Connect with us

Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website. .




Richard Broadbent, GM Banking at Wincor Nixdorf, explores the popularity of cash and how plastic polymer notes will help maintain banknotes as a core currency

There were 1,540,000 five pound notes in circulation in 2014. That’s 50 per cent more than in 2004. Currently, each note could be in circulation for up to five years, but it seems that their days are numbered in their existing paper format. Bank of England plans to replace all five pound notes with plastic polymer notes in the second half of 2016 with the rollout of additional denominations also in the pipeline. Clydesdale Bank has already released 2 million five pound polymer notes in March this year, showcasing Sir William Arrol as the face of the first circulation. Far from spelling the end of banknotes, this evolution will hopefully go some way to keeping them at the heart of the UK economy.

Polymer benefits

The polymer notes have two main benefits versus their paper predecessors. Who hasn’t had a grubby five pound note which is torn and crumpled, clearly at the end of its lifecycle? The new notes are highly durable, featuring polymers that are both dirt and moisture resistant. Lasting at least 2.5 times longer than paper notes, replacements are needed less often, and they are more cost effective and environmentally friendly.  Secondly, they incorporate more advanced security features including threads that weave into the plastic and holographic foil making the notes harder to counterfeit. In Canada, where the notes are already in circulation, during their introduction, there were 28,000 counterfeits of paper notes versus only 400 counterfeits of the new polymer notes. With the notional value of counterfeit notes amounting to £13 million in the UK last year, significant reductions in industry costs could be made.

Cash in society

From a consumer perspective, initial feedback for the polymer notes has been positive – with 87 per cent of respondents in favour of the new prototypes over the old paper notes. With customer feedback vital to such changes, research has shown that cash is still extremely important in society. The ATM Industry Association (ATMIA) claims, “cash is one of the most successful technologies ever invented, being history’s longest-lasting, most resilient form of money”. To meet increasing demand, many western economies have experienced a six per cent rise in cash circulation volumes. Despite the growth of digital money, recent figures suggest that cash still remains a key payment method for consumers and businesses. Cash payments equated to £250 billion in the UK alone last year, making up 52 per cent of transactions, highlighting its acceptance as a comfortable way to spend and manage money. It appears that even with the advancement of recent technologies, such as PayM and Apple Pay, we still value physical notes as a key payment method within our payment choices as a consumer.

Embracing the polymer revolution

A study by Bank of England shows the anticipated savings of producing polymer notes versus paper notes is likely to be in excess of £100 million over a ten year period. Polymer notes have been a success story in a number of countries including Canada, Singapore, New Zealand and Australia – the latter of which introduced these notes as early as 1988.

In the UK, the decision by the issuing banks to move to polymer notes has been made with continued dialogue with stakeholders to ensure a smooth transition. Financial institutions, ATM operators, cash-transportation companies, banknote equipment manufacturers and retailers have all been involved in developing the polymer roadmap. As the phased rollout of notes gets underway, both consumers and businesses should start to see the benefits of polymer notes, until we are eventually as familiar with plastic notes as we are with the paper version.

The good news is that to ease this transition, technological advances have increased in cash processing and the supply chain. Economies of scale, regulation, transportation and cash handling technologies have created an efficient environment for such a large scale change to be introduced without unnecessary disruptions. Moreover consumer’s acceptance of new or advanced payment methods has also proven to be good with many consumers now using a range of payment methods on a day to day basis. This suggests that the widespread adoption of polymer notes should be a smooth process as they are gradually accepted into people’s daily lives.

Polymer notes represent an evolution of a format that consumers are already comfortable with. Cash is accepted everywhere and once in circulation, polymer will strengthen the longevity of cash as a viable payment method. The investment in polymer notes serves as an opportunity to make our currency not only more secure but future proof for generations to come.

Global Banking & Finance Review


Why waste money on news and opinions when you can access them for free?

Take advantage of our newsletter subscription and stay informed on the go!

By submitting this form, you are consenting to receive marketing emails from: Global Banking & Finance Review │ Banking │ Finance │ Technology. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Post