Goodbye Paper, Hello Polymer
By Treena Hein
By Treena Hein
Beginning late in 2011, new polymer bank notes will be phased in and
older paper notes will be removed from circulation. The new $100 bill
arrives in November, with the new $50 note to follow in March 2012. The
more commonly used $20, $10 and $5 notes will appear near the end of
Beginning late in 2011, new polymer bank notes will be phased in and older paper notes will be removed from circulation. The new $100 bill arrives in November, with the new $50 note to follow in March 2012. The more commonly used $20, $10 and $5 notes will appear near the end of 2013.
Paper has been the medium used to make Bank of Canada notes since it issued its first series in 1935. But the current Canadian Journey series of bills incorporated new security features right into the paper that made counterfeiting much more difficult – features like a ghost image (watermark), a woven security thread that appears as metallic dashes on the back of the notes and a colour-shifting metallic stripe.
Bank of Canada stats show that the number of counterfeits passed in Canada was 88 per cent lower in 2009 compared to those passed in 2004. That is, in 2009, there were 45 fake bills per one million authentic bills, which is about 67,000 fake bills (or $3.4 million fake dollars) for about 1.5 billion bills in circulation at that time.
The new polymer notes will be even harder to counterfeit, but Bank of Canada spokesperson Julie Girard says they can’t talk publicly about security features until later this year. The polymer bills, with their smooth, lightweight film, will also be much more durable than paper bills, lasting two or three times longer.
A current $5 or $10 note lasts only one or two years.
While the fact that bills will be harder than ever to counterfeit is welcome news to the vending industry, there are concerns within this sector (and others that use automated currency-reading technology) about cost, as well as whether adequate time will be provided to ensure the bills work in machines in advance of their release into general circulation.
“Whereas coins are the traditionally recognized vending currency, bill acceptors are becoming increasingly common in our industry,” says Kim Lockie, president of Canadian Automatic Merchandising Association (CAMA). “Without the ability to accept bills, there is no doubt the vending industry would lose business, and in many cases, to alternative retail options.”
Lockie adds that “with every currency change, there is a need to recalibrate coin or bill acceptors.” Without this recalibration, the new coins and bills cannot be read and will be rejected or appear to be counterfeit.
Lead time – preferably about six months – is needed for this recalibration. The first step, once new bills or coins are received by vending machine companies (and others that use automated currency reading technology such as transit authorities, ferries, casinos, car washes and automated tellers in retail chains), takes about three or four weeks. This period is needed to create the new software program that will allow machines to recognize the new version of the currency. Secondly, the software has to be loaded on all machines individually, a process that Lockie says will take about two months at his particular company (McMurray Coin Machines in Fort McMurray) – if all goes well.
CAMA is satisfied with how the Royal Canadian Mint is working with them on timelines for the new $1 and $2 coins, which will hit the streets in early 2012. These coins will look the same, but will have steel (and aluminum bronze in the toonie’s insert) as their predominant core materials instead of costly copper and nickel.
“The Royal Canadian Mint sought the input of CAMA,” Lockie says, “and will ensure there has been sufficient time for testing followed by the necessary upgrade to coin acceptors by industry members.” This is confirmed by Mint spokesperson Alexandre Reeves: “Given the extent of our stakeholder consultations and the expected circulation date of the new coins, the stakeholders will have several months to calibrate their equipment.”
However, as of yet, CAMA has received no such assurance from the Bank of Canada.
“It’s still unclear whether the Bank of Canada understands the importance of giving lead time,” Lockie says, “so in a letter addressed to the Bank of Canada early in March, CAMA requested that the new polymer $5, $10 and $20 bills be released to industry in advance of general circulation.” In the same letter, CAMA also asked that these three bills be issued at the same time. “This enables reprogramming of machines all at once,” says Lockie. “It saves a lot of time and money.”
When asked about these requests, Girard said, “We’ve been working with major banknote equipment manufacturers. Those not in the testing group can call the Bank of Canada for more information (1-888-513-8212).” She also said “We want to ensure a smooth transition to the new polymer series.” At this time, the Bank of Canada plans in 2013 to release the $20 bill first, and then the $5 and $10 bills simultaneously some time after that.