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Canadian Operators Scramble To Accept New Plastic $20 Notes; Do $100s Melt?

Posted On: 1/8/2013

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TAGS: currency validation, vending machine, Canadian polymer $20 banknotes, vending, operators, Bank of Canada, Canadian Automatic Merchandising Association, Kim Lockie Royal Canadian Mint, melting polymer banknotes

OTTAWA -- Thousands of vending machines are still not programmed to accept the new polymer $20 banknotes that the Canadian government released two months ago, and operators are blaming the Bank of Canada for not providing enough lead time.

The central bank released 145,000 of the new plastic $20 banknotes in November, designed to thwart counterfeiters and hold up longer than their paper-cotton predecessors. It first started printing the plastic banknotes late in 2011, beginning with $100 notes, followed by $50 bills.

Vending operators have been scrambling to program an estimated 500,000 machines to accept the radically redesigned $20 bills. Canada's paper-cotton $20 notes remain in circulation alongside the polymer notes for now, and reprogrammed bill acceptors can handle both kinds.

But Canadian Automatic Merchandising Association president Kim Lockie estimates up to half of those machines have not been upgraded yet for the new currency, resulting in frustrated customers and lost revenue. He blames the Bank of Canada for not working more closely with the industry to make sure it was ready before releasing the bills.

The CAMA president told Canadian newspapers that the industry warned the Bank of Canada for three years that operators needed a long lead time to recalibrate their machines before the bills were released. Each vending machine can reportedly require up to 15 minutes of onsite reprogramming by a technician using a laptop computer.

The Bank of Canada has rejected the criticism, stating that it has worked closely with the vending industry and made sample bills available to manufacturers of currency-handling equipment in May, six months before the notes entered circulation, according to news sources.

CAMA had asked the Bank of Canada to release its new plastic $5 and $10 bills at the same time as the $20s to allow for a single recalibration visit to each machine. But the bank plans to issue the lower-denomination notes simultaneously later this year, which will require vending operators to plan another round of visits to their machines and absorb the costs.

Some vending operators have also complained that their reprogrammed machines still wouldn't accept some of the new bills because of slight variations in the way they're printed.

In contrast to the industry's dealings with the central bank, Lockie credited the Royal Canadian Mint for providing long lead times before issuing the coins and giving operators the needed time to convert their equipment when it issued new $1 loonies and $2 toonies made of lighter alloys last April.

Meanwhile, several unconfirmed reports have been surfacing about Canada's new polymer banknotes melting when subjected to high heat. One bank teller told news sources that she has heard of cases in which several bills had melted together inside a car. Photos have also surfaced of several $100 bills that were reportedly scorched after they were stored in a metal can next to a baseboard heater.

The Bank of Canada has refuted the claims, maintaining that the new currency has been rigorously tested and can withstand temperatures of up to 284°F.

Polymer banknotes are finding increased use around the world, following Australia's issue of bills for general circulation in 1992.