Polymer bank notes - good or bad? What the experts say

Last week saw the Bank of England unveil its first polymer note, a new fiver that will be circulated from 13 September 2016 featuring former British Prime Minister, Winston Churchill.

Printed on polymer, a thin flexible plastic, the notes are said to be cleaner, safer and stronger, with the Bank describing them as having a "new generation" of security features making it more difficult for criminals to counterfeit.

The strength of the polymer material, according to the Bank, means the new fiver is expected to last longer than the one in circulation today. Security features include a see-through window featuring the Queen's portrait with a border that changes from purple to green, and a hologram which contains the word 'Five' and changes to 'Pounds' when the note is tilted.

Other denominations will be introduced on polymer notes in the years ahead.

Over the last 12 months, Essential Retail has been featuring commentary on the potential impact the new notes will have on the retail industry, with some merchant payment groups concerned the new design will be expensive due to the costs of upgrading and replacing cash-handling systems such as self-service machines and ATMs. Essential Retail has collated some of those varied opinions about the new polymer note.

Speaking last week at Blenheim Palace, Churchill's place of birth, Bank of England governor Mark Carney said: "Our bank notes are repositories of the United Kingdom's collective memory and like Churchill, our new polymer notes will stand the test of time.

"The new fiver, the first of the Bank's polymer notes, is cleaner, safer and stronger. It incorporates advanced security features making the notes even harder to counterfeit. The polymer is also harder wearing, as well as resistant to dirt and moisture, so we expect it to last for at least 2.5 times longer."

Brendan Doyle, CEO of payments consultancy CMS Payments Intelligence, says the costs of introducing the new notes into circulation far outweigh the benefits highlighted by the Bank.

He commented: "Long ago, criminals switched their attention to electronic fraud, so the £5 million worth of annual counterfeit cash pales in comparison to the £236 million burden polymer will place on the economy. It seems to me that the BoE is trying to solve a problem that doesn't exist.

"It is absurd that the BoE would commission a project that costs the economy £236 million upfront, to save just £10 million a year and then offer no compensation to thousands of small businesses that will lose out from this whimsical decision. I am calling on the BoE to compensate banks and retailers left out of pocket by the migration to polymer."

Ewan Ogilvie, managing director of European ATM provider YourCash, says that the launch of a new note is a sure sign that the UK is still far from a cashless society, despite the rapid rise in popularity of alternative, digital methods of payment in recent years.

He remarked: "What Mark Carney has said, and what the launch of the polymer note shows, is that the Bank of England still sees the worth in investing in notes. Whilst popularity around mobile pay and contactless cards may rise, it's all about making sure each consumer payment method is the best standard it can be, to offer consumers a wide variety and reliable level of payment options. 

"This clearly outlines the importance of investing in all payment solutions and that cash will remain an option for many years to come. The fact is that we are hybrid spenders – traditional and tech payments increasingly balance much the same way that readers adopted ebooks but still held on to traditional print texts. Cash is – and will remain – a stalwart player in the payments game.”

Andrew Crowson, managing director of currency and coin sorting equipment manufacturer Cummins Allison UK, described the new £5 note as part of the most significant upheaval in UK currency since the pound coin was introduced in 1983.

He noted: "2017 in particular will be a banner year for new currency. With the new polymer £10 note and pound coin entering circulation, older £5 notes being withdrawn and Scotland also introducing its own polymer £5 note, the public and businesses will need to deal with a potentially confusing mix of changes to new and old currency.

"Businesses need to ensure that they and their employees can deal with the situation, both in recognising the new and old currencies and advising customers who are unlikely to have access to the same degree of preparation. With so many changes at once, eliminating the chance for human error is also important. Without reliable technology, staff may make mistakes that result in them mis-counting cash or unwittingly accepting forged currency."