By : Colin Gordon
March 31, 2016 08:30 AM
Polymer notes have been around in some countries for many years. This type of banknote was first introduced as currency back in 1998 in Australia. Polymer is now successfully used in other countries globally including: Canada (14.6k NCR ATMs), New Zealand (1.9k NCR ATMs), Malaysia (4.7k NCR ATMs), Vietnam (9.1k NCR ATMs), Romania (6.3k NCR ATMs) and Singapore (2.6k NCR ATMs). Polymer notes in the UK 2016 sees the debut of so-called ‘plastic cash’ for the majority of the UK. Whilst Scotland has had £5 polymer notes since 2015, a new five-pound note featuring Winston Churchill will be issued by the Bank of England (BoE) in September 2016.
“As with any change in banknote design, all businesses that handle cash will need to plan and prepare for the introduction of the new, smaller polymer banknotes," said the BoE in an update.
The new ‘fiver’ is just the start - a £10 note is due out in 2017 and the £20 note will go plastic as of 2020.
Impacts on the ATM
It has been said that some cash handling machines, such as traditional ATMs and cash recyclers, from some ATM manufacturers may to need to be adapted. Those specifically with friction-based dispensers may have challenges picking these new notes. However, ATMs using vacuum-based technology to pick notes, such as NCR’s new S2 Media Dispense Module, are better enabled for polymer than older dispenser technology.
Many banks have a polymer note project team and given the UK’s 70,000 ATMs include some more ‘mature’ installations, the rate of replacements may be accelerated by the introduction of polymer to solutions from NCR’s SelfServ cash dispense or multi-function range for example. In Britain, cash machines can dispense £5, £10 and £20 notes in a single dispense. With the larger notes not moving to polymer yet, ATMs will need to be able to simultaneously handle both plastic and paper notes.
“Additional hardware upgrades may be required for some machines because of the change to a polymer substrate and the reduction in size of the notes,” adds the BoE.
The new ‘fiver’ will be 125mm x 65mm, somewhat smaller than the current version, which measures 135mm x 70mm. The new £10 note will be 132mm x 69mm, again about 15 percent smaller the paper note in circulation today, which is 142mm x 75mm.
In addition to hardware and software considerations, banks will need to ensure their staff who handle cash can spot and authenticate the new notes, with the BoE suggesting that some handling practices may need to be adapted. NCR is among a handful of organizations, known as banknote equipment manufacturers (BEMs), which have taken up the offer of testing with example notes at every stage of development from initial tests to mass production.
The benefits of polymer
While the banking industry, along with many other businesses handling cash, will need to adapt to using polymer notes, the change should be welcomed. Polymer banknotes are more secure as they feature better security features than paper versions. They are more durable, reducing the cost of maintaining cash in circulation in the process, with the BoE saying they last at least 2.5 times longer than paper banknotes.
Despite the much talked about move to a cashless society talked about in the financial technology media, cash still is seen as a vital payment method for consumers due to it being secure, tangible, trusted and reliable. Such is the extent of consumers’ widespread use of ATMs as a convenient banking channel that a whopping 91.7 billion cash withdrawals totalling $14.1 trillion done at ATMs.
With cash withdrawals therefore happening at a rate of almost 3,000 withdrawals a second globally, totalling $446,800 – the future of the ATM and this new breed of banknote seems secure for many years to come.