspects of this".

Some of those aspects were not for discussion, however.

She said that talks about an alternative system were under way with key supplier Alcatel and users.

At present IP for eftpos is used by some larger firms internally to consolidate transactions before feeding them into the eftpos network using the established system.