New polymer banknotes being introduced by the Bank of England (BoE) in September this year will cost businesses a staggering £236m to implement, research by an independent payments consultancy has found.
CMSpi claims that the process of switching to polymer banknotes will leave businesses with a hefty bill, thanks to the costs of upgrading and replacing cash-handling machinery such as self-service machines and ATMs.
The study comes ahead of the launch of designs of the UK’s first polymer banknotes on Thursday. The polymer £5 note is set to enter into circulation first, in September 2016, followed by the £10 in 2017 and the £20 by 2020.
The notes are expected to last at least 2.5 times longer than paper notes enabling the BoE to save around £100m on printing costs over a 10-year period.
The notes will also boast enhanced security features to prevent currency counterfeiting. However, the Manchester-based firm said the value of counterfeit notes removed from UK circulation last year came to just £5m, less than 0.01% of the £65bn in circulation. In comparison, credit and debit card fraud stood at £479m in 2014.
Brendan Doyle, CEO, CMSpi, said: “It is absurd that the BoE would commission a project that costs the economy £236m upfront, to save just £10m 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."
Bank of England's chief cashier Victoria Cleland said in November that "communication and collaboration are paramount" when it comes to ensuring a transition to polymer banknotes is smooth.
"The Bank is holding regular forums and supporting five industry-led working groups, representing different parts of the cash distribution chain. These groups are working together to deliver solutions that will ensure effective distribution and authentication once the new banknotes are in circulation. Feedback from industry participants indicates a high-level of confidence in how the programme is moving forward and we are grateful for their ongoing support," she said.