UK: Polymer £5 and £50 Banknotes Soon?

[Bimat]

Banknote printer De La Rue named as Bank of England preferred bidder

Sep 08, 2014 13:03

Banknote printers De La Rue, which employ 400 in the North East, are on the cusp of a 10-year contract to print Bank of England money.

Banknote printer De La Rue has been selected as preferred bidder for a 10 year contract to print bank notes for the Bank of England, it has been announced.

The contract is due to start in April 2015, according to the stock market note, and De La Rue said it will cooperate fully with the bank in the coming weeks, to make sure it meets all the due diligence checks, ahead of the contract being awarded.

The relationship between the Bank of England and De La Rue, which employs 400 people at its Team Valley operation, dates back many years.

Most recently De La Rue has been printing banknotes at the Bank's facility in Debden, Essex under a contract the Bank awarded in 2003 and which is due to come to an end in April 2015.

Philip Rogerson, De La Rue Chairman said: "We are delighted that De La Rue has been selected as the preferred bidder for this very prestigious and important contract with the Bank of England."

The Bank of England started a formal public procurement process in November 2012 for the printing of the Bank's banknotes.

Subject to successful completion of assurance activities in respect of De La Rue's bid, finalising the contract and the final award decision by the Court of the Bank of England, the bank expects to sign the contract in October.

Source: The Journal

[Bimat]

Comment: Polymer bank notes and the real cost to UK merchants

The decision to introduce polymer banknotes in the UK will impose an estimated £240 million on the UK economy and cause merchants operational headaches that could be the catalyst for a complete change in cash strategy.

Published: 15:38:28 on the 21st Aug 2015 Author: Brendan Doyle

The Bank of England (BoE) announced in December 2013 that polymer notes will be introduced in the UK, replacing the £5 note in late 2016 and the £10 note in late 2017. There are currently no plans to replace the £20 or £50 notes.

The general reaction to the decision has been somewhat muted over the past 18 months, with insufficient public information provided meaning that the common consensus among the consumer and merchant communities seems to be that the impact of the changes will be minimal. Concerns raised have generally been restricted to suppliers and manufacturers of the more informed cash industry.

Indeed, merchant respondents to CMSpi's Annual Payments Survey, where respondents were asked to rate their level of concern out of ten (ten being extremely concerned), stated on average (6.14) that they were only 'slightly' concerned about the impending 2016 introduction of polymer banknotes in the UK. However, CMSpi has calculated the astonishing costs of introducing polymer banknotes (see below).

Why should merchants be more concerned?

Firstly, the decision-making process used by the BoE was fundamentally flawed.

The BoE failed to conduct an adequate cost-benefit analysis on the impact that the decision will have on the entire UK economy, instead limiting their focus to assessing the benefits of polymer, rather than scrutinising its costs. The BoE's public consultation process therefore focused on promoting polymer's strengths and because of this we feel it is inevitable that the process returned generally positive feedback. The process also appears to have placed the same weight of opinion on indifferent everyday consumers as it did on retail industry professionals.

On top of the financial costs, the BoE has not acknowledged the potential disruption and costs to the cash supply industry and retail sectors. There will be huge operational challenges for all merchants, particularly those who operate ATMs and vending machines. The co-circulation period, where both paper and polymer notes are present, could lead to cash shortages – particularly for retailers who operate ATMs on a self-fill basis. Indeed, once ATMs have been upgraded (a manual process which itself will cause disruption), they will only be capable of holding and dispensing polymer notes. This means that any paper notes received by retailers will have to be banked rather than re-distributed to consumers via the ATMs.

In the early stages of the migration, retailers may not initially receive the volumes of notes required to fill their newly upgraded ATMs from consumer transactions alone. To compensate, additional polymer notes will need to be ordered and delivered which, of course, incurs a charge.

In our view, all that will really occur with polymer is a transfer of value from the private sector for a small public sector gain. CMSpi's research suggests that the costs far exceed the benefits and ultimately, it will be consumers who suffer as the net costs will inevitably feed through to merchants and finally consumers in the form of higher prices.

What can merchants do?

Nearly all cash handling machines will need some degree of adaptation as a result of the transition to polymer notes and the introduction of the new 12-side £1 coin (in 2017). These include areas such as software, firmware and hardware adaptation for ATMs, self-service checkout machines, desktop counting equipment, bill validators and any cash office technology currently employed. Some of the updates can be done remotely, however others will require manual re-calibration from an onsite engineer.

Merchants need to ensure that they are aware of the adaptations required and are prepared for the costs that will be incurred.

Impact on cash strategy

The introduction of polymer banknotes and the new £1 coin are just two of many changes that will have a marked impact on merchants' cash strategy.

Additionally, in the next 12 months we expect interest rates to increase for the first time in over six years, which will provide an incentive for merchants to get cash into the bank as quickly as possible. This increase in demand for cash collections could result in the service levels of the cash in transit (CIT) industry falling, with some collections delayed or even missed. And, as a means of overcoming this spike in demand, CIT suppliers may introduce "prioritisation tactics", in which prices for peak collection/delivery times are increased.

The new "living wage" target of over £9 per hour by 2020 will increase the cost of onsite cash management by as much as 30% and strengthen the argument for retailers to introduce cash office technology and/or outsourcing.

Merchants are seeing cash volumes starting to steadily decline and this will be quickened by the introduction of interchange caps from December 2015, which will bring the cost of accepting cards in-line with the cost of accepting cash for merchants.

Notwithstanding the above, many of the costs associated with cash are fixed, so per-volume fees are liable to increase as cash processing economies of scale diminish. Therefore, merchants need to be agile to avoid spiraling cash costs.

CMSpi is hosting a 'Polymer Planning Session' for merchants on 1 October, giving independent, practical advice to prepare for the introduction of the new currency.

Countering the arguments – why the BoE's polymer decision simply does not stack up

1. Polymer banknotes are more environmentally friendly. Polymer is made from non-renewable raw materials while paper notes use a renewable waste product from the textile industry.

2. Polymer banknotes are secure. They incorporate advanced security features making them difficult to counterfeit and further enhancing the strong security of BoE banknotes.

3. The value of counterfeit notes totalled a mere £13 million in the UK in 2011 and this number is falling. This is insignificant compared to the rising £455 million of annual card fraud. Nor does experience suggest that polymer is successful in preventing cash fraud – for example, Australia is experiencing rising levels of counterfeiting.

4. Polymer banknotes are more durable. They last at least 2.5 times longer than paper banknotes so will take much longer to become "tatty", improving the quality of banknotes in circulation.
This doesn't take into account costs to the wider economy, which we estimate to be more than twice as high.

What will the costs be made up of?

CMSpi estimates the true costs of polymer banknotes to be in the region of £230 million-£240 million, far in excess of the BoE savings forecasts of £100 million over ten years. Would you commission a project with an ROI of far more than ten years?

Source: Essential Retail

[Bimat]

New £20 notes to be printed on plastic

15:23 Wednesday 02 September 2015

The next £20 banknote will be printed on plastic in moves to help keep cash "fit for purpose", the Bank of England has announced.

The new note will be made from polymer, which is a more durable, secure and cleaner material than paper notes, and it will enter circulation in three to five years' time, the Bank said.

The move follows an announcement in 2013 by the Bank that the next £5 and £10 banknotes would be printed on polymer.

The £20 note is the most common banknote in circulation, with 1.9 billion in circulation at the end of February, according to the Bank's website.

The polymer £5 note featuring Winston Churchill will be issued in autumn 2016, the £10 polymer note featuring Jane Austen entering circulation a year later.

The move to plastic notes will leave the £50 as the only remaining paper note. A decision on whether to print the £50 on polymer will be made in due course.

Victoria Cleland, the Bank of England's chief cashier, told a conference in Bristol how the next £20 note would be printed on polymer.

In a speech to the Follow the Cash Conference, she said that while technology had significantly changed the nature of payments in the UK, "cash remains a vital part of the mix".

She said: "Polymer – incorporating complex windows and sophisticated security features – delivers a leap forward in counterfeit resilience."

She said: "Cash is not ready for the retirement home, and certainly not the funeral home.

"And because there is a lot of life left in cash, we need to keep it healthy and fit for purpose."

The new £20 note will feature a yet-to-be-announced visual artist who has been nominated by the public.

Polymer notes are made from a thin, flexible plastic film, and like paper notes, they can be folded.

They tend to last at least two-and-a-half times longer than paper banknotes and they are resistant to dirt and moisture, so stay cleaner.

Source: Newsletter

[Bimat]

News Release - New £5 note design to be unveiled in June

10 March 2016

Victoria Cleland, the Bank of England's Chief Cashier, announced today that the Bank will unveil the design of the new five pound banknote on Thursday 2 June 2016.

In her speech at the Retail Business Technology Expo in London, Victoria outlined the benefits of polymer banknotes and how businesses can best prepare for their introduction in September. She said:

"On Thursday 2 June we will unveil the full design of the new fiver – the Bank of England's first polymer banknote. The new fiver will bring a step change in counterfeit resilience and quality. We have been working extensively with the cash industry to ensure a smooth transition to polymer. Now is the time for retailers and businesses to prepare. Alongside the launch, we will release new free of charge training materials to help businesses train their staff, and run an extensive public awareness campaign to enable everyone to prepare for the new fiver entering circulation in September. This is an exciting time for banknotes and we are grateful to the cash industry for helping us introduce polymer banknotes."

The new fiver will enter circulation in September 2016 with the paper £5 note being removed from circulation gradually thereafter. The polymer £10 note featuring Jane Austen will enter circulation around a year later and a new polymer £20 note will be introduced by 2020.

Source: Bank of England (Press Release)

[Bimat]

Flash the plastic – Bank of England unveils untearable plastic £5 note

Angela Monaghan
Thursday 2 June 2016 14.11 BST

Mark Carney, the governor of the Bank of England, has formally unveiled Britain's first plastic banknote, the new fiver featuring Sir Winston Churchill.

The transition to plastic notes is a significant departure for a central bank that has used paper money since it was established more than 320 years ago.

Launching the note at Blenheim Palace, birthplace and ancestral home of the late wartime leader, Carney said the new polymer note was a major innovation and was cleaner, safer and longer-lasting than paper. "It is resistant to dirt and moisture, so the note won't wear out as quickly as the current fivers but will stay in good condition for longer," Carney said.

"It is stronger than paper and can better withstand being repeatedly folded into wallets or scrunched up inside pockets. Polymer notes can survive a splash of Claret, a flick of cigar ash, the nip of a bulldog, and even a spin in the washing machine afterwards to boot."

The new fiver is expected to last on average around five years, two-and-a-half times longer than a traditional note, making them more environmentally friendly and costing less over time, according to the Bank. They are almost impossible to tear, meaning there will be no longer any need to patch a torn note back together with sticky tape.

It will be introduced into circulation from 13 September, with 440m recyclable notes rolling off the presses and distributed at cash machines around the country. The event was attended by members of Churchill's family, including his grandson Sir Nicholas Soames and granddaughter Celia Sandys.

In choosing Churchill for the new note, the Bank was commemorating the former prime minister's "bulldog spirit", Carney said. "Churchill was not just a martial leader – though he was an exceptional one – he was also one of the greatest statesmen of all time."

The fiver will be followed by a new plastic Jane Austen £10 note in the summer of 2017, with a plastic JMW Turner £20 note by 2020. A decision has yet to made on the £50 note.

Carney said banknotes have cultural as well as economic value: "By depicting characters on our banknotes, we celebrate those who have advanced British thought, spurred innovation, shown exceptional leadership, shaped this diverse society and forged its common values. "In these regards, money is memory for a country and its people.

"Our banknotes are testaments to the outstanding achievements of the nation's greatest individuals; they are repositories of the United Kingdom's collective memory."

The Bank will start to withdraw the old paper fivers as soon as the new ones are circulated. They will remain legal tender until May 2017. Plastic notes are already used in more than 30 countries, including Carney's native Canada, Australia and Singapore."As Churchill did, we may have to wait a while for the Americans to join up," Carney said.

The image of Churchill on the new plastic fiver is taken from a portrait captured by Yousuf Karsh in Ottawa, Canada, in December 1941. "The famous glower of the war-time hero prompted, in this case, by the photographer's decision to take Churchill's cigar away from him," Carney said.

Behind the portrait is an image of the Houses of Parliament, featuring the Great Clock on Big Ben with the hands set to 3 o'clock, the approximate time on 13 May 1940 when Churchill made his inaugural speech to the Commons as Prime Minister. "I have nothing to offer but blood, toil, tears and sweat," he said during the speech, a quote that appears beneath his portrait on the note.

The Bank has warned the public that brand new polymer notes can stick together – meaning shoppers could mistakenly hand over two notes instead of one – but said the effect tends to wear off quickly once in use. They are not completely indestructible, nor are they counterfeit-proof, but illegally copying them should be a slower and more costly process.

Carney said the plastic notes allowed for better security features than their paper counterparts, including see-through panels, coloured foils, detailed metallic images and tactile features to help visually impaired people recognise different notes. The £10 and £20 notes will have a tactile feature, while the £5 note will be distinguishable by the absence of one.

The security features on the new plastic fiver include:

- A see-through window featuring the Queen's portrait. The border of the window changes from purple to green.
- Big Ben shown in gold foil on the front of the note and silver on the back.
- A hologram that contains the word "Five" and changes to "Pounds" when the note is tilted.
- The words "Bank of England" printed in raised ink along the top of the note.
- The Bank's new notes will be about 15% smaller than paper money, bringing them in line with international sizes. Scotland is -expected to introduce its own £5 polymer note in late 2016. Northern Ireland has no plans to issue plastic notes.

Carney announced the move to plastic notes shortly after he arrived at the Bank in 2013. However, the Bank's notes division had been considering the switch for years.

The move to plastic is the latest in a long line of changes for banknotes, first issued in return for deposits by the Bank, when it was established in 1694, to raise money for William III's war against France.

Coloured £5 notes replaced white ones in the 1950s; the first portrayal of a monarch came in 1960, when the Queen appeared on a new £1 note; and the introduction of historical figures such as William Shakespeare started in the 1970s.

Source: The Guardian

[Bimat]

Enjoy!

http://www.thenewfiver.co.uk/

Aditya

[Alan71]

The new £5 note looks good!  My only gripe is that they still haven't updated the portrait of the Queen.  That one has been in use for 26 years now and replaced one that I think was only used for about 20.  I suppose, like the stamps, they don't see a need to and deem it a Royal Mint thing.

[<k>]

The Queen is very fond of the Machin portrait on the stamps. Attempts have been made to persuade her to allow an update, but she is not having it. 

[FosseWay]

The Queen is very fond of the Machin portrait on the stamps. Attempts have been made to persuade her to allow an update, but she is not having it. 

But have you noticed that the silhouette Queen's head used on commemorative stamps is actually the Gillick head (used on coins 1953-70)? (At least: it was until recently. I haven't seen enough British stamps in the last few years to know whether it's still the case.)

[Bimat]

The new £5 polymer banknote will start circulating next week. Keep checking your change!

Aditya

[Bimat]

Issued today!

New £5 note: Bank of England launches longer-lasting, polymer note

By Dan Cancian
September 13, 2016 09:59 BST

The Bank of England (BoE) has launched a new £5 note, which features the picture of Sir Winston Churchill and, for the first time in British history, is made out of polymer. The new fiver will be available at seven locations across London and at 12 others across the country, including Manchester, Birmingham, Leeds, Hull and Cardiff.

The BoE has indicated that the switch to longer-lasting notes will save approximately £100m, although the move could see shops and banks ending up with a bill of up to £236m as ATMs, vending machines and self-service machines will have to be recalibrated or replaced.

Northern Ireland introduced plastic notes in 1999, when Northern Bank – now known as Danske Bank – put two million notes in circulation to mark the new millennium. Plastic notes have been available since March last year in Scotland, albeit on a very limited basis.

Polymer notes, which are approximately 15% smaller than the current notes, are manufactured from a transparent plastic film and coated with an ink layer and are designed to last for approximately five years, compared with the 18-month shelf life of the current notes.

However, while the new banknotes will be cleaner and harder to counterfeit, they could, at least initially, being prone to stick together, meaning customers could inadvertently hand over more than they intend to.

Polymer notes, introduced by Australia in 1988, are in use in over 30 countries across the world, including New Zealand, Canada, Fiji and Mexico.

"The new fiver commemorates one of the greatest statesmen of all time, Winston Churchill, who remarked that 'a nation that forgets its past has no future'," said governor Mark Carney.

"Banknotes are repositories of the United Kingdom's collective memory, and we will be reminded of Churchill's enormous contributions as he once again becomes part of our daily lives as the new fiver flows out into tills and pockets."

The old £5 bill, which carries a picture of social reformer Elizabeth Fry, will remain in circulation until next year but it will cease to be legal tender on 5 May 2017, the BoE said.

Source: IB Times

[kena]

I got my first new £5 note from my son last night.

[Bimat]

'I sold three new fivers for £460' on Ebay

By Kevin Peachey
Personal finance reporter

A collector who sold three new plastic £5 notes for £460 on the Ebay internet auction site says he will reinvest the money in his hobby.

Alan Scrase said finding the polymer fivers with consecutive AA01 serial numbers was "the luck of the draw".

The 52-year-old struck the jackpot after visiting a bank branch shortly after a delivery of new fivers - on the day after the launch date.

He had failed to get any of collector value on the first day of issue.

"I did not get them on 13 September - the first day - but it was just by sheer chance that I went to the bank the next day and they had just got them in," he said.

"You just go in your bank and ask for them. I got a few."

Bonus value

New issues of bank notes, uncirculated and with low serial numbers in the first printing run are attractive to collectors. Extra value comes when there is something unusual about them, as is the case with the first plastic notes to be issued by the Bank of England.

A total of 440 million new £5 notes have been printed. About one million have AA01 serial numbers, but some are not in general circulation. The very lowest serial number notes are handed to the Queen.

The polymer note - which is much more durable than the old fiver - was delivered to banks over the course of a week.

After arriving at the bank just at the right time, Mr Scrase decided to put a set of three fivers with consecutive serial numbers on internet auction site Ebay.

After 31 bids were made, the set was sold for £456.

'US notes are nicer'

"I am surprised how much they have gone for," he told the BBC News website.

"Any collector wants the first issue but they seem to have gone up in value very quickly."

Instead of spending the money on a weekend away or a trip to a fancy restaurant, Mr Scrase said he would spend the money on adding to his collection of old US banknotes.

The US versions were "a lot more colourful" and more interesting to look at, he said.

"It is a very addictive hobby," he said. "And it gets expensive."

"I spend a lot more money than I get back selling them, so this will subsidise my collection."

Collectors' frenzy

Some auctioneers sound a note of caution to others hoping to cash in on the early issues of the new £5 note.

"There is always some excitement over new issues like this, truly it should be just over the low serial numbers (not consecutive ones) but these are often carefully released by the bank," said Seth Freeman, of AH Baldwin and Sons.

"People get overly excited on platforms like Ebay and the prices are not justified."

Auction host site Thesaleroom.com said that banknotes could be worth more if they were held onto for some time. It is auctioning a Bank of England £5 note dating from 1979, with an estimated price of £7,000.

The new fiver, which features the image of Sir Winston Churchill, is not the first plastic banknote to be seen in the UK. They have previously been in circulation in Northern Ireland and Scotland.

The Bank of England has already said that the new £10 note, featuring Jane Austen, released next year, and the new £20 note to be issued by 2020 featuring artist JMW Turner, will also be made of plastic.

The polymer notes are expected to last an average of five years - compared to the current note's two years.

BBC

[FosseWay]

I'm in the UK at the moment and had a new £5 in change yesterday. And it had been ripped and stapled together. 

Still on the lookout for a decent one to keep.

[Alan71]

Guessing someone did that deliberately to test how strong it was.  I'm sure they don't easily rip.  You were just unlucky.  I've had two good ones in change so far.  Trouble is, they look so good that I can't bring myself to spend them!