New One Pound Coin: One Giant Leap
Like most risk and fraud measures, we aim to stay one step ahead of the bad guys, but with UK Government's approach to the addressing the weaknesses of our coins and notes, we are a little late, in fact very late.
The new 12-sided £1 coin, closely follows the recently introduced and controversial new £5 note, has a number of new security features. This includes a hologram that apparently changes from a '1' to a '£' when viewed from different angles. Funny, Visa and MasterCard thought holograms on cards were a good idea until it became apparent how easy it was to counterfeit the hologram on an industrial scale.
I do note however, that the new £1 coin possesses other security features built into the coin to protect it from counterfeiting. It needs to be as it will be immediately tested by the criminals. If we are going to continue to prolong and in fact promote and extend the life of the £1 coin then it will need super protection.
The UK Treasury believes that one in every 30 £1 coins in circulation today is counterfeit. Funny, I remember reading a few years ago that the Royal Mint and/or the organisation tasked with assessing this ratio, determined that it was closer to one in 20, so closer to 5% of £1 coins in our pocket or piggy bank.
I get it, we have to protect the poor old £1 coin with a new super secure version if we are going to prolong its existence. But along with changes to other bank notes, this is being performed at a time where there is continued rhetoric in moving towards the cashless society and significant momentum in displacing coins and notes with electronic payment methods.
Contactless payments, after a very slow and disjointed start are now increasing in awareness, popularity and usage, whether card or mobile-based, traditional payment brand or new and emerging payment solution.
The cost of deploying the infrastructure to support electronic payments and displace lower value payments has taken a long time and still progressing, at great expense and through an evolution, no, revolution, in electronic payments. The financial services industry, along with the merchant, retailer and vendor communities have effectively collaborated to deploy electronic payment solutions. This may not have always been in a spirit of harmony, but the benefits to all were there to be realised. But are we doing enough to collectively realise the benefits?
So once again, have the powers at be really thought through the impact on coin usage and acceptance by consumers, coin savers, retailers and their PoS equipment, especially unattended devices like self-service checkouts, car parking, vending, etc. Device upgrades and/or replacements will be necessary at great expense. Training, education for all, especially training and educating the consumers, which will probably be left to the retail community.
Does this present the opportunity for some radical change of thinking in how to accelerate cash and coin displacement. Why upgrade equipment, just force consumers to pay electronically or make them follow a different payment process if they really wish to pay with coins. I already see retail staff steering consumers to contactless payment, where both the terminal and card are enabled. Why not promote this approach?
Not only should we be making usage of coins and notes less attractive, but we must ensure that the use of electronic payments is seen to be and is in reality – a superior consumer and retailer experience. Speed, convenience, security, reliability and yes price, are all critical in ensuring that the card, phone or other electronic payment experience is preferred.
So where is the collective focus on trying harder to displace cash transactions rather than just spending lots of money redesigning new coins and notes, which will confuse, add significant implementation and ongoing costs and operational headaches?
Where is the demonstration that UK Government, financial institutions, payments schemes, retailer community, solution providers and other stakeholders are truly collaborating to ensure that cashless payments is not just a dream?
Author Kevin Smith is an senior payment services & risk management consultant who provide his consultancy services to card issuers, banks, corporates and business organizations all over the globe. He is director of RiskSkill, UKFraud and a permanent member of AIRFA.
News Source: https://kevinriskspecialist.wordpress.com/