Bank of England to Save £100M
Polymer pounds are being introduced by The Bank of England in September and it’s expected that the stronger material will save around £100 million by printing fewer notes over the next ten years. The new £5 note that will feature Winston Churchill will be unveiled on June 2nd at Sir Winston’s birthplace, Blenheim Palace, and begin circulating in September. Around 440 million polymer £5 bank notes will be made of a material that is sturdy enough to be able to withstand being washed in a 90C cycle, which would destroy the notes that are currently in circulation.
The decision to replace the current £5 note featuring prison reformer Elizabeth Fry with a male former Prime Minister was unpopular as it left the Queen as the sole representation of women on UK bank notes. A petition has decided that the face of the £10 polymer bank notes that will begin circulating in 2017 will be popular novelist Jane Austen. Artist John Mallord William Turner will be featured on the £20 plastic banknote in 2020. When the announcement to switch to polymer was made in 2013, 87% of the 13,000 Britons who were polled were receptive to the change in the UK currency.
The new notes are printed on a thin, flexible material that is more difficult to tear than paper notes. The bank warns that the notes will handle differently and may be prone to sticking together, and will be more difficult to fold. The bank has yet to make a decision about whether it will print new-style £50 notes in future. The £50 note has numerous features which make it hard to replicate, so it may not be replaced by plastic currency. The notes are more ecologically friendly than paper because they are readily recycled into other plastic products. Also, the notes should last for five to seven years whereas the paper notes have a shelf life of around two years.
Another of the new note’s advantages is that it is far more difficult to counterfeit, which is the reason they were originally introduced in Australia in 1988. Manufacturing from a transparent plastic film that allows clear windows to be incorporated in the design is part of a measure to make them more difficult to forge.
Scotland Banks Issuing Polymer Notes
Bank of Scotland, the Royal Bank of Scotland and Clydesdale Bank are also making the change to polymer £5 in November. Writer and poet Nan Shepherd will be featured on the new notes marking the first time in Scotland’s history that a woman is featured on the country’s currency. Scotland’s £10 polymer notes to be circulated in 2017 will also, as decided by popular public vote, feature a female face: that of scientist Mary Somerville.
Money Handling Businesses Affected
The notes will be slightly smaller at 125mm x 65mm than the current paper notes which are 135mm x 70mm. The change in bank note size and materials will require adaption by all businesses that handle cash. New software will have to be downloaded by businesses with ATMs, cash handling machines, ticket machines or any other device that counts, sorts, accepts, dispenses or recycles bank notes. All bureau de change branches and companies dealing in travel money will obviously be keenly affected. In some cases, new machinery will need to be purchased and the Bank of England has committed to assist businesses in making the transition by listing the names of machine manufacturers who have been offered access to test notes in order to implement the changes.
Also, about three months before the notes are issued, a range of materials to assist in training staff to recognise and authenticate the new notes will be distributed by mail and email. As the new notes are introduced, existing currency will be withdrawn from circulation. Businesses operating in the UK cash industry initially opposed the switch from paper to polymer with concerns about the cost of implementing the new currency.
Counterfeiting Led to Polymer Currency
Australia’s Reserve Bank (RBA) pioneered the polymer bank note as a measure to thwart the counterfeit $10 notes found to be in circulation in 1967. The first patent for a polymer bank note was the result of an RBA collaboration between the Commonwealth Scientific and Industrial Research Organisation and The University of Melbourne resulting in the first patent being filed for the note in 1973. Australia introduced it in 1988 and by 1996 the country’s AU$ were all printed on polymer.
Canada was facing a peak in counterfeiting between 2001 and 2004 which was blamed on the easy to replicate $5 and $10 bills that lacked necessary security features. Australia’s currency with security features like transparent windows and watermarks that had been micro-printed had by this time been well established and was seen as Canada’s best way forward when it introduced polymer currency in 2011. Canada’s decision to change to plastic was motivated by the reduced costs over the long term and the currency’s recyclability as well as security features. Canada’s current $100 bill may be the world's most advanced banknote with a transparent window that features a hologram and, when held up to the light, the bill reveals a circle of numbers that match its denomination. New Zealand’s dollars, known as Kiwis or NZ$ are printed on polymer, as is the Papua New Guinean Kina.
In the 1980s Haiti and Costa Rica were the first countries to issue polymer banknotes that used an American technology which was unsuccessful because the ink smeared. Early specimen banknotes were developed and tested for Honduras and El Salvador, however in those tropical climates the ink did not bind well to the polymer and the notes were rejected after they too were found to have problems with smearing easily. Vietnam’s dong is printed on polymer which has no issues with smearing despite the country’s tropical climate. Brunei dollars also are printed on the thin plastic with no problems reported. Romanian Leu, too, are another polymer printed currency. The latest countries who have already implemented the use of polymer currency notes are Cape Verde, Chile, The Gambia, Nicaragua, Trinidad and Tobago and the Maldives.
Although central Banks are conservative and tend to adopt changes cautiously, no doubt the savings of polymer over paper will make it an increasingly attractive material on which to print world currency. The move by the Bank of England and Scottish banks to replace the paper pound with plastic will no doubt encourage other countries to also take steps to make their own cash less costly.