The UK is to follow the lead of Australia and Canada and replace traditional paper banknotes with plastic ones.
The Bank of England (BoE) said that public consultations will begin immediately, with smaller, more durable plastic banknotes with a see-through image of Britannia likely to replace traditional paper notes from 2016.
The BoE said the wipe-clean polymer notes will be smarter, harder to counterfeit and last up to six times longer than cotton-paper based notes.
They will also be 15% smaller, bringing UK notes into line with sizes in other countries, but will remain larger than existing euro notes.
Following a three-month public consultation the BoE’s new governor, Mark Carney, will make a final decision on the go-ahead in December. However it is likely that the Sir Winston Churchill £5 note will be the first to be made in polymer and launch in 2016, with the Jane Austen £10 note following in 2017. All the notes will continue to feature the Queen and use existing colours.
Plastic notes have been in circulation in Australia for more than two decades and are now being introduced in Carney’s home country of Canada, but the BoE said the conversion project pre-dates the new governor’s appointment.
The new notes will cost around 50% more to produce, but the BoE estimates it will save £100m as they will have a much longer lifespan than paper. They will continue to be produced at the Bank’s ultra-secure plant in Debden, Essex, although subcontracted to a private company, expected to be either De La Rue, the existing maker, or Innovia, which manufactures most of the polymer notes currently in circulation across the world.
Security and counterfeiting are also likely to have influenced the BoE’s decision. Evidence from Australia and other countries such as New Zealand, Singapore, Mexico and Nigeria, where polymer notes are common, is that after their introduction counterfeiting reduced substantially. Last year the BoE removed 719,000 counterfeit notes from circulation, a relatively high rate compared with other countries.
Northern Ireland’s shoppers are also already familiar with polymer notes, as a limited-edition note was circulated in 2000 by Northern Bank to mark the millennium.
Rising interest rates, excitement around blockchain use cases and cross-border payments were all hot topics at this year's AFP conference in San Deigo.
Today CGI and GTNews have announced the launch of the fifth annual Transaction Banking survey report, which offers which offers critical insight into the corporate-to-bank relationship.
While corporates have more choice when it comes to choosing financial services, the core relationship between banks and businesses hasn't changed, argues Michael Cummins, head of treasury solutions at Citizens Bank.
Direct carrier billing is currently a competitive payments industry in Europe, but will it flourish under PSD2? EE and Microsoft think so.