The fault, which was yet to be fixed, saw larger-than-expected totals appearing on some motorists' bank statements after using the machines' debit card service, council development services manager Kevin Thompson said.
It appeared the machines were processing the correct amounts, but temporarily freezing the maximum deductable amounts in motorists' accounts, Mr Thompson said.
That meant some motorists' available balances were reducing by $16 - the maximum able to be charged for a four-hour stay - when using debit cards in $4-per-hour George St parking meters, he said.
The frozen amounts were unlocked once transactions were completed, with only the correct amount being deducted, he said.
However, that process appeared to be taking up to several hours - rather than happening almost instantaneously as expected - when debit cards issued in Dunedin were used, he said.
The machines were supplied by Global Integrated Solutions Ltd, with software by Direct Payment Solutions Ltd, and used in cities across New Zealand and in Australia, Mr Thompson said.
It was the first time the fault had been encountered, but it was "not a satisfactory situation", Mr Thompson said.
Council staff were aware of only three complaints relating to the glitch since the machines were installed, at a cost of $1.64 million, in June.
However, action was taken because neither company could explain the fault, Mr Thompson said.
It was not clear how long the fault would take to fix, meaning debit card payments would be suspended indefinitely, he said.
"They are working on it. They think they can resolve it . . . [but] we are not going to wait around until they do.
"They have got to do a bit more work," he said.
There were no plans to change the terms of the council's contract with GIS Ltd, because the debit card service had been offered by the company in addition to the council's requirements for credit card and text payment facilities, he said.
