Canadians will using a different type of plastic as money starting next month. (Alex Urosevic/QMI Agency Files)

Canada’s new plastic money looks set to cause a major headache for the nation’s banks and any business that needs to count large amounts of cash, as the machines currently in use cannot read the new bills, a company specializing in financial equipment said.

The $100 version of the new money is set to go into circulation this month, with $50 bills coming in March next year and $20, $10 and $5 bills coming in late 2013.

The new notes are harder to counterfeit and last 2.5 times longer than the current paper bills, the Bank of Canada says.

The problem is that the new polymer notes have a large transparent window on one side that confuses the sensors in counting machines, according to Ted Brosnan, president of John Poulet Cheque Writer Service.

“It’s a huge headache,” he said, adding that nearly all of the country’s cash-counting machines will have to be either upgraded or replaced.

The problem means that the machines may not recognize if a bill is torn in half and may not pick up two bills going through the machine at the same time.

The Bank of Canada said it has been working with banking equipment makers for some time to iron out problems.

“Whenever there is a transition (to a new currency), the equipment always has to be adjusted,” said Julie Girard, a spokesperson for the central bank’s currency department. “Because this is a little bit different, we expect there will be a little bit more of a transition.”

Girard said that the new notes, which are amongst the most secure in the world, will ultimately be easier for counting machines to process.

Brosnan said there is a software upgrade available that costs about $400 to $500, but the technology doesn’t work very well and is prone to bugs.

Without replacing the machine, the best combination is to modify the counter manually and upgrade the software, said Brosnan, whose Richmond Hill, Ont.-based company has been in the financial equipment business for about 40 years.

He said the problem may also extend to any older ATMs, although newer equipment is likely to be able to handle the new bills. He said he knows of at least one Ontario credit union that needs to replace 24 ATMs and as many as 40 counting machines.

Read More: http://www.torontosun.com/2011/11/01/plastic-money-to-cause-headache-for-banks-retailers