SA will have new banknotes, bearing the face of former president Nelson Mandela, before the end of the year. Although the new notes are the same sizes as their predecessors, they include new security measures, some of which will mean automatic counting and authenticating machines will need to be updated or replaced.

Neil Dowds, national manager for contracts and gearing at Global Payment Technologies, a company which manufactures and distributes card terminals and note- and coin-counting machines, says banks and casinos will obviously be most affected by the change.

“You can spend R6m on a note-sorting system or R5 000 as there are different levels of technology,” Dowds explains. “Simpler machines just count the number of notes, while others can check the denomination of a note, its size, and perform ultraviolet checks, metal thread detection, and infrared detection to check authenticity.”

Some lower-end machines authenticate using the magnetic threads in banknotes and the properties of these threads have been changed in the new notes. Dowds says another challenge comes from the fact that counting devices, gaming machines and vending machines will also need to be able to recognise old and new notes during the time both are in circulation.

“The Reserve Bank has said it will recall the old edition notes at some point and it anticipates completing the process in nine months to a year,” Dowds says. “The Bank will no longer print old notes, so they might be able to get them out of circulation sooner than one would expect.”

The new notes are expected to start circulating in December. “The cash in circulation grows 25% to 30% during the period, so it’s a good time to do it,” Dowds says.

The current and future SA banknotes are all the same width but the length of each denomination increases by 6mm from the denomination below it. He says that although the size of the notes will remain the same and the basic colour scheme is unchanged, the colours used are more vibrant and there is additional micro printing and increased infrared properties.

Dowds says the Reserve Bank has also included new security features “they wouldn’t tell us about.”

While all of the new notes will carry Mandela’s face on their fronts, the same animals that appear on current notes will appear on the reverse of the new ones.

Dowds says it’s not surprising SA is changing its banknotes given the global trend to redesign notes every six to eight years. As security improves, so can banknotes and replacement is necessary to combat counterfeiting. “The longer notes are in circulation, the longer counterfeiters have to perfect their forgeries.”

The Reserve Bank believes that in the long run refreshing the notes costs less than the number of fraudulent notes that appear in circulation as existing designs age. “The old R200 note had to be withdrawn because it was being counterfeited,” he says.

Bank ATMs will also have to be updated to handle the new notes. Dowds says those that only dispense will not require much updating as the notes are the same size and because ATMs don’t verify the money they dispense, assuming that it has been checked before the machine is stocked.

However, those machines that accept cash, like cash recycling machines some banks have rolled out, will have to be updated so that they can verify that the money put into them by consumers is genuine currency.

Dowds says ATMs and vending machines present a far greater challenge than those in the gambling industry because there are so many of them in disparate locations. “A casino may have 3 000 slot machines, but they’re all at one site. Banks, meanwhile, have branches or ATMs in every town and a technician has to go to each of them.”