LONDON -- The UK's vending operators and payment systems manufacturers may be facing a new challenge. The Bank of England on Dec. 18 confirmed its plan to introduce plastic banknotes, which are set to debut in 2016 with a new £5 featuring Winston Churchill, followed by £10 with Jane Austen's portrait a year later.
It will be the first time plastic notes have been used in BoE's 300-year history.
The new notes, printed on polymer, a thin flexible plastic film, will have smaller dimensions than the current paper ones. The BoE acknowledge that its paper notes are large compared with their international counterparts, making the biggest denominations harder to fit into cash handling technologies and less convenient for everyday use. The bank said smaller notes will also reduce printing and storage costs.
The polymer bills will initially cost more to make, but their durability will make them less expensive to issue in the long run than paper notes, according to the bank.
"Polymer notes are the next step in the evolution of banknote design to meet that objective," said BoE governor Mark Carney. "The quality of polymer notes is higher, they are more secure from counterfeiting and they can be produced at lower cost to the taxpayer and the environment."
The bank said it has been working with retailers on the introduction of polymer notes. While it acknowledges there will be changeover costs for the automated retailing sector, it believes the polymer notes will offer longer term the benefits that outweigh those costs. Bank officials have told UK media sources that more polymer notes can be stacked in ATMs than paper notes, and they don't jam vending machines in the same way.
Mass circulation polymer notes were pioneered in Australia in 1992, though Costa Rica lays claim to the first one made in 1982. Canada began printing polymer notes in 2011. | SEE STORY