But security upgrades worth cost, officials say

John Goddard, Business reporter

New polymer banknotes demand all money-handling machines in the country be upgraded at the cost of $75 million, the Bank of Canada estimates.
That compares with $20 million to $30 million for the last conversion in 2004-2006, bank spokesperson Julie Girard said.
“This transition is going to be a little more involved,” she said.
The $100 bill came into circulation last month, made of a smooth polymer material and incorporating such high-tech security features as the world’s first transparent windows with embedded metallic pictures.
The $50 bill goes into circulation in March, the $20 bill late next year, the $10 and $5 in 2013.
Although the size remains unchanged, the film-like texture, security enhancements and relative lightness of the new bills necessitate machinery upgrades.
“In Canada, we have 500,000 machines that accept, dispense or sort bank notes,” Girard said in a phone interview.
“They include ATMs, parking machines, and sorting machines that banks and financial institutions use – the full gamut.”
Automated teller machines alone number 75,000, she said.
They don’t usually dispense $100 bills. Nor do automated parking wickets, TTC token dispensers or change-marking machines.
So far, the mechanisms affected mainly include institutional ones that count and sort $100 notes. But in the coming months, other money-machine owners will have to adjust, modify, convert or replace their equipment as lower-denomination polymer bills come on board.
“We’ve been working (on this) for more than two years,” Girard said.
“People from our regional offices go out every single to day retailers, financial institutions, law-enforcement officers.
“They do presentations at public libraries,” she said.
“They talk to the blind and visually impaired. You can insert these bills in a banknote reader and it will read out what the denomination is.”
A Bank of Canada presentation proved a hit at the June conference of the ATM operations and manufacturer’s industry association, or ATMIA, chief executive Curt Binns said Wednesday.
“(The bank representatives) brought a bunch of polymer notes and rested them,” he said. “For some machines there will be some challenges.
“The sensors do not pick up the see-through part of the note, chine means a service technician will have to move the sensor half an inch on way or the other,” Binns said.
“These new notes are also more slippery,” he said.
“Some machines use suction cups. Some use wheels.”
“Depending on the machine, adjustments may or may not be required.”
While upgrade costs to all machines nationally during the next two years might appear steep, the polymer bills generate savings in other areas,” Girard said.
Saying with the familiar cotton paper blend to execute the high security features would have cost $200 million more than by using polymer, the bank estimates.
Being more durable, the new bills are expected to last 2.5 times longer than existing ones – at least seven years.
That means savings on production costs, as well as on costs to transport replacement bills across the country, especially as the new bills are 10 percent lighter than the old ones, Girard said.
Thwarting counterfeiters also implies savings for police and courts, the bank says.
The showcase security feature is the large see-through window running vertically toward the right on the face side, next to the portrait of former Prime Minister Sir Robert Borden on the $100 bill.
A smaller, metallic portrait of Sir Robert and a metallic picture of the Parliament buildings embedded in the window can be seen equally from the face and reverse sides of the bill.
The metallic Sir Robert reflects rainbow colours when tipped in the light. The metallic Parliament created using different technology does not reflect light in the same way.
About 30 other countries issue polymer currency, Girard said. Some also have a window, but not as large a window as the Canadian one.
Sooner or later, counterfeiters are expected to catch up to the bank’s technologists. The new series is given a lifespan of eight years, when machine upgrades must begin again.