Canada: Business to Spend Millions on Computer Upgrades to Accept New $10 Notes : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread


Monday, Jan. 29, 2001

January 28, 2001 Business to spend millions on computer upgrades to accept new $10 notes HALIFAX (CP) -- Fraud artists aren't the only ones losing money on the new Canadian $10 bill. Laundromats, car washes and other businesses that rely on change-making machines will end up paying hundreds of dollars to upgrade their equipment to read the new bills, designed to resist counterfeiting.

And that's only after they've received the software upgrades, which are not expected to be released until next month. Until then, businesses will lose money each day the machines continue to reject the new notes, said Paul Thompson, sales manager at Montreal-based Standard Change Makers. "Without a changer on location, they lose approximately 15 per cent of their sales," said Thompson. He estimates the transition to the new $10 note, released earlier this month, will cost machine owners about $2 million. Standard Change Makers, the manufacturer of about 75 per cent of Canada's change-making machines, has about 10,000 machines in car washes, parking lots, hospitals, schools and laundromats, as well as hotels and bars with video lottery machines. Roughly half the machines require increased memory and new software to read the new bill, costing owners about $440 per machine. The rest of the machines require only a $40 replacement chip. But that all-important chip is still in development. And once it is released, the initial demand is expected to outstrip supply as owners rush to get their older machines converted. "They're going to be overwhelmed," said Dan Stewart, owner of Savco Food Services in Sarnia, Ont. Stewart's company oversees 20 bill changers and 300 vending machines, some of which accept bills. "Everyone's going to be wanting to do it." Stewart and others in the business say the Bank of Canada could have saved them lost revenue by releasing the bill's specifications earlier to software developers. "By the time the Bank of Canada was able to provide the manufacturers with the bills . . . there was only a limited amount of time before the release of the bills," said Stewart, who is also a director of the Canadian Automatic Merchandising Association. Joe Basile, a senior analyst with the Bank of Canada, said the final specifications were released to the microchip manufacturers two to three weeks before the new note went into wallets. But it takes time for the engineers to develop and test new software that can read the notes. As the Bank of Canada issues the new $5 and $20 notes during the next three years, every new issue will mean an extra upgrade and perhaps more delays. "That's ridiculous," said Peter Maloney, whose customers rely on eight change machines and an automated cashier to cough out coins at five Halifax-area car washes. "I don't see why we can't have the new chip the same week the bills are coming out." In the meantime, he says, "if somebody comes in and all they have is a new $10 bill, and one of our attendants is not on duty, they aren't going to be given any change." He hopes he won't face the same delays when the new $5 note is issued later this year. The bank defends its staggered release of the new notes, saying it allows time for new security features to be added and the public to become familiar with the bills. But, as a business owner, Stewart sees no benefit in the new bill and doesn't believe he will recoup his investment of more than $10,000 to upgrade his equipment. He said counterfeiting is not an issue for him as he operates in small markets. "Personally, I see no cost-benefit to the new bills. But I do understand the need. It's not just bill machines that are being fooled by counterfeit. Retailers are also being fooled." Thompson said the upgraded machines would save a small business, such as a car wash, $400 to $500 a year in lost revenue due to counterfeit bills. The bank redesigns notes every 10 to 15 years. The last change was made to $20 bills in 1993 when a small strip of reflective film was added for increased security against counterfeiting.

-- Rachel Gibson (, January 29, 2001

Moderation questions? read the FAQ