Pendum

The fiver's alive and well in the U.K., thanks to a Bank of England program that encourages ATM operators to make it an option for their customers' ATM withdrawals.

A BBC report said the program was successful enough that not only bank fleets but now even independently owned ATM fleets are now getting into the fiver-dispensing business.

A previous BBC story said the Bank was having difficulty getting five-pound notes into circulation because they were not being dispensed from ATMs — which distribute more than 70 percent of currency in the U.K., the majority of it in £20 notes.

Fives that did find their way into circulation didn't stay there long — merchants hoarded them for making change so they wouldn't have to dispense heavy £1 and £2 coins. As a result, the notes weren't getting back to the Bank often enough for counterfeiting and quality checks.

The Bank's campaign exceeded its goals, increasing the proportion of total value of notes dispensed from ATMs from 0.2 percent to 1.5 percent — 0.3 percent better than hoped. Some £200 million ($323,740,000) monthly is now dispensed as fivers.

"I am delighted that this initiative has been so successful," Bank of England governor, Sir Mervyn King said in the BBC report. "A key objective for the Bank is to maintain public confidence in the currency, by meeting demand with good-quality genuine banknotes that the public can use with confidence."

"Cash is the payment method that best helps the British public budget, and a greater spread of smaller denominations like fivers helps us keep an even closer eye on our spending," Ron Delnevo, managing director of the IAD Bank Machine told the BBC.

For more on this topic, visit our bank/credit union research center.

 

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User Comments – Give us your opinion!
  • rits dijkstra
    62228226
    This must be a costly business: bringing £50 into circulation in fivers, requires 10 banknotes. Given sthe usual capacity of 4 cassettes of 2000 notes each, the ATM will run empty much faster. ATM-replenishment at higher frequencies increases the operational costs significantly.
    The question remains whether an ATM is the appropriate channel to bring small denominations into circulation OR to provide the "weekly" need for cash.
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