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; request a free guide on NISAs from Hargreaves Lansdown

Arts and Entertainment
Friends is celebrating its 20th anniversary this year
tvSeries celebrates 20th anniversary
Yaya Touré (left) and Bayern Munich’s Spanish defender Juan Bernat
footballToure's lack of defensive work is big problem for City
voicesApple continually kill off smaller app developers, and that's no good for anyone
Arts and Entertainment
Liam Neeson said he wouldn't

Liam Neeson's Downton dreams

Wembley Stadium
footballNews follows deal with Germany
Arts and Entertainment
A spell in the sun: Emma Stone and Colin Firth star in ‘Magic in the Moonlight’
filmReview: Magic In The Moonlight
A 'Sir Alex Feguson' tattoo

Arts and Entertainment
Ben Whishaw is replacing Colin Firth as the voice of Paddington Bear

Thriller is set in the secret world of British espionage

Life and Style

ScienceGallery: Otherwise known as 'the best damn photos of space you'll see till 2015'
Life and Style

Bomber jacket worn by Mary Berry sells out within an hour

Andros Townsend is challenged by Vladimir Volkov
Arts and Entertainment
Rapper Jay Z performs on the Pyramid Stage at Glastonbury in 2008
musicSinger sued over use of the single-syllable sample in 'Run This Town'
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

    £320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

    Head of Audit

    To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

    Audit Manager Central Functions

    To £85,000 + banking benefits: Saxton Leigh: You will be expected to carry out...

    Credit Risk Audit Manager

    Up to £90,000 + benefits: Saxton Leigh: Credit Risk Audit Manager required to ...

    Day In a Page

    Mystery of the Ground Zero wedding photo

    A shot in the dark

    Mystery of the wedding photo from Ground Zero
    His life, the universe and everything

    His life, the universe and everything

    New biography sheds light on comic genius of Douglas Adams
    Save us from small screen superheroes

    Save us from small screen superheroes

    Shows like Agents of S.H.I.E.L.D are little more than marketing tools
    Reach for the skies

    Reach for the skies

    From pools to football pitches, rooftop living is looking up
    These are the 12 best hotel spas in the UK

    12 best hotel spas in the UK

    Some hotels go all out on facilities; others stand out for the sheer quality of treatments
    These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

    Widespread fear of Isis is producing strange bedfellows

    Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
    Topshop goes part Athena poster, part last spring Prada

    Topshop goes part Athena poster, part last spring Prada

    Shoppers don't come to Topshop for the unique
    How to make a Lego masterpiece

    How to make a Lego masterpiece

    Toy breaks out of the nursery and heads for the gallery
    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
    Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

    Ian Paisley’s decision to make peace with his IRA enemies

    His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
    'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

    'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

    Exclusive extract from Janis Winehouse's poignant new memoir
    Is this the role to win Cumberbatch an Oscar?

    Is this the role to win Cumberbatch an Oscar?

    The Imitation Game, film review
    England and Roy Hodgson take a joint step towards redemption in Basel

    England and Hodgson take a joint step towards redemption

    Welbeck double puts England on the road to Euro 2016
    Relatives fight over Vivian Maier’s rare photos

    Relatives fight over Vivian Maier’s rare photos

    Pictures removed from public view as courts decide ownership
    ‘Fashion has to be fun. It’s a big business, not a cure for cancer’

    ‘Fashion has to be fun. It’s a big business, not a cure for cancer’

    Donatella Versace at New York Fashion Week