Personal Finance: Are we facing terminal failure?

Shops and banks are working against the clock to ensure tills don't reject credit cards because of the Millennium. Paul Slade reports.

Barclays Bank, the first card issuer to start giving customers cards with a year 2000 expiry date, says the new cards are failing at the rate of one a day.

The problem arises when retailer systems fail to recognise the cards as valid. Like other computer systems, they were originally programmed to read only the final two digits of any given year, and crash when confronted with a reading of "00".

Visa and Mastercard's embargo on producing cards expiring in the year 2000 ended on 1 October last year. Barclays started producing 00 cards immediately, and now has over 1 million in use. The bank has so far had about 350 complaints from cardholders who have had their 00 cards rejected in shops and other outlets round the world, including 30 complaints in January.

Most other card issuers are also distributing 00 cards now, although none started as soon as Barclays. About four in 10 of the Barclays complaints arose in October. "Systems are becoming more compliant as time goes on," says the bank's Kirsty Robbie.

The big high street banks also supply their own credit card terminals to retailers, and have been busy updating those terminals to cope with the millennium bug for the past few years. Now, they say, all but a tiny handful of systems should be able to accept 00 cards with no problem.

But American Express is refusing to start producing its own 00 cards yet because it fears retail outlets worldwide will not be ready to accept them. Atalia DaSilva of American Express says: "I'm sure we'll issue year 2000 cards this year, but I don't know when. We want to make sure the merchants are ready to accept them in their point of sale devices. When a merchant's system rejects a card, it doesn't say why. It just rejects it. We want to avoid that happening."

Abbey National will not start issuing 00 cards till June this year, when its own systems testing is complete and it can be "completely confident" cards will not be rejected at point of sale. This has meant cutting the lifetime of its own cards to just 18 months - an expensive move for the bank.

NatWest started producing 00 credit cards about a month ago, and has since issued some 400,000, with no complaints so far. The bank has also been responsible for modifying the 170,000 terminals it has in shops and other retail outlets.

Last month two cases came to light where NatWest's modification of its terminals had failed. Both happened in Ikea branches, where customers' 00 cards were rejected, forcing staff to key in card details manually.

NatWest's Nick Gill says: "The upgrade had been put through for the year 2000, but there was a problem with the software. We realised that we'd need to write a new bit of software for it, because it was a bespoke terminal."

Mr Gill says the problem affected fewer than 100 of the terminals NatWest is responsible for, all of which have now been successfully dealt with. He says the bank is ahead of its rivals on year 2000 compliance.

Liz Phillips of the Credit Card Research Group says: "When you start issuing cards, you start finding the outlets where you're getting problems. It's often smaller retailers who've got a second-hand terminal which may not have been made Millennium compliant. The good thing is that the system behind the terminals is working OK."

Gerard Long, manager of Midland's year 2000 programme says: "It's where the terminals are owned by the retailer that there's an issue. They should go to their systems supplier and ensure they get a compliant version. There's only a small number of those out there and they are being addressed."

Some believe there will be more problems for cardholders using their plastic overseas than for those in the UK. Erica Harper of Royal Bank of Scotland says: "I suppose the test will be when the holiday season arrives. Internationally, I think there's likely to be more problems. People have always been advised to take lots of ways of paying for things when they go away, but this year I think that will apply all the more."

Visa divides the world up into six regions, all of which it says are 99 per cent or 100 per cent 2000-compliant. Visa's Matthew Talbot says: "We don't see any particular problem even in the most far-flung places. In the smaller, more remote, places, where Visa might be accepted, often you'll find a manual swipe machine, and no electronics at all."

If you should find your own 00 card rejected in a shop or restaurant, the owner should be able to phone whichever bank supplied his terminal to get authorisation, take a manual imprint of the card and put the transaction through while you wait.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

PROMOTED VIDEO
Arts and Entertainment
Kara Tointon and Jeremy Piven star in Mr Selfridge
tvActress Kara Tointon on what to expect from Series 3
Voices
Winston Churchill, then prime minister, outside No 10 in June 1943
voicesA C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
News
i100
Sport
footballBrighton vs Arsenal match report
Arts and Entertainment
Benedict Cumberbatch has spoken about the lack of opportunities for black British actors in the UK
film
News
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Tax Assistant

    Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...

    Recruitment Genius: Outbound Sales Executive - OTE £25,000

    £16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...

    Ashdown Group: Java Developer / J2EE Developer - Watford - £45,000 - £47,000

    £45000 - £47000 per annum + bonus + benefits: Ashdown Group: Java Developer / ...

    Ashdown Group: Marketing Product Manager - (Financial Services) - SW London

    £35000 - £38000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

    Day In a Page

    Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

    What the six wise men told Tony Blair

    Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
    25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

    25 years of The Independent on Sunday

    The stories, the writers and the changes over the last quarter of a century
    Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

    Homeless Veterans appeal

    As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
    Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

    Smash hit go under the hammer

    It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
    Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

    The geeks who rocked the world

    A new documentary looks back at origins of the computer-games industry
    Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

    Belle & Sebastian is taking a new direction

    Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea
    America: Land of the free, home of the political dynasty

    America: Land of the free, home of the political dynasty

    These days in the US things are pretty much stuck where they are, both in politics and society at large, says Rupert Cornwell
    A graphic history of US civil rights – in comic book form

    A graphic history of US civil rights – in comic book form

    A veteran of the Fifties campaigns is inspiring a new generation of activists
    Winston Churchill: the enigma of a British hero

    Winston Churchill: the enigma of a British hero

    A C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
    Growing mussels: Precious freshwater shellfish are thriving in a unique green project

    Growing mussels

    Precious freshwater shellfish are thriving in a unique green project
    Diana Krall: The jazz singer on being friends with Elton John, outer space and skiing in Dubai

    Diana Krall interview

    The jazz singer on being friends with Elton John, outer space and skiing in Dubai
    Pinstriped for action: A glimpse of what the very rich man will be wearing this winter

    Pinstriped for action

    A glimpse of what the very rich man will be wearing this winter
    Russell T Davies & Ben Cook: 'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'

    Russell T Davies & Ben Cook: How we met

    'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'
    Bill Granger recipes: Our chef serves up his favourite Japanese dishes

    Bill Granger's Japanese recipes

    Stock up on mirin, soy and miso and you have the makings of everyday Japanese cuisine
    Michael Calvin: How we need more Eric Cantonas to knock some sense into us

    Michael Calvin's Last Word

    How we need more Eric Cantonas to knock some sense into us