Let the coins go

We should be letting coins fade away, not wasting time and money on redesigning them.

You may have noticed that the British government has decided to react to the demands of the modern technological always-on super-connected digital economy by… redesigning the one pound coin. This is because of rampant counterfeiting, some of it apparently coming from The Netherlands, which meant that something like 3% of the coins in circulation were bogus. Hence George Osborne’s decision to drag us kicking and screaming into the 17th century by redesigning the coinage: we are to have new dodecahedral pound coin. What a total waste of time and money.

Industry chiefs insist the bill for converting parking meters, vending machines and phone boxes to take the new £1 coin could be as much as £100million.

[From New pound coin will mean £100 million bill to convert EVERY vending machine, parking meter and shopping trolley in Britain | Mail Online]

Phone boxes? There are phone boxes that don’t take cards? Oh well. But as for vending machines that take coins (which I never use) and parking meters that take coins (which I haven’t seen for some time), my question is, then: why bother? If the parking meter operators can’t detect the counterfeits, and get stuck with a 3% fraud rate, well, tough. Instead of wasting money installing new pound coin readers, they may well just forget about taking cash at all in vending machines and go to contactless and mobile payments.

And before anyone says “yeah well but what about excluded groups who don’t have a bank account or a mobile phone”, I say: prepaid cards since the results of our work on the Cabinet Office Alpha project in South Yorkshire, presented at our annual Forum this year, show clearly that a prepaid account linked to both an EMV card and a mobile wallet was not only a feasible but a desirable and successful mechanism for the excluded. It’s only a shame that Telefonica decided to can the mobile wallet that we used in the pilot!

To be honest, I’m baffled as to why parking meters in particular take coins at all in 2014. The cost of collecting the money is high even when things work properly, and the it approaches 100% when they don’t.

Thieves are using doctored pound coins to scam city parking meters in an attempt to fleece the Liverpool taxpayer of thousands in cash..

[From Thieves target Liverpool parking meters with doctored pound coins – Liverpool Echo]

This sort of thing used to go in central London as well before mobile phone parking took over, and with serious consequences.

A gang of Albanian assassins murdered a rival in a feud over the right to steal from London’s parking meters, a court has heard.

[From Albanians ‘shot rival over parking meter theft’ (From This Is Local London)]

There is no point is tossing good municipal money after bad by replacing these old parking machines with new parking machines that are exactly the same as the old ones (ie, that concentrate money in useful on-street locations for criminals).

Incidentally, there is a new technology angle to the story. The Royal Mail are trumpeting the addition of new technology so that the pointless and expensive exercise in replacing the coins can be augmented by pointless and expensive machines so that banks can detect counterfeits and automagically reject them when you empty your tip jar into the machine in the branch.

The iSIS currency system can be authenticated via high-speed automated detection at industry-leading levels and is harder to counterfeit and easier to detect than any coin before it.

[From iSIS]

We should not be investing in producing coins with a better anti-counterfeiting coating, we should be letting coins fade into oblivion, starting with an immediate end to the production of 1p and 2p pieces. The Irish, having done a controlled experiment around continental-style “rounding” have come to precisely this conclusion.

A new national survey shows that they favour the withdrawal of 1c and 2c copper coins.

[From Time for change as 85pc want to banish coppers – Independent.ie]

The Irish experiment took place in Wexford, where customer and retailers were taught to round transactions to the nearest 5 cents. So you pop down tot eh sweet shop with no expectation of using coppers in your transactions. If your sherbet dabs come to €1.02, you hand over a euro coin walk away content. If your gobstoppers add up to 98 cents, the same.

Research has shown consumers and businesses well disposed towards a phasing out of 1 and 2 cent coins because

1. They are inconvenient to handle and carry
2. The cost of counting and storage is greater than their value
3. Other EU countries have effectively phased them out
4. The cost of making 1 and 2 cent is greater than their value and has a negative impact on the environment.

The Rounding Trial rules are simple and fair for all.

[From About the Trial | Wexford Rounding Trial]

Surely it should be a matter of obvious national priority for us to follow the excellent Irish lead here.