Preparing for the new 1 coin
Getting your business ready The new UK 1 coin released on 28 March follows in the footsteps of the recent polymer 5 note as the next update from The Royal Mint. In this article, Barclays and Vaultex discuss the implications of the new coins and the steps that businesses should be taking to make sure they are ready for the transition. Cash continues to be a significant payment method in the UK. Cash transactions amounted to over 253bn in 2015, 1 making cash the largest payment method by volume. 57% of spontaneous consumer purchases were made by cash last year. 1 While these figures are expected to decline somewhat in the coming years, it is likely that cash will still continue to be a significant payment method. The UK Payment Statistics 2016 report by Payments UK forecasts that in 2025, cash transactions will still account for 152bn, or 31% by volume. Why replace the 1 The current 1 coin has been with us for over 30 years, which has led to concerns about its vulnerability to counterfeiting. It is estimated that there are currently over 1.5 billion 1 coins in circulation, and The Royal Mint believes 1 12-sided its distinctive shape makes it instantly recognisable, even by touch. that 3% of all coins in circulation are counterfeits ultimately costing the economy 45m.* The Royal Mint has stated that the new design makes it the most secure coin in the world. The six features of the new coin are detailed below. 4 Micro-lettering it has very small lettering on the lower inside rim on both sides of the coin. One pound on the obverse heads side and the year of production on the reverse tails side, for example 2016 or 2017. 1 coins in circulation Counterfeit coins cost the economy Bimetallic it is made of 2 two metals. The outer ring is 5 * gold coloured (nickel-brass) and the inner ring is silver coloured (nickel-plated alloy). Milled edges it has grooves on alternate sides. With cash still being used by a lot of us, companies need to understand the impact that the new 1 coin will have on their businesses and the steps that they should take to prepare. 3 Latent image it has an image like a hologram that changes from a symbol to the number 1 when the coin is seen from different angles. 6 Hidden high security feature a high security feature is built into the coin to protect it from counterfeiting in the future. 1 UK Payment Statistics 2016. *The Royal Mint. 2 of 5
Changing dimensions The new 12-sided 1 coin s dimensions are different from the current round 1 coin. Thickness 2.8mm it is thinner than the round 1 coin. Weight 8.75g it is lighter than the round 1 coin. New polymer notes and 1 coin timeline 2013 2014 2015 2016 2017 5 10 20 5 10 20 1 1 Diameter 23.43mm it is slightly larger than the round 1 coin. The maximum diameter (point to point) is 23.43mm. 5 and 10 Bank of England polymer banknotes announced in December New 1 coin announced in March 20 Bank of England polymer banknotes announced in September Publicity and training materials made available 5 in September Launch of the Scottish polymer 5 in H2 (RBS, Clydesdale, Bank of Scotland) 1 coin on 28 March Withdrawal of the Bank of England paper 5 from circulation in May 10 in summer 2017 Demonetisation of the paper 10 note is yet to be determined Withdrawal of the old 1 coin on 16th October 20 note The transitional process During this year, businesses will need to be aware of the three distinct stages The Royal Mint will follow for the introduction of the new coin. Co-circulation 1. Introduction (28 March): The launch of the new 1 2. Co-circulation (between 28 March and 16 October): Only new coins will be produced but businesses will accept both old and new coins. 3. Demonetisation: The old 1 is withdrawn (but can still be paid into Barclays branches) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2017 28 March 16 October New 1 launched Old 1 withdrawn Industry will provide new coins only Businesses will accept old and new But can still be paid into Barclays branches 3 of 5
Being prepared Vaultex and Barclays have been planning this transition for over two and a half years and we re in good shape. Our readiness strategy has focused on five key areas: Equipment readiness Where equipment is concerned, our desktop counters, automated devices and weight scales have all been upgraded with the necessary software, firmware and hardware. The polymer event has highlighted that some machines are so old that the only solution is to replace them. What businesses should be doing Working with clients and our partners at Vaultex, we have identified four key areas that organisations should self-score themselves on as a way of highlighting their readiness levels for the introduction of the new coin. Business preparation Area Lagging Preparation Leading IT readiness The necessary IT changes have been implemented and tested ahead of the go-live date. People readiness As we approach the countdown to 28 March, we ve moved from communicating high-level awareness to focus on delivering specific awareness and education sessions. These include procedural guides and the training of frontline staff and operators on the key features of the polymer note. Equipment People Sorting, counting, weighing and ancillary equipment not updated or in a plan. Software not updated or in a plan. No awareness or communication of change. No understanding of in-store equipment status. All equipment updated or in plan: sorters, counters, scales, self-service and ancillary (photo booths, trolleys, vending etc). Software updated as needed. Customer-facing people trained and aware of new 1 coin features and timelines including forgery detection. Trained to deal with queries. Storage and insurance readiness The transitional period between old and new coins will bring increased requirements in terms of storage space, as well as updated insurance requirements to cover the value of those coins. This is all in place. Process No engagement with supply chain. No change in process. No schedule to return old 1 coin volumes. Process in place to segregate new and old 1 coins. Schedule to return all old 1 coins held before end of circulation. The availability of new 1 coins Our vaults already have a significant supply of new coins ahead of the launch date. No owner within business. No impact assessment complete. Accountable manager in place. Project set up with plan and risk management. Organisation No plan to upgrade equipment/train people. Impact assessment complete. 4 of 5
Dealing with forgeries With the demonetisation of the old 1 coin, businesses need to pay particular attention to the risk of counterfeit coins and identify these before attempting to pay them into their bank. To help with this identification process both the Bank of England and Royal Mint websites provide guidance on spotting forged coins, but below are some of the key things you should look out for when identifying counterfeit coins. A guide for identifying genuine coins Date compared to design The reverse design on 1 coins is changed each year and therefore the design must match the year date. A list of designs and their respective dates can be found here. Quality Genuine coins lose their lustre when they have been in circulation for some time. Some counterfeits appear more shiny and golden and show no sign of age despite the date of the coin. Full details can be found at: http://www.royalmint.com/ discover/uk-coins/counterfeit-one-pound-coins How to find out more Obverse date Reverse design Obverse date Edge inscription For further information on the changes, businesses can access a number of resources, including the Bank of England s website, www.thenewpoundcoin.com This is a useful resource and we would recommend that businesses encourage their staff to access it as part of the communication and training process. Edge lettering The lettering or inscription on the edge of a genuine coin must correspond with the year date. Usually the milled edge of a counterfeit is poorly defined and the lettering is uneven in depth and spacing. Orientation The designs on both the heads and tails of the coin should be aligned when swivelled. At Barclays, businesses can speak to their Relationship Directors and cash specialists for further advice. Meanwhile, businesses can also contact Vaultex for a more detailed 1 coin health check, assessing their readiness in areas such as equipment, people, processes and organisation. Aged design Too shiny Obverse vertical Rotated 180 barclayscorporate.com The views expressed in this report are the views of third parties and do not necessarily reflect the views of Barclays Bank PLC, nor should they be taken as statements of policy or intent of Barclays Bank PLC. Barclays Bank PLC takes no responsibility for the veracity of information contained in third-party narrative and no warranties or undertakings of any kind, whether expressed or implied, regarding the accuracy or completeness of the information given. Barclays Bank PLC takes no liability for the impact of any decisions made based on information contained and views expressed in any third-party guides or articles. Barclays is a trading name of Barclays Bank PLC and its subsidiaries. Barclays Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register No. 122702). Registered in England. Registered number is 1026167 with registered office at 1 Churchill Place, London E14 5HP. March 2017. BD05198. 5 of 5