5 reasons polymer banknotes could be a disaster

Today the Bank of England will announce that we are to get new notes - so are they any good?

You may not notice the difference at first glance, but these plastic banknotes could be the face of our currency as soon as 2016.

A Bank of England public consultation into whether to replace our existing banknotes closes today (Wednesday), and the BofE will announce that we will be getting the new notes.

But other countries that have introduced polymer have run into trouble. Here’s why polymer notes could be a colossal failure.

1.       Hard to handle

Canadian polymer banknote

Canadians have been using polymer notes for a number of years and complain about the difficulty in physically handling the money. One of the grievances includes the notes being much less malleable than their paper counterparts. Describing the notes as “unfoldable” and “slippery”, Canadians have said they’re difficult to shove in a pocket or wallet and much easier to lose than paper notes.

One of the most resounding complaints is that the notes stick together when new or wet, making it common to hand over more money than necessary without noticing, and means money sorting or counting machines can get it wrong.

2.       Can melt

Melted money

Bizarrely, another less common but serious complaint from Canadians is that polymer notes can melt when in contact with radiators or hot glove boxes.

The Australian company that makes the them insists they’re able to withstand temperatures of up to 140 degrees Celsius, but pictures have emerged online of shrunken and deformed notes, some of which melted down to a tiny fraction of their normal size.

The Bank of Canada said these cases were an “urban myth” but has reimbursed some citizens who claim their notes have melted in the sun, under lamps and in a tumble-drier.

3.       Habitat for germs

Glove holding money

A study by Dutch and Turkish scientists found polymer notes to be much better at transmitting germs, including E.coli and the deadly superbug MRSA. In the lab, scientists found Romania leu, which is made from the same material selected by the Bank of England, was the most hospitable environment for bacteria when tested against the euro and six other currencies.

However, while plastic banknotes transmitted bugs more easily than the cotton-linen fibre we currently use, scientists said they presented no greater risk than any other plastic object.

4.       Can be forged

Woman inspects money

The polymer note is widely lauded as more difficult to forge, but the plastic itself does not feature the same security measures as the cotton-linen banknotes which have a watermark and security thread.

While seized forgeries fell dramatically in Australia when polymer notes first came into use and have stayed low, it’s not clear whether this is because there are fewer forgeries, or because they’re harder to detect.

Just months after Nigeria introduced polymer notes, fake versions caused panic among traders. In fact, the country has now returned to paper currency. While the forgeries are not perfect, they appear to be good enough to get past normal people and cause trouble.

5.       Costly process

Self service checkout

The cost of overhauling electronic reading, counting and sorting systems in banks, shops and other money-handling facilities, such as vending machines and ticket dispensers, is likely to be enormous.

In the past, the challenge might have been letting cashiers know to accept the new notes instead of old ones, and recalibrating scales used to weigh the money.

However, in 2016 when the new notes could be released in Britain, modifying or replacing the huge volume of automated systems, from cash machines to checkouts, could pose a massive problem.

The other cost to take into consideration is replacing the current circulation of banknotes. The Bank of England tells us that polymer notes will save £100m because they can last twice as long as banknotes currently in use. Even if that is true - it hasn’t been fully tested by UK authorities - polymer notes cost more than twice as much to produce.

 

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Readers' comments (1)

  • Maybe not such a good idea,then! And 100 million over how long?

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