The Bank of England has issued a new one pound coin which it claims is the most secure coin in the world. Its 12-sided, bimetallic, latent-imaged, micro-lettered, milled-edged, hidden high security-featured self is now legal tender and coming to a shop near you. Anna Milne asked some payments bods for their thoughts
Simon Black, CEO PPRO Group
THE NEW POUND COIN RELEASE- IS IT A WASTE OF MONEY?
This month the Royal Mint is undertaking its potential last flip of the coin by introducing an updated £1 coin into circulation. With the same shape as the old 12-sided three pence piece or ‘threepenny bit’, its makers claim it will be the most secure coin in the world.
The current £1 coin it replaces has been in circulation for over thirty years and is deemed to be vulnerable to ever more sophisticated counterfeiters. But how long will we be using this coin? The UK is swiftly moving towards a new cultural phenomenon – the cashless society.
In the UK, payments are generally made using the plastic in our wallet and increasingly, our mobile phones. £288m was spent through mobile contactless payments in the UK in 2016 with 38 million transactions carried out across the year. This was a 247% increase on the year before, with the most notable lift being from payments made via Android Pay.
Pubs, bars and restaurants, the places perhaps most likely to be an outlet to spend the cash burning a hole in our pockets, actually made up 20% of all mobile contactless payments it processed.
‘Meal deal’ hotspots for workers buying lunch – such as supermarkets and grocery stores – accounted for 54%.
The popularity of mobile and contactless payments clearly demonstrates the acceptance of change when it comes to payments in the UK.
The current, or old pound coin, has been in our pockets for more than thirty years. I predict a much shorter lifespan for this new coin which I anticipate will be nothing more than a collector’s item in less than ten years.
Ross Macmillan, market intelligence consultant, allpay
NEW POUND COIN SHOWS CASH IS FAR FROM DEAD
The new 12 sided £1 coin is another clear sign that cash still plays an incredibly prominent role in society.
For all the talk about cryptocurrencies, contactless and virtual accounts – the value of banknotes and coins in circulation in the UK has actually increased.
And with cash still being the most popular payment method in 2015, you could argue cash is still very much alive and far from dead. Consider some of the major household bills like rent, council tax, water, TV Licence, gas and electricity.
Every year hundreds of millions of payments for household bills are made with coins or paper providing flexibility and convenience for the likes of the rurally isolated, unemployed, un/under-banked, digitally excluded, elderly or vulnerable.
If customers were unable to use cash, they’d incur arrears on their bills and fall into debt. Even by 2025, Payments UK predicts that cash will still be used to make nearly 30% of all payments.
Lu Zurawski, consumer payments solutions practice lead, ACI
THE NEW 12-SIDED ONE POUND COIN
The government estimates that currently one in thirty £1 coins in circulation is a counterfeit. The new coin will have a number of features that make it much more difficult to counterfeit, the most distinctive of which is its shape which makes it instantly recognisable, even by touch.
Whilst many in the payment industry have predicted a cashless society over the next 20 years or so, the fanfare over the format of a one pound coin offers a reminder of the challenges when it comes to changing the way people pay.
Although parking meters and vending machines have started to convert to app-based, mobile payments, it seems that metal coins will continue to offer convenient access to supermarket trolleys and gym lockers for generations to come.
The resilience of cash shows that even the ‘millennial generation’ may not be ready to accept a fully cashless state.
To test this, try explaining to a pre-teen kid they’re not allowed to use the “coin pusher” machine at an amusement park.
Society has many ways of teaching impressionable citizens of all types and ages about the complicated social technology of value exchange. It should not come as a surprise that coin technology continues to survive.